The Year That Donald Trump Tried—and Failed—to Kill Free Trade |
The Year That Donald Trump Tried—And Failed—To Kill Free Trade
It’s been hell for business owners to navigate the whims of the president’s tariffs. And now they’re ready to get their money back.
BY MELISSA ANGELL, SENIOR STAFF WRITER @MELISSKAWRITES
It was the chart seen around the world. The CEO of an L.A. floral company watched the White House’s “Liberation Day” announcement from her home office, about a month shy of her company’s busiest holiday, Mother’s Day. A CPG founder in Austin wondered if the price of monk fruit, which is found mainly in China, was about to skyrocket. And a New York City spirits importer was caught by surprise as he was literally negotiating his Series A.
These founders operate in remarkably different sectors—and none could believe what was playing out before their eyes. From different time zones, they watched, stunned, as President Trump stood behind a wooden lectern in the White House’s soon-to-be-uprooted Rose Garden, unable to contain his glee. He would soon reshuffle global trade as the world knew it.
Twenty minutes into Trump’s speech, Commerce secretary Howard Lutnick approached the podium with a blown-up chart partitioned into three columns: country name, tariffs “charged” to the U.S., and the so-called “reciprocal” tariff the U.S. would kindly return. The rates, which ranged from 10 percent to 50 percent, were far higher than any economist had estimated before the speech, with many projecting rates in the 20 percent range.
“April 2, 2025, will forever be remembered as the day American industry was reborn,” Trump boomed to an audience of union workers and cabinet officials. “The day America’s destiny was reclaimed and the day that we began to make America wealthy again.”
It’s a day Mike Musheinesh, the CEO of Detroit Axle, remembers all too well. “It was surely a liberation day for my bank account,” Musheinesh tells me deadpan over the phone. “I was liberated from many funds after that.”
Operating out of two 200,000-square-foot facilities in metro Detroit, Detroit Axle has been around for nearly 40 years, since Musheinesh’s father opened it in 1989. The company deals in everything from brake pads to spark plugs—just about any part that most vehicles need, barring semitrucks—and works with plenty of aluminum and steel.
Auto parts became one of the most heavily tariffed commodities in the United States. By May 3, all car parts imported into the country were subject to a 25 percent tariff, imposed under Section 232 of the Trade Expansion Act of 1962, which allows presidents to adjust tariff rates in the face of national security concerns. Signed by President Kennedy, the measure was enacted to give U.S. leaders a lever to boost American economic growth during the Cold War.
Car parts already faced a 25 percent tariff, thanks to a 2018 tariff from the Trump administration, via Section 301 of the Trade Act of 1974, which allows presidents to wield tariffs in response to unfair trade practices. Then there are the Liberation Day tariffs, tacking on up to 20 percent for car parts, along with the standard 2.5 percent Most-Favored Nation tariff. Stacking all of those on top of one another meant that Musheinesh reckoned with a total duty of 72.5 percent. That’s a considerable jump from the 2.5 percent duty he’d paid during the start of Trump’s first term.
The worst of it arrived in September, when Musheinesh imported an “armada of containers” holding roughly $14 million in inventory arriving from China at the Port of Detroit on a Wednesday. By Monday morning, he says, there was about $50,000 in his company’s bank account after the government debited $10 million for tariffs.
“This is not a market of who can thrive anymore,” Musheinesh says. “It’s a market of who can survive.”
A year later, Musheinesh has accepted that paying $10 million on average in tariffs each month is the new cost of doing business—but it’s a high price to pay. He narrowly avoided shuttering one warehouse and laying off 102 people, and delayed the opening of his third Detroit factory in a new, 350,000-square-foot building. The capital needed to fund those plans, Musheinesh says, went to the government. A year later, revenue is up at Detroit Axle, but profits are down a staggering 80 percent.
As soon as Trump walked away from the podium on that fateful Tuesday, markets tanked. During an earnings call that afternoon, CEO Gary Friedman of furniture retailer RH blurted out “Oh, shit!” when he learned that the company’s stock had tanked by 26 percent in response to the news. The S&P 500 and the Dow tumbled roughly 10 percent over the next few days. The president refused to back down, likening tariffs to “medicine” that would heal the U.S. economy. The administration, eager to save face, sent top officials out to the press to defend the decision. Small Business Administration boss Kelly Loeffler emphasized that tariffs are “critically important to the future of the country,” because they were expected to help uncouple the U.S. economy from relying on foreign nations.
On April 9, Trump announced a 90-day pause on the new tariff rates, except for China’s. Hours before he made the announcement, he posted on Truth Social, “THIS IS A GREAT TIME TO BUY!!!” That day, the S&P shot up 9.5 percent.
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