SAVANNAH, Ga. (AP) — Donald Trump announced Tuesday he would prevent U.S. companies from shipping jobs overseas and taking jobs and factories away from other countries by relying heavily on sweeping tariffs to boost auto production, despite warnings that consumers would have to pay more at home and a lack of details on how his plans would work.
“I want German car companies to become American car companies. I want them to build their plants here,” Trump said during a speech in Savannah, Georgia.
Trump added that if he won the election, he would impose a 100 percent tariff on all cars imported from Mexico, saying the only way to avoid these fees is for an automaker to build the cars in the United States.
If his ideas are implemented, they could spark a massive upheaval in the American auto industry. Many automakers currently build smaller, cheaper vehicles in Mexico – facilitated by a trade deal Trump negotiated during his presidency – or in other countries because their profit margins are slim. Lower labor costs aid companies make money on these vehicles.
German and other foreign automakers already have extensive production facilities in the United States, and many of them now build more vehicles here than they export. BMW, for example, operates a 740,000 square meter campus in South Carolina where 11,000 people build more than 1,500 SUVs a day for the United States and 120 export markets. Mercedes and Volkswagen also have gigantic factories here.
If German automakers wanted to escalate production here, they would likely have to source production from factories in Germany that would then be below capacity and less productive, says Sam Abuelsamid, senior research analyst at Guidehouse Insights.
“That doesn’t make sense,” he said.
Trump proposes a “new American industrialism” – without concrete details
Trump is trying to pressure Vice President Kamala Harris on economic policy issues, proposing import tariffs and other measures to stimulate U.S. industry – even though economists warn that the costs of the tariffs and other Trump proposals, such as carrying out the largest deportation operation in U.S. history, would be borne by U.S. consumers.
In a speech in the key swing state of Georgia, the former president presented a wide range of economic policy proposals and promised to appoint a special envoy to lure foreign manufacturers to the United States and also give them access to federal territory.
He also called for a reduction in the US corporate tax rate from 21% to 15%, but only for companies that manufacture in the US. Harris, the Democratic candidate, wants to raise the corporate tax rate to 28%. When Trump became president in 2017, it was 35%, and he later signed a law to reduce the tax rate.
“America is our number one priority,” Trump said. “This new American industrialization will create millions and millions of jobs.”
And Trump proposed lifting some environmental regulations to boost energy production. America has “the oil, it has the gas. We have everything. The only thing we lack is smart people to run our country.”
Tuesday’s series of economic proposals raised many questions, but the former president did not provide specific answers to his ideas, which could significantly affect their impact and their cost. For example, he did not specify whether his U.S.-focused corporate tax cuts would also apply to companies that make their products domestically from imports.
Trump also proposed using a newly appointed envoy and his own efforts to woo foreign companies. But his record in the White House when it came to attracting foreign investment was rather needy. In one notorious case, Trump promised Taiwanese electronics giant Foxconn a $10 billion investment in Wisconsin that would potentially create 13,000 fresh jobs, but the company never followed through.
But his demand to offer federal land could clash with Bureau of Land Management restrictions on foreign companies leasing land. It was also unclear whether Chinese companies would be exempt, as Trump has long claimed China is hurting American businesses.
Governor Kemp misses Trump’s return to Georgia
The Republican presidential candidate unveiled his plan in Savannah, one of the country’s busiest ports for container cargo, in his first visit since his feud with Republican Brian Kemp that ended last month when the popular Georgia governor finally endorsed Trump.
But Kemp skipped Trump’s rally and instead campaigned in Pennsylvania on Tuesday alongside Republican Senate candidate David McCormick.
Some Republicans fear that Georgia has become more politically competitive in the two months since Harris launched his presidential bid after President Joe Biden abandoned his re-election bid.
Georgia Lieutenant Governor Burt Jones attacked Harris for calling Trump a threat to democracy. Jones acted as a sham elector and falsely testified that Trump won the 2020 election, which he actually lost to Biden. However, a special prosecutor declined to bring charges against Jones in the matter.
Heather Mathis, 43, came to Tuesday’s event with her 11-year-old daughter and said Kemp did a “good job.” She said she did not believe any problems between the governor and Trump would hurt the former president’s chances in Georgia.
“Many people have personality differences. But that doesn’t mean none of them are bad,” Mathis said. “Maybe they just don’t get along, and that’s OK.”
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Weissert reported from Washington and Krisher from Detroit. Associated Press writer Jill Colvin in Indiana, Pennsylvania, contributed to this report.
