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Jobs on hold for Michigan auto parts maker as Trump tariffs loom

Jamie L. LaReau, Detroit Free Press on

Published in Business News

DETROIT -- President Donald Trump's ongoing threat to boost tariffs to 25% on vehicles and auto parts imported into the United States might do what's intended: create a few hundred more jobs in Michigan.

Or it might do the exact opposite: force a local auto parts supplier to cut hundreds of jobs.

That looming uncertainty is what local business leader Mary Buchzeiger grapples with daily. The Trump administration's decision last week to lift tariffs on steel and aluminum from Canada and Mexico is only a minor relief for her company, Lucerne International in Auburn Hills, which imports parts from China.

"That's all fine and lovely that we're lifting aluminum and steel tariffs, but it's still a situation of, 'You can't make car parts anywhere else or we're going to tariff the hell out of you,' " said Buchzeiger, Lucerne's CEO. "So we have one great thing happen, but it's a nosedive for the other part of our industry."

That's because carmakers and auto parts makers that import from China may be hit with a 25% tariff to import those goods. The White House had until May 18 to decide whether to slap tariffs as high as 25% on imported cars and parts based on national security concerns.

The White House said on May 17 it would delay any decision on the matter for up to six months as it seeks to renegotiate trade deals with Japan and the European Union. The administration also is embroiled in a trade war with China, on which it already has imposed auto tariffs.

 

Loss of 700,000 jobs

That offers only small solace. The uncertainty over a possibly higher duty continues to loom, making long-term business decisions next to impossible, said Buchzeiger.

"We have no way to make plans right now," she said. "We're a global economy and industry, and if you expect us to make everything in this country and not give us time to make any preparation around this, I don't see where this is going other than hurting the American people at the end of the day."

The auto industry views the end of duties on Canadian and Mexican steel and aluminum as a blessing because the industry opposes additional tariffs that will raise the costs of building vehicles in the United States, said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research in Ann Arbor.

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