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Donald Trump and Elon Musk.
Credit: Reuters Photos
New York: Former President Donald Trump called for the creation of a government efficiency commission in an economic speech in New York on Thursday, adopting a policy idea that was pitched to him by tech billionaire Elon Musk.
Trump said that Musk would also lead the commission, which would conduct an audit of the federal government and recommend “drastic reforms” for cutting waste. He said the commission would save “trillions of dollars.”
In a wide-ranging and sometimes meandering speech that lasted more than an hour, Trump recast his first-term record as an economic miracle and renewed his pitch for lowering taxes and raising tariffs on imports, often disregarding some of the potential implications of his new proposals.
The trade wars that Trump started had painful consequences for American farmers, and the new tariffs that he called for would also likely trigger backlash and retaliation from other countries. Trump claimed that his new tax cuts would be paid for by spurring economic growth, but the 2017 tax cuts he enacted increased the national debt, and his growth projections never panned out.
Trump’s embrace of the concept of a government efficiency commission — a favorite Washington solution for delaying dealing with hard problems — comes as he is trying to define how his stewardship of the economy would differ from that of his Democratic opponent, Vice President Kamala Harris. He has assailed her economic vision as one that would saddle the economy with wasteful spending and burdensome regulations.
During his speech, Trump also vowed to eliminate 10 existing government regulations for every new regulation added under his potential new administration. Trump — who during his presidency issued an executive order vowing a similar two-for-one rule — argued that the cost of regulations was being passed onto consumers.
Trump advisers said it was not yet clear how a government efficiency commission would be staffed. But having Musk lead such a commission could pose potential conflicts of interest. His rocket company, SpaceX, has contracts from the federal government. And his car company, Tesla, has benefited from tax credits and government incentives meant to spur the production and adoption of electric vehicles.
Trump, in his address to the Economic Club of New York on Thursday, also made the case for a repeal of the Inflation Reduction Act of 2022, which was President Joe Biden’s signature climate and tax legislation.
On tax policy, Trump said that he would lower the corporate tax rate to 15 per cent from 21 per cent. However, companies would be eligible for that reduction, he said, only if they make their products in the U.S.
Trump previously cut the rate from 35 per cent in 2017. Harris has proposed raising it to 28 per cent.
And on trade, Trump signaled that another aggressive round of protectionist measures would be in store for companies that do not produce their goods in the US He branded these “smart tariffs” as a way to shield domestic industries from foreign competition and insisted that they would not fuel inflation.
Trump has previously called for imposing a 10 per cent to 20 per cent tariff on most imports, as well as a more than 60 per cent tariff on Chinese products. He suggested Thursday that the tariff rates could be higher than what he has proposed.
“We will be bringing in billions and billions of dollars, which will directly reduce our deficits,” Trump said.
Building on his frequent promise to boost domestic energy production, Trump said he would declare a national emergency to help cut through bureaucratic regulations and boost drilling for oil, new pipelines and new power plants. American oil and gas production has hit record levels under Biden, but Trump said that it would be “four times higher” had he been elected in 2020.
Joseph Costello, a Harris campaign spokesperson, criticized Trump’s economic plans, pointing to reports by experts that have suggested his tariffs would raise costs for consumers rather than lower them. “His agenda will shrink the economy, crush job growth, raise taxes on the middle class, drive up inflation, and explode the national debt,” Costello said in a statement.
Trump had previously discussed the idea of an efficiency commission, but he stopped short of saying he would adopt it in a livestreamed conversation with Musk last month on X, the entrepreneur’s social-media platform.
Though Musk was once a strong supporter of Democrats and a vocal Trump skeptic, he has grown closer with Trump as his own politics have shifted. As Musk became more conservative, Trump and his team began courting his support.
Musk endorsed Trump in July, just hours after Trump survived an assassination attempt at a rally in Pennsylvania. Their closeness led to Trump’s return to X, which was formerly Twitter and was long Trump’s favored social-media platform before he was barred in 2021 and launched a competitor.
Trump has a tendency to divert any policy-focused speech toward his talking points from his rallies. He veered at times Thursday to criticize the Biden administration’s withdrawal from Afghanistan, to accuse Harris of leftist policies on policing and immigration, and to stoke fear around migrants and crime.
His speech included some of his frequent false claims, including his assertion that all the job growth during the Biden presidency had gone to immigrants in the country illegally.
Still, the crowd at Thursday’s speech was less raucous and more restrained than the audience at a typical Trump rally. Hundreds of men and women in business attire gathered inside Cipriani’s cavernous bank-turned-banquet hall on East 42nd Street, seated at round tables dressed with white linens.
The audience included many former members of Trump’s administration, including Steven Mnuchin, his Treasury secretary; Wilbur Ross, his commerce secretary; and Robert Lighthizer, the trade adviser. Financial leaders — Jamie Dimon, CEO of JP Morgan; John Paulson, a hedge fund investor; and Stephen Schwarzman, CEO of Blackstone — were also in attendance.
After his speech, Trump took four questions from members of the Economic Club. Reshma Saujani, founder of both Moms First and Girls Who Code, asked Trump what legislation he might prioritize to address rising child care costs.
In a jumbled and meandering answer, Trump said he would commit to legislation but did not offer a specific plan. “Well, I would do that,” he said. “And we’re sitting down — you know, I was somebody — we had Sen. Marco Rubio and my daughter Ivanka was so impactful on that issue. It’s a very important issue. But I think when you talk about the kind of numbers that I’m talking about that — because, look child care is child care. It’s, couldn’t, you know, there’s something — you have to have it, in this country you have to have it.”
He continued: “But when you talk about those numbers compared to the kind of numbers that I’m talking about, by taxing foreign nations at levels that they’re not used to, but they’ll get used to it very quickly — and it’s not going to stop them from doing business with us, but they’ll have a very substantial tax when they send product into our country. Those numbers are so much bigger than any numbers that we’re talking about, including child care.”
He then insisted that his other economic policies, including tariffs, would “take care” of child care.
Harris’ campaign, in a statement, called Trump’s economic plan an effective “tax hike on middle class families” that would not make child care more affordable.
Trump was also asked how he might alter existing economic sanctions, particularly on Russia.
Acknowledging that he had imposed some during his presidency, Trump said he would aim to “use sanctions as little as possible” in a bid to avoid other countries turning to Chinese currency. Though he has often cited the sanctions he imposed on Iran as a signature policy achievement, Trump also suggested that he believed the Biden administration was leaving existing sanctions on other countries in place for too long.