UAW's embrace of Trump tariffs could lead to disaster for its members

Yahoo

20-03-2025

Former President Donald Trump with an auto worker at a rally at Alro Steel in Potterville, Michigan on Aug. 29, 2024 (Photo by Anna Liz Nichols/Michigan Advance)
Billionaire tech bros, bankers and other business leaders quickly cozied up to President Donald Trump as he took office on Jan. 20.
The last person I expected to join them was United Auto Workers union President Shawn Fain, but he has.
Just months ago, Fain and Trump were regularly trading sharp barbs. On the campaign trail, Trump relentlessly criticized Fain for supporting President Joe Biden's multibillion-dollar effort to assist Detroit automakers in their choppy transition to electric vehicles.
Trump called Fain 'a stupid person,' and said during his speech at the Republican National Convention in July that the UAW leader 'should be fired immediately.'
Fain shot back, saying in October that Trump 'isn't fit to be an autoworker, and he certainly isn't fit to be the President.'
In a speech at the Democratic National Convention in August, Fain called Trump a 'scab'—someone who crosses a picket line to replace workers striking for better pay and working conditions. It's the worst insult a labor leader can hurl at someone.
They aren't exactly buddies now, but Fain sees Trump's planned 25% tariffs on cars and trucks entering the United States from Canada and Mexico as a rare opportunity to win back thousands of auto jobs—not to mention dues-paying members—lost over that past 30 years.
Fain blames the North American Free Trade Agreement, which allows most goods to flow across the U.S., Canada and Mexico tariff-free, for many of those lost jobs. Trump renegotiated the agreement, now called the United States, Mexico, Canada Agreement, in 2020.
The USMCA boosts domestic content requirements in vehicles to avoid tariffs. And 40% of a passenger car's value (45% for light trucks) must be produced in North American plants where workers make at least $16 an hour.
Still, half of the 2.8 million vehicles Mexico shipped to the U.S. last year were built by Detroit automakers. Auto factory wages in Mexico are about a tenth of what U.S. autoworkers earn. (The U.S. runs a little-known trade surplus in autos with Canada, making Trump's attacks on that country seem absurd from an economic standpoint.)
Fain is all-in on the tariffs. His union issued a statement on March 4 calling for the end of free trade among the U.S., Canada and Mexico, and said the UAW was working with the White House to 'shape the auto tariffs' slated to take effect April 2.
Trump said he won't back down from implementing the tariffs, as he has done before, and said he told the CEOs of the Detroit Three automakers after a meeting earlier this month, 'Don't come back to me after April 2.'
Like Trump, Fain is an elected official who likely sees the prospect of more jobs from increased U.S. auto investment as playing well with his more than 400,000 active members.
'Tariffs are a powerful tool in the toolbox for undoing the injustice of anti-worker trade deals,' the UAW statement said. '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.'
Trump has said he wants every car and truck sold in the U.S. to be built here, including those that are imported from Europe and Asia. Those automakers only need to move their production here and the tariffs go away, the president has said.
But it's highly unlikely that Ford, General Motors and Stellantis, which have large assembly plants in Canada and Mexico that they have sunk billions of dollars in, will shutter them and move the production here.
'It's implausible from an investment standpoint,' Alan Baum, a West Bloomfield-based auto analyst, told me. 'Automakers and suppliers are making it clear they are not able and willing to invest billions of dollars that won't have a payback for years as a result of (tariffs) that could be temporary.'
Ford CEO Jim Farley said tariffs against Canada and Mexico 'will blow a hole in the U.S. industry that we have never seen.'
Fain is playing a risky game with a president who is no friend of organized labor. Trump visited Michigan repeatedly during his last two election campaigns but avoided union-represented shops.
Trump to speak Wednesday at non-union Macomb Co. automotive parts manufacturer
The day after Biden became the first sitting U.S. president to join a picket line, which he did in 2023 at a UAW-represented parts distribution center at Willow Run, Trump visited a nonunion Macomb County auto supplier whose president said widespread electric vehicle adoption would likely put it out of business.
Trump's administration is taking various actions designed to sabotage electric vehicle growth, including rolling back Biden administration fuel economy and tailpipe emission standards, and freezing funds to states to expand electric vehicle charging stations.
The president has said he's also considering killing federal tax credits to automakers to build EV battery plants and for consumers to buy EVs. Those moves could dry up a potential source of thousands of new auto jobs.
Already the economic uncertainty over the impending tariffs is hurting the industry as Trump's 25% tariff on steel and aluminum took hold last week. The upcoming tariffs on Canada and Mexico could hike vehicle prices by as much as $12,500, according to the Anderson Economic Group in East Lansing.
Baum said some smaller parts suppliers might not be able survive Trump's tariff madness. That could bring vehicle production to a halt because the lack of a single part can shut assembly lines.
'We saw that during Covid,' he said. 'Vehicles sat on storage lots for months with missing parts.'
The end result could be a long-term decline in auto sales by Detroit automakers and massive layoffs, the exact opposite of what Fain hopes tariffs will accomplish.
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