At the Detroit Auto Show, Governor Gretchen Whitmer delivered a compelling address on the auto industry’s challenges, successes and an urgent need to strengthen ties with manufacturing partners.
In the 19th and early 20th centuries, the United States, and many other countries, instated high tariffs and traded selectively with other nations. These measures, known as trade protectionism, were intended to buffer the domestic economy in times of financial uncertainty.
Yet, these policies became unproductive, and a more coordinated management was needed. In 1944, world leaders met to establish the IMF (International Monetary Fund) and World Bank to achieve the shared objectives of an exchange-rate system, an international loan reserve and positive trade relationships.
In her speech, she referenced a past meeting with President Donald Trump, where Whitmer stressed the importance of a united front as Chinese automakers seek to dominate global markets heading into 2026 and beyond.
“When we say no to Canada, we are saying yes to China,” she said.
Although foreign policy has alternated between protectionism and zeal for free trade, Trump’s tariffs, applied on 91 nations, have undermined vital trade links — namely with Canada, Mexico and the European Union.
Trump, on many occasions, argued that his tariffs reduced the U.S. trade deficit and benefited domestic producers.
“My tariffs are bringing in hundreds of billions of dollars, and are helping to slash the deficit this year by more than 25%,” he stated on Nov. 12 via a post on X.
While the trade deficit has decreased, the 25% figure is an exaggeration; the fiscal year 2025 deficit, estimated from Sept. 30, 2025, when the term ended, was only down 2% from FY 2024. Meanwhile, in the third quarter of 2025, between July, August and September, GDP increased by 4.4% to reflect increased consumer spending and export totals.
Whitmer, in her speech at the Auto Show, critiqued his approach, acknowledging the value tariffs can have in stabilizing domestic capital flows and their consequences to an industry that heavily relies on an international supply chain.
She emphasized that tariffs do not work alone, in the same way that an economy cannot truly thrive without the goodwill of its trading partners.
“Tarrifs have their place, but they won’t magically restore American manufacturing”, she said.
In her speech, Whitmer noted the detrimental impact of tariffs on U.S. automaking. These don’t immediately cripple industry but erode the protective mechanisms that make it viable. One such is long-time industry partners like Canada.
In a recent trade deal, signed on Jan. 16, Canadian Prime Minister Mark Carney and Chinese President Xi Jinping signed an agreement to relax duties on the import of 49,000 electric vehicles into Canada, in exchange for lowering tariffs on Canadian agricultural products. The move comes after relations soured between the U.S. and Canada last year, when tariffs were first imposed and President Trump introduced the idea of buying Canada, sparking outrage across the border.
U.S. Trade Representative Jamieson Greer, expressed opposition to the trade deal in an interview with Canadian news outlet CNBC, concerned that it would give Chinese automaking a “foothold in North America—” dissolving a critical front that reinforces the domestic auto industry.
Whitmer acknowledged this bipartisan concern. She also explored the reasons behind the rising competition.
According to the governor, in 2025, China exported 6.8 million vehicles as compared to 1 million in 2020—a nearly sevenfold increase in five years. One of the factors behind this that she named was vertical integration—a term that refers to consolidating ownership of all the processes involved in production. The effect extends from rare earth mineral extractions to supply parts, to EV manufacturing.
Chinese vehicles also offer a kind of novelty not experienced before.
In an article by Singapore-based Channel News Asia (CNA), correspondent Deborah Wong explains that, as a saturated domestic market struggles, China looks to export AI-powered electric vehicles to the European Union and Gulf countries, where demand is high for cutting edge-technologies.
Price is also a factor, Wong noted, as Chinese vehicles combine affordability with design luxury.
At a 2024 China Airshow, leading carmaker XPeng launched a concept vehicle—a car with an aerial compartment in the back that can be deployed for short-range flight. Its expected debut is in 2028 for 2 million yuan ($285,000 in U.S. currency), and there have already been 7,000 preorders.
“As a major automotive nation, in our progress to become an automotive power, we must look outwards toward the world,” Wei JianJun, chairman of Great World Motors, said.
In the second half of the 18-minute speech, the governor moved away from fears to the strengths inherent in Michigan’s economy—assets like business opportunity, research and development (RAND) and the resolve of its people.
In a Magazine Site Selections report on corporate rankings, Michigan was ranked fourth for workforce development. Whitmer attributed this, in part, to MI Reconnect, an initiative that offers residents 25 years and older a tuition-free associates degree or skills-training education to attract labor talent. The program, she announced, will now lower its eligibility to age 21. Whitmer also introduced a new directive on geologic hydrogen that could help catapult Michigan and the rest of the U.S. back into clean-energy leadership.
Hydrogen gas (H2) can be artificially produced in a number of ways. Yet, the reactive processes that yield it are energy-demanding or can produce some net amount of carbon dioxide (Co2). Meanwhile naturally-occurring hydrogen, located in subterranean reserves, can be tapped locally, and at a lower cost. Not only can it help decarbonize industry, but it can invite job growth and clean energy-investments from around the world.
Detroit has witnessed countless shifts in its auto industry just over the past year, from challenges in the transnational supply chain to fluctuating demand for electric vehicles (EVs) to worker layoffs. Nonetheless, it still retains a trophy in revolutionary automaking.
Whitmer’s attitude maintained that challenges do not discredit potential and resilience. The same ingenuity that debuted the first Ford is what can pivot Michigan back onto the global scale.
