Trump Misleads on Chinese Auto Factories in Mexico During Speech

Donald Trump, during his acceptance speech for the Republican presidential nomination, appealed to swing state autoworkers. He urged them to dismiss their union president, using inaccurate claims. On Thursday night in Milwaukee, Trump criticised the United Auto Workers (UAW) union for allegedly allowing Chinese automakers to build large factories in Mexico. He claimed these factories would ship cars to the US without taxes.

However, industry experts refute Trump's assertions. Jeff Schuster, vice president of automotive research at Global Data, stated that no such Chinese auto assembly plants are under construction in Mexico. Schuster mentioned that while companies like BYD and Chery might set up plants in Mexico in the future, it hasn't happened yet.

Union's Response to Trump's Claims

The UAW and its president, Shawn Fain, responded strongly to Trump's speech. The union labelled Trump a "scab" on social media platform X, accusing him of representing billionaires instead of workers. Fain argued that Trump did nothing for autoworkers during his presidency when General Motors closed a factory in Lordstown, Ohio, and during a strike against GM.

"He wants to pad the pockets of the ludicrously wealthy auto executives," Fain said. "He wants to cut the corporate tax rates of his golfing buddies. He wants autoworkers to shut up and take scraps, not stand up and fight for more."

Trump's Promises and Biden's Actions

Trump also promised to end what he called the Biden administration's "electric vehicle mandate" on his first day in office if re-elected. He suggested redirecting funds meant for EV tax credits to infrastructure projects. Trump claimed this would save the US auto industry from "complete obliteration." However, there is no mandate requiring automakers to sell electric vehicles under current EPA standards.

President Joe Biden has imposed tariffs on Chinese imported goods, including electric vehicles. The UAW endorsed Biden's re-election bid in January after he joined striking General Motors workers on picket lines near Detroit. The union secured significant raises last fall following limited strikes at all three Detroit automakers.

Upcoming Campaign Events

Recognising the importance of autoworkers in Michigan, Trump and his running mate JD Vance plan to visit Grand Rapids for a rally on Saturday. This will be Trump's fourth campaign visit to Michigan since mid-March when he secured enough GOP delegates to become the party's nominee. The Grand Rapids rally will be his first campaign event since accepting the Republican Party's official nomination.

During his speech, Trump welcomed Chinese automakers to build factories in the US or face increased tariffs on their cars. He stated that he would double or triple tariffs on each car if they didn't comply, making them unsellable in America.

Current State of the Auto Industry

The auto industry is far from obliteration as Trump suggested. Since Biden took office in January 2021, employment in car and parts manufacturing has grown by 13.8%, reaching over 1 million people according to the Labour Department. Detroit automakers General Motors, Ford, and Stellantis have reported strong annual profits, with a combined net income of USD 35.5 billion last year.

The EPA expects most gasoline vehicles to be phased out by 2055. Currently, electric vehicles make up 7.1% of total US new vehicle sales for the first half of this year, down from 7.6% last year. Despite this decline, EV sales are increasing; automakers sold 597,958 electric vehicles from January through June this year, a 6.8% rise from the same period last year.

Chinese companies have long shown interest in entering the lucrative US market. During his speech, Trump said Chinese auto factories would either be built in the US or face heavy tariffs on their cars.