To dispel any doubt, President Donald Trump took to his Truth Social platform Thursday to confirm that, yes, tariffs on vehicles, parts and other products made in Canada and Mexico "will, indeed, go into effect, as scheduled" next week.

That's why Ford Motor Co. CEO Jim Farley, Stellantis NV Chairman John Elkann and General Motors Co. CEO Mary Barra joined a Zoom call the same morning with Commerce Secretary Howard Lutnick, according to three sources familiar with the situation. The goal: to influence, if not stop, the outcome by outlining the negative impacts the proposed tariffs would have on sales, production and employment — and to suggest alternatives.

Buckle up, Detroit, because it's likely to be a rough ride.

To hear the president and his allies tell it, tariffs on foreign-made parts, vehicles and commodities like steel and aluminum would draw jobs-creating investment and bring more vehicle production to the United States: "The tariffs will drive massive amounts of auto manufacturing to MICHIGAN," Trump posted on Truth Social. "Just let it all happen, and watch, it won’t be even close!"

But that theoretical result is largely unsupported by economists and economic history, especially the discredited Smoot-Hawley Tariff Act of 1930 signed by then-President Herbert Hoover and blamed for deepening the Great Depression. Trump's vision would take years longer to realize than the more immediate economic pain inflicted as early as next month from companies buying less steel, producing fewer vehicles, raising already high prices and employing fewer people because of it.

"Tariffs are basically a tax and they raise the cost of things," said Gary Wolfram, professor of economics and public policy at Hillsdale College. "All markets are inter-related." Tariffs "will affect a lot of other industries indirectly. You can't just isolate this steel tariff," for example.

How that would benefit the economy, the bedrock auto industry or its workforce across the industrial Midwest is unclear and unlikely. In a new analysis, East Lansing, Michigan-based Anderson Economic Group estimates the Trump tariffs could add $8,000 to the price of a new pickup, $9,000 to the price of a new full-size SUV and a whopping $12,000 to the price of a battery-electric vehicle. Those would be stunning, rapid price gains in a market where average transaction prices already hover around $48,000.

"Our estimates — nobody's saying they're wrong," AEG CEO Patrick Anderson told The Detroit News, even as he pointed to a presidential post slamming a reference to his data in a Wall Street Journal editorial this week. "I'm shaking my head. I don't have any explanation politically how the president and the White House think you can do a 25% tariff on the industry. It could be disastrous."

The automakers estimate the tariffs on Mexico- and Canada-made products would levy a multibillion-dollar cost on each of them for every year the proposed tariffs are in effect — costs, as Farley and Elkann have publicly pointed out, that mostly would not be borne by rival Japanese, South Korean and European automakers who import roughly 4 million vehicles a year into the United States.

"The real opportunity set for the administration," Elkann said on an earnings call this week, "in order to really boost jobs in America and manufacturing opportunities and investments, is by closing the loophole that currently allows approximately 4 million vehicles into the country without any U.S. content."

The American Automobile Labeling Act requires automakers to report U.S. and Canadian content of vehicles sold in the United States. For 2025 models, there are 176 models listed with 0% U.S. and Canadian content. These include vehicles from Bentley, BMW, Mini, Toyota, Hyundai, Jaguar, Land Rover, Kia, Mazda, Mercedes-Benz, Mitsubishi, Infiniti, Nissan, Porsche, Subaru and Lexus.

Leaving open that so-called "loophole" would be especially bitter for Michigan, home to the Detroit Three, the United Auto Workers and the largest auto-producing state in the nation. Lower costs in the form of smaller tariffs would enable foreign rivals to undercut Detroit on price, claim more U.S. market share and expand production in non-UAW plants.

Worse, concentrating production in such high-cost countries as the United States is an explicit goal of the president, as he pointed out on Truth Social. But a hard-earned lesson of the past generation or more is that grouping production in a single country raises costs for the Detroit Three and subjects them to a labor monopoly controlled by the UAW.

Just ask Farley and Ford, whose boast during national contract talks that it produces all of its full-size pickups and SUVs in the United States was tested when the UAW struck the Blue Oval's massive Kentucky Truck Plant even as rivals GM and Stellantis maintained production at sites in Canada and Mexico. If the near- to mid-term goal of the tariffs is to squeeze profit margins, raise prices and depress sales, that might make sense.

Or ask the leaders of Volkswagen AG, whose concentration of production and employment in high-cost Germany is forcing the giant automaker to contemplate plant closures and layoffs in its historically sacrosanct German plants. Lower-cost production sites in eastern Europe — or in China in Asia or Mexico in North America — are critically necessary cost hedges in the global auto industry.

"Moving production to the U.S. to avoid the tariff also increases the cost of labor for manufacturing, as well as the potential to further exacerbate a general labor shortage," S&P Global Mobility's Stephanie Brinley wrote in a recent analysis. "If imposed, the tariffs will increase consumer prices for autos and likely affect automaker profitability" — and do unnecessary damage to the Michigan economy and a vital American industry rooted in the heartland.

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