Trump threatens to cut GM subsidies in retaliation for job cuts, Latest Business News - The New Paper

Trump threatens to cut GM subsidies in retaliation for job cuts

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WASHINGTON US President Donald Trump threatened on Tuesday to eliminate subsidies for General Motors (GM) in retaliation for the car maker cutting US jobs and plants. GM also took fire from Canadian political and labour leaders for cutbacks there.

"The US saved General Motors, and this is the THANKS we get! We are now looking at cutting all @GM subsidies, including ... for electric cars," Mr Trump said on Twitter.

He did not explain what "subsidies" he was referring to.

GM electric vehicles are eligible for a US$7,500 (S$10,300) tax credit under federal law, but it is not clear how the administration could restrict those credits or if Mr Trump had other subsidies in mind.

His harsh words rattled investors, who bid down GM shares by 2.6 per cent on Tuesday after sending them up on Monday in response to the car maker's cost-cutting.

Mr Trump and Canadian Prime Minister Justin Trudeau "discussed their disappointment in the announced closures of General Motors plants in their respective countries" during a phone call on Tuesday, White House spokesman Hogan Gidley said.

The wrath of the leaders of the US and Canada dramatised the challenges GM and its Detroit rivals will face as they restructure to cope with the most dramatic technology and market shifts in decades.

Mr Trump has made boosting auto jobs a key priority during his almost two years in office and has often attacked car makers on Twitter for not doing enough to boost US employment.

GM said in a statement following Mr Trump's comments that it was "committed to maintaining a strong manufacturing presence"in the US after investing US$22 billion in operations since 2009 and will add new jobs in electrification and autonomous vehicles. - REUTERS