USA TODAY International Edition
GM seeks comprehensive tax reform from Trump
General Motors, the nation’s largest automaker, is trying to work on a comprehensive tax reform proposal with President Trump and his administration as the company grapples with border tax proposals that could hurt its profits, a top executive said Tuesday.
Trump has frequently talked about renegotiating the North American Free Trade Agreement ( NAFTA) so that the U. S. benefits more from trade with Mexico and has threatened to impose a steep border tax ranging from 20% to 35% if the country is unwilling to reach a new trade deal.
But Trump also has spoken in recent weeks about reducing corporate taxes in the U. S., an idea automakers have embraced as a way of potentially offsetting a border tax.
“The border tax is one part of overall tax reform — our view on that right now is that’s pretty complicated,” Chief Financial Officer Chuck Stevens told reporters after the company released year- end earnings.
“And what we want to do right now is work constructively with the administration to come up with a tax reform proposal that is beneficial to the U. S. economy, beneficial to U. S. manufacturing and creates jobs.”
Morgan Stanley analyst Adam Jonas said in a recent report GM is vulnerable to Trump’s trade proposals because of its presence in Mexico and joint ventures in China.
For example, Jonas said about half of GM’s light- duty pickups are made at a plant in Silao, Mexico.
GM CEO Mary Barra was among three automotive chiefs who met with Trump last month and also sits on an economic advisory panel for the Trump administration.
Stevens declined to characterize Trump’s effort to renegotiate NAFTA as a distraction for the company’s management.