March 28, 2025 | This Week in Government: Trump Auto Tariffs Begin Next Week, Draw Mixed Response

President Donald Trump announced Wednesday that 25% tariffs would be enacted on imported automobiles, drawing a mixed reaction over their effectiveness and the long-term implications it would have on the automotive sector and supply chain in Michigan.

On Wednesday, the president said a 25% tariff would begin April 3 on imported vehicles.

The president said the move would spur automakers to open more plants in the United States and grow the industry, while opponents and groups have said it would lead to higher prices for consumers driving down sales and resulting in job losses.

According to the White House, the tariffs would bring in $100 billion in revenue annually.

MichAuto Executive Director Glenn Stevens Jr. in a statement warned that the tariffs announced by Trump will raise prices on vehicles and affect the overall availability of products for customers in showrooms everywhere.

“Demand will be affected across the industry, and that will likely cause production cuts that will reverberate through the supply chain,” Stevens said. “This means jobs lost, increased input costs, and pressure on the balance sheets of companies large and small. Companies that export vehicles and parts to the U.S. will need to make decisions on whether existing facilities in the U.S. have capacity or can be expanded.”

Stevens also said any decisions made by automakers and companies within the supply chain will need to make critical decisions.

“This is by no means a quick process, as safety, quality, and process requirements are stringent to build the most complex consumer product in the world,” Stevens said. “New component and assembly plants will also be evaluated, but this will take years to make happen. … These are complex decisions that will take time, long past when the tariffs’ impact will be felt within the industry.”

United Auto Workers President Shawn Fain in a statement Wednesday praised the move, saying implementing tariffs would be “the beginning of the end of the thirty-plus year ‘free trade disaster,’” a reference to trade deals including the North American Free Trade Agreement that went into effect January 1, 1994, and was subsequently renegotiated during Trump’s first administration.

“Ending the race to the bottom in the auto industry starts with fixing our broken trade deals, and the Trump administration has made history with today’s actions,” Fain said. “These tariffs are a major step in the right direction for autoworkers and blue-collar communities across the country, and it is now on the automakers, from the Big Three to Volkswagen and beyond, to bring back good union jobs to the U.S.”

Stacey LaRouche, press secretary for Gov. Gretchen Whitmer, referred Gongwer News Service to the governor’s initial statement from February 1 on tariffs when asked Thursday for comment.

In February, Whitmer issued a statement calling Trump’s tariffs on autos and other products a “middle-class tax hike” that would harm the economy.

“A 25% tariff will hurt American auto workers and consumers, raise prices on cars, groceries, and energy for working families and put countless jobs at risk,” Whitmer said at the time.

Since last month, Whitmer has largely been mum on tariffs outside of a brief mention during her State of the State address. During her speech she said that strategically they can make sense, but not in the wide-ranging manner Trump was suggesting, adding his proposal “would be a disaster” (See Gongwer Michigan Report, Feb. 26, 2025).

Whitmer also met with Trump earlier this month (See Gongwer Michigan Report, March 13, 2025).

U.S. Rep. Haley Stevens (D-Birmingham) in a statement said smart trade policy is critical when dealing with top competitors globally like China, who she added “do not play by the rules.” She vowed to study the implications of enacting tariffs.

“Stronger protection for American-made cars and trucks is long overdue. I welcome that, but we need to fully understand the details,” Stevens said. “Over the next few days, I will do what I always do: listen to the people. I am eager to hear more from autoworkers, suppliers, and auto companies. I plan to continue to stand alongside Michiganders and the drivers of our economy while navigating this new trade policy.”

U.S. Rep. Debbie Dingell (D-Ann Arbor) in a statement called the action an attempt to move supply chains and manufacturing back to the country.

“We need to remember we must allow the auto companies and suppliers the time they need to adjust – production changes can’t take place overnight,” Dingell said. “Our domestic auto industry relies on a closely integrated North American supply chain, which is why it’s important this includes exemptions for USMCA-compliant imports. However, it is time to renegotiate USMCA.”

U.S. Rep. Shri Thanedar (D-Detroit) opposed the tariffs in a statement, saying the potential cost increases to consumers and effects to the auto industry are unacceptable.

“While I support efforts to strengthen the manufacturing industry and the jobs they create, this is not the way to accomplish that,” Thanedar said. “Economists have agreed that these tariffs are unrealistic, inflationary, and will cause serious harm to the auto industry, a cornerstone to our state’s economy. The Trump administration is leaving Michigan families behind: we can’t afford these tariffs.”

When the Legislature returns from spring break in April, House Speaker Matt Hall said he plans to move the Public Safety and Violence Prevention Fund.

“In the first time in the history of Michigan, we’re investing state dollars in our local communities for public safety record,” Hall (R-Richland Township) said.

Rep. Mike Harris (R-Waterford Township) and Rep. Alabas Farhat (D-Dearborn) introduced HB 4260 and HB 4261 earlier this month, which would earmark sales tax revenues for public safety in counties, cities, villages, and townships (See Gongwer Michigan Report March 14, 2024).

The bill package is a reintroduction of legislation that passed both the House and the Senate last term but ultimately died in the chaos of last year’s lame duck.

Money for the fund would be generated by 1.5% of the first 4% of sales tax revenue.

Of that revenue, $75 million would be set aside, and 2% would go to the Department of Health and Human Services to administer a grant program to cities, villages, townships, and counties for public health and intervention solutions to community violence. Another 2% would go to the Crime Victim’s Rights Fund. The remaining revenue from the $75 million would be distributed statewide to communities based on their share of violent crime in the state.

Any additional revenue from the earmarked sales tax revenue would be distributed to counties based on the number of sheriffs employed at the start of this year.

“We’re working with local leaders right now,” Hall said. “Cities, townships, working this through, making sure we get the formula right.”

Hall also said he wanted to make sure the legislation was supporting crime victims.

“Victims of crime funds are going to get a lot of benefit of this funding,” he said.

The bills will likely move through the House in early April, Hall said, and he said he expected them to move through the Senate as well, though he has yet to have discussions with any senators.

“They all voted for this last year,” he said. “Gov. Whitmer has indicated support for the Public Safety Trust Fund in the past, and I hope they listen to her. It’s in the budget.”

Another priority for the House will be making changes to permitting, licensing, and regulatory reform, Hall said.

Gov. Gretchen Whitmer advocated for permitting and licensing reform in her State of the State address last month (See Gongwer Michigan Report, Feb. 26,2025).

“We’re going to focus on regulatory reform, something that Gov. Whitmer now embraces,” Hall said. “We’re going to make our regulatory system better in the state.”

A coalition of 42 business and renewable energy groups urged Congress to preserve a set of federal tax credits from being eliminated through the budget reconciliation process they say have made the automotive and renewable energy sectors more competitive.

The coalition, which includes Ford Motor Company and General Motors, sent a letter to Michigan’s congressional delegation Monday, saying the various tax credits, including those created under the Inflation Reduction Act, have been critical to helping both industries expand in recent years.

“We write to express our strong support for the federal tax credits that are essential to our ability to grow, hire, and invest in this state,” the letter says. “Without these critical incentives, our businesses will face significant challenges – hindering expansion, slowing job creation, and jeopardizing Michigan’s leadership in the future of energy and mobility.”

Monday’s letter comes as the Republican-controlled Congress begins work on budget reconciliation.

A key priority for Republicans is to throw out many provisions of the IRA that in part would help cover the costs of extending President Donald Trump’s 2017 tax cuts as part of budget reconciliation.

In its letter the groups listed a dozen federal tax credits that they say have helped expand operations and meet customer demand within the two industries. These include the Clean Vehicle Credit, the Residential Clean Energy Credit, the Advanced Manufacturing Production Tax Credit, the Clean Electricity Production Tax Credit and the Clean Electricity Investment Tax Credit. Other credits are for energy efficient homes, for previously owned electric vehicles and deductions for energy efficient commercial buildings.

“These credits have help us stay competitive in a rapidly evolving national and global market, where states and countries are making major investments to support automotive manufacturing, advanced energy, energy efficiency, and critical grid services,” the letter states.

The letter adds that Michigan has secured about $29 billion in private investment and has led to more than 127,000 jobs in the renewable energy and automotive sectors.

Two Michigan Republicans joined in a statement with U.S. House leadership and budget committee chairs in support of moving its reconciliation bill forward: U.S. Rep. Lisa McClain of Bruce Township and U.S. Rep. Tim Walberg of Tipton.

“The House is determined to send the President one big, beautiful bill that secures our border, keeps taxes low for families and job creators, grows our economy, restores American energy dominance, brings back peace through strength, and makes government more efficient and more accountable to the American people,” the GOP leaders said in a Monday statement. “This is our opportunity to deliver what will be on one of the most consequential pieces of legislation in the history of our nation.”

Michigan may be able to cover the cost of some federal funding cuts to key programs in the short term, but covering major reductions for key federal programs, including Medicaid and education, would not be sustainable, the state budget director said Tuesday.

Budget Director Jen Flood told reporters the state would not be able to sustain significant federal funding cuts that may be passed by Congress long-term but could cover some losses in one-time spending.

She pointed to the $2.2 billion in the state’s rainy-day fund, which is one-time spending.

“If there’s major ongoing cuts, it would require either reprioritizing existing spending where we have discretion or doing some one-time patches,” Flood said. “We are always looking with an eye towards fiscal responsibility and sustainability, and so we may be able to do some temporary patching with the rainy-day fund, but that’s not really a long-term solution.”

Her comments followed a Tuesday event inside the House Office Building held by the Michigan State University’s Institute for Public Policy and Social Research where she and State Treasurer Rachael Eubanks discussed work on the fiscal year 2025-26 budget and possible federal funding cuts.

Flood said any potential cuts to Medicaid would have to be addressed in the budget and would depend on when any cuts are made on the federal level.

“We’ll be closely tracking that,” Flood said. “Hopefully these changes are out a ways, so we have some time to figure out how it would impact the state, but we’ve got to start preparing for different scenarios.”

She said the governor’s budget reflects federal funding levels as they exist prior to any potential federal funding cuts.

“To the extent that any federal changes are passed and signed into law, and their effective date overlaps with the budget that we’re working on, we’ll have to recalibrate our numbers based on those changes,” Flood said.

Flood was not sure how long it would take to recalibrate numbers based on any significant federal funding changes. She said during her time in the governor’s administration such a large shift has not occurred.

As to how potential funding cuts and tariffs being implemented by President Donald Trump’s administration might affect the May Consensus Revenue Estimating Conference, Eubanks told reporters it was still too soon to know.

“We’re monitoring all of the developments at the federal level daily,” Eubanks said.

She said details will matter, especially in the case of the automotive sector, where some products may cross borders several times.

Flood said Medicaid and education were the biggest areas of concern when it came to federal budget cuts.

“When you talk about cuts of the size that are being discussed in Washington, D.C., there could be real impacts on Michiganders,” Flood said. “Depending on what cuts come through, we’re going to have some really difficult conversations and decisions to make here in the state.”

Flood said between traditional Medicaid and the Healthy Michigan program, about 2.8 million people are enrolled.

She said the state has been reviewing the Trump order to eliminate the U.S. Department of Education. About 10% of the state’s education funding comes from the federal government.

“There’s a lot of questions still to be answered on if programs are being transferred to other departments, what that looks like,” Flood said.

Flood said she is optimistic about having the budget completed by the June 30 statutory deadline, noting that the House is working on a timeline ahead of the Sept. 30 constitutional deadline.

“That hasn’t happened in a long time, and so I’m very hopeful that we can work together to get it done,” Flood said regarding the possibility of a state government shutdown. “I know we’re in a phase of divided government, but we’ve been here before.”

Flood pointed out that there was a Republican-controlled Legislature during Gov. Gretchen Whitmer‘s first term in office.

When Flood was asked if there is any concern within the administration about the potential effect on small businesses of Corporate Income Tax portion of governor’s road plans, she said many options were considered while developing a proposal.

“When we’re looking at options for fixing the roads, we talk about the size of the General Fund and where that goes,” Flood said. “There’s just not a way to cut to come up with the resources needed to fix the roads.”

She pointed out that the House Republicans and governor’s office both had roughly $3 billion plans.

“I think there’s a lot of different ways that we can get there,” Flood said. “The more options we have on the table for discussion, the better.”

Michigan’s U.S. senators announced Wednesday they are accepting applications for the roles of U.S. District Court judge, U.S. attorney, and U.S. marshal positions for recommendation to the president.

Open until 5 p.m. on May 1, 2025, is the application period for a vacant U.S. District Court for the Eastern District of Michigan judgeship, as well as U.S. attorney and U.S. marshal positions in both the eastern and western districts of Michigan.

Senators typically recommend candidates to fill vacancies in their home states to the president for consideration. Following an official nomination, the home state senators agree to consideration of a nominee before the U.S. Senate Judiciary Committee. If a nominee clears the committee, a vote is taken by the full U.S. Senate.

U.S. Sen. Gary Peters (D-Bloomfield Township) in a statement urged qualified applicants to apply.

“I’m committed to making sure these important positions are held by those with the legal experience and temperament needs to serve our state well,” Peters said. “As we begin the process of evaluating and recommending highly qualified candidates to fill current vacancies, I encourage applicants who are interested in public service to apply.”

U.S. Sen. Elissa Slotkin (D-Holly) echoed Peters in a statement.

“A critical part of the job of a U.S. senator is to review and recommend qualified, fair, and upstanding nominees to the federal bench, U.S. attorneys and U.S. marshal’s offices,” Slotkin said. “Michigan is home to some of the most talented legal minds in the country, and I encourage qualified applicants interested in serving in the federal judiciary to apply.”

U.S. attorneys are typically appointed for four-year terms. When their term expires, they usually remain in office until they choose to leave or there is a change in administration. U.S. marshals are also appointed for four-year terms. Unless a marshal resigns or is removed by the president, they continue in their duties after the end of their four-year term until a successor is appointed.

Federal judgeships are lifetime appointments. They serve until they retire, resign or if they are impeached.