This could quickly vanish down the memory hole just like the overwhelming majority of Trump's proposals, but Larry Kudlow told reporters that Trump intends to unilaterally end subsidies for electric cars and renewable energy.
More specifically -- or perhaps less specifically -- Kudlow says they will end subsidies for anything that was "imposed during the Obama administration."
Asked about plans after General Motors Co (GM.N) announced U.S. plant closings and layoffs last week, Kudlow pointed to the $2,500-to-$7,500 tax credit for consumers who buy plug-in electric vehicles, including those made by GM, under federal law.
“As a matter of our policy, we want to end all of those subsidies,” Kudlow said. “And by the way, other subsidies that were imposed during the Obama administration, we are ending, whether it’s for renewables and so forth.”
Asked about a timeline, he said: “It’s just all going to end in the near future. I don’t know whether it will end in 2020 or 2021.”
The good news is Larry Kudlow has no idea what he's talking about and Trump can't end the subsidies.
Ending subsidies would require an act of Congress and I have serious doubts that even a Republican-controlled Congress would agree to end the subsidies. And, as you know, Democrats will take control of the House of Representatives next month.
Trump is clearly floating this idea because he wants it to appear as if he's punishing General Motors, but the truth is he's impotent. There's little if anything he can do.
I should say there's little he can do to make things better, but there's plenty he has already done to make things worse.
General Motors (GM) was probably going to restructure the company at some point in any event, but Trump certainly accelerated their plans by starting a trade war that has costs GM and other automakers billions of dollars in higher material costs.
I'm not qualified to say if General Motors is being more aggressive than they should be, but I can say what they're doing isn't happening in a vacuum. There are broad trends from increased automation to the shift toward all-electric vehicles and Trump's trade war that are driving the changes.
Several of the models GM is canceling (leaving factories with no orders) are plug-in hybrids. They're being canceled because the industry is moving toward all-electric vehicles that use no gasoline at all. Hybrids are on their death bed.