Live By The Subsidy, Die By The Subsidy
President Donald Trump threatened GM subsidies yesterday after the company announced the shuttering of multiple plants in North America and thousands of layoffs… https://on.wsj.com/2P5sV3a
Trump tweeted, “We are now looking at cutting all @GM subsidies, including for electric cars. General Motors made a big China bet years ago when they built plants there (and in Mexico) – don’t think that bet is going to pay off. I am here to protect America’s Workers!”
Trump got some backing from National Economic Adviser Larry Kudlow who told reporters Tuesday that the administration would look at “certain subsidies” for electric cars, but didn’t provide specifics.
Trump did his best Larry Summers impression from the Social Network advising GM to create a new new project telling CEO Mary Barra, “They better damn well open a new plant there very quickly.”
There is only one problem. President Trump’s own policies are making it even less likely they will move production from China. Trefor Moss at The Wall Street Journal explains, “In today’s globalized car industry, auto makers need their factories to be close to their customers if they’re to turn a profit, a calculation that is being reinforced by the tit-for-tat tariffs China and the U.S. have imposed on each other’s exports, analysts say.” https://on.wsj.com/2Qr5shy
“I will always be against incentives. Whenever the government gets rid of them, no matter what the reason, I will cheer!”