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American auto executives have had a rough go of it of late. As calendars flipped to 2025, the leaders of the Big Three (GM, Ford, and Stellantis) were already confronting lukewarm demand for their electric vehicles as well as the ascendance of new and formidable Chinese competitors. Then Donald Trump arrived in the White House, and the headwinds turned into hurricane-force gales. The most urgent issue has been the tariffs that Trump has declared, and then paused, and then resumed on goods imported from Canada and Mexico. Because the North American auto industry is tightly integrated with suppliers in both countries, Trumps proposed 25% tariffs could increase the cost of new cars in the U.S. by as much as $12,000. On March 6, the Trump administration granted the auto industry a one-month reprieve so that companies can shift production here to the United States of America, according to White House press secretary Karoline Leavitt. The likelihood of that happening in a matter of weeks is virtually nil. Beyond the looming threat of tariffs, U.S. automakers now face an increasingly wobbly domestic market. As Trumps tumult has rattled the economy (and shaken the stock market), American consumer sentiment has tumbled at the fastest rate in three-and-a-half years. Both tariffs and an economic downturn would make Americans relatively poorer when contemplating a vehicle purchase. For that reason, their likely effect on car-buying preferences is similar: They would tilt purchase decisions toward cheaper, modest-sized models. But U.S. automakers have no small, affordable options available; after decades focused on building increasingly massive SUVs and pickups, the Big Three no longer offer Americans a single mainstream sedanonly foreign competitors do. Detroits devotion to car bloat has left the U.S. auto industry uniquely vulnerable to Trumps economic chaos. The term car bloat describes the steady expansion of American automobiles. In 1977, just 23% of new car sales were SUVs and pickups; that figure now stands at around 80%. Individual models have also grown larger, such as the Chevrolet Silverado pickup, which added around 700 pounds and two inches of height between 1995 and 2024. Car bloats causes are manifold, including shifting consumer preferences, loopholes in federal fuel economy rules, and the billions of marketing dollars carmakers have spent convincing Americans that they need a rugged SUV or pickup even if they haul nothing heavier than groceries and venture nowhere more exotic than a shopping mall. U.S. car companies now rely on their heftiest models to generate profit. The pickup truck is the American luxury vehicle, said Glenn Mercer, a longtime automotive researcher. That’s where they make all their money. Last year, GM announced it was ending production of the Chevrolet Malibu, Detroits last non-luxury sedan sold in the U.S. . Meanwhile, the Big Threes margins have grown juicier due to the supply chains that spread across North America following the 1994 adoption of NAFTA. The elimination of border fees has allowed automakers to capitalize on Mexicos relatively cheap labor as well as Canadas abundant raw materials and many factories. A single automotive component can cross national borders as many as seven times during the production process. Free trade has allowed the automakers to minimize the cost of producing cars that have grown increasingly massiveand expensive. In January, Kelley Blue Book found that the average price of a new vehicle in the U.S. was just shy of $50,000, near an all-time record. Car ownership is even pricier when accounting for the rising costs of insurance and maintenance. According to federal data, the average inflation-adjusted cost of owning a car driven 15,000 miles annually rose a whopping 44% between 2017 and 2023, reaching $12,000 per year. Even in a rich and auto-dominated country like the U.S., theres a limit to how much shoppers can fork out. Last year, the Detroit News noted an affordability shift in car-buying preferences, and a recent analysis by Wells Fargo found that most American pickup owners want to pay between $40,000 and $50,000 on their next truck, well below the typical cost of $60,000-plus. A 2024 survey by the Dave Cantin Group and Kaiser Associates found a three-percentage point jump in Americans planning to buy a sedan as their next vehicleand a decline in those eyeing a truck or SUV, the vehicle types that dominate Detroit. The Big Threes loss has been Asian car companies gain: Companies like Kia, Nissan, and Mitsubishi have seen U.S. sales surge for comparatively cheap sedans like the K4, Sentra, and Mirage. Now Trumps tariffs could add thousands more dollars to the cost of a North American SUV or truck, a price hike likely to catalyze the American shift toward downsizing. (Sedans produced by foreign brands in North American would be likely to see less of a price hike than Detroits hefty SUVS and trucks, and many sedans sold in the U.S. are imported from countries that arent current targets of Trumps tariffs.)Even if Trump ultimately dumps his tariff proposalsa huge ifgrowing fears of a recession, which Trump has refusd to rule out, reveal the vulnerability of Detroits bloated lineups. Some budget-conscious car buyers may save money by delaying their purchase, choosing fewer features, or selecting a smaller model within the same vehicle class. (This may already be happening: The comparatively modest Toyota RAV4 recently dethroned the Ford F-150 pickup as the top-selling vehicle in the U.S.) The other likely scenario: They could switch from an SUV or pickup to a comparatively cheap sedan. In a world of uncertainty, a safe harbor is a lower cost, high quality vehicle, said Mercer. Thats the Japanese and Koreans. For U.S. automakers, losing longtime customers would be a disaster. Its easier to keep a customer than conquer one, Mercer said. I’m sure Ford is kicking itself that it discontinued so many of its car linesand the Koreans and the Japanese are feeling pretty damn smart. For Americans not personally involved in the auto industry, a tempering of car bloat would hardly be a bad thing. Bigger vehicles are more deadly and polluting, and a decline in size would reduce crash deaths and emissions. But those societal benefits are unlikely to be top of mind for U.S. automakers facing tumbling sales. Mercer blames the Big Three for lemming-like behavior as they have dropped all of their smaller models over the last 20 years. That culling process has left them vulnerable to the current consumer shift toward affordability, a trend that Trumps economic chaos will only reinforce. If American auto sales take a hit in the months ahead, carmakers will surely blame whipsawing federal policy. Fair enough, but they should also look in the mirror.
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E-Commerce
Denmark’s largest grocery store operator is introducing a new symbol to its electronic price tags to make it easier to shop local and avoid purchasing American goods. Starting this month, black stars will appear on price tags for European-produced groceries in stores across Denmark, Germany, and Poland run by the Salling Group. “We are making it easier to buy European brands,” Salling Group CEO Anders Hagh wrote in a LinkedIn post last week, citing consumer demand. Danish holding company the Salling Group operates multiple grocery stores chains and more than 1,700 stores. [Image: Salling Group/LinkedIn] Attitudes towards the U.S. have soured in Denmark as President Donald Trump has called for taking control of Greenland, an autonomous Danish territory, and for putting tariffs on European goods. A YouGov poll released in January found Danes consider the U.S. a bigger threat than North Korea. “We have recently received a number of inquiries from customers who want to buy groceries from European brands,” Hagh said. “Our stores will continue to have brands on the shelves from all over the world, and it will always be up to the customers to choose. The new label is only an extra service for those customers who want to buy goods with European brands.” Trump’s trade war has elevated the importance of national origin “made in” labels as consumers look to purchase products made in their own countries, turning retail and grocery stores into the front lines of the trade war. For its part, Hagh said products in his company’s grocery stores can get the star “when the ultimate owner of the trademark is European.” “We hope that customers will welcome the new information and will once again let everyone choose freely from our large selection of goods from all over the world,” he said. The black star on the company’s electronic price tags might be a small in size, but the symbol could have an outsized effect. If the trend catches on more broadly with consumers across Europe, U.S.-based brands could suffer.
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E-Commerce
With a mass email sharing what it called difficult news, the U.S. Department of Education has eroded one of its own key duties, abolishing more than half of the offices that investigate civil rights complaints from students and their families. Civil rights complaints in schools and colleges largely have been investigated through a dozen regional outposts across the country. Now there will be five. The Office for Civil Rights locations in Boston, Chicago, Cleveland, Dallas, New York, Philadelphia, and San Francisco are being shuttered, ProPublica has learned. Offices will remain in Atlanta, Denver, Kansas City, Seattle, and Washington, D.C. The OCR is one of the federal governments largest enforcers of the Civil Rights Act of 1964, investigating thousands of allegations of discrimination each year. That includes discrimination based on disability, race, and gender. This is devastating for American education and our students. This will strip students of equitable education, place our most vulnerable at great risk and set back educational success that for many will last their lifetimes, said Katie Dullum, an OCR deputy director who resigned last Friday. The impact will be felt well beyond this transitional period. The Education Department has not responded to ProPublicas requests for comment. In all, about 1,300 of the Education Departments approximately 4,000 employees were told Tuesday through the mass emails that they would be laid off and placed on administrative leave starting March 21, with their final day of employment on June 9. The civil rights division had about 550 employees and was among the most heavily affected by Tuesdays layoffs, which with other departures will leave the Education Department at roughly half its size. At least 243 union-represented employees of the OCR were laid off. The Federal Student Aid division, which administers grants and loans to college students, had 326 union-represented employees laid off, the most of any division. On average, each OCR attorney who investigates complaints is assigned about 60 cases at a time. Complaints, which have been backlogged for years, piled up even more after President Donald Trump took office in January and implemented a monthlong freeze on the agencys civil rights work. Catherine Lhamon, who oversaw the OCR under former Presidents Barack Obama and Joe Biden said: What youve got left is a shell that cant function. Civil rights investigators who remain said it now will be virtually impossible to resolve discrimination complaints. Part of OCRs work is to physically go to places. As part of the investigation, we go to schools, we look at the playground, we see if its accessible, said a senior attorney for OCR, who spoke on the condition of anonymity because he was not laid off and fears retaliation. We show up and look at softball and baseball fields. We measure the bathroom to make sure its accessible. We interview student groups. It requires in-person work. That is part of the basis of having regional offices. Now, California has no regional office. The OCR was investigating about 12,000 complaints when Trump took office. The largest share of pending complaintsabout 6,000were related to students with disabilities who feel theyve been mistreated or unfairly denied help at school, according to a ProPublica analysis of department data. Since Trump took office, the focus has shifted. The office has opened an unusually high number of directed investigations, based on Trumps priorities, that it began without receiving complaints. These relate to curbing antisemitism, ending participation of transgender athletes in womens sports, and combating alleged discrimination against white students. Traditionally, students and families turn to the OCR after they feel their concerns have not been addressed by their school districts. The process is free, which means families that cant afford a lawyer to pursue a lawsuit may still be able to seek help. When the OCR finds evidence of discrimination, it can force a school district or college to change its policies or require that they provide services to a student, such as access to disabilities services or increased safety at school. Sometimes, the office monitors institutions to make sure they comply. OCR simply will not be investigating violations any more. It is not going to happen. They will not have the staff for it, said another attorney for the Department of Education, who also asked not to be named because he is still working there. It was extremely time and labor intensive. The department said in a press release that all divisions at the department were affected. The National Center for Education Statistics, which collects data about the health of the nations schools, was all but wiped away. Education Secretary Linda McMahon called the layoffs a significant step toward restoring the greatness of the United States education system. In addition to the 1,300 let go on Tuesday, 600 employees already had accepted voluntary resignations or had retired in the past seven weeks, according to the department. Trump and his conservative allies have long wanted to shut the department, with Trump calling it a big con job. But the president hasnt previously tried to do so, and officially closing the department would require congressional approval. Instead, Trump is significantly weakening the agency. The same day Congress confirmed McMahon as education secretary, she sent department staff an email describing a final missionto participate in our opportunity to perform one final, unforgettable public service by eliminating what she called bloat at the department quickly and responsibly. Education Department employees received an email on Tuesday afternoon saying all agency offices across the country would close at 6 p.m. for security reasons and would remain closed Wednesday. That led many workers to speculate that layoffs were coming. Then, after the workday had ended, employees who were being laid off began receiving emails that acknowledged the difficult workforce restructuring. Emails also went to entire divisions: This email serves as notice that your organizational unit is being abolished along with all positions within the unitincluding yours. Jodi S. Cohen and Jennifer Smith Richards, ProPublica This story was originally published by ProPublica.
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E-Commerce
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