On March 26, 2025, U.S. President Donald Trump addressed the media from the Oval Office in the White House, Washington, D.C.
Evelyn Hockstein | Reuters
Following President Trump’s announcement on Wednesday regarding the implementation of 25% tariffs on “all cars not manufactured in the United States,” he remarked that his main advisor, Tesla CEO Elon Musk had refrained from commenting on the issue, “due to a potential conflict of interest.”
He emphasized that Musk had never “requested any business favors from me.”
Musk has served as a senior advisor to Trump, having previously made a significant contribution of $290 million to support Trump’s campaign for a return to the White House. While leading companies like SpaceX and Tesla, Musk is also heading the Department of Government Efficiency (DOGE), aimed at reducing federal spending and streamlining various government entities.
Earlier this month, Trump transformed the South Lawn of the White House into a temporary showcase for Tesla vehicles. The company presented five electric vehicles for the president to examine after he announced on Truth Social his intention to purchase a Tesla in support of Musk and his business. While Musk was present, Trump referred to the vehicles as “beautiful” and complimented the unique design of the Tesla Cybertruck.
When reporters inquired whether the new tariffs would benefit Tesla, Trump suggested they might be “net neutral or potentially advantageous,” highlighting Tesla’s production facilities in Austin, Texas, and Fremont, California, and asserting that “any company with plants in the U.S. — this will be beneficial for them.”
Tesla recently communicated to the U.S. Trade Representative that “despite aggressive localization” of its supply chain, “certain components are challenging or impossible to procure domestically.” The company urged the USTR to factor in the broader effects of certain proposed measures intended to address unfair trade practices.
Like many automakers, Tesla sources headlamps, automotive glass, brakes, body panels, suspension components, and printed circuit boards from foreign suppliers predominantly located in Mexico, Canada, and China.
Neither Musk nor Tesla provided immediate feedback regarding how the proposed 25% tariffs could affect their operations.
Tesla is currently contending with escalating competition, as more automakers introduce fully electric models than ever. However, its most significant competitor in the battery electric vehicle sector, BYD from China, has yet to receive authorization to sell its electric cars in the U.S.
Domestic manufacturers such as General Motors, Ford, Rivian and Tesla experienced a slight decline in share prices following the announcement of the new tariffs.
