Asian giants are stunned? "Trump's Treasury Secretary candidate" Paulson: Collaborate with Musk to cut costs, especially by eliminating green energy subsidies

According to a report by The Wall Street Journal on the 29th, billionaire investor and hedge fund veteran John Paulson stated in an interview that if he could serve as U.S. Secretary of the Treasury during Trump's second term, he would work with Elon Musk to significantly cut federal spending.

Paulson said his top priority would be to extend the Tax Cuts and Jobs Act, enacted by Trump in 2017 and set to expire in 2025, followed by "working with Musk to reduce federal spending," particularly by eliminating green energy subsidies in the Inflation Reduction Act.

Paulson stated:

"All these tax subsidies for inefficient and non-economic energy sources like solar and wind should be eliminated, which would reduce spending."

"Encourage energy production and let us become an energy-dominant producer."

In 2022, current President Biden signed the Inflation Reduction Act to stimulate the economy, which included substantial tax credits for purchasing electric vehicles, renewable energy, hydrogen, and nuclear energy. According to the Tax Foundation, repealing the clean energy tax incentives could increase tax revenue by approximately $921 billion over ten years.

For reference, the Congressional Budget Office (CBO) reported that total federal government spending in the last fiscal year was $6.75 trillion.

Musk stated this week that he could push for a reduction of at least $2 trillion in the federal spending budget, but did not specify how this would be achieved. Trump had previously indicated that if elected president, he would have Musk lead a new "Government Efficiency Committee" to help cut federal spending.

According to insiders speaking to The Wall Street Journal, the 68-year-old Paulson is one of the candidates being considered for Secretary of the Treasury by Trump's team, due to his long-standing close relationship with Trump and ongoing involvement in Republican political activities.

It is worth noting that repealing any tax provisions in the Inflation Reduction Act would still require congressional approval.

Over the past two years, encouraged by the Inflation Reduction Act, leading companies in the industry such as Toyota Motor, Hyundai, TSMC, and Samsung Electronics have actively expanded their operations in the U.S. According to data from the United Nations Conference on Trade and Development, new greenfield investments announced in the U.S. have exceeded $110 billion annually since 2021, with total investments from Japan, South Korea, and Taiwan reaching $147 billion over three years.

For Asian giants engaged in electric vehicles and renewable energy, Trump's and his allies' plans to repeal clean energy tax incentives would harm their financial positions and reduce the attractiveness of the U.S. market.

In the second-quarter financial report released in July, LG Energy Solution indicated that it had significantly lowered its annual sales guidance, considering the possibility that Trump might repeal electric vehicle tax incentives