Trump’s Trade War With China Pierces the Heart of Michigan

Trump’s Trade War With China Pierces the Heart of Michigan

Michigan is one of the industry’s global hubs, home to more than three-quarters of all automotive research and development that occurs in North America. The Detroit area boasts two major testing sites for autonomous vehicles, sprawling compounds of interstates, guardrails, and mock pedestrians and bicyclists that companies and researchers use to test their technology. At the University of Michigan, a driverless vehicle shuttles students around the campus.

Global competition is stiff, however. China’s progress on both autonomous and new energy vehicles is booming, in part thanks to generous subsidies and government funding, restrictions on gasoline cars, and regulations that require Chinese automakers to produce a certain number of low-emission cars per year. Last year, China accounted for more than half of the electric vehicles sold globally, according to the International Energy Agency. Although many in Michigan say China is on equal footing or still behind the United States in terms of technological development, they do not expect that edge to last long.

To stay competitive, the state has spent much of the past decade trying to woo foreign investment from Beijing alongside longstanding investors from Japan, Europe and South Korea. In early May, as the Trump administration prepared to roll out tariffs and investment restrictions against China, Rick Snyder, Michigan’s Republican governor, welcomed more than 150 potential Chinese investors to tour Detroit, Ann Arbor and Grand Rapids.

While Washington was projecting a hostile climate, Mr. Snyder told the delegation that Michigan was “open for business.” In each of the past seven years, Mr. Snyder has traveled to China to visit entrepreneurs and solicit investment.

The overtures have paid off. Oakland County, a Detroit suburb home to many auto suppliers, ranks third nationally among American counties in terms of the number of jobs that depend on Chinese investment, according to tracking by MacroPolo, a Chicago-based think tank. Chinese firms have also flooded into Wayne County, which includes downtown Detroit, to buy up defunct office buildings and vacant factory space.

Larry Williams, the president of Henniges, said a cash infusion from the Aviation Industry Corporation of China allowed his company to expand abroad and add jobs at its American facilities, including its Michigan headquarters. That investment was key to the company remaining competitive globally, he said, since major automakers like Ford, Volkswagen and Daimler now standardize their products internationally and will no longer do business with suppliers that can compete in only one market.

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