Former President Trump vowed to repeal the energy tax credits enacted in the Inflation Reduction Act on his first day in office if he succeeds in retaking the White House.
Speaking at an automobile parts plant in Clinton Township, Michigan, September 27, Trump said the section 30D clean vehicle subsidy would “spell the death” of the American automotive industry and argued that President Biden isn’t willing to discuss supposed trade-offs associated with the push toward green energy technologies.
“You can be loyal to American labor. You can be loyal to the environmental lunatics. But you really can’t be loyal to both. It’s one or the other,” Trump said.
Trump’s speech in Michigan came a day after Biden’s unprecedented appearance at a picket line in support of the striking United Auto Workers union. While Biden often touts himself as the “most pro-union” president in history, the UAW has expressed hesitation about the administration’s efforts to encourage electric vehicle uptake.
In addition to a significant portion of the IRA clean energy credits being used in areas historically hostile to unions, manufacturing EVs takes fewer workers than traditional combustion-engine vehicles — a fact Trump was keen to exploit.
“It’s not government regulation. It’s government assassination of your industry. . . . You’re going to lose your beautiful way of life,” Trump said, while calling on the UAW leadership to pressure Biden to rescind the energy credits.
Neither Biden nor Trump, if elected, could overturn the credits without Congress first passing legislation to do so.
The appearance of Biden and Trump in Michigan shows the importance both candidates are placing on the state in next year’s presidential election, said Harry J. Holzer of the Brookings Institution.
“The politics of this are very clear. Both Biden and Trump really need the blue-collar vote. Michigan is absolutely critical for both of them,” Holzer told Tax Notes.
After Trump pulled off a surprise upset and carried the state in 2016, Biden won Michigan in the 2020 presidential election on his way to claiming the White House.
Holzer believes that while Biden may seek a compromise to allay UAW fears, giving in to too many demands may undermine the goal of the EV provisions.
“The union wants a bigger slice of that pie, and I think Biden would look to accommodate them. But they have to find the sweet spot. If you add too many restrictions, it slows things down. That means less EV output,” Holzer said.
GOP Debate
Meanwhile, in California, a group of Republican hopefuls looking to dethrone Trump as the front-runner for their party’s presidential nomination also targeted the energy subsidy in a televised debate.
“Biden’s green new deal is good for Beijing and bad for Detroit,” said former Vice President Mike Pence, referring to China's dominance in mining critical minerals needed to produce EV batteries.
North Dakota Gov. Doug Burgum added that, in addition to China’s influence over the EV industry, Biden’s policies were alienating a key labor force that is worried about its future. Auto workers are striking because manufacturers “need two-thirds less workers to build an electric car,” he said.
“Biden showed up at the picket line, but why are those workers actually there?” former U.N. Ambassador Nikki Haley asked.
All of the GOP candidates on the stage at the Reagan National Library in Simi Valley face an uphill battle to secure the 2024 Republican nomination, with Trump holding a 42 percent lead over his closest rival, Florida Gov. Ron DeSantis, according to a September 26 average of polls by RealClearPolitics.