Donald Trump is sparking a debate about the future of the US auto industry with some bold promises. The Republican presidential candidate is proposing tax breaks for foreign automakers willing to build their vehicles on American soil, while threatening high tariffs on those who dare to import their cars.
In a speech Tuesday in Savannah, Georgia, which focused largely on lowering the corporate tax rate from 21 percent to 15 percent for "those who make their products in the U.S.," Trump said, "I want German car companies become American car companies. I want them to build their factories here."
The former president laid out his bid for all major foreign automakers if he returns to the Oval Office.
“This is the offer I'm making to every major company and manufacturer in the world – I'm going to give you the lowest taxes, the lowest energy costs and the lowest regulatory burden. And free access to the best and biggest market in the world,” Trump said.
“But only if you make your products here in America. All of that goes away if you don't make your product here. And hire American workers to do the job. If you don't make your product here, you will have to pay customs duty, and a very specific customs duty at that,” he added.
According to Trump, those who do not comply will have to pay high tariffs, which will effectively make their products more expensive. He also threatened a 100 percent tariff on "any car imported from Mexico," according to ABC News. Such a move would hurt several companies that have built factories in Mexico to take advantage of lower labor costs in the U.S. hinterland.
Trump claims that under his leadership, he will not only preserve jobs for Americans, but "he intends to take jobs from other countries as well." He added: “We will take over their factories. We will bring thousands and thousands of companies and billions of dollars of wealth back to the good old USA.”
BMW, Mercedes and Volkswagen already produce a large number of models at their extensive US plants. Many of these vehicles are not only intended for the North American market, but also for export.
Let's take BMW as an example. The Spartanburg plant produces almost the entire line of SUVs and employs 11.000 people. For several consecutive years, it has held the title of the largest exporter of cars in the United States by value, with exports in 2023 of approximately $10,1 billion.
But analysts warn that if these German titans increase production in the area, they may have to reduce production at their factories in Germany, which could affect the overall performance of these companies.
Interestingly, the former president also expressed his willingness to accept Chinese car manufacturers in the US market under one condition - that they produce their vehicles locally. "We will give incentives, and if China and other countries want to come here and sell cars, they will build factories here and hire our workers."
