Trump promises to ‘revolutionize’ auto industry in pitch to Michigan voters

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.”

Trump’s new tax cut proposal is the latest in a series of policy initiatives designed to chip away at the Democratic Party’s historical advantages with rank-and-file union members and working-class voters. The former president has also proposed capping interest rates on credit cards and eliminating taxes on overtime, Social Security benefits and tipped income.

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.

Trump also pledged dramatically higher duties on Chinese automobiles produced in Mexico, saying he will impose “whatever tariffs are required – 100 percent, 200 percent, 1,000 percent” to keep the cars out of the U.S. Additionally, he pledged to use the six-year review of the U.S.-Mexico Canada trade deal, due in 2026, to push for more U.S. auto production and prevent China from shipping cars and auto parts through Mexico into the U.S.

“I will formally notify Mexico and Canada to invoke the six-year renegotiation of the USMCA,” Trump said, and “seek strong new protections against trans-shipments so that China and other nations cannot smuggle their auto parts through Mexico.”

That prompted an instant response from the Harris camp, who pointed out that the vice president has also said she would address auto rules in the trade agreement’s six-year review. U.S. trade chief Katherine Tai has also made similar statements.

“Trump copies VP Harris, who said 2 weeks ago that she would use the review process on USMCA, as she called out the failures of his NAFTA 2.0 and cited her vote against it as Senator,” Harris spokesperson Ian Sams posted on X .

Trump pledged to rescind what he called Harris’ “electric vehicle mandate” — a distortion of existing EPA rules on tailpipe emissions that are designed to push the U.S. vehicle fleet toward more efficient vehicles. Trump said the rules would require 67 percent of cars in the U.S. to be electric, but the number is actually an estimate calculated by the EPA on how many new car sales would be electric in 2032 to comply with the rule. Automakers could also comply with lower EV sales if they squeeze more fuel efficiency out of their gas-powered vehicles.

Trump also attacked Harris for sponsoring a bill in 2019 that would require a complete transition away from gas-powered vehicles — a position Harris has disavowed on the campaign trail in Michigan.

“I will terminate that mandate on my first day,” Trump said, ostensibly referring to the EPA regulations, though he did not specify.

Benjamin Guggenheim contributed to this report.