One thing is certain about the second Trump administration’s impacts on labor policies: nothing will be predictable. The president’s fires and hires at the NLRB portend a mess that’s only getting started. Questions also swirl on Trump’s executive-order blitz and which industries will be affected by restrictive immigration policies. Related to that last topic? Tariffs.
Over the weekend, Trump announced 25% tariffs on steel and aluminum imports. And as you are likely aware, Trump already declared 25% tariffs on imports from Mexico and Canada to push back on illegal immigration and drug imports. Those tariffs were set to take effect on Feb. 1, but Trump has postponed them for a month pending negotiations with both nations. Will they happen? Nobody can say.
Clearly, countless industries are set to be impacted, perhaps none more than the auto manufacturers. These days, not too many cars – including a few Jeep, Tesla, Honda, and Toyota models – are entirely built in the U.S. while using mostly American parts. Not only would automakers be hit by the import of vehicles and parts, but they would also pass costs onto consumers, who are poised to hold decreased buying power due to additional tariffs on essential goods.
S&P Global Mobility estimates that the resulting effects on Canadian and Mexican-imported cars will push the price of a $25,000 vehicle up $6,250 on average. CBS News reported a further statement from S&P VP Michael Robinet, who projected that tariffs would send manufacturers into disarray, causing “a potential 30% decrease in production for high-exposure vehicles once tariffs are enacted.”
Multiple automakers are now sounding the alarm:
Ford’s early February earnings call warned that Trump’s tariffs “would have a huge impact on our industry with billions of dollars of industry profits wiped out, an adverse effect on the U.S. jobs as well as the entire value system in our industry.”
Volkswagen would greatly suffer due to running the biggest auto plant on Mexican soil. VW is also currently building a $4.9 billion battery gigafactory in Ontario and heavily relies on parts from Canada. VW and the union remain far apart in negotiations in Chattanooga, according to the UAW.
GM’s earnings call suggested that the company aims to mitigate damages through global truck sales but will still be affected due to heavy production in both Mexico and Canada.
Honda warned that it will likely shift production to the U.S. if tariffs happen since 80% of its current Mexican output is shipped to the U.S. Still, that shift could not happen overnight.
Other drastically impacted automakers include BMW, Stellantis, Mazda, Nissan, Audi, and Toyota.
Job losses could occur at numerous stages for auto workers, so it’s worth checking what the industry’s biggest union thinks. Hmm.
The UAW Response: Union President Shawn Fain issued a contradictory statement that took aim at “Trump’s anti-worker policy at home, including dissolving collective bargaining agreements and gutting the National Labor Relations Board” while also declaring that the UAW “supports aggressive tariff action to protect American manufacturing jobs.” That response was perhaps inevitable for a union chief who has been busy courting lawmakers after betting on the wrong candidate during the 2024 election.
Fain’s response to the tariffs will not do much to reassure UAW members who prefer a clear-cut response in a confusing situation. A union president without all the answers? You don’t say.
