Labor & Employment Law Daily Wrap Up, INDUSTRY NEWS, TRENDS—25 percent tariffs on steel and aluminum implemented, but ‘Big Three’ auto manufacturers get a pause, (Mar 7, 2025)

By Pamela Wolf, J.D.

There is support for tariffs, but are “blanket tariffs” the way to go, and will a one-month pause for big auto manufacturers be enough after they invested billions in complying with the United States-Mexico-Canada Agreement (USMCA)?

President Trump has restored a 25 percent tariff on steel imports and elevated the tariff to 25 percent on aluminum imports with the aim of protecting “these critical American industries from unfair foreign competition,” the White House announced on March 4. In February, President Trump unveiled a plan for “fair and reciprocal trade,” a move intended to make “clear to the world that the United States will no longer tolerate being ripped off.” The White House said the plan was met with praise across the board. A number of companies and some unions have indeed offered support for the tariffs, but at least one union weighed in against “blanket tariffs,” advocating for a more targeted approach.

Significantly, the Administration has given the “Big Three” auto manufacturers a one-month tariff exemption.

Support for tariffs. The White House touted support by the Steel Manufacturers Association, the Aluminum Association, and Western Steel Inc. Robert Simon, CEO of JSW Steel USA, via Fox News, praised the steel and aluminum tariffs “as a project that will flood the U.S. with jobs as trading partners move their industries to U.S. soil to avoid tariffs.”

“American steel producers know well the negative impact of foreign unfair trade practices, including subsidies, currency manipulation and other unfair and discriminatory policies and practices, on domestic industries and their workers,” said American Iron and Steel Institute, applauding the imposition of tariffs.

“For almost a decade now, we have spent precious time and resources fighting back against an unfair and unjustified tariff regime imposed by Brazil’s government on U.S. ethanol imports,” said the Renewable Fuels Association. The association also thanked the President for taking action and expressed hope that the reciprocal tariff “will help encourage a return to free and fair ethanol trade relationship with Brazil.”

Bring manufacturing back to U.S. or pay tariffs. The White House also pointed to what it described as companies seeking to make their products in the U.S. instead of paying tariffs: Nissan CEO Makoto Uchida, who said the President Trump’s tariffs could push the car manufacturer to move its production from Mexico to the U.S.; Honda, which is expected to produce its next-generation Civic hybrid model in Indiana; and Stellantis, which after meeting with the President, announced that it will reopen its assembly plant in Belvidere, Illinois, build its next-generation Dodge Durango in Detroit, Michigan, and make new investments in their Toledo, Ohio, and Kokomo, Indiana, facilities.

The United Auto Workers (UAW) said it is in active negotiations with the Trump Administration about their plans to end what it called “the free trade disaster.” The union is looking forward to “working with the White House to shape the auto tariffs in April to benefit the working class.” The union is looking for serious action aimed at incentivizing companies “to change their behavior, reinvest in America, and stop cheating the American worker, the American consumer, and the American taxpayer.”

New investments. The White House also underscored “new U.S. investments” that it credited to the President’s actions:

• TSMC announced an unprecedented $100 billion investment in U.S.-based semiconductor chip manufacturing.

• Apple announced a historic $500 billion investment that will create 20,000 new U.S.-based jobs.

• President Trump announced the largest artificial intelligence infrastructure project in history, securing $500 billion in planned private sector investment—with major CEOs agreeing it would not have been possible without President Trump’s leadership.

• President Trump secured a $20 billion investment by DAMAC Properties to build new U.S.-based data centers.

• Wisconsin-based Clarios, a leader in low-voltage energy storage, announced a $6 billion plan to expand its U.S.-based manufacturing.

• Eli Lilly and Company announced a $27 billion investment in its U.S.-based manufacturing.

• Saudi Arabia declared its intention to invest $600 billion in the United States over the next four years.

• Taiwan pledged to boost its investment in the United States.

• Electronics giants Samsung and LG “are considering moving their plants in Mexico to the U.S.” now that President Trump is back in office.

Are blanket tariffs the way to go? In response to the tariffs against Canada and Mexico, AFL-CIO President Liz Shuler questioned the use of blanket tariffs. “While we support the targeted use of tariffs to protect workers from unfair competition, the Trump administration’s blanket tariffs run the risk of causing unnecessary economic pain for America’s workers without addressing workers’ core economic priorities,” she said. “The tariffs on Canada are particularly damaging as they ignore our close economic and security relationship, while undermining industries that engage in cross-border trade that supports good union jobs on both sides of the border.”

The union leader urged the Trump Administration “to work with unions to promote a worker-centered trade agenda that protects jobs, rebuilds American manufacturing and addresses the real challenges facing workers in the global economy.”

One-month exemption. Just one day after the Trump administration implemented 25 percent tariffs on goods imported from Canada and Mexico, the White House announced that Ford, GM, and Stellantis—the “Big Three” auto manufacturers—whose cars comply with the USMCA will get a 30-day exemption, set to lift on April 2, Car and Driver said, citing U.S. press secretary Karoline Leavitt’s comments during a March 5 White House press briefing. The press secretary said the pause came at the request of the companies associated with USMCA, so that they are not put at an economic disadvantage.

Is the pause long enough? The White House did not specify the automotive imports that the exemption it covers, according to Car and Driver. “However, it's expected that both auto parts and new vehicles are included in the exemption,” the trade publication reported. “It also seems unlikely that each automaker will be able to dramatically alter their production process and supply chains in the 30-day window.”

Car and Driver also pointed out that, as reported by the Detroit Free Press, some analysts predict that new-car prices could increase between $1,000 and $9,000.

In a March 5 statement, Ford expressed its appreciation for President Trump’s “work to support our industry and exempt auto companies complying with USMCA,” noting also that since the signing of that agreement, “Ford has invested billions in the United States and committed to billions more in the future to both invest in American workers and ensure all of our vehicles comply with USMCA.” The company said it will continue to “have a healthy and candid dialogue with the Administration to help achieve a bright future for our industry and U.S. manufacturing.”

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