Former U.S. President Donald J. Trump has been touting tariffs as the way to strengthen the United States economy.
Now he's suggesting a 2,000% tariff on imported automobiles.
He made the suggestion in an interview at the Economic Club of Chicago on Tuesday.
Trump told host John Micklethwait, editor-in-chief of Bloomberg News, that the tariffs would force companies to build their cars in the U.S.
"I am a believer in tariffs," Trump said. "To me the most beautiful word in the dictionary is 'tariff' and it is my favorite word."
Micklethwait noted that many business people are worried about the actual cost of tariffs to the American economy.
He cited figures that they would only bring in $2 billion into the economy, a figure that wouldn't cover the estimated $7.5 trillion in added debt tied to Trump's promised economic policies.
Trump explained that tariffs on cars will help the economy two fold.
"Tariffs are two things if you look at it," Trump says. "Number one it is protection of the companies that we have here and the new companies that will move in. You will have thousands of companies coming into the country and we will grow it like we have never grown it before and we will protect them because we will not have somebody undercut them."
Trump's vision seems to be rooted in building large auto plants in states that were once known for their auto factories such as Detroit, Michigan and South Carolina.
"China is building massive auto plants in Mexico," Trump said "They are going to build them and take those cars and sell them into the United States. And they will have all of the advantages and none of the disadvantages and that will be the end of Michigan, South Carolina and the end of everything."
Trump claims the tariffs will help the U.S. compete with Mexico, a country he views as having many advantages when it comes to building car factories.
"And I said if I run this country and I will be president I will put a 100 or 200 or 2,000% tariff," Trump said. "They will not sell one car into the United States, because we will not destroy our country because I know you are anti-tariff but I am the exact opposite."
"I said I will put a 100, 200, or 300 tariff and stop them from ever selling a car into the United States," he continued. "If I do not win those factories are going to wipe out this country. They are the biggest factories ever built for cars and they will wipe out my country."
14 million American jobs that rely on trade could also be impacted by increased tariffs.
Micklethwait says that could plunge America into a trade war specifically with China, which would negatively affect the economy.
Critics maintain that Trump's proposed tariffs would essentially be similar to a national sales tax, pushing up the costs of foreign goods, but he doesn't see it that way.
"The higher the tariffs the more likely it is the company will come into the United States and build a factory in the United States so it doesn't have to pay the tariff," Trump said.
