Consider This from NPR: The Enormous Consequences Trump's Tariffs Could Have

Release Date: December 8, 2024

In this episode of NPR's Consider This, host Scott Detrow delves into the potential ramifications of President-elect Donald Trump's proposed 25% tariffs on imports from Mexico and Canada. The discussion navigates through the intricacies of international trade agreements, the fragile supply chains of the auto industry, and the broader economic implications for American workers and consumers.

1. Introduction and Context

Scott Detrow opens the episode by referencing the 2022 protest by Canadian truckers against COVID-19 vaccine mandates. This blockade of the Ambassador Bridge between Windsor and Detroit, a critical artery for U.S.-Canada trade, serves as a real-life experiment in international trade disruptions. The protest resulted in significant economic losses, particularly for the auto industry, highlighting the dependency on cross-border trade.

Scott Detrow [00:00]: "Here's the police chief, Peter Slowly at the time... The blockade ultimately cost autoworkers and car companies some $300 million by one estimate."

2. Trump's Tariff Announcement

Detrow transitions to the current political climate, focusing on President-elect Donald Trump's pledge to impose a 25% tariff on all imported goods from Mexico and Canada. This move is positioned as a direct challenge to existing trade agreements and is met with serious concern by Canadian Prime Minister Justin Trudeau.

Scott Detrow [01:06]: "Now that President-elect Donald Trump has said he will impose a 25% tariff on all imported goods for Mexico and Canada."

Detrow underscores the gravity of Trump's statements, emphasizing that, based on past behavior, Trump is likely to follow through on his promises.

Scott Detrow [01:18]: "One of the things that is really important to understand is that Donald Trump, when he makes statements like that, he plans on carrying them out."

3. Impact on the Auto Industry

Camila Domonoski, NPR's auto industry correspondent, provides a detailed analysis of how the proposed tariffs would affect the automotive sector. She explains that the increase in costs would exacerbate existing concerns about vehicle affordability, with the average new car already priced near $49,000.

Camila Domonoski [05:10]: "It's an increase in costs and that's coming at a time when affordability for vehicles is a major concern for the auto industry."

Domonoski highlights the complexity of the auto supply chain, which relies heavily on seamless cross-border movement of parts between the U.S., Canada, and Mexico. She uses the example of wire harnesses—the "nervous system of a car"—to illustrate how tariffs could disrupt production.

Camila Domonoski [06:08]: "It's a lot of labor. And what happens right now is you might have a wire or clips for those wires made in the US shipped to Mexico... before then they also go into the final car."

The potential for retaliatory tariffs from Canada and Mexico could lead to a cascading increase in costs across the entire supply chain, impacting all car manufacturers regardless of their plant locations.

4. Labor Perspective

Andrea Hsu, covering labor issues, brings in insights from Jeff Wakefield, a truck driver affected by the 2022 blockade, and Romaine McKinney, president of UAW Local 869. The discussion reveals a divided stance among workers regarding Trump's tariffs.

Jeff Wakefield [07:09]: "Specifically higher tariffs on cars coming from Mexico and Canada that don't meet the strict requirements... It's all about protecting jobs."

McKinney emphasizes that while a 25% tariff could initially hurt production by increasing costs and slowing orders, some workers believe that such measures might ultimately secure jobs by encouraging domestic manufacturing.

Romaine McKinney [08:08]: "Autoworkers are middle-class Americans who are price-conscious consumers."

However, Hsu points out that the broader economic impact would extend beyond the auto industry, potentially increasing the cost of various consumer goods and everyday necessities.

Andrea Hsu [08:47]: "A 25% tariff will expeditiously run up the cost of operating your home. That is the bigger problem for us."

5. Feasibility and Likelihood of the Tariff

The episode addresses the uncertainty surrounding the implementation of the proposed tariffs. While Trump has reiterated his commitment, experts like Camila Domonoski and Paul Jacobson of General Motors express cautious optimism that these tariffs may serve more as bargaining chips rather than permanent measures.

Camila Domonoski [10:39]: "The president-elect has talked about it... the goal is not to have this tariff in place."

Jacobson remarks on the long-term planning of car companies, which typically operate on multi-year horizons, suggesting that any immediate tariff threats may not drastically alter their strategies in the short term.

Paul Jacobson [11:03]: "We're trying to not overreact... I'm not going to overreact to a tariff if I don't know that it's not going to be traded away in 90 days for something else."

Nonetheless, the possibility of Trump imposing additional tariffs beyond the initial proposal keeps the industry on edge, as companies prepare for various scenarios.

6. Conclusion

The episode wraps up by reiterating the significant potential impacts of Trump's proposed tariffs on the auto industry, labor markets, and the broader economy. While there is skepticism about the immediate implementation of such a sweeping tax, the discussions highlight the fragile nature of international trade relationships and the extensive interconnectedness of modern supply chains.

Scott Detrow [11:37]: "Thanks to both of you... It's Consider This from NPR."

Through expert interviews and real-world examples, NPR's Consider This provides listeners with a comprehensive understanding of the stakes involved in Trump's tariff proposal, emphasizing its far-reaching consequences for industries and consumers alike.

Notable Quotes:

• Peter Slowly [00:24]: "This is a siege. It is something that is different in our democracy than I've ever experienced in my life."
• Jeff Wakefield [07:09]: "It's all about protecting jobs."
• Andrea Hsu [08:47]: "A 25% tariff will expeditiously run up the cost of operating your home."
• Camila Domonoski [09:00]: "In the auto industry, there is a big, unusual kind of odd tariff, specifically on pickup trucks called the chicken tax."

Attribution:

• Hosts and Contributors: Scott Detrow, Camila Domonoski, Andrea Hsu
• Interviewees: Jeff Wakefield, Peter Slowly, Romaine McKinney, Paul Jacobson
• Production Team: Connor Donovan (Producer), Courtney Dorning, Emily Cobb, Cara Platoni (Editors), Sami Yenigun (Executive Producer)

For more insights and detailed discussions, listeners are encouraged to subscribe to Consider This and explore additional resources at plus.npr.org/considerthis.