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Trump courts auto workers with car loan tax break China crackdown
Republican presidential candidate Donald Trump on Oct. 10, proposed making interest on car loans tax-deductible and preventing Chinese automakers from selling vehicles in the United States, in a push to appeal to autoworkers in the final weeks of election campaigning.
Republican presidential nominee and former U.S. President Donald Trump addresses the Detroit Economic Club in Detroit, Michigan, U.S., October 10, 2024. REUTERS/Rebecca Cook / Reuters
Republican presidential candidate Donald Trump on Oct. 10, proposed making interest on car loans tax-deductible and preventing Chinese automakers from selling vehicles in the United States, in a push to appeal to autoworkers in the final weeks of election campaigning.
In a speech to the Detroit Economic Club that ran for about two hours, Trump criticized electric vehicles, the United Auto Workers union that represents auto workers, and even the city of Detroit where he was speaking.
Polls show Trump and Democratic nominee Kamala Harris are locked in a tight race ahead of the Nov. 5 election, with the outcome expected to be decided by slim margins in battleground states like Michigan, of which Detroit is the largest city.
He alluded to the city's economic struggles in his speech while taking a jab at Harris.
"The whole country is going to be like, you want to know the truth, it'll be like Detroit. Our whole country will end up being like Detroit if [Harris] is your president," Trump said.
The plan on car loans - which would treat interest paid on vehicle loans like home mortgages on federal tax returns - is the latest in a long string of potential tax cuts the former U.S. president has floated during the final weeks of his campaign against Harris.
The speech focused on the U.S. auto industry, which is headquartered in Detroit. Trump said he would impose new tariffs to prevent Chinese automakers from building cars in Mexico and exporting them to the United States.
Trump, who on Oct. 6 said he would slap tariffs as high as 200 percent, suggested he could impose even higher tariffs on vehicles.
"I will impose whatever tariffs are required - 100 percent; 200 percent;1,000 percent," Trump said. Mexico exported just over 2.5 million vehicles to the United States last year.
He also said he will formally notify Mexico and Canada of his intent to renegotiate a North American free trade deal to address concerns about Chinese vehicles. Harris, the U.S. vice president, has also said she plans to invoke the renegotiation provision if elected.
Critics say the free trade deal approved during Trump's term allowed the Detroit Three automakers to continue to produce hundreds of thousands of vehicles in Mexico and export them to U.S. buyers.
STIMULATING PRODUCTION
Congress in 1986 repealed the federal deduction for interest paid on auto and other consumer loans as part of a tax reform bill. In September, buyers paid an average interest rate of 7.1 percent on new cars and 11.2 percent on used cars, according to car research company Edmunds.
Trump said the tax cut "will stimulate massive domestic auto production, and make car ownership dramatically more affordable for millions and millions of working American families."
If elected, Trump will need congressional support to pass changes of tax laws.
President Joe Biden last month proposed prohibiting key Chinese software and hardware in vehicles with internet connectivity on American roads due to national security concerns, a move that would effectively bar Chinese cars and trucks from the U.S. market. Biden separately announced new 100 percent tariffs on all Chinese EVs effective Sept. 27 -- on top of a 25 percent import tariff on all Chinese vehicles that Trump imposed.
Trump also said he will close loopholes around Chinese cars being allowed into the U.S.
Biden last month also proposed barring Chinese automakers from testing autonomous vehicles on U.S. roads.
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