Republican US presidential candidate Donald Trump wants to support the domestic auto industry by imposing high taxes on imported cars.
During an election campaign in Wisconsin on October 6, Mr. Donald Trump said he would impose import taxes of up to 200% on vehicles originating from Mexico. “We will impose a 200% tax, not letting those cars into the US,” he said.
Late last month, Trump announced that he would impose a 100% tax on imported cars and trucks, to support the domestic manufacturing industry. “I want car companies to build factories here,” he said.
This is the fourth time in the past 8 days that Trump has come to Wisconsin. This shows the importance of this state to him when there is only one month left until the US Presidential election. Polls show Vice President Kamala Harris leading Trump in Wisconsin.
Mr. Donald Trump at the event in Wisconsin on October 6. Image: Reuters
During the election campaign, Trump always mentioned import taxes to strengthen the US car industry. However, experts warn that his plans could increase car prices. The Tax Policy Center research organization predicts that huge import taxes imposed on cars from Mexico “could drive up the prices of all types of vehicles, from domestic to imported, new or used.”
Many companies currently produce low-cost, small-sized models in Mexico – a country that has a free trade agreement with the US or other countries with low labor costs. This helps them make better profits. Last year, the country exported 3 million cars to the US, half of which were from three companies: GM, Ford and Stellantis.
During the 2016 election campaign, Trump threatened to impose tariffs on cars imported from Mexico. At that time, car manufacturers said that imposing a 25% tax on cars and spare parts had a heavy impact on the industry, driving up product prices.
In addition to cars, Trump also wants to increase import taxes on many other goods, to strengthen the domestic industry. The former US president once proposed a general tax rate of 10% on all products. However, at an August event in North Carolina, he suggested the tax rate could rise to 20%.
For products from China, he wants to apply 60%-100%. Economists warn American consumers will bear the brunt of these costs.