Trump calls for 100% tariffs on cars made in Mexico

• Republican presidential nominee Donald Trump proposes tariff on cars made in Mexico
• Proposal could upend American auto industry, as many automakers now build smaller, lower-priced vehicles in Mexico
• Experts warn that tariffs would increase cosets for domestic consumers 

SAVANNAH, Ga. — Donald Trump on Tuesday pledged to stop U.S. businesses from shipping jobs overseas and to take other countries’ jobs and factories by relying heavily on sweeping tariffs to boost auto manufacturing — despite warnings that domestic consumers would pay more and a lack of specifics about how his plans would work.

“I want German car companies to become American car companies. I want them to build their plants here," Trump declared during a speech in Savannah, Georgia.

Trump added that, if elected, he’d put a 100% tariff on every car imported from Mexico and that the only way to avoid those charges would be for an automaker to build the cars in the U.S.

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His ideas, if enacted, could cause a huge upheaval in the American auto industry. Many automakers now build smaller, lower-priced vehicles in Mexico — facilitated by a trade agreement Trump negotiated while president — or in other countries because their profit margins are slim. The lower labor costs help the companies make money on those vehicles.

German and other foreign automakers already have extensive manufacturing operations in the U.S., and many now build more vehicles here than they send. 

BMW, for instance, has an 8 million-square-foot campus in South Carolina that employs 11,000 people building more than 1,500 SUVs per day for the U.S. and 120 export markets. Mercedes and Volkswagen also have large factories here.

If German automakers were to increase production here, they likely would have to take it from factories in Germany, which then would run below their capacity and be less efficient, said Sam Abuelsamid, principal research analyst for Guidehouse Insights.

“It makes no sense,” he said.

Trump proposes a ‘new American industrialism’ — without key specifics

Trump has sought to press Vice President Kamala Harris on the economy and has proposed using tariffs on imports and other measures to boost American industry — even as economists have cautioned that U.S. consumers would bear the costs of tariffs and other Trump proposals like staging the largest deportation operation in U.S. history.

The former president laid out a broad array of economic proposals during a speech in the key swing state of Georgia, promising to create a special ambassador to help lure foreign manufacturers to the U.S. and further entice them by offering access to federal land.

Additionally, he called for lowering the U.S. corporate tax rate from 21% to 15%, but only for companies that produce in the U.S. Harris, the Democratic nominee, wants to raise the corporate tax rate to 28%. It had been 35% when Trump became president in 2017, and he later signed legislation lowering it.

“We’re putting America first,” Trump said. “This new American industrialism will create millions and millions of jobs.”

And Trump suggested wiping away some environmental regulations to boost energy production, saying America has “got the oil, it’s got the gas. We have everything. The only thing we don’t have is smart people leading our country.”

Tuesday's series of economic proposals raised a lot of questions, but the former president hasn't given specific answers on his ideas, which could substantially affect their impact and how much they cost. He has not specified, for example, whether his U.S.-focused corporate tax cuts would apply to companies that assemble their products domestically out of imports.

Trump also suggested he use a newly created envoy, and his own personal efforts, to recruit foreign companies. But he had a spotty record in the White House of attracting foreign investment. In one infamous case, Trump promised a $10 billion investment by Taiwan-based electronics giant Foxconn in Wisconsin, creating potentially 13,000 new jobs, that the company never delivered.

His calls to offer federal land, meanwhile, might clash with Bureau of Land Management restrictions on foreign entities looking to lease lands. It also wasn't clear whether companies from China would be excluded, given Trump's longtime accusations that China is hurting American business.