On Tuesday night, President Trump created an ambitious plan to build a new American economy with sweep and regulatory relief for domestic production, while imposing tariffs on products made outside the United States.
Trump will detail his extensive plans to stimulate American manufacturing by cutting taxes on companies that produce goods in the United States, allowing them to spend capital investments immediately, extending interest tax credits, including car loans for American-made cars, and holding countries responsible for protecting US products and strategic products.
“We intend to rediscover the unstoppable power of the American spirit,” Trump said in his address to the US Senate and House of Representatives.
Taken together, Trump's announcement of trade and economic initiatives and those who took office in his first six weeks are equivalent to a pioneering new approach to the American economy.
Trump said the current quarter-global trading system, which has led to a decades-long increase in trade deficit, is hurting the US, noting that “friends and enemies” trading partners tend to have far higher tariffs than the US has on their goods.
“This system was not fair to the US and was never the case,” Trump said.
Trump also elaborated on his promise to impose mutual tariffs to impose US tariffs on countries around the world. With mutual tariffs, the United States coincides with tariffs imposed by other countries.
“On April 2nd, mutual tariffs will begin. Whatever they charge us, we will be involved with them,” Trump said.
The president has also pledged to reflect non-caliphate barriers that prevent American goods from entering foreign markets. Many countries around the world exclude US products by imposing burdensome requirements or by banning imports entirely.
Earlier on Tuesday, the Trump administration did good with its promise to impose 25% tariffs on Canada and Mexico. In his speech to Congress, Trump touted tariffs as a way to win more cooperation on the northern and southern borders of America in the fight against fentanyl smuggling and illegal immigration. He also pointed to the long-term trade deficits with these two countries, describing them as subsidies to the economy.
“We're subsidizing hundreds of millions of dollars of Mexicao and Canada, and the US, we're not going to do that anymore,” Trump said.
Based on his trade agenda, Trump repeated the call for a massive new tax cut, in addition to the extension of the expired tax cuts passed during his first administration. Trump says he wants to reduce the business tax rate for domestic manufacturers to 15%. He also proposed to recover the 100% cost of capital investment. This is a key component of his first term tax cuts, which spurred economic growth.
In the new proposal, Trump also said interest in car loans should be deductible.
Trump hit an optimistic tone, pointing to recent announcements from companies such as Oracle, Apple, Honda and Taiwan Semiconductor. Major US and foreign companies have halted US production and avoided tariffs, demonstrating the effectiveness of policies in repurposing manufacturing.
Trump positioned his trade policy as a market-driven alternative to the Chips Act, a signature of Biden-era law that provided more than $52 billion in grants for technology manufacturing and research but did not result in sustained growth in manufacturing employment or production. Although it spurred a surge in construction spending, manufacturing employment stagnated, and production volumes in the manufacturing sector were contracted for 26 consecutive months. Since Trump took office, manufacturing has expanded for two months.
“Your chips' actions are both scary and scary,” he told Democrats, calling for it to be abolished. He said spending approved by the Chips Act should be redirected to reducing the deficit.
Trump said his tariff plans are causing a revival of manufacturing without taxpayer dollars.
“If it's built in America, they'll come because they don't have to pay tariffs,” Trump said.
Trump has announced plans to impose a 25% tariff on aluminum, copper, wood and steel imports, saying it will protect America's strategic interests. He also said he would soon release plans to revive rare earth mining and production in the United States.
“We're going to renew the unlimited promise of America's dream,” Trump said.
