The unions have been careful not to endorse tariffs on all $360 billion worth of car, truck and automotive parts imports, but they have told the Trump administration that they think “targeted” actions are a good idea.
“It is our hope that the Trump administration will take targeted measures to boost domestic manufacturing,” Jennifer Kelly, director of research for the UAW, said at a Commerce Department hearing last week. “We believe a comprehensive investigation into the impact of the loss of auto manufacturing and its consequences for our national security and economic well-being is long overdue."
On Wednesday, Trump seemed open to the idea of excluding some countries from tariffs on autos. After a meeting with the president of the European Commission, Trump said a deal had been struck to avoid additional tariffs (including on autos and parts) as the two sides work to increase trade with each other.
Union members in Midwestern states were critical to Trump’s 2016 presidential election victory, and they continue to have the president’s ear. In interviews, union leaders and rank-and-file members say they trust the president to deliver on his promise of better trade deals since he’s already imposed steel tariffs, tax cuts and regulatory rollbacks. They say that if the European Union, China and other countries lowered their tariffs on cars and parts, there will be more jobs for U.S. autoworkers.
“My own opinion on the tariffs and the things he’s doing are it’s all part of a master plan to get the jobs to come home,” said Frank Pitcher, a 51-year-old Ford worker outside Detroit who voted twice for Barack Obama and then for Trump. “In my 25 years, I’ve seen us start off with 145,000 workers and go down to 45,000."
It’s a very different message than what executives at Ford, General Motors and Chrysler are telling the White House, not to mention what auto dealers, parts suppliers and foreign automakers are saying. These groups are united in warning the White House that moving forward with tariffs on autos and auto parts will lead to mass layoffs, truck prices that are thousands of dollars higher and factories moving overseas.
“The only way auto part markers can absorb the added costs is to let people go,” said Ann Wilson, senior vice president at the Motor and Equipment Manufacturers Association. "We’re the largest employer of manufacturing jobs in the United States, with over 870,000 jobs. This could wipe out virtually every single one of those jobs in this country. It’s astronomical.”
The UAW says that more than 360,000 autoworker jobs have been lost since 2000 and that something needs to be done to ensure more aren’t lost, especially as the industry moves into the production of electronic and autonomous vehicles that need lithium-ion batteries and semiconductors, most of which are coming from overseas. They are urging Trump to protect these fledgling industries in the United States to ensure the U.S. military gets the vehicles of the future that it needs and that jobs stay at home.
Unions point especially to Mexico, China and Japan as culprits in eroding U.S. auto jobs over the years. Trump’s tendency is to go big, as he did with steel, by putting tariffs on countries around the world. Many union leaders don’t think Canada should be hit with auto tariffs, for example, but they made a similar argument on steel and aluminum and Trump still went forward with metals tariffs on the northern U.S. neighbor.
Trump has urged people to “be cool” and give him time to negotiate lower trade barriers. The European Union, for example, has a 10 percent tariff on U.S. cars while the United States has a 2.5 percent tariff on European vehicles. (The European Union counters that the United States has a 25 percent tariff on trucks from Europe, while the E.U. only has a 10 percent tariff on American trucks.)
Michigan, the home base of American car manufacturing, had one of the largest number of counties that flipped from blue to red in support of Trump in the 2016 election. Macomb County, just outside Detroit, went for Trump after voting for Obama in the previous elections. Macomb is home to numerous auto factories and union workers such as Pitcher who have watched the dramatic changes in their industry and are looking for signs that their $30-an-hour jobs won’t go away.
The Trump administration has launched what’s known as a Section 232 investigation into whether foreign countries are hurting U.S. national security by undercutting American car and parts manufacturers. Trump used the national security argument to put tariffs on steel and aluminum earlier this year, a playbook he is following again. But the auto tariffs would be a large escalation of the trade war.
“The [auto] tariffs would be very big. This impacts nine to 10 times more trade than with steel or aluminum,” said Philip Levy, who is a senior fellow at the Chicago Council on Global Affairs and who was an economist in President George W. Bush’s administration.
Levy thinks that the economic impact could be severe but that Trump is likely dismissing the warnings about the auto tariffs, much as he did with steel.
“Everyone told Trump the markets would crash and voters would scream in outrage after the steel and aluminum tariffs. That hasn’t happened yet," said Levy.