Published: Fri, November 30, 2018
Business | By Eloise Houston

Why Donald Trump Keeps Telling Himself That Tariffs Are Working

Why Donald Trump Keeps Telling Himself That Tariffs Are Working

Sen. Sherrod Brown said he spoke with President Donald Trump Wednesday night, and that even though Trump blamed him this week for the closure of a major General Motors plant in OH, the president still backs his call for a bill that could provide a tax break for people who buy American-made cars.

Trump's statement - which sent GM shares lower - came after the automaker on Monday announced it was cutting 15 per cent of its workforce, shuttering five plants in the U.S., including two in MI and one in OH, key battleground states that Trump narrowly carried in the 2016 presidential election.

In a statement Tuesday afternoon, GM tried to appease the Trump administration while justifying the decisions it announced Monday. Trump said Tuesday that he was "very disappointed" that General Motors was closing plants in the United States and warned that the White House was "now looking at cutting all GM subsidies", including for its electric cars program.

"GM is committed to maintaining a strong manufacturing presence in the US, as evidenced by our more than $22 billion investments in USA operations since 2009", the company said in a statement, referring to the year of its government-backed bankruptcy. He spoke to the president in June after the automaker announced plans to cut its second shift at the Lordstown factory.

Trump told Congress to "get smart" and added: "The president has great power on this issue - because of the GM event, it is being studied now!" Many assumed that Trump was referring to the 7,500-U.S. -dollar tax breaks the USA federal government grants to consumers who buy electric vehicles.

This week, the motor vehicle manufacturer announced its plans to lay off 15 percent of its salaried workforce (up to 14,000 employees) and close five plants in the United States and Canada.

Brown has said he repeatedly tried to get GM to keep the plant open in recent months.

Trump called for the end of subsidies to GM and also blamed Brown for GM's decision. And he announced the study of executive powers that could allow him to punish GM on his own - without congressional approval, which might be hard to acquire. Among those four is a vehicle factory in northeast OH, a state critical to victory in the 2020 presidential campaign. A Honda executive at the September hearing testified tariffs are hurting the entire auto supply chain, calling the business environment in the USA "unsettling". It found that households earning more than $50,000 per year claimed 99 percent of the credits.

"GM was the first in the market alongside Tesla, and eliminating the EV tax incentive all together would level the playing field as the competition has only started to heat up the segment", he said.

"We've done this to help you and I think his disappointment is, it seems like that they kind of turned his back on him", Kudlow said.

Like this: