Michigan, the cradle of the U.S. auto industry, is grappling with changes in the labor market, automation and the reshaping of supply chains. The industry is also affected by tariffs introduced by President Donald Trump’s administration. Opinions on their effects are divided.
The U.S. auto industry has been dealing with the effects of tariffs since the beginning of 2025, when the president’s administration imposed duties on goods imported from many countries, including Canada. On Monday, Reuters reported that Washington and Ontario are working on an agreement that would ease U.S. tariffs, including duties on Canadian steel and cars of up to 50% and 25%, respectively.
Brian Pannebecker, who was appointed in early October as the U.S. president’s special envoy for auto industry workers, argued in an interview with PAP that “Trump’s tariffs have been in place for just over a year, and we are already seeing a huge number of auto industry jobs coming back.” The data do not clearly confirm that the tariffs have already led to higher employment in the U.S. auto industry.
“New plants are being built, or production is being moved back to the U.S. from Mexico and other countries where cars for the American market were previously made. Audi’s first-ever manufacturing plant in the U.S. is also being built,” said the former longtime auto industry worker and founder of the group Auto Workers for Trump.
At a rally last weekend ahead of the congressional elections, Trump announced that Audi plans to build a plant in Georgia. The company said the investment, worth about $4 billion, is expected to create around 4,500 jobs. Construction is scheduled to begin in 2027, with production starting in the early 2030s.
The Wall Street Journal reported Thursday, citing sources, that in recent weeks Audi executives had lobbied in Washington for relief from tariffs. The Trump administration has promised relief for automakers that commit to increasing production in the U.S. Details of the program are still being worked out.
“As long as Republicans are in power, we can rest assured that the auto industry will continue to grow and expand,” Pannebecker told PAP. On Sunday he appeared on stage with Trump at a campaign rally in Michigan, which borders Canada.
John Austin, an expert on Michigan’s economic transformation, sees the industry’s situation differently. “Trump promised to strengthen the economy and bring back jobs. That is how he twice won the votes of undecided voters, including members of the white working class and some Hispanics and other groups who had worked hard but did not see their situation improve. Meanwhile, his policies are having exactly the opposite effect. By imposing tariffs on Canada and all our trading partners, he is destroying the manufacturing base,” the expert told PAP.
“These days there is practically no such thing as a car made solely in the United States. We use parts and materials from all over the world, especially from Canada and Mexico, but also from Germany and, increasingly, from countries even farther east,” he said.
Austin pointed out that the auto industry is changing under the influence of automation. He noted that while a large auto plant once might have employed 5,000 people, today 400 can do similar work. Demand is growing for specialists in engineering, design and programming, while some lower-skilled work is being moved abroad.
In his view, the region is too dependent on the auto sector. He noted that some other Midwestern states have diversified their economies more, developing modern technology sectors, among other things. According to Austin, the region needs investment in research and development of new technologies and innovative products.
“When this state was rich and powerful, it offered plenty of well-paying assembly-line jobs that did not require a high level of education. The economy was based on a network of small, medium-sized and large industrial cities scattered across the state. Today the economy looks different. Most of those cities have declined (…) and are gradually losing residents. Many of the former large employers have disappeared entirely or significantly scaled back their operations,” he said.
He added that a good example is the city of Flint, where General Motors was founded. At its peak, the company employed 70,000 people there, and the city had nearly 200,000 residents. “Today General Motors employs only 7,000 people in that place. These are the communities that have the biggest problems. The white working class in particular is embittered there and feels alienated. It is in these places that support for Trump grew,” the expert told PAP.
“There are two Michigans and two Midwests. There is a small group of communities that are doing well in the new, globalized economy based on knowledge and advanced technology. At the same time, many former small and medium-sized industrial towns have lost their main employers and are struggling,” the expert concluded.
According to data from Michigan authorities, manufacturing employed about 583,000 people in 2025, or more than 15% of private-sector workers. Between 2018 and 2025, manufacturing employment fell by 7.1%, while employment in the state’s economy as a whole rose by 1%. After the pandemic-era collapse, manufacturing employment did not return to its pre-2020 level and has fallen every year since 2023.
From Washington, Natalia Dziurdzińska (PAP)
