Ahead of the 2024 presidential election, former President Donald Trump has made headlines with his latest trade policy proposal, promising hefty tariffs on vehicles produced by alleged Chinese factories in Mexico.
What Happened: Trump reiterated claims about Chinese automakers building large factories in Mexico, during a town hall event in Flint, Michigan, the Associated Press reported on Tuesday
Trump pledged to impose 200% tariffs on vehicles produced by these unbuilt factories and shipped to the U.S. He also claimed that if Vice President Kamala Harris is elected, the U.S. auto industry would vanish within two to three years due to EV production moving to China.
"If I don't win, you will have no auto industry within two to three years," Trump said.
“You will not have any manufacturing plants. China is going to take over all of them because of the electric car."
Despite Trump’s assertions, auto industry employment has increased since President Joe Biden took office in January 2021. According to the Bureau of Labor Statistics, auto jobs rose 13.6% to 1.07 million in August.
Trump stated that his tariffs would make Chinese vehicles built in Mexico unsellable in the U.S., forcing automakers to establish factories in the U.S. He also promised tariffs on vehicles from countries that tax U.S.-made vehicles.
However, industry analysts indicate there are no large Chinese-owned auto factories under construction in Mexico, with only one small assembly plant operated by JAC. The Harris campaign responded, asserting that a second Trump term would harm auto jobs and benefit China, according to the report.
Why It Matters: Trump’s tariff proposals have been a recurring theme in his campaign. Last week, a strategist from Commerzbank AG warned that Trump’s plan to enforce dollar dominance through 100% tariffs could disrupt the global economic system and weaken the U.S. currency.
During a presidential debate, Vice President Harris criticized Trump’s tariff policy, labeling it a “Trump sales tax” that would impose a 20% tax on everyday goods, affecting middle-class families. Trump defended his tariffs, proposing additional duties of 60% to 100% on China.
Jason Furman, an economist from former President Barack Obama‘s administration, questioned the logic behind Trump’s tariffs, highlighting the potential economic repercussions and who would bear the cost of retaliatory measures from other countries.
Earlier in July, Goldman Sachs chief economist Jan Hatzius stated that Trump’s proposed 10% across-the-board tariff on U.S. imported goods could lead to a trade war, causing significant monetary policy shocks and increasing inflation across the U.S.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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