Bill Ford Jr. speaks at a concert celebrating the reopening of Michigan Central Station on June 6, 2024. Eminem, Diana Ross, Big Sean and Jack White headlined the event at Roosevelt Park, titled “Live From Detroit: The Concert at Michigan Central.” (Photo by Andrew Roth/Michigan Advance)
Ford Motor Co. and General Motors Co. each donated $1 million and fleets of vehicles to President Donald Trump’s inauguration.
It might not have been enough for a president that craves cash and adoration.
Despite his repeated promises on the campaign trail that he will revitalize U.S. manufacturing, Trump’s economic attention appears to be shifting toward the desires of billionaire tech bros who are lavishing praise on the new president.
“For all Trump’s talk of manufacturing jobs, you didn’t see the CEOs of GE [General Electric] and Caterpillar sitting in the prime seats today,” New York Times columnist Ezra Klein wrote in a social media post about the inauguration ceremony. “You saw the CEOs of Amazon and X and Meta and Google and TikTok.”
Self-appointed “first buddy” Elon Musk spent more than $250 million to put Trump back in the White House. The CEO of Tesla, X, SpaceX and several other companies is the world’s richest person and considered to be the second-most powerful figure in the Trump administration.
Moments after Trump took the oath of office, he announced several measures that could greatly damage Michigan’s auto industry and the state’s overall economy.
The new president said he intends to slap a 25% tariff on goods from Canada and Mexico, and possibly a 10% tariff on China on Feb. 1. And he issued an executive order on energy policy that could result in the billions of dollars Detroit automakers have spent to develop electric vehicles going up in smoke.
On Tuesday, Trump was flanked by the CEOs of tech firms SoftBank, Oracle and OpenA1 in announcing “Stargate,” an artificial intelligence infrastructure project that could cost up to $500 billion and create as many as 100,000 U.S. jobs.
(It should be noted that Musk, who reportedly despises OpenAI CEO Sam Altman, threw cold water on the planned project.)
Trump also reversed an executive order by his predecessor, President Joe Biden that established AI safety and security guardrails for the fast-growing technology, a sign of the major influence the tech industry is building in the new administration.
All these events of the past few days have left Michigan’s auto industry leaders scrambling over how to respond to a trade and regulatory climate that is suddenly far different from it was before January 20.
Trump’s moves on tariffs and energy policy weren’t a surprise. But they present a significant challenge to an auto industry that is grappling with vehicle affordability issues, costly investments in new technologies and toughening global competition.
And Trump may be better positioned to carry out policy proposals that don’t exactly favor the auto industry than he was in his first term.
“He understands Washington now,” said Glenn Stevens, executive director of MichAuto, which promotes the state’s auto industry.
Plus, Republicans who have shown little inclination to denounce even Trump’s most outrageous acts, control the House and Senate.
MichAuto issued a statement shortly after Trump’s inauguration saying tariffs could weaken American competitiveness, disrupt supply chains and shrink investments by companies uncertain over the direction of trade policies.
“Specifically, the increased cost of doing business between the U.S. and Canada could be especially acute, even as the new Gordie Howe Bridge connecting Detroit and Windsor is set to open this year,” the statement said.
Tariffs could protect Michigan companies from tough foreign competition in the short term. But other countries will retaliate with their own tariffs, and the cost of vehicles and other goods will rise at a time when Trump has promised to bring prices down.
“Those things generally outweigh protection from tariffs,” University of Michigan economist Gabe Ehrlich said during a presentation at the Detroit Economic Club on Tuesday. “We won’t get protection for the auto industry without paying a price.”
Stevens said it’s possible that the tariffs on Canada, Mexico and China, if enacted, might not come as soon as February 1 because Trump often uses imprecise language that leaves him wiggle room in meeting self-imposed deadlines.
“Right now, there’s a lot of rhetoric and posturing,” Stevens told me. “We’re hoping calmer heads prevail.”
It’s unclear how Trump’s energy policies will impact Detroit automakers’ gradual transition to electric vehicles. Analysts believe the Detroit Three will continue their EV push because that’s where the global auto industry is headed. But he has already announced moves designed to ensure the continued dominance of gas-powered cars and trucks over EVs, threatening the business case for new technology vehicles.
Trump’s executive order on energy revokes a Biden order that set a goal of having 50% of all cars and light trucks sold in the U.S. be electric, hybrid or fuel cell vehicles by 2030.
The order also calls for a variety of anti-EV actions, including pausing all spending in the Inflation Reduction Act related to EVs and eliminating any incentives that favor EVs over other technologies. America’s energy policy will be fossil fuel-based, climate change be damned, the president asserted.
“We will drill, baby, drill,” Trump said in his inaugural address.
There is one hopeful sign for automakers. Ford Executive Chairman Bill Ford Jr. told reporters earlier this month that Trump called him “out of the blue” to discuss the industry.
Ford said he came away from that conversation confident the industry will have “a seat at the table” as the administration develops economic policy details. Stevens said that’s crucial.
“There’s an old saying: when you’re not at the table, you’re on the menu,” he said.
Hopefully not all the seats have already been taken by the tech bros.
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