Trump’s looming tariff deadline could trigger ‘self-inflicted recession,’ Slotkin warns

DETROIT − U.S. Sen. Elissa Slotkin, D-Mich., warned Monday the Trump administration could be risking a “self-inflicted recession” if reciprocal tariffs slated for April 2 take effect.

“If it were working for our economy, I would be interested,” she said during a panel at Wayne State University’s Industry Innovation Center. “But to me, the economic indicators are going the wrong way, and we cannot stay silent as a state that would be most affected. And certainly for me, as an elected representative, the risk of recession is so much more important than anything else I do, then we have to speak clearly about that risk.”

Tariffs are a credible tool, Slotkin said. There’s interest in them among her colleagues in response to national security concerns with China, she said, but added it makes no sense to impose them on longtime allies .

Trump’s administration earlier this month imposed a 25% tariff on Canada and Mexico and then a 25% levy on aluminum and steel on all countries. Trump also imposed a combined 20% tariff on China.

“If people aren’t buying cars, if people are being laid off, if the price of groceries is going up and not down,” Slotkin said, “it doesn’t give consumers confidence to be active in the economy.”

The Federal Reserve Bank of Atlanta’s GDPNow model estimated on March 6 that real gross domestic product would decline by a seasonally adjusted 2.4% in the first quarter. That’s improved from its March 3 estimate of negative 2.8% on March 3 but far below full-year economic growth of 2.8% in 2024.

Exemptions to the tariffs have been granted on some of the new levies. Following a conversation with top executives of General Motors Co., Ford Motor Co. and Stellantis NV, Trump announced exceptions to the Canadian and Mexican duties for goods like vehicles and their components that are compliant with the United States-Mexico-Canada trade agreement that Trump signed into law in 2020. Some agricultural goods like potash, which is used in fertilizers, also received an exception.

But not all companies have the resources to advocate for those kind of benefits, Slotkin said.

“The first time Trump was in the White House, he had a process, and I think it was the Department of Commerce where you could apply and try and get some exceptions,” she said. “And we did get some exceptions for some of our agricultural things, etc., etc.”

Right now, “it’s a bit of a free-for-all, and it’s kind of like people are doing anything they can to get those exceptions. I don’t blame them, but what it means is that the people who have the big government affairs programs, who have the big, well-known CEOs are going to get in those rooms, and the mom-and-pop, who depend on the tiny widget from somewhere else that isn’t made anymore in the United States, are going to get screwed.”

The Detroit News on Monday morning emailed a request for response to the U.S. Commerce Department but did not immediately receive a reply.

Colin Bird, consul general of Canada in Detroit, emphasized the USMCA deal is working – as both the United States and Canada have seen “record-breaking investments” after years of offshoring. The Mexican minimum wage has doubled, too.

”We don’t see a lot of value to rehash issues that we negotiated with the first Trump administration,” Bird said. “Let’s have a conversation and see what we can do better to compete better with the rest of the world. But fundamentally, the agreement is working.”

He cited Canada’s imposing 100% tariffs on Chinese electric vehicles last year, plus additional duties on their aluminum and steel as an example of collaboration to strengthen North American manufacturing. He noted advancements in green manufacturing, artificial intelligence and other areas of manufacturing and technology are other spaces to examine with respect to trade policy.

For businesses, the biggest issue is the uncertainty created by the on-again, off-again tariffs, said Sandy Baruah, CEO of the Detroit Regional Chamber, likening the situation to the COVID-19 pandemic.

”We have built this 100-plus years of having this unified, predictable trade relationship,” Baruah said. “If that goes away, then how are we as the Western industrialized world, how can we be expected to effectively combat China? Because that’s where we have real trade challenges, where we have real unfair trade practices, where we have the real threat from fake drugs, even fentanyl and others.”

Baruah raised some concerns about state governors and economic development agencies indicating an openness to welcoming and even incentivizing a Chinese automaker to manufacture their vehicles in the United States.

Slotkin pushed legislation she introduced during her time in the U.S. House of Representatives – and which she says she is about to reintroduce in the Senate – to ban Chinese vehicles from being sold in the United States.

”I will lay my body in front of the border before I let Chinese electric vehicles come inside the United States,” said Slotkin, a former Central Intelligence Agency analyst. “We have to be bipartisan in favor of that, because that is like a walking, driving collection unit for their intel. It’s all our data, all our full-motion video, all our mapping, all our lidar. No, no, no, no, no.”

Michigan automakers like GM and Ford do build vehicles for the U.S. market in China, including the Buick Envision and the Lincoln Nautilus. Slotkin said ultimately whether a vehicle can be sold in the United States should depend on who has access to the information its computer is capturing.

”The future of warfare and threats is who controls amalgamated data, and so I don’t like those parts in American vehicles that can send back video or mapping to the Chinese,” she said. “Same thing with an American car built in another country. Who controls the data is the whole game.”