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>> President Trump and Republicans in Congress are talking about giving corporations a big tax cut. The question is, whether companies will use that windfall to create jobs? I'm Joe White, Transportation Editor for Reuters in the Americas. Big companies in the United States are really looking forward to a tax cut, possibly to a rate as low as 20%.
The question is, what will they do with the money that they get? Fiat Chrysler for instance, said that they might get as much as a billion dollars to the bottom line if taxes are cut from the current rate of 34% for that company to 20%. Here's the thing, companies like Fiat, Chrysler, Ford, General Motors, big manufacturers like General Electric.
They're not gonna build factories, hire thousands of people just because they get a windfall. They're gonna do that if their market and their customers tell them they need that capacity and need those jobs. Companies may use some of their tax windfall to invest in new equipment, new machinery, new technology.
But that doesn't necessarily mean humans will get more jobs. It could be that robots get more jobs because automation is the way to increase productivity, especially in a high wage country, like the United States. Just because a big company like Ford Motor Company gets a tax break does not mean that they will automatically take that money and invest in the United States.
They might, but they have a lot of considerations. Free trade agreements, does the United States have fewer free trade agreements than say Mexico? Well the answer is yes. You put a plant in Mexico, you can export to more than 40 countries. In the US it's roughly half that number.
Companies also really need to pay attention to where the demand is Growth and demand for cars is not really happening in the United States. The market is strong it is not growing, it is growing in places like China. And that's where you'll see new capacity and new jobs.
Just because you have the money, doesn't mean you spend it.