DETROIT (WXYZ) — On a Thursday afternoon, traffic is constant on the Ambassador Bridge. According to the bridge's website, it's the busiest international crossing in all of North America with roughly $323 million worth of product crossing the border every single day.
But soon, the costs of that product could go up dramatically.
On day three in office while speaking to the World Economic Forum, President Donald Trump again proposed the idea of tariffs, just days after pledging to implement a 25% tariff tax on China, Mexico and Canada on Feb. 1.
Watch coverage of Trump speaking to the World Economic Forum in the video below:
“If you don't make your product in America, which is your prerogative, then very simply, you will have to pay a tariff," Trump said.
Dale Hadel works in Sterling Heights for Citic Dicastal, which claims to be the world’s largest producer and exporter of aluminum wheels. They supply to most auto assembly plants in the U.S. and are concerned about Trump’s tariffs and potential retaliatory tariffs.
“We do a lot of business with all three countries... We export a lot of products into Mexico today and into Canada,” Hadel said. "If we have to raise prices because of tariffs to our customers, which is the OEM manufacturers, they in turn have to pass that along in the price of the vehicle.”
I spoke to two industry experts — one from Michigan and the other from Canada — who both agree that the American consumer would likely bear the brunt of the costs.
"At the end of the day, it’s going to be felt by the customer,” said Mike Wall, auto analyst at S&P Global Mobility. “The suppliers and the supply chain can not weather a 25% tariff.”
Hear more from Mike Wall in the video below:
Flavio Volpe is president of the Automotive Parts Manufacturers' Association in Canada and says 30% to 40% of the parts used at Michigan auto plants come from Canada. Parts can often cross the Detroit River seven times before final assembly. A tariff on every crossing would mean exponential costs.
“Ground zero for the impact of a 25% tariff in automotive is Detroit-Windsor,” Volpe said. "All of these companies getting hit with a tariff when it crosses the border means all of them will be operating at a loss, and how long can you do that?”
Hear more from Flavio Volpe in the video below:
While the goal of the tariff’s is to encourage U.S. manufacturing as more investment is made in Mexico, both experts say the auto supply chain has relied on this open-border trade for decades.
“It's hard to divorce ourselves from that supply chain. It's nearly impossible in the near term,” Wall said. "All the pieces and parts that go into these vehicles, that's how they've been sourced for the better part of these last few decades.”
“We're married and we don't want to leave that marriage," Volpe said of Canadian-American trade. "We're all going to hurt at the same time.”
While the countries' leaders argue, both Canadian and American consumers agree that costs are already too high.
“Things are getting a bit expensive," Carlonte Kyles from Pontiac said. "I see gas working its way up and everything. The price of living is just going up."
“With the cost of living as it currently is, that obviously is a concern,” Nick Sapardanis of Windsor, Ontario said.
While those on both sides hold their breath, those in the middle hope a resolution comes quick.
“Watching the negotiations and trying to figure out what action we will take when and if there is tariffs,” Hadel said. “We're hoping that there's some rationalization of the USMCA agreement and not bailing out of the USMCA agreement so everyone wins. Our customers win, our clients win and the tariffs are mitigated in some way shape or form.”
