Tariffs weigh heavy on Detroit Chamber's State of the Region as Trump pledges additional levies

Yahoo

01-04-2025

Democratic former Gov. James Blanchard, a former U.S. Ambassador to Canada, slammed President Donald Trump's approach to foreign relations with the U.S.'s northern neighbor during the Detroit Regional Chamber's State of the Region presentation on April 1, 2025. | Screenshot
While the Detroit Regional Chamber celebrated a resilient economy, low unemployment and a prosperous business environment in the region, President Donald Trump's trade policies cast a cloud over the state's future as business and political leaders warned that a trade war with Canada could bring particular harm to metro Detroit.
Arguing Canada has not done its part in combating the flow of migrants and fentanyl into the United States, Trump has levied a 25% additional tariff on goods from the nation's northern neighbor, with a lower 10% tariff on energy resources from Canada.
Trump has also ordered a 25% tariff on all Canadian steel and aluminum imports and a 25% tariff on imported cars and light trucks, which economists have said could reduce 2025 US auto sales by 700,000 vehicles.
Canada has responded by levying tariffs of its own on more than $30 billion in U.S. goods including orange juice, peanut butter, wine, spirits, beer, coffee, appliances and more. It has also imposed a 25% reciprocal tariff on $12.6 billion worth of U.S. steel products, $3 billion in aluminum products, and $14.2 billion in additional goods including tools, computers and servers, display monitors, sport equipment and cast-iron products.
While the Canadian government has said all options are on the table should the U.S. continue to impose tariffs, Trump has labeled Wednesday, April 2, 'Liberation Day' with plans to announce massive tariffs in an effort to fulfill his administration's economic promises, although the details of his plans still remain unclear.
Addressing members of the chamber and their guests on Tuesday, James Blanchard, a former Democratic governor of Michigan who served as the ambassador to Canada from 1993 to 1996, pointed to the benefits of the centuries-long alliance between the U.S. and its neighbor to the north, noting the two countries have held an integrated economy in the automotive, energy, agriculture and national security sectors for years.
With many economists predicting a recession and Ford CEO Jim Farley warning a 25% tariff on autos would 'blow a hole' in the U.S. auto industry, Blanchard warned further tariffs could bring serious harm to businesses and consumers. 'I'm not an economist. I'm not an astrologist. All I know is Liberation Day could become Inflation Day if we don't watch it. And that's serious,' Blanchard said.
From allying together in World War I and II, the Korean War and the War in Afghanistan, serving as founding members of the United Nations and NATO, as well as partners in NORAD, holding integrated economies and partnering on issues pertinent to the Great Lakes, Blanchard said there is 'no good reason' to label Canada a national security threat or trade villain or to suggest it should become the 51st state, in reference to remarks from Trump suggesting Canada would be better off as part of the U.S.
Additionally, Blanchard claimed more migrants have been heading north into Canada than south into the U.S., challenging the President's rationale for initiating a trade war with what has long been regarded as one of its closest allies.
According to the Canadian government, the country has experienced an influx of individuals crossing between official ports of entry, though it has not publicly released statistics on the number of irregular border crossings since the beginning of 2025.
Blanchard also noted that fentanyl coming from Canada represented less than 1% of fentanyl seizures nationwide.
The former ambassador later noted that Canada was the largest importer of American goods, pointing to energy imports as the cause of the U.S.'s trade deficit with Canada.
'We want that. Michigan uses that. We need that on any given day, natural gas which heats the homes and businesses in this town is probably natural gas from Canada, either shipped directly or back from Ontario,' Blanchard said,
He once again challenged Trump, noting the country is already leading the globe in oil production, countering the president's argument that the country is facing an energy crisis.
Throughout his speech Blanchard called on Michiganders to show their appreciation for their friends and family members in Canada, pointing to the opening of the new Gordie Howe International Bridge between Detroit and Windsor planned for this Fall as an opportunity to celebrate the nation's friendship.
'Let's celebrate that as we move forward, and let's make sure no one distorts the truth about how fabulous this relationship is,' he said.
While the Detroit Regional Chamber's 2025 State of the Region report showed strong economic growth, job growth, growth in commercial real estate market as well as strong activity in venture capital, the chamber's President and CEO Sandy Baruah warned that region was particularly susceptible to the impacts of Trump's trade policy, with its report noting that 234,000 jobs in the Detroit Region rely on trade and investment with Canada.
'In just, you know, literally two or three months, we've seen one of the biggest drops in nationwide CEO confidence we've ever seen and Michigan is at a disproportionate risk with some of the changes that we are seeing potentially at the federal level, everything from changes in [electric vehicle] policy, electrification, infrastructure and certainly tariffs,' Baruah said.
'We're an automotive state. Our supply chains are completely integrated. There is no other state in the nation that has a more integrated supply chain than with the nation of Canada, than Michigan, particularly around automotive and manufacturing,' Baruah said.
While Blanchard highlighted the U.S.'s personal ties to Canada, Baruah further emphasized the economic ties, noting that one in eight residents of the Detroit Region workers hold ties to Canada in addition to 650 Canadian companies with major footprints in Michigan.
According to a poll conducted by the Lansing-based Glengariff group in partnership with the Chamber, Baruah said nearly 70% of Michigan voters believed Canada is an economic friend of the U.S., while a majority understand that tariffs on Canadian goods will hurt Michigan's economy.
Following Baruah's breakdown of the chamber's economic report, lawyer and International Trade expert Aida Dismondy joined Blanchard and Baruah alongside Consul General of Canada in Detroit Colin Bird for a discussion moderated by Devin Scillian, a longtime journalist who retired from WDIV-TV 4 in December.
The panelists severely criticized Trump's actions against Canada, with Bird noting that 70% of exports from Canada into the U.S. are further input into manufacturing.
'What that speaks to is what we do in this region of highly integrated trade… that's what makes it really valuable for me as a Canadian diplomat here in Michigan to know that this is not a Michigan policy. This is a made in Washington problem, and we need to be working together across this border to protect this region together,' Bird said.
Dismondy echoed Blanchard's earlier remarks about friends in Canada, noting that she had told her clients their suppliers are their best allies at the moment.
'In a time when the federal government has let us down from a trade policy perspective, it is this time when going back to [the] Governor's remarks, not only to just call our friends, but our business partners and come together as a united front, because it is through business partners that we will continue these relationships at a time when chaos and insecurity or uncertainty is looming large,' Dismondy said.
On Friday, Baruah, alongside Glenn Stevens Jr., the executive director of MichAuto, which advocates for the state's automotive and mobility sector, sent a letter to the U.S. Secretary of Treasury, the U.S. Secretary of Commerce, the U.S. Trade Representative and the state's congressional delegation, asking them to continue a pause on applying tariffs to auto parts that comply with the United States–Mexico–Canada trade agreement and advising against levying tariffs on vehicles produced outside of Mexico and Canada as well as parts produced outside North America.
When asked to expand on this letter, Baruah told Scillian he could not see the end game of these policies.
'When I talk to people who are close to the president, people who are in the administration, Republican members of Congress, etc, etc. And they kind of give us the talking points. They say 'Well, you know, there's going to be short term pain, you know, but it's, you know, we're going to bring, you know, we're going to bring manufacturing back here,'' Baruah said.
'Tell me how that's going to happen in a political cycle, because, you know, best case scenario, it takes three, four years to build an automotive plant, it takes about that same amount of time, if you're lucky, to build an aluminum plant, right? So how does, frankly, the Trump administration, from a political standpoint, withstand the unemployment that's going to happen, the slowdown in the economy,' Baruah asked, warning that tariffs could lead to rising prices due to tariffs and high unemployment as industries slow down.
Bird later noted that the U.S.'s actions toward Canada had spurred the country into conversations with other trade partners as other countries also expect to face U.S. tariffs.
'How do we reimagine some trading arrangements that, frankly, we have not put enough effort into because this has been such an easy, effective relationship that we've had with the United States. So it's forcing us to be more creative, and it's uniting Canadians in a way that I've never seen, and makes me proud,' Bird said.
Dismondy, Blanchard and Baruah further stressed the importance of allies as the U.S. works to protect itself from economic threats alongside threats to national security, focusing on Russia and China. 'The only way, given China's frankly, very strong competitive advantages, to combat the Chinese economic and national security threats is to do it together,' Baruah said.
However, there is some good news, Blanchard said, pointing to Trump's nominee for ambassador to Canada, Pete Hoekstra, the former chair of the Michigan Republican Party, who served as ambassador to the Netherlands under Trump's first administration as well as a U.S. Representative from 1993 to 2011.
'He is eminently qualified to be ambassador to Canada or just about anywhere. He does have the ear of President Trump. I've spoken with him. I said, 'You got a big job, but you're up to it, Pete.' So I think he will be helpful to a reasonable degree, and I think that's good for Michigan and good for our country,' Blanchard said.
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