Trump threatened to cut General Motors subsidies in a tweet after GM announced that they were going to be cutting thousands of employees. Trump’s tweet caused GM stocks to decline 3.8 percent, according to Yahoo Finance.
Trump threatened to do this as a form of retaliation of the company cutting U.S. jobs. Canadian officials were also upset with General Motors for job cutbacks in Canada.
According to Investopedia, a subsidy is a benefit given to an individual, business or institution, usually by the government. It is usually in the form of a cash payment or a tax reduction. The subsidy is typically given to remove some type of burden, and it is often considered to be in the overall interest of the public, given to promote a social good or an economic policy.
If Trump goes through with his claim, GM is taking a big downfall in their company. However, Trump was unclear about what exact subsidies he was referring to.
Many are viewing this threat by Trump as another empty claim.
“Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland. Nothing being closed in Mexico & China. The U.S. saved General Motors, and this is the THANKS we get! We are now looking at cutting all @GM subsidies, including…,” Trump said in a tweet. “…for electric cars. General Motors made a big China bet years ago when they built plants there (and in Mexico) – don’t think that bet is going to pay off. I am here to protect America’s Workers!”
On Twitter, and especially the replies to Trump’s tweet, there are several angry former Trump supporters upset about Trump’s tax laws.
During the election, Trump had explained that his tax laws would benefit workers, but that has not been the case.
Several working class employees are receiving pink slips and having to tackle the hardship of unemployment, not only with GM but with many other companies such as Wells Fargo, Sam’s Club and Harley Davidson.
GM and other companies affected are not the only people upset about Trump’s policies as president.
Senate Democratic Leader Charles Schumer criticized Trump for overpromising as a candidate about protecting against plant closures if he was elected on Tuesday, said reuters.com.
Many other politicians, Republican and Democrats alike, are criticizing Trump for being too quick to say something on an issue like this.
Several investors have bid down on their GM shares since Trump had made the tweet. Although Trump may not follow through with cutting GM subsidies, he has still affected the company because he is the reason for their dramatic loss in investors and the reason for the job cuts in general.
General Motors’ decline is one of many likely to come due to changes in tax laws, which has caused several companies to be in a panic about the issue.