Tesla Inc., the iconic electric vehicle manufacturer, is raising red flags about the risk of retaliatory tariffs impacting not only itself but also other major U.S. exporters, in the wake of President Donald Trump’s assertive deployment of tariffs.
This warning, although echoing concerns from numerous American businesses, stands out due to Tesla’s significant market presence and influence.
Elon Musk, Tesla’s CEO and an ally of Trump, has been active in advocating for a leaner federal government, helming what is referred to as the Department of Government Efficiency.
The cautionary stance was clearly articulated in an open letter to the U.S. Trade Representative’s Office, amidst a substantial batch of correspondence from companies expressing apprehensions over U.S. trade policy.
The origin of the document within Tesla remains unspecified, as the letter lacks a signature despite being on official company stationery. The automaker has yet to issue a direct response to inquiries regarding the matter.
In its plea, Tesla emphasizes the necessity of ensuring that the administration’s trade measures do not inadvertently damage U.S. businesses.
The company voiced an eagerness to avoid scenarios observed in earlier trade conflicts, where heightened tariffs were imposed on electric vehicles entering markets affected by U.S. tariffs.
Tesla underscores that U.S. exporters often bear a disproportionate brunt when foreign governments retaliate to American trade maneuvers. Past experiences have seen immediate responses from affected nations, including tariff hikes on imported EVs.
As Trump deliberates the possibility of implementing extensive tariffs on foreign auto products this April, Tesla warns of the challenges in sourcing certain car parts domestically despite efforts to localize the supply chain. The company suggests a phased strategy to facilitate adjustment and compliance among manufacturers.
Reinforcing these concerns, Autos Drive America, a coalition representing international automakers like Toyota, Volkswagen, BMW, Honda, and Hyundai, highlighted the risks of widespread tariffs unraveling U.S. manufacturing operations.
The group cautioned that such measures could inevitably lead to increased consumer prices, a reduced variety of available vehicle models, and potential closures at U.S. production sites, together with job losses cascading through the supply chain.
