The UAW at a Crossroads: Can Trump’s Trade War Revive the Labor Movement?

A C-Suite Quick Take

The United Auto Workers (UAW) finds itself significantly weaker than it appeared only a year ago. Paradoxically, the re-election of Donald Trump presents an unexpected opportunity for the union to regain its footing.

• The momentum from the UAW’s record-breaking contracts with the Detroit Three automakers and the successful unionization vote at Volkswagen’s Tennessee plant has dissipated

• In recent months, the UAW has faced multiple setbacks, including leadership challenges and diminished political influence following Trump’s re-election

• However, the incoming Trump Administration’s likely trade initiatives —focused on tariffs against China and vehicle imports from Mexico—creates a potential opening for the UAW to expand its economic influence and membership if it plays its cards right

• Automakers and suppliers must act proactively, working with both the new Administration and the UAW, to navigate these changes and mitigate the potential fallout from disruptive trade policies

Just one year ago, the United Auto Workers (UAW) seemed unstoppable. High-profile strikes against the Detroit Three (D3) automakers secured record-setting contracts.  The UAW promptly announced a campaign to unionize the rest of the industry, with the first win in an April vote at Volkswagen’s Tennessee plant appearing to signal a new era for the labor movement. Shawn Fain, the union’s aggressive leader, was hailed as the most influential UAW president since Walter Reuther. Public support surged for what appeared to be a revitalized labor movement.

Yet, that momentum has all but evaporated. A series of setbacks has stalled the union’s progress, raising questions about its strategy and future. Compounding these challenges is an unexpected twist: the re-election of Donald Trump. While initially seen as a blow to the labor movement, Trump’s trade policies may paradoxically provide the UAW with a rare opportunity to regain its footing—if it plays its hand wisely.

Momentum Lost

The UAW’s triumphs in 2023 created a wave of optimism within the union. The contracts with Ford, GM, and Stellantis were celebrated as landmark wins, forcing wage increases not just at the D3 but also at non-union competitors. Fain announced ambitious plans to unionize foreign automakers and their suppliers, leveraging public goodwill and the union’s newfound confidence. And, in April 2024, the successful unionization vote at Volkswagen’s Tennessee plant seemed to confirm the UAW’s momentum.

But that victory turned out to be the high-water mark. By May, the UAW’s unionization campaign began to unravel. Mercedes workers rejected unionization, and efforts to secure a contract at Volkswagen have stalled. Internally, Fain faces mounting challenges, including an investigation by a federal monitor appointed after the union’s corruption scandals. Allegations of retaliation against whistleblowers have cast a shadow over his leadership, and his once-unified base is splintering.

Politically, the UAW’s influence has also diminished. Fain’s support for Kamala Harris and other Democrats in the 2024 election proved costly as Republicans swept key races. Michigan’s support for Trump and the loss of Sherrod Brown’s Senate seat in Ohio further underscored the union’s eroding clout.

Trump’ Re-election: A Double-Edged Sword

The Trump Administration will be hostile to unions. Yet amid this turmoil, the UAW faces an unlikely lifeline: Trump’s proposed trade policies. The new administration’s focus on tariffs—particularly against China and Mexico—could reshape the competitive landscape of American manufacturing by making U.S. factories and suppliers more competitive. This shift presents the UAW with a unique opportunity to rebuild its influence, grow its membership, and heal internal divisions between pro-Democratic leadership and a significant bloc of pro-Trump rank-and-file workers. However, these potential gains are contingent on the union’s ability to navigate a volatile economic and political environment with caution and pragmatism.

For the UAW, the key to success lies in restraint. Overreaching, as it did during the height of its momentum, risks alienating automakers and forestalling potential gains. Companies fearful of aggressive union tactics may choose to delay expansions or turn to non-union suppliers to mitigate risk. The UAW should focus on making incremental progress, particularly by finalizing a contract with Volkswagen. Securing this deal would signal stability and competence, countering recent setbacks. Simultaneously, the union should advocate for the permanence of Trump’s tariffs, leveraging their potential to create long-term advantages for U.S. auto workers.

Engaging with Trump’s administration will be delicate but essential. While it’s unlikely that Fain will openly align with Trump, the UAW could seek common ground with trade representatives to promote U.S. manufacturing jobs. History shows the enduring power of tariffs—consider the Detroit automakers’ continued dominance in the truck market, bolstered by a 25% tariff imposed over 50 years ago. The UAW must seize this moment to secure similar protections for its members.

The D3 also stand at a crossroads. Trump’s policies provide an opportunity to strengthen their U.S. operations, but only if they act strategically. Rebuilding their relationship with the UAW could pave the way for a more collaborative approach to labor relations, reminiscent of quieter, more productive negotiations in past decades. GM and Ford, in particular, should engage with the administration to shape trade policies that protect profitability while preserving jobs. They should push hard to keep any change to North American trade within a renegotiated USMCA agreement allowed in 2026. Proactive engagement with the UAW could help mitigate labor disruptions while ensuring a unified front in navigating the challenges of a global trade war.

Foreign automakers like Volkswagen and Mercedes must also weigh their options carefully. For Volkswagen, finalizing a contract with the UAW could provide stability and demonstrate goodwill amid heightened scrutiny. For others, such as Mercedes, the current political climate may embolden their resistance to unionization. They can also try to leverage their red-state footprint to mitigate or delay damage from the trade war.

Suppliers, too, need to take action to protect their operational footprints and supply chains. Those with UAW-represented operations should prepare for increased demand and use this moment to strengthen relationships with the union. Non-union suppliers based in the U.S., meanwhile, have an opportunity to expand their market share by positioning themselves as reliable, cost-effective alternatives in a tariff-protected landscape. Capacity constraints may allow some suppliers to negotiate higher prices, creating a rare chance to improve profitability. However, they must tread carefully, ensuring that short-term gains do not jeopardize long-term partnerships or reputations.

The UAW’s Next Hand

The UAW’s journey over the past year has been a study in the complexities of momentum—how quickly it can build, how easily it can falter, and how difficult it is to regain. Trump’s trade war will undoubtedly disrupt the auto industry, creating winners and losers. But for the UAW, this disruption represents a chance to rewrite its narrative. To succeed, the union must embrace strategic moderation, balancing assertiveness with pragmatism. The Detroit Three and their suppliers must also act decisively, leveraging the opportunities created by a volatile geopolitical landscape.

In the end, the story of the UAW’s next chapter will not be written by bold declarations or dramatic actions but by quiet, calculated moves—by those who understand that in a game of high stakes, it’s not about the cards you hold but how you play them.