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The mayor of a General Motors factory town on the impact of new tariffs

STEVE INSKEEP, HOST:

Let's hear how Americans across the country see President Trump's new taxes on imported goods.

A MARTÍNEZ, HOST:

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First to Denver, Colorado, and Democratic Mayor Mike Johnston.

MIKE JOHNSTON: Our economists are projecting this would cost the city about 11,000 jobs in Denver. It'll probably drive 30 to $50 million of decrease in sales tax revenue just to the city alone - think it could be almost a billion dollars in lost economic activity next year.

MARTÍNEZ: Mayor Johnston says Denver has a housing crisis, and he's concerned about the rising cost of materials to make more homes.

JOHNSTON: If we can't keep up with supply of housing, then it becomes unaffordable for teachers or nurses or firefighters to live in our city anymore, and that has a huge impact on commute times, on traffic, on climate and all the things that make Denver Denver. So yeah, we are fighting hard to undo the escalating expenses in someone's kitchen counter right now, and this is going to just add to them.

INSKEEP: That may be true even if it's a domestically made kitchen counter, since tariffs tend to rise - to raise the cost of all products. In Kentucky, Shelby Somervell is with Greater Louisville Inc., the regional Chamber of Commerce.

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SHELBY SOMERVELL: We have a lot of heavy manufacturing companies here in Louisville, and a lot of the proposed or talked-about tariffs would have implications on a lot of the businesses in our area. But what's even harder than adapting to that sort of policy change or tariff is really the uncertainty. So businesses can adapt to taxes and tariffs, but what they can't adapt to is something that's changing, you know, every 90 days or every other day.

MARTÍNEZ: Ethan Karp is the CEO of MAGNET, a company that advises manufacturers in northeast Ohio.

ETHAN KARP: Some of them have gotten new business, and they're very optimistic. Some of them have lost business because it's export, and the exports were being taxed. And most of them are in the tire-kicker stage. They are being asked if they can provide new American business, but nobody's locked in those orders 'cause nobody knows for sure what the tariffs are going to be. So if you believe they're going to be good for you and those orders are going to come through, you're very excited. If you don't, then you're frustrated with the turmoil.

INSKEEP: Now let's go to Lansing, Michigan, the home of two General Motors plants and many other businesses. It's next to East Lansing, Michigan, the home of Michigan State University. And yet somehow, the Lansing mayor, Andy Schor, managed to get elected, even though he is a graduate of the archrival, University of Michigan.

ANDY SCHOR: (Laughter).

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INSKEEP: Broad-minded voters, Mayor Schor. Good morning.

SCHOR: It's all true. It's all true.

INSKEEP: Good morning. Good morning.

SCHOR: Yeah, good morning.

INSKEEP: Welcome to the program. Which parts of the executive order directly affect businesses in Lansing, so far as you can tell?

SCHOR: Sure. Well, we - you know, we've talked in the past about the auto industry. As you said, we have two auto plants. We have a battery plant. So we're certainly concerned about cross-border parts and other things that are going to make cars more expensive. The more expensive a car is, the less people can afford it. We're concerned about shifts in layoffs with workers. But it's more than just that. It's general manufacturing. We have about $2 billion in development going on right now. In Lansing, we're building thousands of units of housing. You just heard from the Denver mayor talking about housing. You know, if we can't build it, then we don't have the supply, and then the demand is higher and prices are higher.

So when you look at - we've got our finances set, and now aluminum and copper and steel - now those prices are uncertain. When you hear of the tariffs going up - you know, we do a lot of trade back and forth with Canada. We send there. They send here. It's right across the border. You know, if you're in Detroit, you can see it out your window.

INSKEEP: Yeah.

SCHOR: And that's really concerning, you know, having those prices go up for development, for housing, for agriculture. Essex County has a huge greenhouse, and then they send a lot of vegetables and things over. So people who want to eat their avocados and green beans and things, those prices are going to go up. And, you know, the commitment in the election was prices are going to go down, and now they're going to go up. These are all extremely concerning for Lansing residents.

INSKEEP: You know, I hear those concerns, and at the same time, I'm from the Midwest. I'm from Indiana. I talk to my family...

SCHOR: Yeah.

INSKEEP: ...There. I know a lot of people there. And there are people who support this move, feel that the tariffs are necessary. And their general idea is that without so much foreign competition, without so much outsourcing, there would be more Midwestern jobs, more Midwestern auto jobs and other kinds of jobs. Do you accept that general proposition?

SCHOR: You know, I think that in the short term, when they see their prices go up at - in the grocery store, when they see the prices go up for a variety of things in the economy, I think they're going to be upset about that. We certainly want as many jobs as we can get. I mean, we - you know, we're - we've got a battery plant with 1,700 jobs that's about to open up. You know, we're pushing for jobs. But if you say, you know, we're not going to trade with Canada anymore, it could be three years. It could be five years and billions of dollars of investment to build something new here. And that's a long time, and that's a lot of money. And who's going to make that investment? So those jobs may not come, but the costs are going to go up.

INSKEEP: You just...

SCHOR: And that, to me, is a huge concern.

INSKEEP: You just said a battery plant. That's for electric vehicles?

SCHOR: Originally, it's supposed to be for electric vehicles, but because of other policies, they're looking at, you know, should they convert to different batteries? Should they convert to - so they're actually figuring that out.

INSKEEP: You're talking about the fact that this...

SCHOR: It's LG, yeah.

INSKEEP: ...Legislation that passed recently eliminates...

SCHOR: Yes.

INSKEEP: ...Subsidies for EVs and other things. So you're facing several...

SCHOR: That's right. Yep.

INSKEEP: ...Economic changes...

SCHOR: Yeah.

INSKEEP: ...At once, and it sounds like you were attempting to lean into one economy as a city and as a region, and now you're discovering it's a different economy you're moving into.

SCHOR: Well, we're attempting to be a diverse economy, to be honest with you. You know, we've got two auto manufacturing plants. If - you know, if somebody, you know, drives a Chevy Traverse, that was built in Lansing. If they drive the Camaro, that was built in Lansing. If they drive the CT5, built in Lansing. But we'd love to see your traditional gas cars. We'd love to see your EV cars. We'd love to see, you know, a diversification looking into the future economy. And again, if cars are more expensive, people aren't going to buy them. If the parts and the aluminum and the steel for development is more expensive, then you don't have the housing for the 1,700 jobs that we are bringing in. These are all part of the economy, and it's something where we trade back and forth with Canada pretty regularly. I talk to the mayor of Windsor all the time. If costs are more expensive, then these are harder things to do because it's more expensive.

And we've got financing set. We have a $27 million performing arts center that we are building right now. You know, and when you hear - oh, yeah, and when you hear that the costs could be more, that throws your finances out of whack, and we may not have the ability to build that. So these are all the things that I'm concerned about.

INSKEEP: Andy Schor is the Democratic mayor of Lansing, Michigan. Mayor Schor, thanks very much for your time. Good to talk with you again.

SCHOR: You bet. Go blue.

(SOUNDBITE OF SEBASTIEN TELLIER'S "FANTINO (SESSIONS VERSION)") Transcript provided by NPR, Copyright NPR.

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Steve Inskeep
Steve Inskeep is a host of NPR's Morning Edition, as well as NPR's morning news podcast Up First.