Michigan’s economy is in flux.

Tariffs have pushed up the cost of some goods. Unemployment has ticked up slightly. Hiring practices are shifting as artificial intelligence tools like ChatGPT become more prevalent in workplaces.

Those changes raise big questions for the state’s more than 900,000 small businesses — and the workers who depend on them. How are owners adapting to rising costs and new technologies? What does this moment feel like on the ground? And what should people be doing now to stay resilient?

To explore those questions, Mark Lee, founder of The Lee Group, sat down with The Metro’s Robyn Vincent. Lee hosts several talk shows and writes about business and the economy for Crain’s Detroit, with a focus on how national trends play out locally.

Listen to The Metro weekdays from 10 a.m. to noon ET on 101.9 FM and streaming on demand.

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Holiday decorators in Michigan are facing a Grinch stealing part of the Christmas tree business.

The American Christmas Tree Association says most U.S. families use artificial trees that are imported and subject to heavy tariffs.

That could help Michigan real tree growers who provide millions of trees nationwide annually.

But the founder and CEO of artificial tree company Balsam Hill, Mac Harman, says tariffs are forcing price hikes for much of the season’s holiday décor.

The following interview has been edited for length and clarity.

Mac Harman: For artificial trees, pre-lit trees, all of those are made in Southeast Asia. 87 % of artificial trees imported to the U.S. last year came from China. It’s going to be lower this year because we and many others have diversified our supply chains to other parts of Southeast Asia. But there’s a tremendous amount of labor that goes into a pre-lit artificial tree.

Most of the reasons that people choose artificial trees are around convenience and longevity. What’s really convenient is you don’t have to spend an hour or more stringing the lights on the tree. And that’s a job that Americans don’t like doing when they set up their farm-grown trees.

And it’s a job that Americans didn’t want to do in factories, which is why pre-lit artificial trees were never made in the United States. That’s why we see them coming in from overseas.

From a farm-grown tree standpoint this year, maybe they have some increased costs affecting something they use on the farm. The price of the tree may not change as much.

But you still need the lights and the tree stand. And those are generally imported as well. Certainly the lights are all imported. And so those costs are up even more because, unfortunately, Christmas lights are tariffed even higher than pre-lit Christmas trees.

Quinn Klinefelter, WDET News: When you were looking at what was going on with tariffs as you were plotting your sales for the holidays this year, how difficult was it? Tariffs would go up, they’d go down again. Is it possible, even with diversifying supply chains, that there could be a shortage of trees?

MH: This year has been the most difficult running a business in my 25 years being a CEO, more difficult than COVID. And it is exactly because of trying to manage the tariffs. Literally the day after the presidential election, we started shipping as many products in as we could because it was talked about that there was going to be a so-called Day One tariff on Inauguration Day. So we and most major retailers shipped-in a lot. Then, on Day One, there wasn’t any tariffs.

There was an announcement that there would be a change on April 2nd. So we all scrambled and manufactured as many goods as we could and shipped them in before April 2nd. Everyone kind of independently made a decision to cut back around 15%-20%. So across the industry about 15% fewer trees were imported this year. We don’t have official data yet because the data was shut down during the government shutdown and they haven’t caught up. But we also think demand is going to be a little bit slower because the prices have gone up.

I think what we’re going to see is that there won’t be as many trees available at clearance. There are consumers who say, “Hey, an artificial tree lasts me 10 years. I can get by with the one I have this year. I’m going to wait ‘till after Christmas and buy one next year.” I don’t think we’re going to see as many of those deals this year. And we’re starting to see across the major retailers, as well as Balsam Hill, that we’re running out of stock on the most popular models because there just aren’t as many to go around this year.

QK: Let me play devil’s advocate. President Trump has long argued that the reason he wants to use tariffs is because he wants to have products made in the U.S. Obviously I’m paraphrasing, but if you’re making something and you’re depending on imports, well, you should be making it in the U.S. instead. So there might be a little bit of short-term pain, but suck it up and start building your stuff in the U.S. What’s your reaction to that argument?

MH: I think it’s fantastic that the president wants to bring strategic good manufacturing back to the U.S. I’d love it if my cell phone, telecommunications equipment, ships, things that we need for our defenses could be made in the U.S. What I don’t think needs to be made in the U.S. are non-strategic goods. And certainly Christmas trees are a non-strategic good, meaning that they don’t have any national security interest.

And they’ve actually never been made in the US. So it’s not even a matter of bringing it back. When the idea for the pre-lit artificial tree came about, the workers in the factories that made unlit artificial trees said they literally did not want to get paid to put lights on a tree. They said they were going to go find another job. And the entire industry moved in the early 1990s over to Thailand at the time.

We are in discussions with the Trump administration in D.C. Pretty much every official I’ve talked to, and I’ve had the privilege to talk to many, agrees with that. We’re hoping that, once things settle down with the U.S. Supreme Court case over IEEPA authority for tariffs, we will see more targeted tariffs. Just like we’ve seen these carve-outs for things that don’t grow here, like bananas and coffee and chocolate, I think we’re going to start to see that for some other non-strategic industries. So I’m hoping that we will see some tariff relief for the Christmas industry in the coming months.

QK: If you did want to try to start making them in the U.S. in some fashion, would that even be possible?

MH: We looked at that back during the first Trump administration. The only way we could manufacture artificial Christmas trees, pre-lit artificial trees in the United States would be if we could invent ways that reduce the labor costs. And we got to a point where a tree that we sell today for $800 would need to sell for about $3,000, back when we looked at this six or seven years ago. And that just isn’t feasible. We have taken another look at it now and not enough things have changed to make any difference in that.

I’ve spent a lot of this year in Washington, D.C., talking with the administration as well as Congress about this holiday decor issue. What we’re hoping for and what we think is going to happen is that President Trump’s going to do something like he did back in 2019, when he was putting the 301 tariffs on China in place. He delayed them until after Christmas to help Christmas retail. That’s public, he spoke about it. At the same time, many Christmas decorations were placed on list 4B, which was tariffed at 0%. So pre-lit Christmas trees have not been tariffed above 0% until this year.

I do think we are going to see some kind of relief from the administration. Going into the mid-term elections next year, you want consumers to be really happy. If everyone goes into Christmas and the conversation around the dinner table is about how expensive the mashed potatoes and the roast beef are, or whatever you’re eating, that’s not going to be a super Merry Christmas from at least an economic standpoint. For us, even though we’ve already imported all the goods we’re going to sell this year, if we know relief is coming next year, there are ways we can cut costs even more. We could potentially lower prices as we’re selling things for the rest of this season.

Right now we’re staring at even higher tariffs next year because the tariffs would be in place for the whole year. Whereas this year they’ve been in place only part of the year. And we brought a lot of our inventory in before those tariffs went into place.

The head of Macomb County’s government says the economic uncertainty felt in some sections of Michigan has yet to truly impact his area.

County Executive Mark Hackel summed up the situation in his annual State of Macomb County speech.

Hackel says the county is not just weathering the ebbs and flows of the overall U.S. economy but thriving in the midst of them.

The following interview has been edited for length and clarity.

Mark Hackel: With our financial situation, our economic foundation, we’re in a great place. I know the things that you’re hearing across the country are challenging. But there’s so many things that kind of help lift us up. We’re pretty diverse too, though we rely heavily upon the automotive and defense industries and manufacturing. But the reality is Macomb is in a very sound place.

Quinn Klinefelter, WDET News: President Trump’s tariffs have impacted various segments of the U.S. economy, including the auto sector, which does have a pretty significant presence in Macomb County. Some of the prices for vehicles are starting to climb now. Do you have any concerns about how tariffs or the overall economic outlook are going to impact jobs or other parts of Macomb County’s economy?

MH: We’re always concerned about what happens at the federal and or state level that may have an impact on our economy. But look at what happened in 2010. There was a huge challenge with manufacturing, job losses, housing shortages that we faced back then. And we doubled down on manufacturing. By doing so, we’ve seen our economy continue to grow here.

Macomb County is a $54.2 billion economy. That’s bigger than the states of Vermont and Wyoming. We are right now at an all-time high. There’s never been a better time in Macomb County with our economy being as robust as it is right now. So whatever might happen with some of these tariffs or other economic concerns, we’re not seeing it directly have an impact right now. We’re in a good place with that.

QK: There is some financial stress in other parts of the country, other parts of Michigan, other parts of metro Detroit, for that matter. In your view, why is Macomb County doing well when some of these other places are having a bit of a struggle?

MH: We decided to double down on manufacturing. We retooled some of our manufacturing facilities. They’re different than they once were. We upgraded them. We really put a full-court press on making sure people understood that with our workforce, from concept to consumer, no one does it better than right here in southeast Michigan. And Macomb County is a major part of that. We are the defense capital of the Midwest. More contracts are awarded to Macomb County, as far as the actual number and the money associated with them, than anywhere else in the entire Midwest. So we keep promoting that, we keep pushing that.

And I think all the attention that we’ve been trying to drive has really helped us. We used a protecting growth strategy when we first got in and worked with the state on that. And we’ve done so well that we’re not really as worried about protecting anymore because we’re seeing that continuous growth. So we’re fortunate. Working with everybody has really had an impact on where we’re at today.

QK: In last year’s State of the County speech, you said that Macomb needed to focus on partnerships instead of partisanship. There was a line about not reaching across the aisle but getting in the aisle. How’s that bipartisan effort been going for you?

MH: Aside from a certain election here or there, for the most part, partisanship is not our conversation. None of that drives what we do here in Macomb County. People are willing to work with each other. You’ve heard that phrase, “Us versus everybody.” Some sports teams use it sometimes, municipalities or communities use it, as a sense of pride, a sense of esprit de corps. But when I look back on 15 years of how Macomb County has got to where it’s at and how we’ve evolved, we’ve kind of flipped the narrative on that. We look at it as, “Macomb with everybody.”

We’re trying to partner at the local, state and federal level. And never do we look at it as, “We can’t talk to them because they’re Democrats or Republicans. We can’t let their idea soak through or let them get successful because their party may get credit for it.” We don’t talk about that, don’t think about it. It’s a call for everybody who wants to come to be part of the solution. And if somebody looks more like they’re wanting to be part of the problem or be just a naysayer, we accept that. But the reality is we continue to forge ahead with people that want to provide solutions and help us get to where we need to go.

QK: When you talk about bipartisan cooperation, there are elections next year that could be pretty significant on a number of fronts. Michigan U.S. Rep. John James, for one, is running for governor and leaving a seat open that represents part of Macomb County. And there is a gubernatorial race underway. Whoever ultimately wins, what would you like to see from Lansing that you think could really affect Macomb County?

MH: That same willingness to partner and work with us rather than figure out how they could get credit by giving support to one particular area or segment of the state as opposed to somewhere else. Ensuring they are not ignoring any community within the state of Michigan. Specifically for Macomb County, whoever the governor is needs to realize they’re not the governor on behalf of the party, they’re the governor on behalf of the people. So govern on behalf of the people. That’s all I ask from whoever the next governor is. Work together on projects that matter, whether it’s in Macomb County, southeast Michigan or beyond.

QK: In terms of the partnerships that you’ve had, are there specific projects that you would like to see either the state or the federal government partner with Macomb on? Or projects that you’re pleased that they have partnered with you on to date?

MH: I’ll go with the ones I’m pleased that they have done to date. We got some support from the state because they realized the importance of our new jail project. It isn’t just about a jail. It’s about dealing with people that are going to be assessed for mental health or substance abuse when they’re brought in at the first point of contact. Every municipality now is partnered-in on this particular facility. We make a determination whether there’s any substance abuse, then decide what we need to do. The state partnered with us with some financial contributions because it impacts the state prison system too. When people are leaving our facility and sentenced on a felony, they’re going to the state facility. We look at what happened with Mound Road, a quarter of a billion dollar project. We got some state funding to help support that as well as federal and local. And then look what happened with Selfridge Air National Guard Base and us pushing the defense industry here in Macomb County. We are the defense capital of Midwest. And I do declare that at some point in time we’re going to be the defense capital of America.

There’s so much happening and we’re so excited about that. But there’s more to be done. We’re partnering on trying to figure out how we retool a facility or find a new use for the Romeo Ford engine plant. We’re looking at the Romeo airport. There’s a lot more that we need to do with our water quality. The support we get from Candice Miller and her team at Public Works. I’m telling you, there’s another trusted voice and a fierce advocate for cleaning our waterways and making sure we’re addressing underground issues. So, a lot has been happening. We’re going to continue those conversations and hopefully wherever the next governor is, they’re willing to address the issues that we’re talking about as opposed to politics.

The whole issue of where we’re headed as a region and even as a state is incredibly important. The biggest thing is that we all need to come together because we need to be competitive with other regions around the globe. And southeast Michigan is a major player. But our biggest challenge right now is our workforce, making sure that we’re attracting people to this area so they take on these jobs. That provides better opportunities for these manufacturers or companies that do the things that they do here in southeast Michigan. Us all coming together to promote the region as one.