U.S. auto industry faces turmoil as new tariffs threaten supply chains, job cuts

The U.S. auto industry is bracing for the fallout from new trade policies, including 25 percent tariffs on the sector, as announced by President Donald Trump’s administration.

Following a 30-day delay, the policies are scheduled to take effect in April, raising particular concerns among businesses and residents in Michigan.

The latest headwind facing the so-called "big three" U.S. auto manufacturers - Ford, Stellantis and General Motors - is tariffs. Many cars and auto parts cross the border multiple times between the U.S., Canada and Mexico. But that system could soon be upended, with tariffs threatening a huge increase in the cost of cross-border traffic.

Jamie Butters, the executive editor of Automotive News and host of the Daily Drive Podcast, said the policies could have a ripple effect on the auto industry.

"It'll start with the parts that become prohibitively expensive, and so then a plant might get shut down, or pause for some period of time. Then all of their supplier plants are going to be shut down too, or working less, and it can really ripple from there," said Butters.

Glenn Stevens Jr., executive director of the trade association MichAuto, stated that reorganizing supply chains is not feasible in the short term.

"The system is very lean. It works in what we call 'just in time,' pulling parts into the assembly plan, just in time to make the vehicle. Nobody's going to make a quick decision on production changes. It doesn't make sense. It's very capital intensive. You have labor issues, you have part approval processes. You can't switch production in a few days, a few weeks, or even a month. It takes time to make these changes," said Stevens.

A few miles away in Dearborn, home to Ford's Rouge Factory, locals unwind at a neighborhood bar. Some here support President Donald Trump's "America First" policy, but many are worried about their jobs.

"I think the potential impact is great in this community, particularly because of the auto industry, but also because of the price we're going to have to pay for produce and everything else coming in," said Sharon Dulmage, a Dearborn resident.

It may take some time before the full impacts of the tariffs on the auto industry become clear. But experts warn that the potential fallout will likely be felt across many industries, throughout Michigan.

According to a recent study by Fitch Ratings, Michigan's economy would likely be the hardest hit of all U.S. states from the tariff fallout, with 19 percent of its imports coming from Canada, Mexico and China.

"You take out a manufacturing plant, it's thousands of jobs. It's probably 10,000 jobs with the suppliers that serve that. And then all of those people, you know, they buy groceries and homes and cars and movie tickets, and they're going to be dialing back," said Butters.

"We already have a market that's very competitive, and so anything that puts a dampening on that overall production demand, you know, if the consumer pulls back on spending, if prices became too, too high in the vehicle showroom, we as an industry, don't want that," said Stevens.

U.S. auto industry faces turmoil as new tariffs threaten supply chains, job cuts

U.S. auto industry faces turmoil as new tariffs threaten supply chains, job cuts

A major port in northern Venezuela came under U.S. airstrikes in the early hours of January 3, which caused extensive damage to civilian infrastructure, destroyed critical medical supplies in a warehouse, and severely impacted centuries-old cultural heritage sites, according to local residents.

The La Guaira Port, a vital hub for imports that support daily life in the region, was heavily damaged during the attack.

Large quantities of medical supplies stored at the port were destroyed. A historic cultural building dating back for some 300 years was also badly damaged by the bombardment.

Residents living near the port recalled the terrifying scenes as explosions shook nearby neighborhoods.

Humberto Bolivar, who lives in a community separated from the port by only a main road, said the blast waves shattered his home's windows, while stray shrapnel struck the water tank on his roof. According to reports, three missiles were fired at the port that night.

Bolivar said that beyond material losses, he is most concerned about the psychological impact on his children, who remain too frightened to leave their home days after the attack.

"The United States invaded our country. The children were frightened. This is not good for them, because it leaves some children with psychological trauma. They do not want to go to school or leave the house, because they are afraid that something worse might happen. We truly do not want this to happen to our country," he said.

Apart from civilian facilities, local cultural heritage site was also affected.

The La Guaira state government building, a structure with nearly 300 years of history and once served as the site of Venezuela's first national customs office, was struck by the force of the explosions.

Windows of the building were shattered, and furniture scattered across the floor.

"As people of La Guaira, we feel deep pain. Our cultural heritage has been bombed. We are living in constant anxiety and suffering, and life can no longer be the same as it was before," said a local named Henry Cumares.

The U.S. side has claimed the airstrikes targeted warehouses allegedly used to store narcotics. However, locals refuted such accusation.

"According to what Donald Trump said, they bombed this place using the excuse that the warehouses here were used to store drugs at the port. But based on the video released by our governor, these warehouses that were burned contained medicine for kidney patients and foods. Many people depend on these supplies to survive. I think the bombing is extremely despicable," said a local resident named Alejandro Capriles.

US strike hits Venezuelan port, wrecking medical supplies, heritage building