Donald Trump's assurances about growth in the auto industry looked quite foolish this week when General Motors announced plans to shutter three assembly plants and two other facilities, while eliminating an estimated 14,700 jobs. The president has decided to respond with a series of threats.
In one interview this week, Trump said he told GM's Mary Barra, "You're playing around with the wrong person." Referring to a plant in Ohio, the president claims to have added, "It's not going to be closed for long, I hope, Mary, because if it is you've got a problem."
Yesterday, the oblique threats became more explicit.
"Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland," the president tweeted."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 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!"
The presidential attempts at intimidation took a quick toll on General Motors' stock price, though the company itself did not respond publicly.
To be sure, there is a relevant policy at issue: current federal tax law allows electric-vehicle consumers to receive a $7,500 tax credit. In theory, every auto manufacturer can benefit from this, but GM in particular has been among the biggest beneficiaries.
But whether Trump knows this or not, his threat comes with a big asterisk.
As Emily Stewart explained, the White House can't unilaterally punish one company and it also can't change federal tax law without congressional action. The president may be prepared to scrap the electric-car tax credit, but there's no evidence of lawmakers having any comparable plans.
Indeed, there was some talk during last year's fight on taxes about scrapping this tax credit, but Republicans ultimately backed off and left the current policy in place.
All of which suggests Trump is saber rattling, but may not be able to follow through, even if he wants to.
Postscript: As we discussed yesterday, the fact that the president is threatening a private company over its business decisions used to be the sort of thing condemned by the right as "gangster government." Apparently, those concerns have disappeared.