Musk’s Electric Car Maker Warns of Retaliatory Tariffs Affecting US Exports
Tesla, the electric car manufacturer headed by Elon Musk, has raised alarms about the potential harm US exporters, including itself, could face due to retaliatory tariffs from other countries in response to President Donald Trump’s trade policies. The company expressed its concerns in an unsigned letter to the US Trade Representative, which outlined Tesla’s worries that tariffs might disproportionately impact American exporters.
Tesla has been an ally of President Trump, with Musk taking part in efforts to reduce federal government size. However, the letter, which was submitted on the same day Trump hosted an event at the White House where he pledged to buy a Tesla, conveyed Tesla’s belief that while it supports fair trade, the imposition of tariffs could place US businesses at a disadvantage if countries retaliate.
Since the beginning of the year, Tesla’s share price has fallen by 40%, a decline that analysts attribute more to concerns over the company’s ability to meet production targets and a drop in sales, rather than its relationship with the Trump administration. Some critics have linked Musk’s alignment with Trump to damage to the Tesla brand, but financial analysts believe the issues are rooted in production and sales challenges.
In the letter, Tesla stated it was taking steps to reduce its reliance on foreign markets by localising its supply chain, sourcing parts and components from US suppliers where possible. However, Tesla cautioned that some components remain difficult or impossible to source domestically, despite these efforts.
The concern stems from President Trump’s additional 20% tariff on Chinese imports, to which China has retaliated by imposing its own tariffs, including on electric vehicles. China is Tesla’s second-largest market after the US. The letter highlighted that previous US trade actions had already led to increased tariffs on electric vehicles in other countries, which could have negative consequences for Tesla’s global business.
This week, Trump also faced protests over his role in leading efforts to cut government spending, with demonstrators targeting Tesla showrooms. During a White House event, Trump, sitting in the driver’s seat of a Tesla, pledged his support for the company and warned that protesters would face severe consequences if they harmed Tesla.
