Two Fords, a Mexican, and an Oligarch: The American Trade War

Two Fords, a Mexican, and an Oligarch:

The American Trade War

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By Shawn Bell

Introduction

Trade wars have long been a source of economic volatility, and as the United States grapples with its ongoing confrontations over tariffs, the intertwining roles of various political figures, corporate giants, and nations are behind the scenes shaping the future of North America.

The 2025 clash between the U.S., Mexico, Canada, and China, spurred on by President Donald Trump's tariffs, has led to a dramatic shift in the "North American Economy". Among the key players, we find major figures like Bill Ford, the Executive Chairman of Ford Motor Company and Doug Ford, Premier of Ontario, Canada, as well as a complex mix of governmental reforms under Elon Musk's leadership of the Department of Government Efficiency (DOGE). This article explores how these figures fit into the American trade war and its economic fallout.

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The Two Fords: Business and Politics Collide

Bill Ford, Executive Chairman of Ford Motor Company

Bill Ford: A Legacy Automaker in Crisis

The first Ford in this economic drama is Bill Ford, the Executive Chairman of Ford Motor Company. As the leader of one of America's most iconic automakers, Bill Ford is directly affected by Trump’s aggressive trade policies. The imposition of a 25% tariff on Canadian and Mexican imports increases production costs and threatens the company’s competitive edge in the global market. Bill Ford now faces the tough decision of whether to absorb these costs, pass them along to consumers, or relocate production to other parts of the world.

The biggest challenge for Bill Ford is the increased cost of raw materials and automotive parts. Many components used in Ford vehicles are manufactured in Canada and Mexico, where lower labor costs and proximity to U.S. markets made production seamless under the North American Free Trade Agreement (NAFTA). The Trump administration’s decision to impose tariffs on steel and aluminum has placed significant financial strain on U.S. automakers as a whole, forcing them all to reassess their global manufacturing strategies. For Ford, these tariffs have translated into increased production costs, with estimates suggesting that the additional expense per vehicle could range from several hundred to a thousand dollars. As a result, the company has been forced to make difficult decisions to protect its profitability and maintain its competitive edge in an increasingly volatile market.

In an effort to offset these rising costs, Ford has made strategic adjustments to its global manufacturing footprint. One of the most notable developments is its decision to restart production in India. After ceasing operations there in 2021 due to declining profitability, Ford recently announced that it would reopen its Chennai plant, primarily for exports. The move is expected to create up to 3,000 new jobs and signals the company’s intent to strengthen its presence in global markets that may offer cost advantages over the tariff-laden U.S. manufacturing sector.

At the same time, Ford has reconsidered its investments in North America. The company scrapped its initial plan to build a $1.6 billion plant in San Luis Potosí, Mexico, a project that was initially intended to expand its vehicle production capacity. Instead, Ford opted to invest $700 million in its Flat Rock, Michigan facility, transforming it into a center for innovation and advanced manufacturing. This decision, which will create around 700 jobs, reflects Ford’s ongoing effort to balance domestic production while adapting to the economic pressures created by the trade war.

These shifts in Ford’s manufacturing strategy highlight the challenges faced by automakers in an era of protectionist trade policies. While the company’s investments in India and Michigan suggest a careful attempt to navigate these economic hurdles, the uncertainty surrounding future tariffs and global trade relations continues to weigh heavily on the industry. Ford, like many of its competitors, is walking a fine line between maintaining cost efficiency and responding to the demands of an unpredictable political and economic landscape.

The uncertainty surrounding trade policies also makes it difficult for Ford to plan for the future. If tariffs continue to escalate, Ford may be forced to cut jobs, close plants, or delay electric vehicle production plans. The company’s stock price has already experienced volatility due to investor concerns about how trade restrictions will impact Ford’s bottom line. As a result, Bill Ford must navigate these economic pressures while maintaining investor confidence and ensuring that Ford remains a competitive force in the automotive industry.

Doug Ford, Premier of Ontario, Canada

Doug Ford: Ontario’s Defender in a Trade Battle

On the other hand, Doug Ford, Premier of Ontario, Canada, has a different battle to fight. He finds himself on the frontlines of the economic fallout caused by the trade war. Ontario is home to a massive automotive manufacturing sector, with Ford, General Motors, and other major car companies operating factories that depend on cross-border trade with the U.S. The province’s economy is deeply tied to the automotive supply chain, meaning that any disruptions in trade policy could have devastating consequences for local businesses and workers.

Doug Ford has taken a strong stance against Trump’s tariffs, advocating for the removal of trade barriers that threaten Ontario’s economic stability. He has worked closely with Canadian Prime Minister Justin Trudeau to push for exemptions and fair trade negotiations, emphasizing the importance of maintaining the free flow of goods between Canada and the U.S. Ford has also explored financial incentives and support packages for Ontario’s auto industry to help offset the impact of tariffs.

However, his ability to shield Ontario from the trade war is limited. If companies like Ford Motor Company or General Motors decide to shift production to the U.S. to avoid tariffs, thousands of Canadian jobs could be lost. Ontario’s economic health is also tied to exports, and a prolonged trade war could weaken demand for Canadian-made vehicles, further exacerbating the problem. Doug Ford must walk a fine line between advocating for Ontario’s interests and maintaining diplomatic relations with the U.S., all while preparing for the possibility of economic downturns driven by trade uncertainty.

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The Mexican: Standoff at the Border

Claudia Sheinbaum. President of Mexico

Claudia Sheinbaum: Mexico’s Economic Balancer

While business and politics collide in Canada, the Mexican element in this trade war puzzle is embodied by Claudia Sheinbaum, Mexico's newly elected president. Sheinbaum inherited an economy heavily reliant on manufacturing and trade with the U.S., and Trump’s tariffs on Mexican goods have disrupted the delicate balance that Mexico had cultivated over the years. The rise of Mexico as a hub for auto manufacturing was due in large part to lower labor costs and favorable trade policies. However, as tariffs on Mexican imports rise, these advantages are eroded. Sheinbaum now faces the dual challenge of keeping Mexico competitive in the manufacturing sector while fending off the economic fallout from Trump's trade actions.

To mitigate the damage, Sheinbaum has taken a diplomatic approach, striving to maintain strong relations with the U.S. while bolstering Mexico’s economic position. To Demonstrate a commitment to addressing U.S. concerns, Sheinbaum deployed 10,000 National Guard troops to Mexico's northern border to enhance security and curb illegal activities, including drug trafficking and unauthorized immigration. Additionally, her administration facilitated the extradition of key drug cartel figures to the United States, underscoring Mexico's dedication to combating organized crime.

In a significant diplomatic engagement, Sheinbaum and Trump conducted a phone call described as "excellent and respectful," leading to a temporary suspension of the proposed tariffs. This conversation highlighted the potential for collaborative efforts to resolve trade disputes and reinforced the importance of bilateral relations. At the same time, she has taken measures to strengthen Mexico’s internal economy, focusing on local job creation and investment in industries outside the automotive sector.

Sheinbaum is working to reduce Mexico’s dependence on foreign manufacturers by promoting domestic industries and infrastructure development. She has introduced economic incentives aimed at encouraging Mexican companies to expand their operations, creating more job opportunities for local workers. While this strategy has the potential to make Mexico more self-reliant in the long run, the immediate economic uncertainty caused by the trade war remains a significant challenge.

The potential consequences of Mexico losing its manufacturing edge are severe. If tariffs continue to escalate, companies may be forced to relocate operations to other low-cost regions, such as Southeast Asia. This would not only lead to job losses in Mexico but could also strain the country’s economy, which relies heavily on trade-generated revenue. Sheinbaum’s ability to strike a balance between diplomacy and economic reform will determine whether Mexico can weather the storm of the trade war.

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The Oligarch: Elon Musk and His High-Stakes Global Game

Elon Musk, CEO and chief engineer, Space X

At the heart of this trade war and its economic implications stands Elon Musk, the billionaire behind Tesla, SpaceX, and now, the Department of Government Efficiency (DOGE). Musk’s involvement in the trade war is multifaceted. Tesla, Musk’s flagship company, has faced significant challenges from the tariff policies. With a Gigafactory in Nuevo León, Mexico, Tesla’s production of electric vehicles has been directly impacted by Trump’s tariffs. Musk now finds himself at the crossroads of managing a global empire of electric vehicles, space exploration, and artificial intelligence while dealing with the complexities of these trade tensions.

However, it’s Musk’s role in DOGE that has raised eyebrows. DOGE, a new governmental agency designed to streamline U.S. government operations and reduce spending, has already proposed reducing the federal workforce by a staggering 75%. Musk’s push for efficiency has resulted in the elimination of nearly 2 million federal jobs. While some see this as a necessary step to curb wasteful government spending, others fear that such drastic cuts will cripple vital government services. In particular, the restructuring could affect key areas like regulatory oversight, public health, and infrastructure—areas that are already stretched thin by the ongoing trade war and its economic impact.

Musk’s dual role—leading a high-tech empire while simultaneously overseeing major governmental reforms—has drawn mixed reactions. His supporters see him as a visionary capable of transforming government operations, while his critics argue that his focus on efficiency could undermine essential public services and exacerbate economic inequalities. The public’s opinion on Musk’s involvement is divided, and as the trade war intensifies, so too does the scrutiny of his decisions and their consequences.

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Stock Market Reactions and Recession Concerns

As trade tensions escalate, the U.S. stock market has been in turmoil. The tariffs on steel, aluminum, and other goods have had an immediate effect on industries most exposed to international trade, such as automotive manufacturing and agriculture. Ford’s stock, for example, has fluctuated significantly as the company navigates the increased costs of production due to higher tariffs. With the potential for additional price increases on vehicles like the Ford F-150, consumer demand may be adversely affected, putting further pressure on Ford’s profitability.

Tesla, too, has faced a volatile market. The electric vehicle giant has been caught in a perfect storm: its production in Mexico is impacted by tariffs, its stock price has fallen by over 50% since late 2024, and investor confidence has been shaken. Analysts have downgraded Tesla’s stock amid concerns about its international market share, particularly in Europe and China, where Tesla faces increasing competition. Despite these challenges, Musk remains committed to expanding Tesla’s global footprint, even if it means navigating trade barriers and tariff-induced price hikes.

The broader economic picture is one of growing uncertainty. Stock market corrections and declining consumer confidence signal that the U.S. may be heading toward a recession. Analysts predict that the U.S. economy could experience a slowdown as a result of rising tariffs, diminishing trade relations, and increasing costs for both businesses and consumers. The threat of a recession looms large, and it is clear that Trump’s trade policies and Musk’s deep involvement in government reforms are playing central roles in this unfolding economic drama.

The DOGE and Its Potential Economic Effects

While the ongoing trade war between the U.S. and its trading partners is causing market upheaval, Elon Musk’s leadership of DOGE adds another layer of complexity to the situation. The proposed massive cuts to the federal workforce and government programs under DOGE could create a ripple effect across the economy. The loss of 2 million government jobs is not only a blow to public sector workers but also a potential drag on consumer spending and economic growth.

The cuts could exacerbate the economic downturn caused by the trade war, particularly in sectors dependent on government contracts or support. With fewer government employees to handle international trade negotiations and regulatory functions, the U.S. may struggle to effectively manage its trade deals with Mexico, Canada, and China. This could further escalate tensions and lead to more retaliatory tariffs or trade barriers.

Public reaction to Musk’s involvement in these changes has been mixed. While some view his efforts as a necessary step toward fiscal responsibility, others question his motivations and the broader impact on public services. As the U.S. faces growing economic instability, the combination of trade tensions, corporate strategies, and drastic government reforms will undoubtedly shape the future of the American economy in profound ways.

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How It All Fits Together

The interconnected roles of Bill Ford, Doug Ford, Claudia Sheinbaum, and Elon Musk highlight the deep entanglement of trade, industry, and policy in shaping North America's economy as a whole. Each of these figures, while not the only individuals, represent key pillars of economic influence—manufacturing, regional governance, international diplomacy, and technological disruption. Their actions, and the policies they navigate, ripple across the continent, affecting supply chains, investment flows, job markets, and long-term economic stability.

Bill Ford’s struggle with rising production costs is emblematic of the broader challenge facing North American automakers. Tariffs on steel and aluminum, coupled with disrupted supply chains, are making it increasingly expensive to manufacture vehicles domestically. As Ford Motor Company weighs the benefits of reshoring versus shifting production overseas, these decisions have direct consequences for American and Canadian workers. A continued rise in costs could push companies to relocate, undermining domestic job security and investment in manufacturing infrastructure.

Doug Ford’s role as Ontario’s Premier places him at the center of Canada’s response to these economic pressures. Ontario’s auto industry is deeply intertwined with the U.S. market, and Trump’s tariffs threaten its competitiveness. In an effort to mitigate the damage, Doug Ford is seeking strategies to shield Ontario’s economy, whether through retaliatory tariffs, negotiations, or provincial incentives to keep automakers from leaving. His approach could influence not only Canada’s economic policy but also the broader trade relationship between the two countries, shaping how industries respond to protectionist measures.

Meanwhile, Claudia Sheinbaum’s efforts to maintain Mexico’s position as a manufacturing hub add another layer of complexity. Mexico benefits from lower production costs, making it an attractive alternative for companies seeking to bypass tariffs. Sheinbaum must balance diplomatic negotiations with the U.S. while ensuring that Mexico remains an appealing destination for investment. Any instability in U.S.-Mexico relations could disrupt industries that rely on cross-border manufacturing, such as the auto and tech sectors. If Mexico succeeds in drawing more business away from the U.S. and Canada, it could lead to further economic shifts, with both job creation and capital investment flowing southward.

Elon Musk’s role adds an unpredictable yet significant factor. His leadership of DOGE—the Department of Government Efficiency—has led to sweeping changes in how federal agencies operate. The restructuring of government operations could have lasting economic effects, particularly if it leads to deregulation or shifts in federal funding. If Musk’s changes prioritize technological advancements and automation, it could accelerate job displacement in traditional sectors while boosting growth in high-tech industries. His involvement also signals a growing influence of corporate leaders in public policy, raising questions about how private interests might shape government decision-making in the years to come.

Together, these four figures represent a clash of economic forces—corporate strategy, regional policy, international trade, and government restructuring. The trade war has forced each of them to adapt, and their decisions will shape North America’s economic trajectory. If protectionist policies continue, the region could see a reordering of manufacturing power, with potential long-term effects on job markets, trade relations, and industrial competitiveness. Conversely, if diplomacy and innovation manage to stabilize the situation, North America could emerge more resilient, with a modernized industrial base and stronger economic integration.