Donald Trump doubles down on China carmakers being unwelcome in US market

The Star - Republican presidential candidate Donald Trump on Thursday said he would take steps to prevent Chinese carmakers from selling vehicles in the US as part of his plan to save the American auto industry.

“They’re going to pay a 100 per cent or maybe even a 200 per cent tariff because we’re not going to let them come into our country and destroy what’s left of our auto industry”, Trump said, addressing the Detroit Economic Club in the manufacturing state of Michigan.

Trump was referring to Chinese cars potentially being made in Mexico and shipped stateside tax-free under the United States–Mexico–Canada Agreement (USMCA).

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Chinese auto companies have been rumoured to be scouting for production facilities in Mexico, although major mainland electric-vehicle maker BYD said it would pause such plans until after America’s presidential election in November.

Trump on Thursday said he would formally notify Canada and Mexico of his intention to renegotiate the USMCA – currently slated for review in 2026 – to address concerns about Chinese vehicles.

The former president also proposed making interest on car loans fully tax-deductible, saying this would “stimulate massive domestic auto production” and “make car ownership dramatically more affordable” for millions of Americans.

In addition, Trump reiterated his invitation to foreign companies to manufacture products in the US, touting his “Made-in-America” plan to lower the corporate tax rate from 21 to 15 per cent.

“US-based car makers and manufacturers will also be rewarded with expanded research and development tax credits, very substantial, where they will be able to write off 100 per cent of their cost of heavy machinery and other equipment necessary to build a plant in the first year, and full expensing for manufacturing investments,” he said.

Previously, Trump said he would welcome Chinese carmakers to build plants in the US if they used American workers.

“We’re going to give anybody that comes in free access to the best and biggest market anywhere on the planet,” he said on Thursday, without excluding China.

Trump’s pledges on Thursday reflect the intensifying battle for crucial electoral college votes in the US Midwest.

During a September speech in Pittsburgh, Pennsylvania, another swing state, US Vice-President Kamala Harris, the Democratic presidential candidate, proposed her own tax incentives aimed at bolstering advanced manufacturing. Harris has also said she would invoke the USMCA’s renegotiation provision.

Recent polls show the two are locked in a tight race, with the outcome likely to be decided by narrow margins in battleground states like Michigan and Pennsylvania.

In a speech largely focused on economics, Trump in Detroit blasted what he called the “twin disasters” of China joining the World Trade Organization and the launch of the North American Free Trade Agreement, a free-trade deal that preceded the USMCA.

He also touted his pulling out of the Trans-Pacific Partnership in his first week in office as president; slapping tariffs on Chinese cars and steel; and negotiating the phase-one trade deal with Beijing.

Trump’s presidency ushered in a bilateral trade war that led to tariffs imposed on hundreds of billions’ worth of mainland goods. The Biden administration has kept much of the former president’s tariffs.

And last month, US President Joe Biden proposed prohibiting key Chinese hardware and software in vehicles with internet connectivity from being used on American roads, citing national-security concerns.

The move effectively bars mainland cars and trucks from the US market.

Separately, Biden also unveiled new 100 per cent tariffs on all Chinese EVs that came into effect last month.