Back in 2022, some angry truckers in Canada unintentionally ran a real life experiment in international trade. This was that big convoy protesting Canada's COVID-19 vaccine mandate. requiring truckers to be vaccinated to pass freely across the U.S. border. They drove the rigs into Ottawa, the Canadian capital, and basically shut it down. Here's the police chief Peter slowly at the time. This is a siege. It is.
Something that is different in our democracy than I've ever experienced in my life. The protest, though, wasn't just in Ottawa. The truckers also blockaded the Ambassador Bridge between Windsor and Detroit. A quarter of all trade between Canada and the U.S. goes over that bridge. Truck driver Jeff Wakefield was stranded on the U.S. side of the border during the blockade. He said the jam also rippled out to another nearby border crossing. I got a friend down there. Four hours.
moved a half a mile. Now the blockade is supposedly down there blocking that off. So Sarnia closed, this closed, where do you go? The other option is you want to run 700 miles out of route and go to Buffalo Cross and come all the way back to Windsor. That's the only other option.
This was a huge disruption to cross-border trade, and some of the businesses hit most immediately were car companies. With parts not able to get to the plants that needed them, factories on both sides of the border cut entire production shifts and slowed their operations. The blockade, which only lasted one week, ultimately cost auto workers and car companies some $300 million by one estimate.
It was a demonstration of just how dependent the industry is on trade across the U.S.-Canada border. And this is particularly relevant right now. now that President-elect Donald Trump has said he will impose a 25% tariff on all imported goods for Mexico and Canada. It's a threat that Canadian Prime Minister Justin Trudeau takes it face value.
Consider this. Trump's tariffs could have huge consequences for the people who make cars and the people who buy them. And even if he's bluffing, Trump has other big plans to shake up the auto industry. From NPR, I'm Scott Detra. This message comes from NPR sponsor, the UK government. It's time to make your UK visa digital. If you have a BRP card that expires on the 31st of December, 2024, or a stamp or vignette sticker in your passport, you should change to an e-visa now.
This means it will never be lost and can be accessed online at any time to prove your right to live, work or study in the UK. It's free and your immigration status won't be affected. Find out more now at gov.uk forward slash e-visa. From the online trends that dominated 2024. On the spectrum of rat to demure. Where are you right now? To spicy TikTok viral reads. These romance fantasy books about dragons. NPR kept you up to speed on pop culture. And thank you. This message comes from Pushkin.
In a new episode of the Revisionist History Podcast, how a right-wing organization tried to take over the Parent Teacher Association in the 1960s. Listen wherever you get your podcasts. It's Consider This from NPR. You never know if President-elect Donald Trump is bluffing, but when you have billions of dollars on the line, you have to take him seriously. So...
Car companies took notice when Trump announced a plan for huge new tariffs in a social media post just before Thanksgiving. A 25% tax on imports from Canada and Mexico would have a major impact on the car industry, which depends heavily on crop. NPR's Camilla Dominoski, who covers the auto industry, and Andrea Hsu, who covers labor, have been talking to car companies and workers about the plan, and join me now. Hey there. Hi. Hey, Scott. So, Andrea, I'm going to start with you.
Getting back to this question, which we asked so many times for a four year span, can Trump do this? Because specifically, doesn't the U.S. have a free trade agreement with Mexico and Canada? Yeah, yeah. It's called USMCA. Trump himself signed it into law in 2020. It replaced NAFTA. And under this agreement, goods flow across the borders duty free as long as they meet certain requirements. So when it comes to cars, So if.
Trump issues an executive order imposing a 25% tariff as he is threatened to do. We would just expect Canada and Mexico to retaliate with tariffs of their own. But I do want to reiterate here, we just don't know if he's actually going to follow through with this. Right. Camila, I want to get to the car company's perspective on this.
What would a 25% tariff on imports from Canada and Mexico mean for the car industry? Well, look, it's an increase in costs, and that's coming at a time when affordability for vehicles is a major concern for the auto industry. The average new vehicle right now... almost $49,000, which is wild. It's a tremendous amount of money.
If you look at how these tariffs would affect prices, one way is on finished vehicles. So that's your Toyota Tacomas that come from Mexico, Chrysler Pacificas that are made in Canada. They would get more expensive as the tariff is applied to them. But the other element... which is much bigger than that, is
parts, the kind that cross that bridge between Canada and the U.S. and also cross between the U.S. and Mexico all the time. We have built an entire supply chain around these three countries working together to build vehicles. Can you give me an example to help us understand that supply chain and how important and I guess fragile it is when it comes to all of this? I'll take one example, which is talking about wire harnesses. So this is like the nervous system of a car, the wires that connect.
all the different electronic bits and bobs. And you don't want a giant spaghetti pile of wires at the bottom of a car like I have on top of my desk right now. So they connect these wires into bundles very precisely and neatly. It's a lot of labor.
And what happens right now is you might have a wire or clips for those wires made in the U.S. shipped to Mexico to then be tied into these precise bundles and then shipped back into the U.S. to go into, say, a seat or another component. Before then, they all... So when you have concerns about tariffs and then retaliatory tariffs, the costs could really... build. And this affects all car companies, not just ones that have plants in Mexico or Canada. Given all this, though, Andrea...
You know, the UAW has actually pushed for higher tariffs on cars in the past, right? Like, help us make sense of all of this. Yeah, specifically higher tariffs on cars coming from Mexico and Canada that don't meet the strict requirements for North American-made parts and higher wages.
And this is all about protecting jobs. So let's say you have a car plant in Mexico that's making cars for the U.S. market, but the engines or the transmissions are not made in North America. Those cars can't come into the U.S. duty-free. The penalty is a 2.5% tariff. But the union is saying that's too low to be a deterrent. It might be cheaper for those carmakers to pay that tariff than it would be to source everything in North America. So the union would like...
tariffs that are high enough to compel companies to make, you know, cars, make parts, ideally in the U.S. But, you know, raising that 2.5% tariff is very different from imposing a blanket 25% tariff on everything. that's coming from Mexico and Canada. Any sense from the conversations you've had how workers think they'll be affected by all of this? Well, I talked with Romaine McKinney. He's president of UAW Local 869 outside Detroit. His members work at Warren Stamp.
They stamp all kinds of metal parts that are sent to plants in the U.S., but also to Mexico and Canada. And so they would feel the impacts of a trade war immediately. Maybe they'd have to slow production if orders slowed. But beyond that, McKinney stress is not. just about cars or car parts. A 25% tariff, he says, would run up the prices of all kinds of consumer goods. Whether that's fruit and vegetables or nuts and bolts, a 25% tariff will expeditiously run up the cost of operating your home.
That is the bigger problem for us. You know, he says auto workers are middle class Americans who are price conscious consumers. OK, Camille, what about the other argument, the one in favor of tariffs? You make it more expensive to import things. More things are built in the U.S.
Yeah, and you know, in the auto industry, there is a big, unusual, kind of odd tariff specifically on pickup trucks called the chicken tax. And after that tariff was put in place a very long time ago, a bunch of pickup manufacturing did. move from overseas to North America. One caveat is the number of jobs involved is not always what people would hope for.
When a company moves production from a country where cost of labor is cheap to one where wages are really high, they are often very motivated to see how much they can do by robots. of manufacturing workers, union workers, they really were won over by Trump's promises that, you know, he was going to bring back manufacturing to the US and do it through tariffs, even if the reality of that is far more complicated and messy.
I have also heard from rank and file workers who didn't support Trump, who think his tariffs are a bad idea, who nevertheless believe this presidency, the second Trump term. ultimately will be good for their jobs. You know, some of the other promises that Trump has made could provide them some job security. If he lowers emission standards, for example, that could extend the longevity of gas-powered models like trucks and SUVs. which are bestsellers in America and are fueling those jobs.
OK, so when it comes to incoming President Trump, we know how quickly he can change his mind. We know how quickly policies will be redirected. We're talking a month of some change before he actually takes office, given all of that. Do either one of you want to give us a reality check on how likely this 25% tariff is? Yeah, I'll jump in and say that this particular tariff, the president-elect has talked about it. He described it in his post as being a negotiating tactic.
Over immigration and drug trafficking. So the goal is not to have this tariff in place. So even if it is actually imposed, there will be a question about how long it will last. Paul Jacobson, he's a senior executive at General Motors, he was recently talking to investors and he said this.
We're trying to not overreact to anything out there in the short term. I understand the rhetoric that's out there, but I'm not going to overreact to a tariff if I don't know that it's not going to be traded away in 90 days. You know, car companies plan years ahead, right? And any new factories would be open for decades.
At the same time, I am hearing from folks that Trump has talked seriously about other tariffs, ones that he does not describe as bargaining chips, but as policies in themselves. And companies are taking those possibilities really seriously. as Camila Domenoski, who covers the auto industry, as well as Andrea Hsu, who covers labor. Thanks to both of you. Thank you. Thank you, Scott. This episode was produced by Connor Donovan. It was edited by Courtney Dorning, Emily Kopp, and Cara Platoni.
Our executive producer is Sammy Yenigan. It's Consider This from NPR. I'm Scott Detrow. This is Eric Glass on This American Life. We specialize in compelling stories from everyday life. I was like, wow, you literally just died and came back. And the first thing you ask is, do you need any money? Your life stories, really good ones. in your podcast feed, This American Life. Hi, it's Mariel Segara from LifeKid. There's a first time for everything, including giving to NPR.
Whether you're a brand new listener or a longtime fan, please join the community of NPR network supporters today. Make your gift at donate.npr.org. And thank you. Want to hear this podcast without sponsor breaks? Amazon Prime members can listen to Consider This sponsor free through Amazon Music. Or you can also support NPR's vital journalism and get Consider This Plus at plus.npr.org. That's plus.npr.org.