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Trump tells Detroit he’ll make car loan interest tax-deductible

by Brett Samuels - 10/10/24 3:49 PM ET

Former President Trump laid out his pitch to strengthen the auto industry in an economic address in Detroit on Thursday, proposing to make interest on car loans fully tax deductible, pledging to renegotiate trade deals and vowing to use tariffs to target foreign auto imports.

Trump, in a speech to the Detroit Economic Club, made clear his economic vision for bolstering the industry would rely heavily on tariffing foreign nations. He also spoke disparagingly about Detroit itself at times, calling the city in which he was speaking a “developing area more than most places in China.”

The former president said he would propose making interest on car loans fully tax deductible, a policy he argued would “stimulate massive domestic auto production and make car ownership dramatically more affordable for millions and millions of working American families.”

The idea is in line with Trump’s series of proposals to eliminate taxes on various forms of income, including overtime work, tipped wages and Social Security benefits.

Trump also said he would notify Mexico and Canada that he would invoke the six-year renegotiation provisions of the U.S.-Mexico-Canada Agreement, which was approved in 2020 in place of the North American Free Trade Agreement (NAFTA).

The former president previously said he would impose tariffs on American companies that outsource manufacturing to incentivize domestic production, and he has vowed to impose a tariff on all imports, a tactic he suggests would bring more companies into the U.S.

“I want German car companies to become American car companies. I want them to build plants in America. Otherwise, I’d rather not have their cars here,” Trump said Thursday.

While Trump has claimed the use of tariffs would lower costs, economists have repeatedly said it would cause companies to pass higher costs on to consumers and could worsen inflation. And experts have disputed the former president’s claim that tariffs would bring in billions of dollars for the U.S. government.

Trump has offered few details about the specifics of the various tax cuts he’s proposing, including how they would be paid for. The former president has also vowed to extend the individual tax cuts from his 2017 law that are set to expire in 2025. An analysis by the Committee for a Responsible Federal Budget found that Trump’s tax and spending plans would add $7 trillion to the national debt over a decade.

Trump has claimed tariffs on other nations would bring in revenue to pay down the debt, but experts have stressed tariffs would not bring in nearly enough to pay down the deficit and would likely increase costs for consumers.

The speech was part of the effort to win over key voting groups in Michigan, which has long been the heart of the U.S. auto industry. Trump is essentially deadlocked with Vice President Harris in the polls in Michigan less than a month before Election Day.

Trump has sparred with the head of the United Auto Workers (UAW) union, and his running mate, Sen. JD Vance (R-Ohio), opened the campaign up to attacks when he said earlier this week that a $500 million grant from the Biden administration to convert a Michigan plant to one that produces electric vehicles amounted to ““table scraps.”

The former president has repeatedly painted a bleak picture of what would happen to the auto industry if he does not win in November and railed against the Biden administration’s investments in electric vehicles.

Data from the Bureau of Labor Statistics shows that roughly 8,800 auto- and parts-manufacturing jobs were lost under Trump’s time in the White House, while that sector added about 128,000 jobs during President Biden’s term.

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UAW leadership has endorsed Harris in November’s election.

Harris campaign allies earlier Thursday tore into Trump over his record and accused him of making empty promises.

“We look at Lordstown, Ohio. Lordstown assembly plant,” UAW President Shawn Fain said. “He told workers there, ‘Don’t sell your houses.’ The plant closed. He came to Warren, Mich., a week ago or two. Again, wants to talk about how he cares about autoworkers. But we had GM’s powertrain plant in Warren closed under his watch. He did nothing.”