Report: Trump’s Tariffs Hurt Auto Manufacturers-Also Jobs Lost

Well, that didn’t go well. After President Trump made a bargain with the Detroit automakers in 2016 we now have a clear picture of what that accomplished. Nothing. Trump told Ford, Fiat Chrysler, and GM, that he would cut taxes and regulations. In turn, he wanted them to increase jobs and investment. But the Trump tariffs meant to bolster many US businesses has hurt auto manufacturers and also led to many jobs lost. 

Now Trump says he “saved” US automakers by canning old trade deals with his tariffs and also renegotiated new deals. At a rally in Michigan last month he told the crowd, “You better vote for me, I got you so many damn car plants.” But the reality is just the opposite.

Trump’s tariffs caused many problems for suppliers to the Detroit automakers

US President Donald Trump greets General Motors CEO Mary Barra (R) alongside US Vice President Mike Pence | Getty

Trump’s unexpected tariffs have caused many problems for suppliers to the Detroit automakers. Even with an administration change in January, the problems will continue to hurt suppliers for years to come. The Trump trade war with China has netted nothing, hurting relations with the superpower while forcing suppliers to raise prices to cover some of the added expense.

To be fair, part of the issue has been the plant closings due to COVID-19. Auto production has dropped by 20% as a result. That alone has killed any job growth the industry saw. Almost 4% of all auto-related employment has vanished. According to the Bureau of Labor Statistics, the 956,000 employed when President Trump took office has dropped to 919,000 as of last month. 

“It would be fair to say the Trump record for the auto industry is mixed”

Donald Trump at American Center for Mobility in Ypsilanti, Michigan with General Motors CEO Mary Barra| Getty

“It would be fair to say the Trump record for the auto industry is mixed,” Kristin Dziczek, vice president of industry, labor, and economics for the Center for Automotive Research in Ann Arbor, Michigan, told Automotive News. “He’s created a focus, a goal of there being greater U.S. production of vehicles. I don’t know that the data bears that out.”

Any increase in jobs was a result of the federal bailouts because of the Great Recession starting in 2012. And tweeting his anger at the car companies and berating company heads at the White House has not helped. While Ford initially credited Trump for killing a $1.6 billion plant in Mexico, it later said shifting consumer tastes made building the plant unnecessary. 

When GM closed its Lordstown, Ohio, plant in 2018 over 14,000 workers were laid off

President Donald Trump meets with CEO of General Motors Mary Barra (L), CEO of Fiat Chrysler Automobiles Sergio Marchionne | Getty

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In 2018, when GM closed its Lordstown, Ohio, plant, over 14,000 workers were laid off. When the Lordstown electric truck was announced to be built at the plant it was a hollow victory for Trump. Only a fraction of the 3,200 GM workers will have employment with the EV manufacturer. 

One of the Trump moves that the industry hopes will help manufacturing has been the change in US trade deals with China. Those deals were made decades ago to help war-torn Europe and Japan. And it was way before China became the number one market for autos.

Though results are elusive right now many like Boston Consulting Group’s Xavier Mosquet think we should give them a chance. “Whether it’s a Biden administration or a Trump administration, I think it should be part of the U.S. policy,” Mosquet told Automotive News. “Once we pay the cost of entry it would be good to go to the end, and not waste this effort that has been taken.”