Former President Donald Trump made false assertions during a visit to Michigan, claiming that Chinese automakers are constructing large factories in Mexico. He pledged to impose 200% tariffs on any vehicles produced by these hypothetical plants and exported to the U.S. Trump also warned that if Democratic Vice President Kamala Harris wins the upcoming election, the American auto industry will suffer as electric vehicle production moves to China.
Despite Trump’s predictions, employment in the automaking sector has actually increased since President Joe Biden assumed office in January 2021, following a decline in Trump’s initial term. Trump asserted that without his victory, the auto industry would vanish within a few years, claiming that China would dominate due to electric car manufacturing.
Trump told the audience that he would compel foreign automakers to establish plants in the U.S. by enforcing tariffs on imported vehicles, likening the action to taking advantage of a simple opportunity. It is important to note that foreign automakers already operate numerous factories in the U.S., primarily in southern states.
During Trump’s tenure, auto jobs decreased by 0.8%, but following Biden’s inauguration, they rose by 13.6% in August 2021. There is no indication of the industry disappearing, particularly considering the 2.4% increase in auto sales in the first half of this year.
Trump’s proposed tariffs are aimed at rendering Chinese vehicles manufactured in Mexico unsellable in the U.S., thus pressuring Chinese and other automakers to establish factories within the U.S. However, analysts have reported that there are no major Chinese-owned auto manufacturing facilities under construction in Mexico, with only one small Chinese assembly plant managed by JAC currently operational there.
Additionally, Trump vowed to apply tariffs on vehicles produced in other countries that impose taxes on American-made vehicles. Nevertheless, such tariffs often end up being transferred to consumers in the assessing country. As of now, there has been no response from the Harris campaign regarding Trump’s statements.
