Mr. Trump tapped into nostalgia for the days of plentiful, secure, well-paying jobs in traditional industries – promising a 'Michigan miracle' of an auto sector restored to 20th-century glories, as part of a new golden era in manufacturing. The crowd cheers as Trump arrives to speak at a campaign rally in Grand Rapids, Mich., on Nov. 5.Carlos Osorio/The Associated Press
When Donald Trump rallied in the Detroit area, in the final days of his triumphant election campaign, dozens of men and women in “Autoworkers for Trump” T-shirts were his backdrop.
Handed the microphone by Mr. Trump, their leader – retired autoworker Brian Pannebaker – warned of factory jobs being outsourced to Mexico. And he painted the tariff-loving Republican nominee as the only person who could prevent it.
There was some dispute during the campaign about the group’s claims to represent large numbers of United Auto Workers rank and file disgruntled by the union’s endorsement of Kamala Harris.
But when the votes came in, they got the last laugh. Not only did Mr. Trump reclaim manufacturing-heavy Michigan, but, in a pattern repeated around the United States, he won large margins in the Detroit area’s Macomb County, where blue-collar workers are clustered.
Alongside his campaign’s hammering of the Democrats on inflation and immigration, Mr. Trump tapped into nostalgia for the days of plentiful, secure, well-paying jobs in traditional industries – promising a “Michigan miracle” of an auto sector restored to 20th-century glories, as part of a new golden era in manufacturing.
Even veterans of the organized-labour establishment acknowledge that it found purchase. Never mind that manufacturing jobs have actually gone up slightly under President Joe Biden’s administration. Brian Rothenberg, a long-time UAW spokesperson who is now a political consultant, pointed to pervasive frustration over the perception that there are fewer opportunities than for past generations, made worse by anxiety around the bumpy transition to making electric vehicles.
What Mr. Trump promises is disruption of a different sort: a dramatic escalation of the protectionist economic strategy toward which he began ushering his country during his first presidency.
That approach has been largely maintained by Mr. Biden. He kept in place Mr. Trump’s tariffs on imports such as steel and aluminum, and added new ones on EVs, batteries and solar panels.
But while those measures have mostly been targeted directly at China, Mr. Trump promised on the campaign trail to begin waging trade war against the rest of the world.
What exactly that could look like requires parsing through his rambling discussions of the subject during the campaign. But a few promises were running themes.
Most striking is a plan to impose tariffs of at least 10 per cent (sometimes he said 20 per cent) on nearly all imports from anywhere.
That would be accompanied by especially combative measures toward certain countries, such as a 25-per-cent tariff on all imports (and 100 per cent on cars) from Mexico.
While Canada is less the object of his attention, he promised to renegotiate the United States-Mexico-Canada-Agreement – the NAFTA replacement from his first presidency – with a more aggressive approach toward the auto sector.
The trade measures would be supplemented by other policies – including cutting the corporate tax rate from 21 per cent to 15 per cent, and creating low-tax and low-regulation economic zones on federal lands – explicitly aimed at getting companies to move overseas manufacturing to the U.S.
He will have some ready backing for all of this, and not just from workers.
“In our view, these things are good, in terms of a greater focus on industrial capacity in this country, and the effects that offshoring has had on communities,” said Nick Iacovella, a vice-president with the Coalition for a Prosperous America – an alliance of hundreds of U.S. manufacturers who favour protectionism.
What Mr. Trump will have to grapple with, though, is how far he can go on tariffs, without contributing to anger over high prices that he exploited this fall.
Mr. Iacovella countered that tariffs’ inflationary impacts are dramatically overstated by opponents who fail to account for domestic production replacing newly expensive foreign goods. But he acknowledged that some tariffs might require carve-outs, or gradual implementation, for domestic industry to catch up.
Gary Hufbauer, a former senior U.S. trade official and fellow at the free-trade-oriented Peterson Institute for International Economics, echoed the latter assessment. While expanded production of relatively simple goods such as furniture and basic electronics could be set up fairly quickly, he said, the U.S. is nowhere near ready to replace more high-tech imports, with smartphone components an obvious example.
Partly because of that reality, Mr. Hufbauer suggested that Mr. Trump could use the mere threat of tariffs (without necessarily implementing them) to strong-arm multinational companies into investments in the U.S.
Hanging over that calculus is uncertainty about how Mr. Trump will use subsidies to boost domestic capacity.
Mr. Biden introduced the most expansive such policy in generations through the Inflation Reduction Act (IRA), which provides hundreds of billions of dollars in production tax credits for clean-energy goods such as EV batteries and solar panels. But while those are among the sectors that present the biggest challenges to U.S. industry in competing with China, Mr. Trump – a climate-change denier – has vowed to scrap what he can.
On that subject, there may be a gap between Mr. Trump’s corporate and blue-collar allies.
Mr. Iacovella said Mr. Biden’s subsidies are “smart industrial policy” that need to accompany protectionist trade policy. He predicted that “the IRA is like Obamacare” – a policy that Republicans publicly oppose, but will mostly keep in place.
However, among Mr. Trump’s autoworker boosters in Michigan, the turbulent shift to EVs – which has seen production delays and in some cases temporary layoffs – is routinely invoked as evidence that workers are suffering from a failed attempt to force unpopular products onto consumers.
Mr. Rothenberg, the UAW veteran, suggested that while the EV shift will eventually happen, Mr. Trump was able to tap into unrest from trying to accelerate it beyond what the industry was seemingly ready for.
A danger now, he assessed, is further chaos if Mr. Trump removes policy supports and presses automakers to reverse course.
As with the rest of Mr. Trump’s plans for manufacturing, the unknown is how much he’s willing to risk backlash through economic reordering with unforeseeable outcomes, especially for Rust Belt voters who came out in droves for him this time.