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Trump pushes tax break on car loans as he courts auto industry

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Donald Trump vowed to boost the U.S. auto industry by making interest on car loans fully tax-deductible and renegotiating a trade deal with Mexico and Canada as he sought to court business leaders and workers in swing-state Michigan.

“Your car industry is going out of business,” Trump said in an address at the Economic Club in Detroit on Thursday, touting his agenda as one that would revitalize an industry with deep roots in that city. “My goal is to see U.S. auto manufacturing even greater than it was in its prime, and for Detroit and Michigan to be at the center of the action.”

The Republican presidential nominee vowed to invoke the six-year renegotiation provision of the USMCA — a trade deal among North American partners that replaced NAFTA under his first administration — to prevent cars being made by China across the border in Mexico from being sold in the United States. 

Trump vowed to impose “whatever tariffs are required” to do so — floating rates as high as even 1000%.

He also pledged to stop Chinese-made autonomous vehicles from operating on American roads — a policy poised to benefit billionaire backer Elon Musk, the head of Tesla Inc., who is competing with the same technology.

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Former President Donald Trump

Sarah Rice/Bloomberg

“I will stop Chinese and other countries-produced automobile and autonomous vehicles,” Trump said. “The autonomous vehicles I will stop from operating on American roads. I will close the loopholes under Biden and Harris that are beginning to allow Chinese vehicles to creep onto American streets.”

The administration of President Joe Biden and Vice President Kamala Harris, Trump’s general election rival, has proposed a ban on Chinese-made hardware and software for connected vehicles, citing national security concerns around automobile machinery.

Key battleground

Trump’s address in Michigan, one of the seven battleground states likely to determine the outcome of November’s election against Harris, is the latest in a pitched fight between the candidates to court both business leaders as well as blue-collar workers worried about jobs and prices in an election in which the economy is a defining issue.

Both candidates have offered a slew of competing tax breaks and benefits both to spur job creation and help consumers buffeted by high prices.

Trump said his plan to make car-loan interest deductible would “stimulate massive domestic auto production, and make car ownership dramatically more affordable for millions and millions of working American families.”

The former president also touted a proposal to help small businesses afford work vehicles by doubling the amount of equipment investment they can deduct to $1 million from $500,000, and a proposal to write off automakers’ costs for heavy machinery and other equipment.

“This will be great for small businesses and great for Ford and General Motors,” Trump said of his proposals. “We’ll sell cars and trucks and work vans like never before.”

Detroit, where Trump spoke, is known as the Motor City with auto manufacturing heavy in the region and the industry’s workers pivotal to carrying the state. While the powerful United Auto Workers has endorsed Harris, Trump has made inroads among organized labor’s rank-and-file fueled in part by worries about Biden’s push to transition the US to electric vehicles and the impact it will have on jobs and wages.

Democrats seized on one of Trump’s remarks at the event, disparaging the battleground state’s largest city. 

“Our whole country will end up being like Detroit if she’s your president,” Trump said. 

Polls show a tight contest in Michigan, with a Bloomberg News/Morning Consult survey in September finding Harris up by 3 percentage points, 50% to 47% over Trump among likely voters in the state. Swing-state voters across the seven battlegrounds say they trust Trump more than Harris on handling the economy but the vice president has managed to chip away at his edge on the issue since replacing Biden atop the Democratic ticket.

Trump also touted his vow to lower the corporate tax rate to 15%, but only for companies that manufacture domestically. That move marks a substantial reduction from the current 21% rate. Harris has called for raising the corporate tax rate to 28%.

High inflation

Trump also hit Harris over high prices, a major political liability for his opponent, seeking to capitalize on voter frustration with the administration’s handling of the economy. Bureau of Labor Statistics figures released earlier Thursday showed underlying U.S. inflation rose more than forecast in September.

The Republican presidential nominee also repeated his criticisms of the Federal Reserve, saying the central bank acted  “a little too quickly” in their half-point reduction in interest rates last month, and calling it a “political maneuver” to help Harris ahead of the election.

Trump’s comments are the latest in a long-running tussle with the central bank, centered on his charges that the Fed has worked against him and suggesting that presidents should have more sway, despite traditional efforts to insulate the bank’s decisions from political considerations.

The hotter-than-expected inflation in the Thursday report fueled a debate over whether the Fed will opt for a smaller rate cut next month or a pause and saw stocks fall.

Monthly jobs figures released last week showed employment growth topped estimates in September, wage growth accelerated and unemployment declined — offering the vice president a slight boost in her argument that the economy is on an upswing. 

A Bloomberg analysis found the jobless rate in six of the seven crucial battleground states has fallen below where it was when Trump was president.

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Accounting

IAASB tweaks standards on working with outside experts

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The International Auditing and Assurance Standards Board is proposing to tailor some of its standards to align with recent additions to the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants when it comes to using the work of an external expert.

The proposed narrow-scope amendments involve minor changes to several IAASB standards:

  • ISA 620, Using the Work of an Auditor’s Expert;
  • ISRE 2400 (Revised), Engagements to Review Historical Financial Statements;
  • ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information;
  • ISRS 4400 (Revised), Agreed-upon Procedures Engagements.

The IAASB is asking for comments via a digital response template that can be found on the IAASB website by July 24, 2025.

In December 2023, the IESBA approved an exposure draft for proposed revisions to the IESBA’s Code of Ethics related to using the work of an external expert. The proposals included three new sections to the Code of Ethics, including provisions for professional accountants in public practice; professional accountants in business and sustainability assurance practitioners. The IESBA approved the provisions on using the work of an external expert at its December 2024 meeting, establishing an ethical framework to guide accountants and sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity to use their work, as well as provisions on applying the Ethics Code’s conceptual framework when using the work of an outside expert.  

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Accounting

Tariffs will hit low-income Americans harder than richest, report says

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President Donald Trump’s tariffs would effectively cause a tax increase for low-income families that is more than three times higher than what wealthier Americans would pay, according to an analysis from the Institute on Taxation and Economic Policy.

The report from the progressive think tank outlined the outcomes for Americans of all backgrounds if the tariffs currently in effect remain in place next year. Those making $28,600 or less would have to spend 6.2% more of their income due to higher prices, while the richest Americans with income of at least $914,900 are expected to spend 1.7% more. Middle-income families making between $55,100 and $94,100 would pay 5% more of their earnings. 

Trump has imposed the steepest U.S. duties in more than a century, including a 145% tariff on many products from China, a 25% rate on most imports from Canada and Mexico, duties on some sectors such as steel and aluminum and a baseline 10% tariff on the rest of the country’s trading partners. He suspended higher, customized tariffs on most countries for 90 days.

Economists have warned that costs from tariff increases would ultimately be passed on to U.S. consumers. And while prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods, including food and other necessities, compared to wealthier individuals.

Food prices could rise by 2.6% in the short run due to tariffs, according to an estimate from the Yale Budget Lab. Among all goods impacted, consumers are expected to face the steepest price hikes for clothing at 64%, the report showed. 

The Yale Budget Lab projected that the tariffs would result in a loss of $4,700 a year on average for American households.

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Accounting

At Schellman, AI reshapes a firm’s staffing needs

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Artificial intelligence is just getting started in the accounting world, but it is already helping firms like technology specialist Schellman do more things with fewer people, allowing the firm to scale back hiring and reduce headcount in certain areas through natural attrition. 

Schellman CEO Avani Desai said there have definitely been some shifts in headcount at the Top 100 Firm, though she stressed it was nothing dramatic, as it mostly reflects natural attrition combined with being more selective with hiring. She said the firm has already made an internal decision to not reduce headcount in force, as that just indicates they didn’t hire properly the first time. 

“It hasn’t been about reducing roles but evolving how we do work, so there wasn’t one specific date where we ‘started’ the reduction. It’s been more case by case. We’ve held back on refilling certain roles when we saw opportunities to streamline, especially with the use of new technologies like AI,” she said. 

One area where the firm has found such opportunities has been in the testing of certain cybersecurity controls, particularly within the SOC framework. The firm examined all the controls it tests on the service side and asked which ones require human judgment or deep expertise. The answer was a lot of them. But for the ones that don’t, AI algorithms have been able to significantly lighten the load. 

“[If] we don’t refill a role, it’s because the need actually has changed, or the process has improved so significantly [that] the workload is lighter or shared across the smarter system. So that’s what’s happening,” said Desai. 

Outside of client services like SOC control testing and reporting, the firm has found efficiencies in administrative functions as well as certain internal operational processes. On the latter point, Desai noted that Schellman’s engineers, including the chief information officer, have been using AI to help develop code, which means they’re not relying as much on outside expertise on the internal service delivery side of things. There are still people in the development process, but their roles are changing: They’re writing less code, and doing more reviewing of code before it gets pushed into production, saving time and creating efficiencies. 

“The best way for me to say this is, to us, this has been intentional. We paused hiring in a few areas where we saw overlaps, where technology was really working,” said Desai.

However, even in an age awash with AI, Schellman acknowledges there are certain jobs that need a human, at least for now. For example, the firm does assessments for the FedRAMP program, which is needed for cloud service providers to contract with certain government agencies. These assessments, even in the most stable of times, can be long and complex engagements, to say nothing of the less predictable nature of the current government. As such, it does not make as much sense to reduce human staff in this area. 

“The way it is right now for us to do FedRAMP engagements, it’s a very manual process. There’s a lot of back and forth between us and a third party, the government, and we don’t see a lot of overall application or technology help… We’re in the federal space and you can imagine, [with] what’s going on right now, there’s a big changing market condition for clients and their pricing pressure,” said Desai. 

As Schellman reduces staff levels in some places, it is increasing them in others. Desai said the firm is actively hiring in certain areas. In particular, it’s adding staff in technical cybersecurity (e.g., penetration testers), the aforementioned FedRAMP engagements, AI assessment (in line with recently becoming an ISO 42001 certification body) and in some client-facing roles like marketing and sales. 

“So, to me, this isn’t about doing more with less … It’s about doing more of the right things with the right people,” said Desai. 

While these moves have resulted in savings, she said that was never really the point, so whatever the firm has saved from staffing efficiencies it has reinvested in its tech stack to build its service line further. When asked for an example, she said the firm would like to focus more on penetration testing by building a SaaS tool for it. While Schellman has a proof of concept developed, she noted it would take a lot of money and time to deploy a full solution — both of which the firm now has more of because of its efficiency moves. 

“What is the ‘why’ behind these decisions? The ‘why’ for us isn’t what I think you traditionally see, which is ‘We need to get profitability high. We need to have less people do more things.’ That’s not what it is like,” said Desai. “I want to be able to focus on quality. And the only way I think I can focus on quality is if my people are not focusing on things that don’t matter … I feel like I’m in a much better place because the smart people that I’ve hired are working on the riskiest and most complicated things.”

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