Automotive Industry

United States President Donald Trump has made a range of claims about the state of the US economy.

In a long and meandering address to the media on Tuesday, the first year anniversary of his second term as president, Trump’s claims ranged from there being “no inflation” in the US to drug prices being slashed by as much as 600 percent. Most claims were factually inaccurate.

Al Jazeera examined some of his statements on the economy:

Core inflation has been at 1.6 percent for the past three months, and there is “no inflation”.

Both claims are false. Core inflation in November and December stood at 2.6 percent year over year, according to the Bureau of Labor Statistics (BLS).

A core consumer price index (CPI) report was not released for the month before due to the federal government shutdown, the longest in US history.

Overall, inflation rose by 2.7 percent compared with the same period last year.

Drug prices under Trump’s “most favored nation” programme are down by “300, 400, 500, 600 percent”.

This is incorrect. While the programme is intended to lower drug prices, reductions beyond 100 percent are mathematically impossible.

A 100 percent price reduction would mean a product is free. Anything beyond that would require pharmaceutical companies to pay consumers to take their products.

Pending Supreme Court ruling on tariffs:

Trump addressed a pending Supreme Court case that will rule on the legality of his use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs. He claimed the US would have to return money if the court rules against his administration.

This is partially accurate but unclear. If the court rules against the administration, the US would need to refund some of the money importers paid in tariffs. In September, Secretary of the Treasury Scott Bessent said the government could be required to refund roughly half of the tariffs it collected.

The White House’s economic adviser, Kevin Hassett, has said the administration is exploring alternative legal avenues to impose tariffs if the court blocks the current plan.

Former President Joe Biden “did not do tariffs”.

This is false. Biden imposed multiple tariffs during his administration. In 2022, he imposed 35 percent tariffs on Russian imports as part of sanctions following Moscow’s full-scale invasion of Ukraine.

In 2024, Biden raised tariffs on Canadian lumber to 14.5 percent from 8.5 percent, continuing a Trump-era policy.

That year, he also imposed tariffs on China, including 100 percent on electric vehicles, 25 percent on steel and aluminium, and 50 percent on semiconductor chips.

Trump administration removed more than 270,000 bureaucrats from the federal government, but they are going to the private sector. 

The federal government has cut 277,000 jobs since January 2025, according to the BLS. But data shows limited growth in the private sector, especially in tariff-exposed industries.

In the most recent jobs report, the US economy added 50,000 jobs. The biggest gains were in food service, which added 27,000 jobs, and healthcare, which added 34,000 jobs.

The US economy added 584,000 jobs in 2025. This is significantly lower than the two million created the year before, under Biden.

Gas prices are at $1.99 per gallon in some states

This is inaccurate. According to the American Automobile Association (AAA), which tracks gas prices, the average price for a gallon of gas is $2.82. The cheapest gas prices are in the state of Oklahoma, at $2.31.

More car factories are being built in the US now than ever before.

Oxford Economics tracks private construction spending on transportation equipment factories. In 2025, nominal spending on manufacturing structures related to transportation equipment was down from its peak in 2024, it said.

Trump has been making claims like this for close to a year. Auto industry experts have long said they are exaggerated, because while companies, including Hyundai and Stellantis, have increased investments in US manufacturing, these are additions to existing plants.

Oxford Economics, which tracks private construction on transportation equipment, found that “nominal spending” in 2025 was trending downwards after hitting a peak during the final year of the Biden administration.

But car makers have urged an extension to the USMCA, saying it is crucial to US auto production.

US President Donald Trump says the United States-Mexico-Canada Agreement (USMCA) is not relevant to the US, but that Canada wants it, as he pushed for companies to bring manufacturing back home.

“There’s no real advantage to it; it’s irrelevant,” Trump said about the trade agreement on Tuesday, during a visit to Detroit, Michigan.

“Canada would love it. Canada wants it. They need it.”

Detroit’s three big automakers, Ford, General Motors and Stellantis, are heavily reliant on supply chains that include significant parts production in Mexico and Canada, and all three produce hundreds of thousands of vehicles annually in both countries.

Major car makers, including Tesla, Toyota and Ford, in November also urged the Trump administration to extend USMCA, saying it is crucial to US auto production.

The American Automotive Policy Council, representing the Detroit Three automakers, said the USMCA “enables automakers operating in the US to compete globally through regional integration, which delivers efficiency gains” and accounts “for tens of billions of dollars in annual savings”.

Mark Reuss, president of General Motors, said at an event on Tuesday, “Our supply chains go all the way through all three countries. It’s not simple. It’s very complex. The whole North American piece of that is a big strength.”

Trump made his comments as he toured a Ford factory in Dearborn, Michigan, ahead of a speech he is delivering on the economy in Detroit on Tuesday.

“The problem is, we don’t need their product. You know, we don’t need cars made in Canada. We don’t need cars made in Mexico. We want to take them here. And that’s what’s happening,” he said.

Stellantis said in November that under the 15 percent tariffs with Japan, US vehicles complying with North American content rules “will continue to lose market share to Asian imports, to the detriment of American automotive workers”.

The USMCA is up for review this year on whether it should be left to expire or another deal should be worked out.

The trade pact, which replaced the North American Free Trade Agreement in 2020 and was negotiated during Trump’s first term as president, requires the three countries to hold a joint review after six years.

On Wall Street, two of Detroit’s major automakers are trending downwards. Ford is 0.25 percent below the market open and Stellantis is down 2.9 percent, while General Motors is up by 0.6 percent.

Decline in sales comes amid outrage of Elon Musk’s political forays, end in US electric vehicle tax breaks.

Tesla has lost its place as the top global seller of electric vehicles to Chinese company BYD, capping a year defined by outrage over CEO Elon Musk’s political manoeuvring and the end of United States tax breaks for customers.

The company revealed on Friday that it had sold 1.64 million vehicles in 2025, compared with BYD’s 2.26 million vehicles. The sales represented a 9 percent decline for Tesla from a year earlier.

Tesla, founded in 2003, had for years far outpaced traditional automakers in its development and sale of electric vehicles. However, the market has become increasingly crowded with competitors, with China’s electric vehicle market bounding ahead.

Musk’s embrace of US President Donald Trump in 2024 and subsequent spearheading of a controversial “government efficiency” panel (DOGE) behind widespread layoffs of federal workers has also proved polarising. The political foray prompted protests at Tesla facilities and slumps in sales.

The company’s fourth quarter sales totaled 418,227, falling short of the much-reduced 440,000 target that analysts recently polled by FactSet, an investment research firm, had expected.

Musk left DOGE in May, in what was largely viewed as an effort to reassure investors.

Tesla was also hard hit by the expiration of a $7,500 tax credit for electric vehicle purchases that was phased out by the Trump administration at the end of September. Trump’s opposition to electric vehicles has contributed to a strained relationship with Musk.

Despite the downward trends in sales, investors have generally remained optimistic about Tesla and Musk’s ambitious plans to make the company a leader in driverless robotaxi services and humanoid robots for homes.

Reflecting that optimism, Tesla stock finished 2025 up about 11 percent.

Tesla has also recently introduced two less expensive electric vehicle models, the Model Y and Model 3, meant to compete with cheaper Chinese models for sale in Europe and Asia.

Musk entered 2026 as the wealthiest person in the world.

It is widely believed that the public offering of his rocket company, SpaceX, set for later this year, could make the 54-year-old the world’s first trillionaire.

In November, Tesla’s directors awarded Musk a potentially historic pay package of nearly $1 trillion if ambitious performance targets were met.

Musk scored another huge win in December,when the Delaware Supreme Court reversed a lower court’s ruling, awarding him a $55bn pay package that had been paused since 2018.

Conversely, Tesla is at risk of temporarily losing its licence to sell cars in California after a judge there ruled it had misled customers about the safety of its driverless taxis.