Opinion | President Trump’s tariffs hobble Michigan’s automotive future

Mike Alaimo is the executive director of Clean Fuels Michigan.

Michigan is a state built on wheels. As the de-facto automotive capital of the world for over a century, Michigan is home to some of the largest and most recognizable car brands, and nearly 20 percent of our workforce is dedicated to building safe, reliable and affordable vehicles. These skilled men and women generate products for every stage of the automotive manufacturing supply chain, from engines and transmissions to headlights and upholstery. We are now becoming the epicenter of innovation, as electric power trains, autonomous vehicle capability and connected platforms are being developed for the next generation of mobility.

Manufacturing has created countless jobs for the people of Michigan, jobs now threatened by the looming trade war between the United States and China. Michiganders cannot afford to operate under an uncertain trade environment and tariffs that inflate raw materials costs. This creates a multiplier effect on the cost of production and hits consumers in their pocketbooks and force companies to outsource high-paying manufacturing jobs elsewhere. Automakers are facing unprecedented competition from new technologies and a rapidly changing market, we need solutions that help them compete.

This has particular consequences for advanced mobility technologies like battery packs for electric vehicles, in which vast resources and effort are being put into commercializing technology that will improve our quality of life. We have seen recent reports that the United States needs to take aggressive steps towards increasing the supply and production of rechargeable batteries needed for storing renewable energy and powering electrified transportation technology.

Not only do we need to end harmful trade wars, but we also must support pro-growth trade policies that will create jobs across Michigan. Currently, Congress is considering a modernized free trade agreement with Mexico and Canada. The United States-Mexico-Canada Agreement (USMCA) will be beneficial to Michigan’s trade dependent economy and is a trade policy that we should be pursuing.

After the economic collapse in 2008 Michigan was left in economic shambles. Leaders from state government and industry faced this catastrophe head-on and rebuilt the automotive industry to levels never seen before. Ford, Chrysler and General Motors paid back in full the loans taken from the federal government, with interest, restructuring the companies to be more competitive globally and ensuring the long-term health of American automotive manufacturing. Over the past several years, Michigan’s auto industry has soared to new heights, with experts crediting major automakers as key drivers in the economic recovery seen after the Great Recession. Now the industry is investing billions of dollars into electric power trains and advanced mobility technology crucial to winning the global ‘arms race.’

Each of the major auto manufacturers continued to drive growth in the American economy, and still do today, but costly tariffs on raw materials, namely tariffs on Chinese steel and aluminum, have undermined the full return of our domestic automakers as economic powerhouses. American consumers want cleaner and more efficient vehicle choices. Tariff policies negatively affect the development of these options, and as the price of fuel continues to rise, American consumers will once again be forced to foot the bill.

Automotive manufacturers rely too on a complex network of part suppliers from across Michigan for their finished product, with these smaller operations employing thousands of our citizens. RoMan manufacturing, a vehicle components manufacturer based in Wyoming, Michigan, has been forced to look for outside vendors to source critical components, looking outside of the US into Israeli markets as high prices cut into profit margins. This outsourcing hurts American business, and threatens Michigan jobs.

Since his election in 2016, President Trump has delivered on his promise to promote American business, reducing government red tape and lowering taxes on domestic companies. It is my hope the president will see the damage his trade policies are causing in our state and act to end the trade war plaguing our manufacturing sector. The Administration should heed Senator Charles Grassley’s recent comments, and cement its legacy as a pro-growth, pro-made in America, and global leader in trade. The President should end costly and damaging tariffs on Chinese products and continue to work to push for the USMCA.

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Comments

Terry
Thu, 05/09/2019 - 7:45am

Well Mike, this so called "trade war" was started BY the Chinese decades ago and no one up to now has had the guts to respond and try to stop the grossly unfair policies against our country. Most of Chinas industries are govt run so they can absorb losses to dump cheap products on us that robs our workers of jobs. Especially this admin wants to curb the THEFT of intellectual property and processes that again takes away our investments and hurts our companies and workers. The very thing you say you want to protect. Up until yesterday there was an agreement to correct these unfair policies and a deal was at hand when the Chines suddenly backed out of it, questioning their real sincerity. All this admin wants is mutual free to make it possible for Americans to compete fairly. China wants best for them and so they want to continue stealing, this admin wants what's best for America and wants to stop it. The tariffs will surely be a short term burden but in the long run will greatly benefit our country and workers. I totally support these actions.

Lennie
Thu, 05/09/2019 - 8:24am

Common sense and compassion for your neighbor doesn't matter to the so called economic experts. Low costs and short term profit is all that matters. For lack of a better term, the coastals could care less about the flyovers.

And some wonder where and who buys into the term 'fake news'. As if the regular folk don't smell the bull bring spread.

Jim V
Thu, 05/09/2019 - 8:40am

Oh Terry, you need to turn off FOX News. You're right about this being a so-called "trade war", because it's not a war at all. This is about the current president's reckless use of power in an attempt to embolden his base. There's an old saying, "You don't straighten teeth with a sledge hammer". The current president doesn't care about the impact on American workers. He has no interest in farmers, factory workers, waitresses, teachers, or nurses, unless it's to get their vote. He is only interested in enriching himself and his crime family and projecting a virile, machismo image of himself to the world. I totally approve of all actions to put an end to his reign of madness.

Bob
Sun, 05/12/2019 - 12:42am

Grow up......what you spouting off is pure bs.

Gary Lea
Thu, 05/09/2019 - 7:54am

I could not visit the Clean Fuels Michigan website; something about 'my' server running PHP version 5.4.45, but WordPress 5.2 requires at least 5.6.20.

Lennie
Thu, 05/09/2019 - 8:18am

Damned if you do, damned if you don't. What's more important? Your neighbor that has a tough labor intensive job keeping that job while the price of your car goes up or buying into the BS taught you by a "professor" who never screwed a bolt in during their hard life talking about how business "works" teaching?

World is a tough place. We all won't live in a beach house. The bull spread to subsidize the coastal urban life is just that, bull. No it doesn't matter that the elite have more while many have nothing. If tariffs create lousy jobs here that don't pay huge yet a few no longer take two dozen trips a year on their savings, so what? The press and politicians are wrong on many things. Just so much of the common sense that ISN'T taught at so called higher education establishments. Your neighbor does matter. Since we subsidize the economic system with a taxation system that is completely out of whack, may as well use the same logic to help the fly overs.

John
Thu, 05/09/2019 - 8:23am

I support the presidents Trade policies. The facts are they are working to even the playing Feild. Everyone in Michigan is painfully aware of the negative impact unfair trade agreements have had on their economy.
Electric vehicles will not be the engine of choice for transportation. They will be short lived.

Robert Gothard
Thu, 05/09/2019 - 8:28am

The Clinton administration and NAFTA is what killed the Michigan automotive industry. Then the Obama administration killed even more with the red tape and regulations. China and other countries have raped American manufacturing. Obama and Hillary Clinton said America would never be the manufacturing powerhouse it once was.Trump is proving them wrong every day.
What has hurt Michigan Automotive Industry more than anything you might ask?? The UAW has cost more jobs than anything!! Not allowing foreign company's to come into Michigan and setting up Car plants. So Georgia, Tennessee, Texas, Mississippi and the like are setting up automotive assembly plants. Michigan had a chance to be the biggest powerhouse it once was but the UAW and it's cronies said NO!! and even people had to die trying. I was raised UAW and Teamsters everyone in our family was union. There was a time and place for unions, like when my Dad wasn't allowed to take a pee break. Today is not the time or place. Our families and our neighbors are no longer Democrats. The Democrats have gone off the deep end. Trump is bringing back America's wealth and jobs. Look what he has done in two years even with all the SWAMP resistance. Just think what he could do for America if the SWAMP would get out of his way.

middle of the mit
Thu, 05/09/2019 - 6:51pm

"The Clinton administration and NAFTA is what killed the Michigan automotive industry. Then the Obama administration killed even more with the red tape and regulations. China and other countries have raped American manufacturing. Obama and Hillary Clinton said America would never be the manufacturing powerhouse it once was.Trump is proving them wrong every day."

First, Nixon opened the door to China. For as long as I have been alive (over 45years) the Republican party has been ALL ABOUT FREE TRADE.

Until now.

"What has hurt Michigan Automotive Industry more than anything you might ask?? The UAW has cost more jobs than anything!! Not allowing foreign company's to come into Michigan and setting up Car plants. So Georgia, Tennessee, Texas, Mississippi and the like are setting up automotive assembly plants. Michigan had a chance to be the biggest powerhouse it once was but the UAW and it's cronies said NO!! and even people had to die trying."

Now you are telling us what has the MI economy is workers getting paid a decent wage that allowed them money to spend. What we have now, a decade after right to work is what?

An economy that our biggest industry now shoves most of it's profits into executive bonuses and shareholder profits and the rest of the State is left with nothing because those people pay a way less share of their profits towards what helps the State run.

And, our economy is faltering because the profits are going to fewer and fewer individuals. And that means a less dynamic economy.

But have no fear!!

I am sure that CEO's visit your up north community all the time!!

duane
Fri, 05/10/2019 - 10:52am

In the not to distant past wasn't the UAW/its members the major stock holder of GM, where they could be one of the major beneficiaries of the corporate profits and a controlling vote on the bonus for the executives? What did they do with that control, did they sell it off for more money or are they some of those 'nasty' shareholder getting the profits?
Which is it, not getting part of the profits by selling off stocks or being a stockholder and getting a fair share of the profits? UAW had the choice, what would your choice be?
As for where the CEO's visit, I would hope it is where their plants are, who their suppliers are, and who buys the most of their products and services. I would hope they would avoid Lansing and DC and let their underlings do that work.

middle of the mit
Tue, 05/14/2019 - 7:34pm

It may have been at one point that the union workers had majority stakeholder in GM. Without looking as I didn't, would you bet that is the same scenario today? Considering that with the new right to work for less laws, all NEW union workers take a cut in pay and benefits?

"Which is it, not getting part of the profits by selling off stocks or being a stockholder and getting a fair share of the profits? UAW had the choice, what would your choice be?"

Do you even know the amount of the stockmarket the "average American" owns? Only about 20% of the population has money in the market and of that percentage, less than 5% own most of 80% of that.

What would you chose? And by the way, profit sharing is totally different from stock shares.

"As for where the CEO's visit, I would hope it is where their plants are, who their suppliers are, and who buys the most of their products and services. I would hope they would avoid Lansing and DC and let their underlings do that work"

You honestly think that CEO's don't leave their place of employment? If they didn't that is where they would be if they were only visiting their plants and purchasers of their products, but I have never heard of Mary Bara or the Ford family coming to my little podunk town.

But I have met lots of line workers, engineers and other that did, Not so much anymore.

Conservative economic policies are coming to roost. You are all about austerity.

That literally means doing with less and learning to live with it.

Make America Austere Again!!

woody
Thu, 05/09/2019 - 8:37am

This is an Opinion piece and let's leave it at that!This is America and everyone can have one to bad more peoples opinions are not based in fact. Fact more jobs have been created in Michigan because of Trumps strong stance on tariffs making a more level playing field for Michigan workers. Fact more companies are building here instead of other places. Fact everyone got cheated in the GM deal(even though they paid it back) the damage done by the deal to workers will never be over. All the dealers that lost their dealership, all the workers at the Saturn plant.

Anonymous
Thu, 05/09/2019 - 9:00am

Mike,
Perhaps you missed it this week. The first new Laker has begun construction in Wisconsin. More Taconite will be going south to the steel mills, more lime, more coal and other raw materials to feed the growing economies of all of the Great Lakes states. What is causing American Shipmakers to decide to lay this new keel? It is the effect the Tariffs will create over the next decade or two here in the heartland.

So, what is the effect of Pennsylvanians and Ohioans making more steel in Pittsburgh and Cleveland? These guys need a new truck, don't ya know? What percentage of Steelworkers will buy a Toyota even if it is built in the US? No, No, No! They are going to buy GM Trucks and Dodge Trucks.

And all of this is because one man who cares more for the worker in Michigan than his own legacy has the Kahunnas to stand up to China's lack of respect for Detroit!

Chuck Fellows
Fri, 05/10/2019 - 9:20pm

Hey people, the world is round and borders are imaginary lines defined by politicians. The president is a failed negotiator time and time again and if he thinks he can threaten the Chinese with his empty words he is wrong. NAFTA improved the quality of cars and lowered the cost of manufacture. It also contributed to the raising of living standards for millions of people. Don't believe what this president says or what Fox News reports.

Rolando
Wed, 05/15/2019 - 4:19pm

Typos and syntax errors aside, there is not much substance to this opinion piece as it relates to how the continuing trade war is tangibly impacting Michigan in a negative manner, especially when one considers Michigan's unemployment rate to be around or under 4% in the months encompassing the aforementioned trade war. Further, it never helps an argument when it's author is untruthful, there's just no reason for the statement to be included in this piece that the auto bailout was fully paid off, even politifact is critical of such claims: https://www.politifact.com/truth-o-meter/statements/2015/jan/22/barack-o....

In summation, this entire piece is disjointed and entirely unconvincing.