Trump said he wants to cut into inflation by focusing on increased energy supply to lower electricity costs. He also touted a Canada-inspired 15% corporate tax rate for domestic manufacturers, and said this would be complementary to his tariff policy.
While he did not give any tariff percentage figures this time, he has alluded to a 10% target for non-free trade agreement countries like all of Western Europe, and as high as 60% for China.
“I saved the U.S. auto industry from obliteration with a 25% tariff on all China made cars and that remains in place to this day,” he said. “China wants to take it off, but if they did we would be invaded by Chinese cars. Without those tariffs, our auto industry would be dead. And now I’m going further: we will bring our auto industry to its previous record levels of 37 years ago through tariffs,” he said, perhaps hinting that Mexico and maybe Germany and Japan could be in for high import duties on cars.
Worth nothing, July’s trade figures from the Bureau of Economic Analysis, released on Wednesday, showed the U.S. exported around $4 billion worth of passenger cars, but imported around $10 billion, most of it from Mexico.
In explaining his American First theme, Trump said he treated the US economy “like I would my own company. In every decision I asked, will I be creating jobs here or will I be sending jobs overseas? Will it make our country richer and stronger, or weaker and poorer?”
For tax breaks, he is focused on corporate tax cuts and would expand the R&D tax credit for manufacturing companies with 100% depreciation and expensing for new manufacturing investments.
Trump took questions from the audience for about 15 minutes.
On marrying trade policy with national security for China, Trump reiterated what he has said in the past – that he got along with China’s leaders, but Covid ruined that relationship. Now he seems to think differently, but always with a tilt towards getting along rather than fomenting animosity.
“We helped build China,” he said. “They take money from here, build their military with our investment capital and we get cheap consumer goods out of it. Wow, you can buy a pack of 19 pencils for the price of two, who the hell cares? That’s what we get out of that relationship.”
Billionaire hedge fund manager John Paulson – famous for shorting mortgage backed securities prior to the 2008 housing bubble collapse — talked about the fiscal deficit, which is approximately $2 trillion. He said “increased revenue from tariffs would lower that.”
Trump, of course, agreed with that statement. “We are going to increase growth and we will take in a certain tariff percentage. That will bring in billions of dollars which will reduce those deficits,” he said.
Trump Reinforces Tariff Policy in Front of The Economic Club of New York
Former President Trump went into what some might consider a lion’s den full of cufflinked transnational financiers and billionaire money managers on Thursday – but during a one-hour speech at The Economic Club of New York, Trump stuck to his guns on tariffs, called NAFTA “the worst trade deal ever made”, and said his China tariffs never caused inflation.
He said his trade and economic policies, if granted a second term, would “encourage domestic production instead of discouraging it.”
“Our manufacturing wealth was created with fewer regulations and lower taxes and most revenue came from tariffs from other countries,” Trump said, harkening back to the early days of American industrialization, over 120 years ago. “Now we impose lower tariffs or even no tariffs and let those foreign producers sell here. We have the lowest tariffs in the world and punish American producers,” he said. The bound tariff rate for the U.S. is around 3%, similar to that of the U.K. and lower than the European Union, Japan and Canada.
“I have many companies tell me, ‘sir I cannot compete: they are sending kitchen cabinets, washers and dryers, motorcycles.’ I should get some of those companies to talk to you, (tariffs) saved their businesses,” he said.
For sure tariffs, namely anti-dumping tariffs, saved America’s kitchen cabinet industry. And washing machines, which were increasingly imported from South Korea and Mexico, remained a domestic concern thanks to tariffs.
Trump said he wanted the U.S. “to be the manufacturing superpower in the world. We can do that intelligently with trade policy that uses tariffs that encourages production here. We deserve it. We have helped other countries get rich at our expense for the last fifty years. We can build ships again, and will create the biggest and greatest middle class in the history of our country with higher paying jobs by using our heads and not letting other countries take advantage of us,” he said, adding that he would ensure that the U.S. “has a giant steel and aluminum industry” that complements an “industrial base that can take care of our defense needs 100%. Some might call it economic nationalism. I call it America First.”
Then he went into a little history lesson. He spoke of 25th president William McKinley; he served from 1897 to 1901 before being assassinated. He famously created the McKinley Tariff Act of 1890 while Chairman of the House Ways and Means Committee and then passed the Dingley Tariff Act in 1897 that raised tariffs.
“This is the policy that built this country and this is the policy that will save our country,” he said, alluding to his own tariff ideas.
Trump’s talk of tariffs recently ignited a bunch of headlines and research papers from economic think tanks saying the policy would increase costs to individual Americans by around $4,000 per person. This is an incrediblenumber because it does not account for price competition, domestic supply increased caused by some reshoring or production in free trade countries that will not be hit with the tariff proposal. Nor does it consider Chinese overproduction of certain tariffed, global commodities that send prices lower. This has been the case with solar products for example, now at their lowest prices in more than a decade despite the Section 201 solar safeguard tariffs and anti-dumping duties against four Chinese solar multinationals in Southeast Asia.
Trump said he wants to cut into inflation by focusing on increased energy supply to lower electricity costs. He also touted a Canada-inspired 15% corporate tax rate for domestic manufacturers, and said this would be complementary to his tariff policy.
While he did not give any tariff percentage figures this time, he has alluded to a 10% target for non-free trade agreement countries like all of Western Europe, and as high as 60% for China.
“I saved the U.S. auto industry from obliteration with a 25% tariff on all China made cars and that remains in place to this day,” he said. “China wants to take it off, but if they did we would be invaded by Chinese cars. Without those tariffs, our auto industry would be dead. And now I’m going further: we will bring our auto industry to its previous record levels of 37 years ago through tariffs,” he said, perhaps hinting that Mexico and maybe Germany and Japan could be in for high import duties on cars.
Worth nothing, July’s trade figures from the Bureau of Economic Analysis, released on Wednesday, showed the U.S. exported around $4 billion worth of passenger cars, but imported around $10 billion, most of it from Mexico.
In explaining his American First theme, Trump said he treated the US economy “like I would my own company. In every decision I asked, will I be creating jobs here or will I be sending jobs overseas? Will it make our country richer and stronger, or weaker and poorer?”
For tax breaks, he is focused on corporate tax cuts and would expand the R&D tax credit for manufacturing companies with 100% depreciation and expensing for new manufacturing investments.
Trump took questions from the audience for about 15 minutes.
On marrying trade policy with national security for China, Trump reiterated what he has said in the past – that he got along with China’s leaders, but Covid ruined that relationship. Now he seems to think differently, but always with a tilt towards getting along rather than fomenting animosity.
“We helped build China,” he said. “They take money from here, build their military with our investment capital and we get cheap consumer goods out of it. Wow, you can buy a pack of 19 pencils for the price of two, who the hell cares? That’s what we get out of that relationship.”
Billionaire hedge fund manager John Paulson – famous for shorting mortgage backed securities prior to the 2008 housing bubble collapse — talked about the fiscal deficit, which is approximately $2 trillion. He said “increased revenue from tariffs would lower that.”
Trump, of course, agreed with that statement. “We are going to increase growth and we will take in a certain tariff percentage. That will bring in billions of dollars which will reduce those deficits,” he said.
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