Detroit — Just before President Donald Trump hit the stage Tuesday at MotorCity Casino to promote his economic policies, a trio of economic and business leaders sat in the same theater and expressed a lukewarm — and at times pessimistic — view on the trajectory of Michigan’s economy.
“There’s so much uncertainty, and that’s the key word,” said Mary Buchzeiger, CEO of Lucerne International Inc., an Auburn Hills auto supplier. “Businesses don’t like uncertainty, and it’s a very difficult environment to plan for the future, to invest in the future, to make those CapEx decisions when you have so much uncertainty.”
Buchzeiger joined a Detroit Economic Club panel with Quentin Messer Jr., the Michigan Economic Development Corp. CEO, and Gabriel Ehrlich, a University of Michigan economic forecaster, to talk over the state’s economic outlook.
The event had already been scheduled when Trump opted to visit the state to tout his own economic policies in an afternoon speech at the casino’s Sound Board theater, following a tour of Ford Motor Co.’s Dearborn Truck plant.
Ehrlich said data is showing conflicting narratives on Michigan’s job situation. Some recently-collected numbers indicate falling overall employment, and others suggest that total wage and salary jobs have ticked up lately.
“We have a very puzzling story about Michigan’s labor market right now,” he said. “So that’s the backdrop coming in to the year. We do expect to hit a little bit of a soft patch this year, in terms of job growth, but picking up as we get into the back half of the year.”
That late-year pickup, he added, should come as businesses find “a little bit more clarity and certainty.”
Detroit Economic Club officials on Tuesday released the annual Michigan Economic Outlook survey results, which found equally mixed responses among state business leaders and associations. Trump’s visit also coincided with continued national concerns around high prices, though new numbers on core consumer prices showed more tepid growth in December, a welcome development.
Short, medium and long-term economic outlook scores improved over a year ago, signaling optimism, the state outlook scores showed. But respondents leaned more negative on the expected impact of Trump’s policies. And while the survey found positivity on questions about raising a family in Michigan and whether it’s a good place to be a professional, a question about whether the state is “business-friendly” got less support than a year ago.
Buchzeiger said amid Trump’s sharp policy shifts, including on tariffs, it has made businesses like hers “scared to act.” Her company pressed pause on a $50 million Michigan project last year amid the uncertainty.
“Scared to act because you just don’t know what’s going to change next, or if this policy with the next administration is going to flip-flop,” the CEO said. “So your investment that you’re making, that is going to be profitable with this policy, next thing you know, three, four years down the road, (there’s a change).”
But Messer called for patience, to “give elected officials time to grown and to evolve into their roles.”
“We get the government, we get the policy that we elect,” he said. “So we have a responsibility to behave differently if we want a different set of outcomes, I would argue.”
Ehrlich said that Trump’s auto policies have been supportive in several ways for Michigan’s flagship auto industry. Changes over the past year to Trump’s initial tariff policies, which initially could have hurt Michigan, “should actually make the tariffs now a very slight net positive for domestic auto production,” he said. Cutting vehicle fuel economy standards should also boost the state’s industry.
Yet Ehrlich said his department still anticipates the tariffs will ultimately add more than $3,000 to a price of cars.
“So from an affordability perspective, it’s still not a winner,” he said.
As a top supplier business executive, Buchzeiger made it clear she hasn’t seen much benefit to Trump’s aggressive tariff policies, including for the auto industry, and believes other current federal auto policy shifts don’t have the long-term in mind.
“Tariffs are a tax on U.S. citizens,” she said. “People don’t realize that tariffs are not paid by foreign countries … It’s an affordability issue.”
She added: “The tariffs, while in the short term, will definitely drive investment, in the long term, it is going to drive up the cost of vehicles, and it is going to make us uncompetitive with the rest of the world. Plain and simple.”
