Although the Trump administration’s new tariffs are intended to stimulate American labor and domestic production, some experts say they will not bring back auto industry jobs to the U.S.
The planned tariff “has not led to an ongoing dialogue about bringing business back from Mexico,” Foley & Lardner partner Ann Marie Uetz told Automotive News. Foley & Lardner is a Detroit-based law firm that represents more than 200 automotive suppliers as clients. “It’s about who’s going to pay for it and who can weather the storm.” Foley & Lardner partner Nicholas Ellis added that intermittent tariffs “cannot unwind 30 years [of automotive jobs moving to Canada and Mexico] in 30 days or 60 days or 90 days,” citing the North American Free Trade Agreement (NAFTA) that went into effect in 1994.
The Trump administration points to Honda’s decision to produce the next-gen USDM Honda Civic Hybrid in Indiana rather than Mexico as evidence that tariffs are working as intended, but some industry experts don’t foresee a significant shift in automotive jobs from Canada and Mexico moving to the States. “I don’t see anything coming back,” Steven Wybo, senior managing director of business advisory firm Riveron, told Automotive News. “The capacity does not exist in the United States.”
Experts say the ongoing and slower-than-expected EV transition is another reason automakers and suppliers aren’t looking to put much investment into shifting manufacturing to the U.S. For many mainstream automakers, EV investments have yet to return profits. The possibility of the federal EV tax credit being eliminated could further exacerbate the problem of EV profitability. “Right now, it’s very unpredictable,” Wybo said. Supply chains prize long-term stability, he said, and “not being able to plan out the next 24 months is a massive change.”
New 25 percent tariffs on cars imported to the U.S. from Mexico and Canada are again on hold, this time until at least April 2nd, 2025. Trump recently threatened to double his 25 percent tariff on steel and aluminum from Canada up to 50 percent after Ontario Premier Doug Ford said he’d put a 25 percent tax on energy exported from Ontario to the States, but Trump reconsidered after Ford backed down.
Comments
Bullcrap. Did Wybo look at the current utilization rate of Spring Hill, Orion, Factory Zero, Lansing Grand River, Fairfax (even with the Bolt) as well as Ford Flat Rock and Stellantis Warren Truck among others? Easy math says that is at least a million units of spare capacity there.
I was just going to say this. I’m no expert, but I know there is severe underutilization in the market right now because of the EV downturn. It would be perfect to get those factories retooled and up and running. I have to seriously question this law firm’s intent when they say things that do not line up with what we see.
And how many billions would be spent retooling plants just in time for Trump to be out of office? Also the cars would be more expensive.
How many billions are being wasted now on government regulations that the average person does not benefit from or want? The price of the average new vehicle rose $10,000 during the Brandon administration, and that was with gm moving work to Mexico, China, and South Korea at a breakneck pace.
Most of the GM work that left the U.S., went during the Bush administration. The bigger price increases occurred because of the mishandling of the Covid Pandemic and the supply lines breakdowns. Many truckers were among the 1,200,000 Covid deaths, just in the U.S.
Since this firm represents the Suppliers, he may be somewhat correct in that the Supplier space may not have as much underutilized capacity, but there is plenty of capacity in the OEM facilities. It is a matter of cost to re-tool, time to re-tool, and then cost to manufacture stateside vs. just paying the tariffs. It is a very poor analysis of the situation though, and not more than a passing comment by a lawyer.
Wrong and you know it, trump is bringing jobs back to america.
Maybe not so many UAW jobs as they make too much for blue collar. Hopefully, instead of shipping parts across the world, we can get more US content in US made vehicles. We need to get the lazy and unfortunate back to work; so they can build a career and not depend on the other 60% of the country.
Joe G.,
I have worked for GM for 40 years, now retired.
Throughout my entire life there has always been a disparity between things I like and things I can reasonably afford. I have always lived within my means. Largely because you never knew when the layoffs were going to come, and I have been through plenty . That’s just the way it was working in the auto industry.
I think it’s self-centered and ludicrous for people to suggest someone takes a pay cut so they can purchase things they cannot afford.
Live within your means.
Stop your whining because people have better jobs and paychecks than yours.
Tariffs will make things more expensive. They might increase jobs in the U.S., but does the end justify the means? The tariff on washing machines from 2018-2023 is a good example. Samsung and LG opened new plants in SC and TN respectively, and created nearly 2000 jobs after the tariffs were implemented. The tariffs increased the cost to the consumer by 12%. Ultimately each new job created cost approximately $800k.
Ago k. James,
Great news.
Trump is going to create hundreds of thousands of jobs.
Bad news.
You are going to need three of them, just to keep a roof over your head, and transportation to work.
Probably just as well. Union auto workers get paid too much as it is. Plus their recent actions and increase in pay are a big reason auto manufacturers raised their prices on vehicles.
Are you jealous? GM would still be very profitable if every car sold was built by union employees.
In the post war years GM paid a top marginal tax of 95% and employed many more union workers.
What you are really saying is profit margins/large stock dividends are more important than the US worker.
I don’t think you really grasp economics and have been brainwashed into believing in Wall Street growth as the ultimate economic health metric. It’s not and, in fact, today signals the massive disparity between rich and poor
You must be jealous of the Union jobs. Good pay, health benefits, pension to retire with some dignity. Instead of being jealous of Union workers maybe you should join a Union or help form a Union where you work!
Ya if you ever worked a day on my assembly line you’d understand why we get paid for what we do! Doesn’t take long to get arthritis at my job I’ll tell ya! People like you make me sick….speaking about something you don’t have a clue about!!!
Hey byte me, I think you’re one of those that wishes you could make what we make. So stop your crying and go get a real job!
Maga, You are too stupid to have a job.
taxes has nothing to do with jobs… taxes are things of t mind and jobs are a not easy to explain thing which could appear in managers of industry
Feckspert-Noun, someone who has an advanced degree, but no real life experience so they work for some organization funded by big interest money and tell you how you should live.
I believe this as much as any Michael Moore film, I.E. more than likely the exact opposite is true and the United States has way more auto production and export capacity, particularly to countries shedding their auto production like Australia, Argentina and Peru. Wouldn’t be suprised if Europe jumped on the band wagon with their current labor shortages and determination to dive in headfirst on all things Tech. I do know Italy is determined 200% to not loose their agriculture MFG, so they probably will maintain that, but we could see more machinery made stateside, less in Indian.
Eh, didn’t some of the companies ALREADY say that they were now bringing some of the jobs here? And the UAW President, of all people, was praising Trump on this issue.
Returning jobs, and more importantly entire industries like aluminum production, back to the US is a 10 year project probably best accomplished by tax breaks for investors.
Our industrial base is stripped which, in war time is a problem, but Trump’s methods are a problem. Also, jobs in N America aren’t the problem. The focus should be on bringing work back from unfriendly nations like China and then shifting low value manufacturing like textiles to Mexico and turbine, computer chip, solar, and components production to the US.
A rich continent–US, Canada, Mexico–means less undocumented immigration, more freedom of movement like EU and a greater base when war time eventually comes.
I appreciate your post. Some great points and a lot of it has been predicted for years by geopolitical analysts with the change away from the post-WWII world order from Bretton Woods.
The finer points can be debated, but with a more regional (N America, Central America, and into South America, etc) manufacturing focus, the tariffs and trade agrrements were ALWAYS going to need renegotiated. That’s what is happening, whether people agree with who and how he is doing it, this was always coming.
This is where I don’t understand the tariffs on Mexico and Canada. If the goal of that move is to regionalize production, it would have been easier to move lower value production to places like Mexico and higher value production to US and Canada. With China, the tariffs make sense. With Canada and Mexico, they seem counterproductive to this goal. Unless the goal is to eliminate tariffs entirely between the three countries to facilitate this at which point, I don’t see why Canada and Mexico would need leverage for this.
Which brings me to my next point. I thought USMCA addressed that already?
Good questions and I had to do more research on my end. Hopefully the mods approve my longer post here.
On this point: “Unless the goal is to eliminate tariffs entirely between the three countries” – Personally, I think that would help consumers in all 3 countries, to be honest.
I don’t see the issue with Canada because the labor difference is very small compared to the US. However, I can see issues with Mexico. It is very hard for the American worker to compete with $3 an hour labor in Mexico.
So you build it. You think China had the capacity back in the 60s? No. They didn’t. We built it up for them. We can build it up for ourselves as well. No excuses.
Bringing manufacturing back to the US will take time and investments like the infrastructure reduction act.
Tis what it is. We should never have allowed our manufacturing and industrial base to get hollowed out like this. We put ourselves in this very dangerous situation. I see this as a price we must pay to restore our home that we neglected and allowed the outside elements to degrade for too long.
But I do agree. Its not just tariffs. We need to incentivize manufacturing here too. Did you mean Inflation Reduction Act?
Fact. The inflation reduction act actually increased inflation.
Like the Inflation Reduction and the Infrastructure acts, but with less fraudulent end points for the cash to flow into.
This all comes down to a “purchase is a vote”.
Everything else is posturing.
When folks have a choice of an America-made product or something else, their purchase sends a message of support to the manufacturer.
“Capital One” said it best….”What’s in your wallet (driveway)?
Jennifer,
Americans today are two self-centered.
Most just look at the price of an item and not where it’s made.
GM stopped making smaller economy cars because everybody bought the Imports because they were cheaper.
GM just stopped making them.
It’s more likely these later generations just whine about everything, than do anything about it.
The primary reason people didn’t buy smaller economy cars from GM is because the cars they were selling were junk (Vega/Pinto/Pacer/Gremlin/Cricket/X-Car, etc.). It took decades for the American manufacturers to get their product anywhere close to what was being built in Japan. I remember an interview with a senior executive at Toyota. The reporter was asking how they could afford to make AM/FM radios standard in their cars instead of making them optional upcharge as it was done in the US. The exec said that you’d be surprised how inexpensive it is when you put one in every car.
Who knows how many Hondas and Toyotas that the US auto builders took apart trying to figure out how they could manufacture such well-built, reliable cars. When the oil embargo hit, we were still building cars like it was 1948.
The US auto industry never missed an opportunity to miss an opportunity.
Mike,
The power trains in the early to mid 70s Japanese cars were junk.
Up north were they salt the roads in the winter time those Japanese cars rusted out so fast they were undrivable in 3 years.
Accident wise, they were death traps.
as a canadian i feel stabbed in the back. Canada baled out GM and chrysler back in 2009 0r they would have got down ,in return to keep auto jobs in canada. since then the jobs went to mexico! now Trump wants to kill our economy and take over our country!, this is not going to be a trade war its going to be war!!!
Canada love’s tariffs on the Mexico, US and other countries for years. Seriously you want to go to war with US???
Hector,
In 1776 America tried to take land from by force U.S. lost.
In the War of 1812 the United States tried to take land from Canada, U.S. lost.
If the U.S. got into a military war with Canada, you can bet Russia and China would back Canada in a heartbeat. And then when it was all over, if there was anything left, Russia or China would be occupying Canada.
Surprise, look who’s your new neighbor.
That is the reality of the world.
Note, correction.
The first sentence in the above statement should read,
In 1776 America tried to take land from Canada by force, U.S. lost.
Wrong! Honda just announced a new assembly plant for Indiana!
Honda did not announce a new assembly plant. Trump missinterpreted Honda’s announcement (made in 2023) to move all Accord production to the existing plant in Greensburg, IN which started production in 2008.
Misinterpreted or lied about it?
The author needs to read the news before making ignorant statements like this.
If it wasn’t for cooperate greed 30-35 years ago the jobs would be here in the USA now. With thousands of workers, working and spending money. The Rich just get Richer.
There are other reasons for the tariffs than moving jobs. The administration is very focused on illegal border crossings and the cross-border drug trade. They are trying to focus Canada and Mexico on those issues as well as the industrial issues.
Mike, Smoke and mirrors Mike.
Pay more attention to what president Musk and Trump are really doing.
I think I have a pretty good handle on what they are doing. Thanks.
I doth declare myself an expert and say that these so-called experts are wrong. My credentials are infinitely more impressive than their non-existent credentials, so I win.
They are wrong. Jobs will come back to America.
End of story from this self-declared “Expert”.
Now please stop listening to “Experts”.
Only losers say, ” I win.”
End of story.
Stock market in a free fall! Great job CHUMP!!!
Great time to buy…
Warren,
You are correct Warren. It is a great time to buy stocks. That is exactly what Trump and his rich buddies are doing.
Trump is using the threats of tariffs to manipulate the stock market.
Trump doesn’t care if you have a good job or not. They would prefer the hoi polloi work until the day they die.
Should have corrected naturally a couple years ago. They pumped it up in every way possible since then.
Check today’s numbers.
Hi,
4 days down and one day up.
That is not viable.
Unless you are Bernie Madoff.
I hope you are not investing your own money.
The thing that ANNOYS me is that DemocRATS had office for 4 years, and 12 of past 16 years, and NOTHING was good!!! Inflation ran rampant the past 4 years, and under “Obuma”, he did nothing for the American people! He created a healthcare system, the crippled hard working Americans who could have insurance, and allowed “dead beats” to live off of US!! Now, we are stuck with FEW insurance coverages!
Trump was in office for 4 years fixing Obuma’s mistakes and I had more money then I have ever had under TRUMP!! Then, “Let’s Go Brandon” took office, and inflation went rampant!!
I’m convinced “LIBS” will blame Trump till they die, instead of looking into the mirror and seeing they were the ones who caused all of this nonsense!! Many have woken up, hopefully many more will as well, because their party has lost all common sense, and does not care at all for the American People or AMERICA!!!!
Thumbs down by Libs who hate facts and hate being proved wrong!!! Pathetic.
You are ranting off topic again like your idol, calling people names and blaming the Democrats for “they were the ones who caused all of this nonsense!!”. The nonsense is stabbing your allies in the back, threatening to take over independent countries (and allies at the same time) and causing uncertainty for millions of people. And it is not the Democrats doing this.
@Belo
You live in a bubble the past 16 years. (Oh wait, most of you have mental illness, and can’t tell us conservatives what a woman is?) Read and comprehend what I just posted. It’s true. You just can’t stand it. So all you and your Beta libs do is blame TRUMP. It’s all you have and thats why your party losing people left and right. Proceed…..
@TNTSIERRA
You are not a Conservative. Real Conservatives do not side with Russia. You are a MAGA old boy believing that siding with Russia and stabbing your closest allies in the back is the right thing to do.
TNTSIERRA,
Nothing new from you.
More unhinged rantings and mindless drivel.
This is the riot! The experts have been wrong on so many issues.They haven’t even given the tariffs a chance to work. Trump hasn’t been in off for two months yet and they are guessing the worst is going to happen. It took four years of Biden to destroy the country, it will take more than a few weeks to fix it. They seem to forget that Donald Trump used tariffs in his first term and they worked . Haters are going to hate. You should want the president to succeed.
We live in a global economy. Third world countries want what we have and the their standard of living goes up when they compete in the global economy. Economy of scale dictates who can produce goods at the cheapest cost. Natural resources, cost of labor and transportation costs all determine who can do it best for less cost. The world is smaller now due to technology and we all have to find the next widget that can compete with other markets.
That’s true. And I’ll add the post WWII, it has been mainly US Naval might that has allowed so much secure shipping/trade to occur.
John,
The other day a Russian piloted ship ran into a US tanker full of jet fuel. Anchored 10 miles offshore, and not in a shipping lane.
Both ships were set ablaze. The tanker was headed for Europe.
Initial reports state that this was clearly deliberate.
Putin will deny knowing anything about it.
Trump will take his word again over our own intelligence.
Tariffs will definitely bring more good paying jobs to the US, anyone that tries to tell you otherwise is a fool that simply doesn’t understand how domestic economics work, or has another political agenda.
How about Canada opening up its’ door for the 9/11 fiasco, Canada was in the “WAR” two years before the “States” got their ass kicked at Pearl harbour. Canada helped free the Netherlands in WW 2. We helped the “Yanks’ in Afghanistan, but all Trump can do is bad mouth us. Shame on the US. R.
RC,
9/11 Fiasco. They probably don’t know what you’re talking about. Most of the people expressing their opinions were children if not toddlers back then. I will refresh them.
During the attack on the twin towers the U.S. grounded all aircraft and shut down the airspace over the continental United States.
Planes coming from different places around the world, and full of Americans, were low on fuel and had nowhere to land.
Canada took them in. They made sure they were fed and put a lot of them up in their own homes.
That is how Canadians are.
Trump leads you to believe that the hooray for me, and screw everybody else attitude, is the right way to be.
It is not.
The basic premice as to why a LOT of manufacturing does not exist in North America is
we’ve fostered 2 generations of “kids” who will never voluntarily work in a factory. We, those 2 generations of parents, TAUGHT our kids to “Go to school, get a good education, get a good job”. That has translated directly to mean, Manual labour (Factory Work) is WAY too below you.
Ask any current 24 – 34 year old if they want to work on an assembly line 40+ hrs a week and they will laugh out loud. “I NEED a good work/life balance.” That means working a semi part time job (28 – 32 hrs a week) and have “vacation” 10 weeks a year. That’s why their useless MBA and HUGE student debt will plague them forever. At least till their parents pass.
Lets put Vocational programmes back in Schools and teach folks it’s OK to be a tradesperson or factory worker. Boomers got wealthy working in factories. Wall Street took that wealth and “invested it abroad”. Good “blue collar” jobs should be desirable. They WERE in the 60’s and 70’s. Ask your current 17 year old to pick apples as a part time job in the Fall. Since not one would say “sure”, that’s exactly how many of them will work in a factory. Not One. Stay in the basement and TIK TOK your way to wealth. What a concept. The world has simply become self absorbed and stupid. Taffifs won’t “find” new, good blue collar jobs or workers. “Put your damn phone down and go pick apples.”
Spot on Fred!
Fred,
They don’t want to work in the factories.
They want people working in the factories to be paid less, thinking it will make products cheaper for them to purchase. Sad.
Fred,
When I first started working at GM – UAW you received no vacation until after you put in your first year. After the first year you received 3 days vacation.
It took over 5 years to accrue 2 weeks vacation.
Before I retired my vacation was maxed out at 3 weeks vacation plus one week of sick days.
Get over yourself and only buy American Made , boycott Walmart and all retailers filling their stores with foreign made products . Your grand children will thank you.
Steve, Pie in the sky and candy cane dreams.
Good luck with that.
Steve,
You are the grandchildren of people that didn’t buy American Products because something else was cheaper.
Canada is the worlds fourth largest producer of aluminum, behind China, India, and Russia.
The United States has very little of the raw material needed to make aluminum.
Aluminum ore, AKA. bauxite.
GM Central Foundry in Massena, New York was one of the largest producers of aluminum in the world. Lack of enough U.S. bauxite made it cost prohibitive to produce. It was cheaper to buy aluminum already made than to import aluminum ore from around the world.
GM shut down the foundry, and later sold it to Reynolds Aluminum, and later they became Alcoa.
That is why we purchased finished aluminum and aluminum ingots from Canada and China.
Personally I would prefer we purchased all the aluminum from Canada. Business-wise it’s always better to have more than one supplier.
Especially in the era of just in time manufacturing.
John Z, More than one supplier is also smart in the event that some clueless politician threatens another country and starts a trade War.
Ervin, apparently you’ve been licking candy canes your whole career! I’m sure there’s plenty more to go around even after your DEI was broken up.