WASHINGTON — A new legislative proposal introduced in Congress seeks to make American-made vehicles more affordable by allowing consumers to deduct auto loan interest from their taxes, aligning with President Donald Trump’s push to revitalize U.S. manufacturing.
The United States Automobile Consumer Assistance and Relief Act (USA CAR Act), introduced by Congressman Dave Taylor (R-OH) in the House and championed by Senator Bernie Moreno (R-OH) in the Senate, would apply to vehicles with final assembly in the United States. The tax deduction would take effect for interest paid on auto loans starting January 1, 2025.
The bill builds on a promise Trump highlighted during his State of the Union address in April 2025, where he touted the idea of incentivizing the purchase of American-made cars. “We’re going to make it so every car sold in America is made in America, and we’re going to help our workers and families afford them,” Trump said, emphasizing the need to strengthen domestic manufacturing. “This is about bringing jobs back and making America the auto capital of the world again.”
Congressman Dave Taylor is a conservative businessman and attorney who represents Ohio’s Second District in the U.S. House of Representatives
The USA CAR Act comes on the heels of Trump’s recent imposition of 25% tariffs on imported automobiles and certain auto parts, which took effect on April 3, 2025. The tariffs, enacted under Section 232 of the Trade Expansion Act of 1962, aim to protect U.S. national security by reducing reliance on foreign vehicles and parts. However, they have sparked concerns about rising car prices, with analysts estimating increases of $3,000 to $6,000 per vehicle, prompting the administration to promote measures like the USA CAR Act to offset costs for consumers.
“Under President Trump’s leadership, Republicans are taking tangible action to prioritize American workers and consumers,” Taylor said in a statement. “Lowering the cost of purchasing an American-made vehicle will lead to the increased sale of American-made cars, which in turn will bolster our Nation’s economy and put more money in the pockets of hard-working families.”
Moreno, a former auto dealer who introduced the Senate companion bill on April 1, emphasized the need to reverse decades of decline in the U.S. auto industry. “For decades, the American auto sector has been devastated by bad trade deals and bad leaders, who shipped American manufacturing jobs overseas while flooding our market with cheap foreign cars,” Moreno said. “Thanks to President Trump, we are finally ensuring every car sold in America is made in America and that working Americans can actually afford to buy a car in the first place.”
The USA CAR Act aims to stimulate demand for domestically produced vehicles, which account for about 50% of the 16 million cars sold in the U.S. last year, according to White House data. By offering tax relief, the bill seeks to make car ownership more affordable while encouraging automakers to expand U.S.-based production. Supporters argue it will create well-paying manufacturing jobs and reduce dependence on foreign supply chains.
However, critics warn that the benefits may be limited, as most taxpayers opt for the standard deduction rather than itemizing, potentially reducing the impact for low- and middle-income households. Additionally, the tariffs could increase prices for both imported and domestic vehicles, as many U.S.-assembled cars rely on imported parts, which will face tariffs starting May 3, 2025.
The proposal has garnered support from industry groups like the United Auto Workers, which praised the tariffs as a step toward reviving American auto jobs. However, some economists caution that higher prices could dampen demand and hurt consumers, particularly lower-income buyers.