Shift Key with Robinson Meyer and Jesse Jenkins The U.S. Auto Industry Wasn’t Built for Tariffs
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Feb 5, 2025 Ellen Hughes-Cromwick, former chief economist at Ford and the U.S. Department of Commerce, brings her extensive knowledge of the auto industry to the table. She discusses how proposed tariffs could disrupt the intricate supply chains of North America's auto manufacturers. Ellen also explains the challenges these tariffs pose for the transition to electric vehicles and highlights the economic ramifications for consumers. The conversation delves into the relationship between protectionist policies and the growth of the electric vehicle market.
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Auto Industry's Economic Impact
- The U.S. auto industry is a significant part of the economy, representing about 5% of GDP and employing over 4 million people.
- These jobs offer good pay, benefits, and contribute to a stable middle class.
Cross-Border Supply Chain
- The North American auto industry is deeply integrated, with parts crossing borders multiple times during production.
- This intricate supply chain makes it vulnerable to disruptions like tariffs.
Tiered Supplier Network
- Auto parts are not solely made by the branded automakers.
- A complex network of suppliers, tiered based on their relationship to the manufacturer, contributes parts.