Democratic presidential candidate Kamala Harris wrongly claimed that “as many as 300,000 autoworkers may be out of a job before the end of the year.” That’s a high-end estimate for total job losses — not solely among autoworkers — due to the potential impact of the Trump administration’s trade policies, including actions not yet taken.
In fact, the vast majority of that impact would be due to a threatened, but not implemented, tariff on imports of autos and auto parts.
Harris made the comment during an Aug. 12 interview on CNN in which she criticized President Donald Trump’s trade policy. “He said he was going to help working people, and it is estimated that as many as 300,000 autoworkers may be out of a job before the end of the year,” the senator said.
Her campaign confirmed that Harris was referring to a study by the Center for Automotive Research on the potential impact of Trump’s automotive trade policies. But the CAR study said as many as 366,900 total jobs “economy-wide” would be lost in its “worst-case scenario.”
Kristin Dziczek, vice president of industry, labor & economics at CAR, told us in an email: “300,000 auto workers out of a job before the end of the year is NOT what CAR is projecting,” confirming that the figure was an estimate for “job loss across the economy” from the impact of several proposed and implemented trade policies on the auto industry.
“Total workers in motor vehicle & parts manufacturing … was 832,700 in June 2019, and hourly workers (production & non-supervisory workers) in the sector totaled 640,200 in June 2019. It is inconceivable that the industry could lose more than 36 percent of current employment by the end of the year,” she said.
Dziczek noted that hourly motor vehicle and parts manufacturing employment dropped 0.1% in the first six months of 2019.
Total motor vehicle and parts employment has dropped by 16,100 jobs from January through July this year, but such employment is up 32,900 since Trump took office, according to the Bureau of Labor Statistics.
As for the CAR study, it provided a range of outcomes, depending on which trade policies come to fruition, with the job loss Harris cited as the high-end figure. “In the broader economy, U.S. GDP is projected to fall between USD 6.0 billion and USD 30.4 billion and total economy-wide employment would drop between 71,200 and 366,900 jobs,” the study, published in February, said.
Dziczek told us those projections are for the first year after the policies were in effect.
The study said that high-end job loss, as well as an increase in light-duty vehicle prices and a decrease in sales, “will likely occur” in a “worst-case scenario” in which the new trade deal between the U.S., Canada and Mexico is implemented, other tariffs including those on steel and aluminum imports continue, and 25% tariffs on autos and auto parts are imposed on imports except those from Canada, Mexico and South Korea. The vast majority of the impact — 90% of it — would be due to those auto and auto parts tariffs, which Trump has threatened but not implemented.
“Importantly, in this worst-case scenario, the broad-based Section 232 autos and auto parts tariffs will be responsible for over 90 percent of the total economic harm,” the CAR study said.
Other trade policies have changed since the February CAR report, Dziczek told us. The administration announced in May that steel and aluminum tariffs would be removed for Canada and Mexico, and the formerly 10% tariff on $200 billion in Chinese goods went up to 25% in May. But when CAR re-ran the economic modeling analysis, including the potential for those auto/auto parts tariffs, the projected job loss was about the same — 368,000, according to Dziczek.
The threat of tariffs of up to 25% on imported vehicles and auto parts has been looming. In August 2018, Trump said: “We are going to put a 25% tax on every car that comes from the European Union into the United States.” In February, the month CAR’s study was published, the Commerce Department gave the White House its report on the impact of auto and auto parts imports on national security. Trump had requested the so-called “Section 232” investigation under the Trade Expansion Act, which says a president can implement trade restrictions if the Commerce Department determines the imports hurt national security. Trump used that justification for the steel and aluminum tariffs, implemented in March 2018.
But on May 17, Trump announced a decision on the auto and parts tariffs would be delayed for six months while the administration negotiates with the European Union, Japan and other countries.
Auto industry groups including the American International Automobile Dealers Association and the Motor and Equipment Manufacturers Association have been opposed to such tariffs.
CAR’s low-end estimate, of a loss of 71,200 jobs, is under a scenario in which the aluminum and steel tariffs were lifted for Canada and Mexico (which occurred) and the auto and auto parts tariffs were implemented only on the United Kingdom.
Harris would have been correct to cite the CAR study as an estimate of total job losses if Trump follows through on broad tariffs on imported autos and auto parts. But she wrongly attributed those losses only to “autoworkers,” and Trump has now delayed those tariffs until at least November. Since the CAR projections are for the first year after such tariffs would be implemented, the study’s estimates can’t possibly apply to “the end of the year,” as Harris said.