Trump Talks Taxes, Inflation and China During RNC Acceptance Speech
A spectacle that brought together the likes of Hulk Hogan, Kid Rock and UFC president Dana White culminated in former President Donald Trump’s formal acceptance of his party’s nomination on Thursday.
On the fourth night of the Republican National Convention (RNC), Trump delivered a 90-minute-plus speech bent on invigorating his base and piquing the interest of undecided voters. But the lengthiest address in convention history focused chiefly on pumping up the 45th president’s record and critiquing the performance of incumbent President Joe Biden, doing little to inform the masses about his future plans should he ascend to the highest office once again.
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Clues about Trump’s priorities lie in his language. He mentioned “tax” or “taxes” 20 times during the speech, and “inflation” 14 times. He said “economic” and “economy” 13 times, “China” 14 times, and “tariff” or “tariffs” twice.
On taxes
“We’ll start paying off debt and start lowering taxes even further. We gave you the largest tax cut. We’ll do it more,” Trump said Thursday, claiming that by contrast, the Democrats “want to raise your taxes four times.”
The Biden White House has released plans to increase taxes by about 7 percent over the course of the next decade, and more than 80 percent of that increase would be levied on the top 1 percent of taxpayers who earn a little under $1 million per year. Biden would also increase the corporate income tax rate to 28 percent.
By contrast, Trump has said throughout his campaign that he would extend the 2017 Tax Cuts and Jobs Act, which expires next year. The legislation brought down the corporate tax rate from 35 percent to 21 percent.
He has also touted an “All Tariff Policy,” which would replace personal income taxes with a universal baseline tariff of 10 percent on imports. He didn’t mention that plan on Thursday evening, though he said he would consider making tips exempt from income taxes to help workers in jobs like food and hospitality.
“You’re paying too much, we’re going to reduce your taxes still further,” Trump said Thursday. “We’re going to give you more and it’s going to lead to tremendous growth. We want growth in our country.”
On inflation
“We have an inflation crisis that is making life unaffordable, ravaging the incomes of working and low-income families, and crushing, just simply crushing our people like never before. They’ve never seen anything like it,” Trump said during the address, tapping into Americans’ enduring worries about making ends meet.
Inflation reached a 40-year high in June 2022, reaching a lofty 9.1 percent. Since then, inflation has softened, albeit remaining higher than pre-pandemic levels.
The Consumer Price Index (CPI) fell 0.1 percent in June 2024, the lowest monthly growth rate seen since May 2020. Inflation rose 3 percent on a yearly basis, down from 3.3 percent in May and slightly below expectations. The Federal Reserve has long targeted an inflation rate of 2 percent.
With inflation cooling, consumers have started to see gas prices fall. In June, the U.S. national average for regular gas was $3.44 a gallon, down from $3.59 during the same period last year. The apparel market is taking longer to normalize; it saw prices rise by 0.1 percent in June after falling 0.3 percent in May.
“Inflation has been a killer for our country. No matter what you’re making, it doesn’t matter because inflation is eating you alive,” Trump said. “First, we must get economic relief to our citizens. Starting on Day One, we will drive down prices and make America affordable again. We have to make it affordable. It’s not affordable. People can’t live like this.”
On China
Trump made the trade war with China a central tenet of his first campaign and his presidency, further fraying ties with the sourcing superpower throughout his time in office by escalating punitive duties and sanctions.
On Thursday evening, he made a rare reference to the Phase One trade deal, signed into law by Washington and Beijing in January 2020. After railing against the North American Free Trade Agreement (NAFTA), calling it “the worst trade deal ever made,” and quipping that he replaced with the “the best trade deal ever made,” the U.S.-Mexico-Canada Agreement (USMCA), the former president said, “Actually, probably the best trade deal was the deal I made with China where they buy $50 billion of our product. They were buying nothing.”
The trade agreement’s central promise was actually that China would buy $200 billion more in U.S. goods and services over the course of 2020 and 2021—a feat the country failed to meet, exacerbating the duty-slinging that had come to characterize the U.S.-China relationship.
By 2022, the Peterson Institute for International Economics estimated that China had only purchased 58 percent of the U.S. exports it had committed to purchasing under the deal, which didn’t even meet its import levels from before the trade war.
The economic upheaval of the Covid-19 crisis, which hit China full force just as the trade deal took effect, was partly to blame for its lack of efficacy. “I don’t even mention it frankly because of what happened with the China virus,” Trump said, veering off-script.
The tension between the U.S. and China has persisted, with neither American administration willing to back off on punitive duties. Trump has said if re-elected, he would hit China with duties of 60 percent.
Trade and American industry
Notably, the former president’s enmity for China seems to be expanding to include American allies.
“We have long been taken advantage of by other countries. And think of it, oftentimes these other countries are considered so-called allies,” he said. “They’ve taken advantage of us for years.”
Mexico, which the Republican nominee mentioned five times during his meandering soliloquy, was fingered for stealing American jobs. “We will take over the auto industry again and many, many, hundreds of thousands of jobs, we lost so many jobs over the years,” he said, claiming that over the past 20 to 25 years, China and Mexico’s production efforts have pulled 68 percent of auto jobs away from U.S. workers.
“And right now as we speak, large factories, just started, are being built across the border in Mexico. So, with all the other things happening at our border, and they’re being built by China to make cars and to sell them into our country, no tax, no anything,” Trump said.
While he focused heavily on the automotive industry, the nominee’s sentiments about China’s foreign direct investment efforts mirror concerns felt across sectors like textiles and apparel.
Trump also reinforced his intention to lower corporate tax rates as he did in 2017, saying that the move incentivized U.S. companies to bring production back to the U.S. “Everybody was coming to the country, they were bringing back billions and billions of dollars into our country,” he said.
When the TCJA was signed into law, then President Trump estimated that it would claw back $4 trillion from overseas, but economists say the impact, years later, has been negligible. A study by economist Gabriel Zucman cited by the Center for American Progress said “the global allocation of profits by U.S. firms appears to have changed relatively little overall.”
Nonetheless, “The way [companies] will sell their product in America is to build it in America, very simple,” Trump insisted Thursday night. “Build it in America and only in America. And this very simple formula, and Congress has to go along with us and they will. This very simple formula will create massive numbers of jobs.”