Trump defends tariffs as midterms loom, says they made US 'a fortune'

President Donald Trump defended his tariff agenda as a revenue windfall for the US, even as new levies on Canada threaten to raise costs for Michigan's auto-dependent economy ahead of the midterm elections.

President Donald Trump defended his tariff agenda as a revenue windfall for the US on Tuesday, even as new levies as high as 50% on Canadian cars threaten to raise costs for Michigan's auto sector ahead of the Nov. 3 midterm elections.

"We've made a fortune on tariffs," Trump told Fox & Friends, arguing the import taxes have boosted domestic manufacturing and generated revenue for the federal government.

The president's remarks came a day after he toured a General Motors proving ground in Milford, Michigan, where he claimed tariffs are "amazing" for the automaker. GM collected a $500 million refund after the Supreme Court overturned some of Trump's tariffs this year, and the company is not having its best year ever despite the president's claims. Trump has imposed levies of 10% to 12% on 60 countries, while singling out Canada with tariffs as high as 50% on a wide array of products including automobiles.

Michigan's economy relies heavily on Canada, meaning the new tariffs — coupled with inflation running high and gas prices rising as the war in Iran escalates — have created additional economic concerns statewide. Some advocacy groups say tariffs have cost Michigan businesses billions of dollars since last spring, creating a potential liability for Republicans trying to hold Congress in November.

Tariffs as a Political Wedge

The president's visit to Oakland County, a Detroit suburb that flipped from Republican to Democratic in recent presidential cycles, previewed the political stakes. Trump boosted GOP candidates including Senate hopeful Mike Rogers and gubernatorial contender John James, who faces a primary challenge from businessman Perry Johnson on Aug. 4.

Jason Roe, a former executive director of the Michigan Republican Party, said Trump's visit was partly designed to ensure James secures the nomination but warned that tying GOP candidates too closely to the president could be "kryptonite to November voters." Trump's approval ratings have sagged as voters grow increasingly dissatisfied with his handling of the economy, according to recent polling.

The current average US tariff on Canadian goods stands at roughly 25% after the latest escalation, up from about 8% before Trump's first term. The previous round of tariffs on Canadian steel and aluminum in 2025 reduced bilateral trade by an estimated $3.2 billion over six months, according to Census Bureau data. Canada has retaliated with its own levies on US imports, and the two countries have squabbled over the opening of the $4.7 billion Gordie Howe International Bridge connecting Detroit and Windsor, Ontario — a project from which Canadian officials disinvited US representatives after Trump announced the new tariffs.

Cross-Asset Fallout

Financial markets showed signs of relief from trade tensions elsewhere, with the S&P 500 rising 0.6% and the Dow Jones Industrial Average gaining 518 points, or 1%, on Monday as the US and Iran paused strikes to create space for diplomacy. Brent crude dropped 5.4% to $86.74 a barrel, reversing some of the gains from earlier in July when prices surged above $100.

The tariff debate is unfolding against a broader policy push by Trump to reshape US trade relationships. The administration acknowledged in court filings last week that it canceled $7.6 billion in clean energy grants "based solely on the political identity of the grant recipient's state" — targeting 16 states that voted for Democrat Kamala Harris in 2024. Separately, a federal appeals court upheld an injunction blocking Trump's executive order to create a federal voter list and restrict mail ballot delivery, a ruling the administration is challenging at the Supreme Court.

Trump has also pressed Senate Majority Leader John Thune to delay the August recess until the SAVE America Act — requiring voter ID and proof of citizenship to register — is passed, though Thune said there are not enough Republican votes to advance the bill or eliminate the filibuster.

The next major test for Trump's trade policy will come as midterm voters head to the polls on Nov. 3, with control of Congress hanging in the balance. If Republicans lose ground, it could constrain Trump's ability to escalate tariffs further in his second term. If they hold or expand their majority, it would be read as a mandate for his protectionist agenda.

This article is for informational purposes only and does not constitute investment advice.