Former President Donald Trump rolled out a plan to boost the U.S. auto industry in Detroit on Thursday, part of an intensifying battle with Vice President Kamala Harris over who will better defend domestic auto manufacturers and their workers.
In a rambling, two-hour speech at the Detroit Economic Club, Trump pitched new restrictions on Chinese autonomous vehicles, stricter automotive trade rules with Mexico and Canada, dramatically higher tariffs on cars, and a new tax deduction for car loan interest payments.
“We’re going to make it fully deductible,” Trump said, after comparing his latest tax proposal to the invention of the paper clip. It’s “going to revolutionize your industry. This will stimulate massive domestic auto production and make car ownership dramatically more affordable for millions and millions of working American families.”
The cost of new deductions for auto loan interest payments would likely be hefty. There were $1.6 trillion in securitized auto loans as of midyear, according to Federal Reserve data.
With the latest polls showing the two presidential candidates in a virtual tie in Michigan, both campaigns are increasing their direct appeals to the state’s all-important auto industry and workers. In recent days, Harris and Democrats have begun attacking Trump on his manufacturing record as president, as well as his threats to claw back billions in unspent Inflation Reduction Act funding targeted for electric vehicle and clean energy manufacturing in states like Michigan.
Trump will “gut those resources,” United Auto Workers President Shawn Fain told reporters before Trump’s speech on Thursday. “His plan will rip away direct investments in union workers … he’ll gladly close our plants if it saves his billionaire buddies another penny.” UAW has endorsed Harris, something that has drawn Trump’s scorn; he attacked Fain repeatedly by name in his speech.
The new Chinese vehicle restrictions and tax deduction for auto loan interest come on top of Trump’s plans for higher tariffs and lower corporate tax rates, which he reiterated on Thursday.
At least part of his plan appears to be in motion already — from the Biden administration. This fall, the Commerce Department proposed new restrictions on “connected vehicles” from China, over concern that the cars could become surveillance tools for the Chinese Communist Party. Though the rule has yet to be finalized, analysts expect it would bar many high-tech vehicles from China. Biden has also quadrupled Trump-era tariffs on electric vehicles from China to 100 percent, all but locking them out of the U.S. market.
