Trump proposes 15% corporation tax to 'Save America's Auto Industry,' threatens 1,000% tariffs on imports
Trump said Detroit's auto industry was decimated 'as if by a foreign army'
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Former President Trump on Thursday spoke at the Detroit Economic Club, where he announced a new plan to supercharge America’s auto industry and warned he could slap up to 1,000% tariffs on foreign-imported vehicles if he's elected to a second term in office.
The plan, dubbed the "Build It in America Plan," consists of a corporate tax rate of 15% for companies that choose to make their products in the U.S. as well as tax credits for research and development and fully tax-deductible interest on car loans for small businesses.
Trump said that Michigan and Detroit were once the world’s capital of automotive production until it was squandered by Washington policies, but he vowed to bring it roaring back.
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Former President Trump speaks at the Detroit Economic Club in Detroit on Thursday. (Bill Pugliano/Getty Images)
"Detroit was decimated as if by a foreign army. This was a foreign army invading us, but it was an army of business people, very brilliant business people, that took the candy out of our pockets, just like you take it from a baby. That's how easy it was for them," Trump said.
"[The U.S.] lost nearly 4 million manufacturing jobs after globalist politicians gave us the twin disasters of NAFTA and China’s entry into the WTO," Trump said. "Nearly a quarter of a million jobs were destroyed here in Michigan alone — including 40% of all auto jobs. Factories were left in ruins. Beautiful hotels and theaters crumbled. More than 80,000 homes were abandoned."
Trump is proposing a 15% "Made in America Corporate Tax Rate," which would cut corporation tax for those companies from 21% to 15%.
U.S.-based carmakers and manufacturers would also receive expanded research and development tax credits, where they will be able to write off 100% of the cost of heavy machinery and other equipment in the first year and full expensing for new manufacturing investments. Trump said it will help companies "build the sprawling, state-of-the art plants our country needs to be an industrial superpower in the modern world."
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Workers put engines on the frame as Ford Motor Co. fuel powered F-150 trucks under production at their Truck Plant in Dearborn, Michigan, on Sept. 20, 2022. (Jeff Kowalsky/AFP via Getty Images / Getty Images)
To help small businesses afford the work vehicles they need to get the job done, Trump vowed to double the amount of equipment investment they can deduct under Section 179 — from $500,000 to $1 million.
He also announced that the Trump-Vance administration will make interest on car loans fully tax-deductible, much like mortgage interest is deductible, so small businesses can afford the work vehicles they need to get the job done. 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% on new cars and 11.2% on used cars, according to car research company Edmunds.
Trump said that China is currently building gigantic auto plants in Mexico with the intention of selling cars produced there in the U.S., "which would destroy Michigan." He threatened to slap huge tariffs on such vehicles.
"I will impose whatever tariffs are required — 100%, 200%, 1,000%. They're not going to sell any cars into the United States with those plants they're building," Trump said.
"We're not going to let them come in to our country and destroy what's left of our auto industry, because it's a failing industry, just like it's a failing country right now. We're a failing country. You know, we're a nation in decline," Trump added.
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The General Motors world headquarters office is seen at Detroit's Renaissance Center. (Paul Hennessy/SOPA Images/LightRocket via Getty Images / Getty Images)
Trump 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.
During the speech, Trump also announced that his daughter Tiffany, 30, is pregnant. Trump recognized businessman Massad Boulos, who is the father of his daughter's husband, Michael Boulos.
"He happens to be the father of Tiffany’s husband, Michael, who’s a very exceptional young guy. And she’s an exceptional young woman. And she’s going to have a baby. So that’s nice," said Trump.
Reuters contributed to this report.