Trump Pushes Tax Break on Car Loans as He Courts Auto Industry

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(Bloomberg) — Donald Trump pledged to boost the U.S. auto industry by making interest on auto loans fully tax-deductible and renegotiating a trade deal with Mexico and Canada as he courted business and labor leaders in the swing state of Michigan.

“Your auto industry is going out of business,” Trump said in a speech at the Economic Club of Detroit on Thursday, touting his agenda as one that would revitalize an industry with deep roots in that city. “My goal is to see the U.S. auto industry bigger than it was in its heyday, and to have Detroit and Michigan at the heart of the action.”

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The Republican presidential candidate has pledged to invoke a six-year renegotiation provision in the USMCA — a trade deal between the North American partners that replaced NAFTA under his first administration — to block cars made by China across the border in Mexico from being sold in the United States. Countries.

Trump has pledged to impose “any tariffs needed” to do so — with floating rates of up to 1,000%.

He also pledged to ban Chinese-made self-driving vehicles from operating on American roads — a policy that would benefit billionaire supporter Elon Musk, the boss of Tesla, who is competing with the same technology.

Trump said: “I will stop the production of cars and self-driving vehicles produced by China and other countries.” “Self-driving vehicles will be retired on American roads. I will close the loopholes that existed under Biden and Harris that began to allow Chinese vehicles to infiltrate American streets.

The administration of President Joe Biden and Vice President Kamala Harris, Trump’s general election rival, have proposed a ban on Chinese-made hardware and software for connected vehicles, citing national security concerns about the cars’ machines.

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The main battlefield

Trump’s speech in Michigan, one of seven states likely to decide the outcome of the November election against Harris, is the latest in a heated battle between the candidates to appeal to business leaders and workers concerned about jobs and prices in the United States. An election in which the economy is a decisive issue.

Both candidates have offered a slew of competing tax breaks and benefits to stimulate job creation and help consumers struggling with rising prices.

Trump said his plan to make auto loan interest deductible would “stimulate massive domestic auto production, and make car ownership significantly more affordable for millions and millions of working American families.”

The former president also promoted a proposal to help small businesses afford work vehicles by doubling the amount of investment in equipment that can be deducted from $500,000 to $1 million, and a proposal to write off automakers’ costs for heavy machinery and other equipment.

“This would be great for small businesses and great for Ford and General Motors,” Trump said of his proposals. “We will be selling cars, trucks and work vehicles like never before.”

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Detroit, where Trump spoke, is known as the Motor City, where the auto industry weighs heavily in the region and industry workers play a pivotal role in supporting the state. While the powerful UAW has backed Harris, Trump has made inroads among the ranks of organized labor, driven in part by concerns about Biden’s push to transition the United States to electric vehicles and the impact on jobs and wages.

Democrats exploited one of Trump’s statements at the event, disparaging the largest city in the battleground state.

“Our entire country will end up like Detroit if I become your president,” Trump said.

Polls show a tight contest in Michigan, where a September Bloomberg News/Morning Consult poll showed Harris up 3 percentage points, 50% to 47%, over Trump among likely voters in the state. Voters in swing states across the seven battlegrounds say they trust Trump more than Harris to handle the economy, but the vice president has managed to eliminate his advantage on the issue since replacing Biden atop the Democratic ticket.

Trump also touted his pledge to reduce the corporate tax rate to 15%, but only on companies that manufacture domestically. The move represents a significant decline from the current rate of 21%. Harris has called for raising the corporate tax rate to 28%.

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High inflation

Trump also attacked Harris over rising prices, a major political liability for his opponent, seeking to capitalize on voters’ frustration with the administration’s handling of the economy. Core inflation in the United States rose more than expected in September, Bureau of Labor Statistics figures released earlier Thursday showed.

The Republican presidential candidate also repeated his criticism of the US Federal Reserve, saying the central bank acted “a little too quickly” in cutting interest rates by half a point last month, calling it a “political maneuver” to help Harris ahead of the presidential election. Elections.

Trump’s comments are the latest in a long-running conflict with the central bank, which has centered on his accusations that the Fed has worked against him and a suggestion that presidents should have greater influence, despite traditional efforts to insulate the bank’s decisions from political considerations.

Hotter-than-expected inflation in Thursday’s report sparked debate over whether the Fed will choose to cut interest rates smaller next month or pause and see stocks fall.

Earlier: US CPI rose more than expected, inflation progress stalled

Monthly jobs numbers released last week showed employment growth beat estimates in September, wage growth accelerated and unemployment fell, providing the vice president with a slight boost in her argument that the economy is on an uptrend.

The unemployment rate in six of seven crucial battleground states has fallen below where it was when Trump was president, a Bloomberg analysis found.

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