Tag Archives: Tax cutting war

Tesla and Fiat Chrysler is up about 80% since the election

The focus now is how Donald Trumps policies are going to "Make America Great again". One of the first things Trump did was to shut down the TPP agreement, which is favoring TPPs laws before the constitution.

Trump do not blame Obama for this TPP agreement because this is something that has been negotiated in decades. Trump is a business man and he do things he belive is right for the American people.




Trump can start a new global trade war and that means off for global equities, but what will happen if he starts a tax-cutting war? Countries around the world will start to compete to lower tax rates and that will probably make companies to invest and hire more, which is positive for equities.

President Trump has tweeted a lot about the automotive industry over Twitter, and after a few hours in the White house, he made a point to meet with the chief executives of Tesla and Fiat Chrysler. What Mr Trump want is to press the companies to build more vehicles in the U.S and hire more Americans into manufacturing jobs.

Reduced corporate taxes will surely please executives. If the automotive industry work together with the government, it will improve the environment and jobs creation and the competitiveness of manufacturing.

Trump`s decision to withdraw from the TPP is a largely symbolic move since it was unlikely to pass Congress. It was a strong symbol of his desire to implement policies that improve competitiveness and a new renaissance in American manufacturing.

The mother of all trade barriers is currency manipulation, and TPP failed in meaningfully dealing with that, and the automotive industry appreciate Trump`s courage to walk away from a bad trade deal.

Tesla and Fiat Chrysler combined is up about 80% since the election. Tesla has been a great rally since the beginning of December last year. It has so far been a great ride since its IPO in 2010, and now the average analyst`s recommendation is a Hold.

Fiat Chrysler look very cheap but a new scandal casting a shadow over the company. The company has doubled its value in a very few months but the scandal makes it risky for investors at the moment.

Trump met Tesla`s chief executive Elon Musk and the President told executives that he intends to eliminate a majority of regulations and «massively» cut corporate taxes, but that in return those companies must keep production domestic and preserve American jobs.

Trump told the CEO`s to device a «series of actions» within 30 days.




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