(WXYZ) — The US auto industry is breathing a sigh of relief after President Trump agreed to give the industry a one month exemption from the 25% tariffs implemented on Canada and Mexico.
The industry had been bracing for what many experts have said would be a huge blow to the industry’s supply chain, but the pause now gives both sides more time to come up with a plan.
On nearly every campaign stop in metro Detroit, Trump pledged to usher in large tariffs on foreign products. Now, as President, the threat of a 25% tariff between Canada and Mexico is very real.
The promise of tariffs is what sold many auto workers to vote for Trump.
“There’s been a lot of promises made and a lot of promises kept,” said Geoff Booth, who works at Michigan Assembly Plant in Wayne. "From the perspective of the Auto Workers for Trump, we have full faith in him.”
Booth and his coworker, Brendan Fluker, are members of the group Auto Workers for Trump and attended many of Trump's rallies in metro Detroit.
“I hope that the result of the tariffs is reopening the plants that have shuttered and closed in the past few years, that you see a lot more jobs coming back to Michigan,” said Fluker.
"And do you think tariffs, or at least the threat of tariffs, is the way to get that accomplished?" I asked.
"I think so," responded Fluker. "I think that's the best way of doing it instead of giving all these subsidies to corporations in hopes they bring jobs to America.”
But just as the tariffs were set to kick in, the White House delayed them for another month for automakers after a push from the Big 3.
“We spoke with the Big 3 auto dealers; we are going to give a one-month exemption on any autos coming through UMCA,” said White House Press Secretary Karoline Leavitt on Wednesday, referring to Stellantis, Ford, and General Motors. "At the request of the companies associated with UMCA, the President is giving them an exemption for one month so they are not at an economic disadvantage... They requested the call, they made the ask, and the President is happy to do it."
“I actually support that so he can work with the automakers and work with the Union to see what's the best plan to bring the most jobs to America,” said Fluker. "Using the 25% tariff say on Canada and Mexico, that's just a negotiating tool."
Many industry analysts like David Zoia have warned that the massive tariffs could severely and negatively impact the companies. So too does the constant back and forth.
“They (Big 3) can't react to that 25% tariff very quickly, and I think following those discussions, they've convinced President Trump that maybe we need to dial this back a little bit,” said Zoia. "The auto industry really needs consistency in policy; that's what they look for. Tell them what the rules are and they’ll adjust accordingly, but it's very difficult to do if the rules are changing constantly.”
Glenn Stevens Jr., Executive Director of MichAuto and Vice President of Automotive and Mobility Initiatives at the Detroit Regional Chamber, is one of the industry experts speaking out against the tariffs, saying the pause has still had a negative impact.
“While another postponement of the White House’s proposed tariffs on automotive-related trade between the U.S. and Canada and Mexico is somewhat of a reprieve for the industry, damage has already been done. For an industry that operates in three-to-five-year product cycles, this level of day-to-day uncertainty is debilitating," Stevens Jr. said in a statement. "MichAuto will advocate for all of the proposed tariffs, across industries, to be rolled back in the interest of the state and nation’s economic prosperity. With Michigan’s global automotive and economic competitiveness on the line, lifting these tariffs is the necessary path forward.”
However, the UAW is supporting the tariffs and says they're in active negotiations with the Trump administration regarding the tariffs.
"Tariffs are a powerful tool in the toolbox for undoing the injustice of anti-worker trade deals. We are glad to see an American president take aggressive action on ending the free trade disaster that has dropped like a bomb on the working class," the UAW statement said in part. "There’s been a lot of talk of these tariffs 'disrupting' the economy. But if corporate America chooses to price-gouge the American consumer or attack the American worker because they don’t want to pay their fair share, corporate America bears the blame for that decision."
“You have a threat of 25% tariff one day, and a couple days later, it's not there; that's chaotic for the auto industry, and it's not a good formula for them to adjust to,” Zoia said. "Short term, it could be very tough. Longer term, as a strategy to drive more investment in the US? Yes, that could be a possibility.”
Despite all the uncertainty, those auto workers who supported Trump during his election still believe this plan using tariffs will have long-term benefits.
“I think everyone is looking at the doom and gloom and all that, but they're not looking at the positive side,” said Booth. “The sun shines after the storm... There may be a little bit of a storm right now with the tariffs, but that's just putting Canada and Mexico back in check.”
“What I'm really excited about is broad tariffs," said Fluker. “I don't think it should be focused on punishing Mexico or punishing Canada, I think it should just be focused on bringing jobs back to America.”
In response to the pause in tariffs, the Big 3 sent statements to WXYZ.
"We thank President Trump for his approach, which enables American automakers like GM to compete and invest domestically," said a General Motors spokesperson. "With more vehicle assembly plants in the U.S. than any other automaker, GM has invested over $60 billion since the USMCA took effect, and we continue to invest billions of dollars every year in our manufacturing base, supply chain, and U.S. jobs. We are committed to continued growth and delivering winning vehicles to American consumers."
“As America’s top auto producer, we appreciate President Trump’s work to support our industry and exempt auto companies complying with USMCA," said a Ford spokesperson. "Since President Trump’s successful USMCA was signed, Ford has invested billions in the United States and committed to billions more in the future to both invest in American workers and ensure all of our vehicles comply with USMCA. We will continue to have a healthy and candid dialogue with the Administration to help achieve a bright future for our industry and U.S. manufacturing.”
“We thank President Trump for the decision to grant a one-month exemption from tariffs to USMCA-compliant products. We strongly support his determination to enable the American automotive sector to thrive, and in the first 100 hours of his new Administration we announced major investments to grow our business in America," said a Stellantis spokesperson. "Since the USMCA was enacted in his first term, we invested billions in our U.S. activities and U.S. suppliers. We share the President’s objective to build more American cars and create lasting American jobs. We look forward to working with him and his team.”
