At the polls Tuesday, voters expressed concerns about the U.S. economy and the Trump administration's handling of it in the first nine months of President Donald Trump's second term.
The country's cautious economic mood, which has led to Democratic victories in several states, extends beyond this year's election battle.
Ahead of the election, the Monitor assessed the economic climate by speaking with city officials, chambers of commerce and business owners in Michigan, a prominent swing state in the recent presidential election. We visited three very different cities—rural Three Rivers, industrial Battle Creek, and booming Orion—to learn about the challenges and opportunities facing their citizens.
Why did we write this
The Monitor visited Michigan, a political battleground state, to assess the economic climate in the first nine months of Trump's presidency. We found people who are weathering economic uncertainty in hopes that the warning signs will turn out positive.
The interviews did not address personal political positions. However, two themes emerged: cautious optimism about the economy and deep concern that current tariffs are dragging down economic growth. Tariffs aside, many local leaders and employers are concerned that the ongoing government shutdown, now in its 38th day, will erase the gains they've made. Everyone believed that their local leaders had a better sense of local sentiment than Washington's leadership.
Each of the towns visited by the Monitor has its own history and its own problems: in Three Rivers, a small mixed agricultural and industrial town reflects the ups and downs of the national economy; in Battle Creek, big changes for a major employer add uncertainty; and in the town of Orion, tariffs are clouding a bright future as a new auto assembly plant comes to town.
Three Rivers: The Path to a Top-Down Economy
Surrounded by farmland, Three Rivers has a more complex economy than it may seem at first glance. The largest employer, for example, is the American Axle auto parts plant. Much of the surrounding farmland was long ago sold to large agricultural companies, which buy tractors, fertilizers, pesticides and seeds from larger suppliers rather than local mom-and-pop stores.
Three Rivers has good paying jobs and the city has an industrial, blue collar feel, with its fortunes rising and falling with the overall national economy.
“Southwest Michigan is pretty stable, but very tertiary,” says Jamie Clark, president and owner of Clark Logic, a third-party logistics company based in nearby Portage. With a fleet of 70 trucks and 7 million square feet of warehouse space spread across Michigan and northern Indiana, Mr. Clark says the key to his success is diversification.
“If the auto industry is down, you would hope the RV industry would rise,” he says, noting Three Rivers has small factories producing both cars and recreational vehicles. Tariffs could hurt farmers given how much of their produce is shipped overseas. But there are signs that some production will move to Michigan.
“If I modeled everything based on economics, I would probably still have one building in Three Rivers rather than 100,” Mr. Clarke says. “I go by intuition. I don't know any other way.”
On U.S. Highway 131, Chris McGuire can tell when the economy is up or down by how many people buy his awnings.
“This area is in decline because it depends on agriculture,” said Mr. McGuire, owner of McGuire's Big Boyz Toyz LLC, which sells portable sheds, greenhouses and chicken coops. “There are a few other barn sellers on this road, but many of their sites are only about a third full.”
Scott Baldauf/The Christian Science Monitor
Mr. McGuire says he doesn't think the federal government cares about what happens in small town America. However, federal policies can have a major impact on the lives of rural Americans. “You get these tariffs and it drives up prices,” he says. “And you have interest rates that are so high that people can't buy a home.”
While he worries about other locals struggling with inflation and stagnant wages, he says his own company is doing well. This year sales are up 30% compared to last year. “I go to people's houses. I shake people's hands. I work one-stop,” he says. “Even then, it's a difficult task because of the financial burden of maintaining an office here. Every year I have to wonder: Is it really worth it?”
Battle Creek: Headwinds from Tariffs and Economic Shutdown
Battle Creek, home of the W. K. Kellogg Co., has long been known as the “Grain City.” The Kellogg name is everywhere, with the Kellogg Arena for sporting events, Kellogg Community College, Kellogg High School and even the Kellogg Air National Guard Base.
So when Italian candy maker Ferrero announced an agreement to buy W.K. Kellogg Co. in July, it was a gut punch for that community.
Ferrero has assured city leaders that they will keep Kellogg's headquarters in Battle Creek for at least one year, Mayor Mark Behnke says. They also said they would look for ways to modernize and expand the product line coming from Kellogg's manufacturing facilities.
But no matter what happens, Kara Beer, president of the Battle Creek Area Chamber of Commerce, isn't worried. She says there's a lot more going on in Battle Creek than just cereal, and notes that the main employer is Denso, a Japanese auto parts maker, not Kellogg.
In addition, she said, the local Viking-Cives plant makes snow blowers and de-icing equipment, there is a strong small business sector, and a new battery plant for Ford electric vehicles is coming to town.
One of the major concerns for business owners here is the damage that threatening tariffs can cause. President Trump has imposed tariffs on U.S. trading partners including China, Canada, Mexico and the European Union, covering everything from cars and heavy trucks to steel, aluminum, lumber, semiconductors, pharmaceuticals and copper. The Tax Foundation estimates that the tariffs will amount to an average tax increase of $1,300 per U.S. household in 2025.
At the Fort Custer Industrial Park, 67 of the 89 companies are foreign-owned, Ms. Beer said. “When you put these tariffs in place, it will have a major impact.”
These international firms bring in foreign parts to make goods in Battle Creek and will now have to pay higher customs duties. “Add the tariffs and one week you might be paying $21 for parts and the next week you'll pay $28 and of course they have to adjust their prices.”
The ongoing government shutdown is another concern. A significant number of federal employees at the Fort Custer Air National Guard Base and Training Center now work for free, meaning many of them are not spending money at restaurants or other local businesses.
“They don't know when their next paycheck will come,” Ms Beer says. “We are all trying to hope that the quarantine will end soon. But the longer it goes on, the longer it takes to recover from the effects of the quarantine.”
Orion Township: seeing “positive” for the economy
Unlike Battle Creek, a small industrial town with a proud industrial past, Orion Township is a leafy Detroit suburb with an auto assembly plant about to expand. In June, General Motors announced it would invest $4 billion to reconfigure its Orion Assembly plant to produce gasoline-powered trucks and SUVs, including the Cadillac Escalade and Chevrolet Silverado.
The decision follows a three-year charm offensive by township officials led by Supervisor Chris Barnett. Three years ago, GM was considering closing the assembly plant, which at the time produced electric vehicles such as the Chevy Bolt. But Mr. Barnett met with GM executives and vowed to do whatever it took to save the automaker.
“We told them we were going to make this process really smooth,” he says. This included a 15-year tax cut and greater flexibility in bureaucratic procedures. The result: GM will double the size of its operation and create more than 3,000 jobs, Mr. Barnett says, as well as an estimated 2,000 more new positions at ancillary companies that make car seats, bedding and related products.
All these jobs are good news for Tony Battaglia, owner of several local restaurants, including Palazzo di Bocce, which has its own bocce courts. “This assembly plant will attract people and you'll see it in the housing market,” he says. “It's a real positive for the local economy.”
Nationally, Mr. Battaglia says, “I've heard from business people around me that they seem more optimistic now, more than six months ago.”
But he admits the tariffs are making people a little nervous. “The tariffs are a mixed bag, but if they can finally get our money back from China, where they've been stealing from us for years, hopefully things will continue to improve.”
Denis Bozinowski, another Orion Township restaurateur, says the ongoing expansion of GM's assembly plant is great news, and his own sales are already up 10%. However, according to Mr. Bozinowski, the overall market is “stagnating.”
“A lot of people are scared right now,” he says. “They are afraid to spend money on luxury items, and for many people, going to a restaurant is a luxury.”
The biggest hit for young families is the cost of housing. “These young couples in their 20s who are looking at $300,000 to $400,000 houses with 8% interest rates, how are they going to buy a house? It's a stressful situation. If you have a husband and wife and they both have to bring in income, it's really difficult.”
Mr. Barnett, the township manager, says local and state leaders are finding common ground on issues such as the need for affordable housing. What worries him most is hyper-partisanship at the national level and what he calls “bold” tariff policies.
“I've heard directly from some of our Tier 1 and Tier 2 suppliers. That's what keeps them up at night,” Mr. Barnett says. “I have no problem with tariffs as long as they are well designed. We cannot prepare our employers and job creators for uncertainty.”
“They are looking to us for answers,” he adds, “and we don’t have them.”
