Tariffs, tax cuts core to Trump’s economic pitch to voters

NEW YORK – Republican presidential candidate Donald Trump has made

tariffs and tax cuts the key elements of his economic pitch

to US voters, the majority of whom view the economy as the biggest campaign issue of the 2024 presidential election.

Several prominent Budget forecasters have estimated that Trump’s tax cut plans would add some US$3.6 trillion (S$4.6 trillion) to US$6.6 trillion to federal deficits over a decade, depending on which proposals are included.

The same forecasters show his rival US Vice-President Kamala Harris’ spending and tax break plans would add far less to deficits, and possibly may reduce them, with a range of a US$400 billion reduction over a decade to a US$1.4 trillion increase, depending on which proposals are included.

Here are the tariff and tax proposals Trump has made so far in his campaign:

Tariffs on imports

Trump has floated plans for blanket tariffs of 10 per cent to 20 per cent on virtually all imports as well as tariffs of 60 per cent or more on goods from China, in a bid to boost US manufacturing.

On Sept 23, Trump said he would slap a 200 per cent tariff on US agricultural company John Deere’s imports into the United States if it moved production to Mexico as planned, comments that hit the agricultural equipment manufacturer’s share price.

Trump has frequently said he would hit automakers that move their production to Mexico with a 200 per cent tariff, but his Sept 23 remarks appeared to be the first time he has extended that threat to an agricultural equipment company. The duties would likely violate the US-Mexico-Canada Agreement on trade that he signed into law in 2020.

During a Sept 24 speech in Georgia, Trump said he would put 100 per cent tariffs on every car coming across the US-Mexico border. He also said he would reward US-based manufacturers with research and development tax credits.

The US National Retail Federation, which represents Walmart and other companies that account for almost half of container shipping volume, is among the industry groups opposed to Trump’s proposed tariffs, and economists say they would reignite inflation.

A narrow majority of US voters support Trump’s campaign vow to increase tariffs on imported goods, particularly from China, according to a Sept 11 to Sept 12 Reuters/Ipsos poll.

Tax cuts for domestic producers

In early September, Trump pledged to reduce the corporate tax rate from 21 per cent to 15 per cent for companies that make their products in the US.

While he had previously said he wanted to cut the corporate tax rate to 15 per cent, he had not tied that lower rate to keeping manufacturing inside the country.

Trump slashed the corporate tax rate to 21 per cent from 35 per cent during his 2017 to 2021 presidency.

No tax on overtime pay, tips or social security income

Trump said on Sept 12 that if he is elected, he will end all taxes on overtime pay as part of a wider tax cut package.

He has also said he would seek legislation to end the taxation of tips. Ms Harris has made a similar pledge. Current law requires employees to report their tips as income.

Trump has also vowed to exempt Social Security income from taxes.

Extend tax cuts

Trump wants to extend all individual tax cuts he pushed through Congress in 2017, including for the wealthiest Americans, which tax and budget experts estimate would reduce revenue over a decade by about US$3.3 trillion to US$4 trillion.

Unclear proposal on ‘Salt’ deduction

In a Sept 17 Truth Social post, Trump vowed to “get Salt back” – a reference to the state and local tax (Salt) deduction available to federal taxpayers. At a rally on Sept 18, Trump said he would be “restoring the Salt deduction” if re-elected.

Trump’s 2017 tax cuts imposed a US$10,000 cap on the amount of state and local tax that taxpayers can deduct. It was unclear whether Trump was suggesting that he would remove the US$10,000 cap, which predominantly affects high-tax, Democratic-leaning states such as New York.

Other economic proposals

Beyond tax cuts and tariffs, Trump has promised he would support the oil and gas industry by backing new pipelines and restoring fracking on federal land in a bid to boost the economy.

On Sept 24, he said he would put Alaska’s Arctic National Wildlife Refuge – where the Biden administration cancelled oil and gas drilling leases – “back into play” if he wins the election.

He has also said he would consider ending a US$7,500 tax credit for electric-vehicle (EV) purchases. While president, Trump sought to repeal the EV tax credit which was later expanded by US President Joe Biden in 2022.

During a Sept 18 campaign rally in New York, Trump pledged to put a temporary cap on credit card interest rates of “around 10 per cent”. REUTERS