Trump Admin. tariffs on imported vehicles could undercut the UAW’s bargaining power and hand more influence to Tesla CEO Elon Musk, an avowed foe of the union, a Cornell University research professor says.
“The Trump administration’s announced automotive tariffs may seem a blessing for U.S. autoworkers, and many trade unionists welcome the end of free trade,” notes Ian Greer, who has studied the industry for two decades. UAW President Shawn Fain is campaigning for the Trump tariffs “despite his misgivings about the president and the administration’s other policies.
“All union members are struggling right now. They need new investment. Investors must have stability,” Greer says during a phone interview with WardsAuto. “But tariffs undermine the stability and certainty required for new investment.”
Tariffs also could create new challenges for the UAW at the bargaining table, where, in the recent round of contract negotiations with Detroit’s three automakers, new investment was one of the union’s key demands.
“The union needs new products to ensure its members are gainfully employed,” Greer says, adding the automakers require certainty. “They do not know if tariffs are going to stay. How are companies going to plan?”
Greer says the tariffs threaten the profitability of the Detroit Three. “The union was successful during the 2023 contract negotiations because the companies were profitable,” he says.
The Anderson Economic Group in East Lansing, MI, estimates any reduction in the profits of Detroit’s automakers could reduce UAW members’ annual profit-sharing payouts by anywhere from $1,000 to $5,000.
UAW president Fain says the UAW does not intend to make political issues out of personalities or parties.
“We see politics as a negotiation,” he says in an online speech last month. “You win what you have the power to fight for. I want to be very clear on this point: We are not aligning with the Trump administration. We don’t align with any politician or president. We are negotiating with the Trump administration.”
Fain continues, “Free trade has been a disaster for the working class. Here is how the free trade scam works – the government gives a green light to companies to build their product wherever they can find the most exploited workers. Countries where desperate people will work for $3 an hour, where there are no labor laws and where there are no environmental regulations.”
But tariffs are risky for workers who belong to the UAW, says Greer.
“In the electric vehicle segment, tariffs are a boon to fiercely anti-union Tesla, which will benefit from the disarray of competitors who need time to rethink production strategies and retool factories,” he says. “Any new automotive jobs will be overwhelmingly nonunion, and Republicans in state and federal governments will work to keep them that way.”
Tesla is the EV market leader in the U.S. And while some of its components are subject to tariffs, it is less exposed to Trump’ s tariff regime than General Motors, Ford or Stellantis. It also has no unionized employees and carries a reputation as a ruthless employer who routinely fires employees for attempting to organize a union.
Meanwhile, the Ann Arbor, MI-based Center for Automotive Research estimates potential tariffs on imported auto parts and light vehicles will increase U.S. automakers’ costs by $107.9 billion.The CAR analysis emphasizes the complexity of the modern automotive supply chain, noting it is both global and complex. “Automakers and their suppliers are often multinational companies with facilities spread out across the world, making it difficult to discern how much of a vehicle is domestically produced,” says K. Venkatesh Prasad, senior vice president of research at CAR.
