Tesla, the electric vehicle manufacturer founded by Elon Musk, has cautioned that it and other exporters from the US could face repercussions from countries responding to Donald Trump’s trade tariffs.
Despite Mr. Musk being a close confidant of the president and his push for a smaller federal government, Tesla expressed concerns in an unsigned letter to a US trade representative. The company stated that while it “supports” equitable trade, it feels that US exporters are “vulnerable to disproportionate effects” if other nations retaliate against tariffs.
The correspondence coincided with an event at the White House where Trump mentioned his intention to purchase a Tesla, showing his backing for Mr. Musk.
Tesla’s stock has dropped by 40% since the beginning of the year. As the company’s CEO, Mr. Musk has faced criticism that his connection with the Trump administration may be damaging Tesla’s reputation. However, market analysts believe the decline in stock price is more related to concerns over the company’s ability to meet production goals and falling sales over the last year.
In the letter, Tesla mentioned its strategic adjustments to supply chains, aiming to source more local suppliers for its vehicles and batteries to minimize dependency on foreign markets.
“Nevertheless,” it cautioned, “even with significant efforts to localize the supply chain, some parts and components are challenging or impossible to procure within the US.”
In response to trade tensions, the US president has enacted an additional 20% tariff on all imports from China, which led Beijing to impose retaliatory tariffs, including those on vehicles. China is Tesla’s second-largest market following the US.
The letter pointed out, “For instance, previous trade actions by the United States have triggered immediate reactions from affected countries, including heightened tariffs on electric vehicles imported into those markets.”
Both the European Union and Canada have indicated plans for extensive retaliation against tariffs on steel and aluminum imports into the US, which were implemented earlier this week.
Recently, protesters have targeted Tesla showrooms, voicing their opposition to Mr. Musk’s role in the Trump administration’s cost-cutting initiatives, where he leads the Department of Government Efficiency (Doge).
Earlier this week, during an event at the White House, Trump suggested that those protesting against Tesla should be branded domestic terrorists while he was behind the wheel of a brand new red Tesla he claimed he intended to purchase.
He remarked that demonstrators were “endangering a great American company,” and those who resort to violence against the electric car manufacturer would “face severe consequences.”
