As expected, President Donald Trump revealed his proposed tax plan and it includes a healthy cut to the corporate tax rate. To no one’s surprise, General Motors and Ford praised the tax reform plan, which would bring rates down from 35 percent to 15 percent, according to The Detroit Free Press.
U.S. companies have long complained the tax rate, which is one of the highest in the world, makes America an uncompetitive place to do business in. Treasury Secretary Steve Mnuchin said the goal of the plan is “creating jobs and creating economic growth.”
In a statement, GM said it looks forward to “reviewing the details of their proposal and working with them and Congress.” The automaker added, “General Motors supports a balanced approach to tax reform to help grow the U.S. economy. We are encouraged by the administration’s efforts to modernize our tax code.”
Ford echoed GM’s approval stating, “We believe this is a positive step toward much-needed U.S. tax reform. Nothing has greater potential to spur American job and economic growth than lower and more competitive U.S. tax rates.”
The tax plan made no mention of an increased border tax for goods coming back into the U.S. from Mexico or Canada, something President Trump has threatened in the past. Specifically, GM was targeted over the Chevrolet Cruze hatchback, which is produced in Mexico. GM responded by saying it will not move production.
In the meantime, U.S. automaker also worry of a potential withdrawal from the North American Free Trade Agreement. New reports suggest the president is ready to exit the agreement altogether, while others state an intention to renegotiate will come soon. A new deal may be reached by mid-2018.