Commerce Secretary Howard Lutnick stated that President Donald Trump's Section 232 auto tariffs are driving domestic manufacturing growth and bringing thousands of jobs to the United States. Speaking at Monterey Car Week in California, Lutnick claimed the tariffs were "winning the day" by incentivizing automakers to shift production facilities to US soil.

Ford and Toyota Manufacturing Shifts

Lutnick highlighted specific corporate actions as evidence of the policy's impact. He pointed to Ford Motor Co.'s (NYSE: F) decision to move production of Lincoln vehicles from China to the US by 2030. Lutnick described this move as a significant victory for domestic manufacturing.

Ford CEO Jim Farley confirmed that tariffs influenced the decision, noting that the Lincoln Nautilus imported from China faces a 52.5% tariff. Farley stated that Ford is betting on its belief in America by expanding domestic operations.

Lutnick also cited Toyota Motor Corp (NYSE: TM) as a positive example, praising the automaker's existing facilities in San Antonio, Texas, and Kentucky. He noted that Toyota manufactures its Tacoma and Tundra trucks in the US.

Workforce and New Product Developments

Beyond existing models, Lutnick suggested the manufacturing push could attract younger workers to high-tech roles. He mentioned companies offering wages starting at $23 an hour to professionals hired directly out of high school for training programs.

In related product news, Ford revealed the name of its new electric pickup truck, the Fathom. The vehicle is priced under $30,000 and will compete with Tesla Inc. (NASDAQ: TSLA)'s Cybertruck.

What the Numbers Show

The data highlights a direct correlation between tariff rates and supply chain restructuring. The 52.5% tariff on the Lincoln Nautilus serves as a specific cost driver for Ford's decision to relocate production by 2030. This suggests that high tariff barriers are actively reshaping long-term capital allocation strategies for major automakers, prioritizing domestic compliance over current import efficiencies.

The Trump White House accused China on Thursday of using third countries to disguise the origin of exports and evade U.S. tariffs, estimating the practice costs Washington $19 billion to $26 billion in tariff revenue annually. The administration released a 25-page report titled "The Great Transshipment Scam," which identifies more than 40 countries with elevated transshipment risk.

White House trade adviser Peter Navarro stated that Chinese-origin products are being relabeled, repackaged, or lightly assembled before entering the United States under a different country of origin. The report places Canada, the European Union, India, Israel, Japan, Mexico, South Korea, and Taiwan in its highest-risk tier, while acknowledging legitimate trade flows.

Trade Flow Divergence

The allegations highlight a significant shift in global supply chains. Direct U.S. imports from China fell to a 16-year low of $308.7 billion in 2025. Conversely, imports from Mexico and Vietnam climbed during the same period. Chinese exports to the U.S. plunged 43% year over year in May 2025, while shipments to Vietnam and Indonesia jumped.

A Commerce Department analysis estimated roughly $67 billion in U.S.-bound goods moved from China through Mexico, India, and Vietnam in 2025. This rerouting resulted in about $28 billion in lost tariff revenue, according to the administration's central case which assumes $75 billion of annual illegal transshipment.

Enforcement and AI Tools

The White House is developing an AI-enabled "Detective Border" for Customs and Border Protection to analyze routing histories, cargo images, and ownership links. Trump’s June executive order separately tightened importer disclosure and bonding requirements. The administration stated that the age of untraceable illegal transshipment is over.

This release comes before Chinese President Xi Jinping’s planned September U.S. visit, following May talks that produced new U.S.-China trade and investment boards. China’s embassy rejected efforts to target its interests, saying Beijing would "resolutely take necessary measures to safeguard its legitimate rights and interests."

What the Numbers Show

The data reveals a sharp divergence between direct trade volumes and transshipment activity. While direct exports from China to the U.S. dropped by 43% in May 2025, the Commerce Department identified $67 billion in goods moving through third countries like India and Vietnam. This suggests that a substantial portion of Chinese export volume is being redirected through intermediate hubs rather than disappearing from the U.S. market entirely.