Trump’s Tariff Policy Faces Backlash in Michigan; US Businesses Concerned Over Trade Uncertainty and Higher Costs

The levies as well as trade fighting with Canada are facing a test in the state, where voters appear skeptical of free trade but also of the president’s erratic approach.

1. Growing Political Backlash Against Tariffs

o President Donald Trump's tariff policy, intended to protect US manufacturing and industrial states, is facing growing opposition ahead of the US midterm elections.

o Voters and businesses in trade-dependent states are increasingly concerned about higher costs, disrupted supply chains and uncertainty over trade policy.

o Michigan, a major automobile manufacturing centre, has become a key battleground because of its close trade links with Canada.

2. US-Canada Trade War

o In August 2026, the Trump administration imposed 50% tariffs on approximately $20 billion of certain Canadian exports following the failure to reach a trade agreement.

o Canada retaliated with its own tariffs.

o The US subsequently banned imports of certain Canadian goods, including alcohol and some dairy products.

o Trump has threatened to impose 50% tariffs on Canadian automobiles and auto parts from 1 January 2027 if no agreement is reached.

o Trump indicated that he had the "concepts of a very good deal" with Canada.

o Canadian Prime Minister Mark Carney said both countries would work towards outlining a mutually beneficial trade agreement.

3. Impact on US Businesses and Farmers

o Ranchers in Texas have complained about increased tariff costs and trade friction with Canada and Mexico.

o Farmers in Maine and Iowa are concerned about higher input costs and reduced access to foreign markets.

o On 23 October, the Trump administration modified certain tariffs on Canadian products, replacing tariffs on some agricultural inputs with tariffs on other goods to provide relief to US farmers.

4. Michigan's Dependence on Canadian Trade

o Canada is Michigan's largest import and export market.

o Michigan's automobile industry depends heavily on integrated US-Canada supply chains.

o Businesses have adapted to the US-Mexico-Canada trade agreement (USMCA), which Trump continues to threaten.

o Consequently, tariffs against Canada are increasingly viewed as harmful to Michigan's manufacturing and automobile industries.

5. Political Opposition to Tariffs

o Democratic Senate candidate Abdul El-Sayed has criticised Trump's Canada tariffs as chaotic and harmful to consumers because they increase prices.

o His Republican opponent, Mike Rogers, has also distanced himself from the tariffs, stating that "Canada is not our enemy."

o The United Automobile Workers (UAW) supports tariffs as a manufacturing protection instrument but opposes Trump's trade offensive against Canada.

6. Some US Manufacturers Benefit from Tariffs

o Certain Michigan manufacturers report increased business as tariffs encourage customers to source domestically rather than import cheaper products from China and other countries.

o Detroit-based Atomic Industries, supplying automotive, defence and other sectors, reported:

§ Higher costs for imported machinery from Japan and South Korea.

§ Increased orders from customers seeking US-based production to avoid tariffs.

o The company believes tariffs have helped its business overall by encouraging domestic manufacturing.

7. Uncertainty Over Long-Term Tariff Policy

o Manufacturers are concerned that tariffs could be reversed by a future administration.

o Businesses face uncertainty over whether investments made to avoid tariffs will remain commercially viable.

o The shift from the Biden administration's subsidy-based industrial policy, particularly for green energy, to Trump's tariff-driven approach has created additional adjustment costs.

o The cancellation of several Biden-era green-energy measures led automakers to scale back EV investments and record tens of billions of dollars in write-downs and restructuring charges.

8. Possibility of Tariffs Continuing Under a Future Democratic Administration

o US Trade Representative Jamieson Greer believes Democrats may retain several Trump-era tariffs because tariff protection has traditionally enjoyed bipartisan support.

o Former President Biden had retained some of Trump's tariffs on Chinese imports.

o However, if tariff unpopularity contributes to Republican losses in the midterm elections, Democrats may reconsider the policy.

9. Trump Administration's Claims of Manufacturing Revival

o Trump has argued that his tariff policies are helping revive US manufacturing.

o The administration has highlighted newly announced manufacturing investments, including Audi's proposed automobile plant in Georgia.

o US manufacturing activity has expanded since January 2026.

o Factory employment has recently trended upwards but remains slightly below the level when Trump returned to office in January 2025.

o US industrial production has also shown an upward trend.

10. Economists Question the Effectiveness of Tariffs

o Economist Brad Setser of the Council on Foreign Relations cautioned that the improvement in industrial production cannot necessarily be attributed to tariffs.

o Industrial production has weakened in the heavily tariffed automobile sector, while the largely tariff-free aerospace sector has performed strongly.

o Tariffs have also increased costs for US manufacturers by raising the prices of essential imported inputs such as steel and aluminium.

o Higher consumer costs have accompanied the protection offered to domestic industries.

11. Overall Assessment

o Economists argue that tariffs can protect selected domestic industries but poorly designed tariffs can damage integrated supply chains.

o The trade conflict with Canada is particularly problematic because Canada is an important customer for US manufactured goods and a critical supplier to American factories.

o Frequent policy changes between successive administrations also discourage long-term industrial investment.

Key Takeaway: Trump's tariff-driven manufacturing strategy is facing growing political and business resistance, particularly in Michigan, where the automobile industry depends on integrated US-Canada supply chains. While some domestic manufacturers benefit from import protection, higher input costs, disrupted trade and policy uncertainty are undermining the broader manufacturing revival. The US-Canada trade dispute could therefore become an important economic and political issue in the midterm elections.

[ABS News Service/03.11.2026]

President Trump’s use of tariffs to shield manufacturing-heavy states like Michigan from foreign competition was supposed to be a political win for the president and his party.

But voters in many of the states that Mr. Trump said he would help with his trade policies now appear skeptical of his erratic approach. And they are wondering if a growing backlash to tariffs will mean that the Trump administration’s economic experiment will come to an end just as quickly as it started.

Those concerns are being acutely felt in the Detroit area, where auto supply chains are intertwined with Canadian businesses just across the border. Mr. Trump’s global tariffs and his trade wars have become a midterm flashpoint as businesses and consumers contend with higher costs from tariffs and America’s strained relationship with Canada.

Mr. Trump in August imposed a 50 percent tariff on $20 billion of certain Canadian exports, after the countries failed to reach a trade deal. Canada swiftly retaliated with its own tariffs, prompting the Trump administration to ban the import of some Canadian goods, including alcohol and some dairy products.

Mr. Trump has still been threatening to proceed with a 50 percent tariff on Canadian autos and auto parts if the countries can’t make a deal by Jan. 1. On Sunday, just days before the midterms, Mr. Trump said he had “concepts of a very good deal with Canada,” though no details on the arrangement were released.

Mark Carney, the Canadian prime minister, also said that teams from the countries would be working in the coming weeks on “the outlines of a mutually beneficial trade deal.”

Most midterm voters are focused on issues other than trade, like high gas and housing prices. But in pockets of the country that depend on trade with other nations, Mr. Trump’s tariff policy has been on trial.

Ranchers in Texas have complained of increased tariff costs and other trade frictions with Canada and Mexico. Farmers in Maine and Iowa have also been worried about rising costs and diminished foreign markets. On Oct. 23, the Trump administration swapped some tariffs on Canadian products that U.S. farmers need for tariffs on other goods, in an apparent effort to help vulnerable Republican candidates like Senator Susan Collins of Maine.

In Michigan, local views on trade are mixed. Decades of deindustrialization have left blocks of factories vacant and locals bitter toward trade deals like NAFTA. Those views helped a trade-skeptical Mr. Trump win Michigan in 2016 and 2024, breaking down what had traditionally been a blue wall for Democrats.

But since then, many businesses have adapted to rely on the U.S. trade deal with Canada and Mexico, which Mr. Trump continues to threaten. Canada is Michigan’s largest import and export market, and voters have looked less kindly on the trade fight Mr. Trump has picked with the Canadians.

The Democratic nominee for Senate, Abdul El-Sayed, has called Mr. Trump’s Canada tariffs “chaotic” and “ham-fisted,” arguing that they raise prices for consumers. Dr. El-Sayed has the backing of the United Automobile Workers union, which has welcomed tariffs as a tool but rejected Mr. Trump’s offensive against Canada in particular.

His Republican opponent, Mike Rogers, a former congressman, has also carefully distanced himself from the president’s tariffs, saying in campaign ads that “Canada is not our enemy.”

Beneficiaries of the tariffs

While some companies have lamented the higher costs from tariffs, others in Michigan say the levies have helped, by shielding them from cheap imports from China and elsewhere, and boosting their customers’ interest in U.S.-made products.

Executives at Atomic Industries, a Detroit-area manufacturer that supplies automotive, defense and other customers, said that the tariffs had increased some of their costs. The company paid a significant tariff bill this year on expensive machinery it needed to import from Japan and South Korea because it is not available elsewhere.

But on balance, the tariffs had been helpful for their business, said Lou Young Jr., the company’s co-founder and head of manufacturing. The levies had resulted in increased sales for the company from customers seeking to produce more in the United States to avoid paying tariffs.

“The juice is worth the squeeze, in my opinion,” Mr. Young said of the effect of tariffs.

But Aaron Slodov, the company’s co-founder and chief executive, said tariffs had also created uncertainty, as manufacturers wait to see if the policies will be permanent, or if a new administration might come in and scrap the levies.

“It’s like throwing a grenade into the international order,” he said, adding, “it’s very confusing for everybody because the end of the tunnel is not very clear.”

“It’s not just like, tariffs good, tariffs bad,” he continued. “It’s not that straightforward.”

In its factory north of the Detroit city limits last week, Atomic Industries was pumping out plastic steps for recreational vehicles manufactured in Indiana, as well as drone bodies and a part for the New York City subway system. The company’s business involves using 3-D printing and A.I. to speed the process of creating specialized molds, which are in turn used to make plastic parts for a variety of customers.

Atomic Industries says building up this capacity helps overcome one of the biggest bottlenecks in the factory supply chain, making U.S. manufacturing for a variety of goods much cheaper, more flexible and competitive with Chinese factories.

Policy whiplash

Both Mr. Young and Mr. Slodov are strong proponents of building up U.S. manufacturing capacity, arguing that the country needs to maintain domestic factories not just for its economy but to prepare for global conflicts.

It’s a bipartisan goal that both the Biden and Trump administrations have shared. But the ways those administrations have pursued that goal have been drastically different, and the sharp turn from one political party’s strategy to another has incurred costs for companies that have had to adjust their business models as a result.

The Biden administration, for example, focused on providing subsidies to green energy. After Mr. Trump scrapped many of those measures, automakers scaled back their electric vehicle capacity and recorded tens of billions of dollars in write-downs and restructuring charges.

The question now is whether a sharp political end to Mr. Trump’s tariff policies could result in even more stranded investment. Some Trump officials believe that Democrats in power in the future will retain many of the tariffs, just as Mr. Biden kept some of Mr. Trump’s tariffs on China in his first term.

In an interview this year, Jamieson Greer, the United States trade representative, said that tariffs had traditionally been an important part of the Democratic platform. Setting aside midterm election rhetoric, he said, they would be more likely to retain them in the future.

“Democrats for years have talked about how we need to have tariffs to protect our workers,” he said. “If President Trump cured cancer, people would say, ‘Oh, well, you, know, but there’s a side effect that you have freckles on your nose.’”

But if the unpopularity of tariffs proves to be one reason Republicans lose seats in the midterms, Democrats may not retain the policies.

Mr. Slodov and Mr. Young said both the Biden and Trump approaches had certain advantages, but agreed that a sharp shift from one strategy to the other, especially compared with China’s commitment to long-term industrial planning, wasn’t helpful.

“If this kind of stuff can’t sustain through one or more administrations, and it just changes every four years, that’s a terrible place for everybody,” Mr. Slodov said.

The record

With elections approaching, the Trump administration has been eager to argue that its approach to revitalizing manufacturing has worked. The Trump administration has pointed to newly announced factories, like an auto plant planned by Audi in Georgia, as evidence of its success.

“Because of me, the auto industry is doing better than it’s ever done before, with plants and factories being built at a record clip and also being expanded all over the country, but especially in Michigan,” Mr. Trump said last week.

An index of factory activity shows that the manufacturing sector has been expanding since January. The number of workers employed in factories in the United States has also trended upward recently, though it’s still down slightly from when Mr. Trump came into office again in January of last year.

Industrial production in the United States has also been trending upward, a positive sign for U.S. manufacturing. But, Brad Setser, an economist at the Council on Foreign Relations, pointed out that those trends weren’t necessarily because of tariffs. Industrial production has sagged for the auto industry, which is heavily tariffed, while it has boomed for the aerospace sector, which is largely tariff free, he said.

The benefit for factories from tariffs has also come with higher costs for consumers, though Mr. Setser said that people “have probably attributed more of the cost increase to tariffs than is warranted.” Many of the costs that Americans are most concerned about, like gasoline, beef and housing, have little to do with tariffs, he said.

Some economists argue that tariffs could help protect some factories, but that Mr. Trump’s had not been particularly well designed. Mr. Trump had picked a trade fight with Canada, for example, a country that is a relatively strong customer for manufactured goods, and imposed tariffs that raised the cost of inputs that many U.S. factories need, like steel and aluminum.

The trade war with Canada “doesn’t look like it’s paying off politically,” Mr. Setser said. “In my view it’s a net negative for autos in Michigan and it’s a net negative for manufacturing in the U.S.”