Tesla, the electric vehicle company led by Elon Musk, has expressed concerns that retaliatory tariffs against U.S. manufacturers could negatively impact its operations. In a letter dated March 11 to U.S. Trade Representative Jamieson Greer, Tesla emphasized the importance of considering the downstream effects of trade actions on U.S. exporters. The letter, which remains unsigned, highlights past instances where U.S. tariffs have led to immediate retaliatory measures, such as increased tariffs on electric vehicles imported into affected countries.
Tesla’s concerns come despite Elon Musk’s close ties to President Donald Trump, who has been a strong supporter of the company. Recently, Trump even posed with a fleet of Teslas, announcing his intention to purchase one, in a show of support for Musk amidst Tesla’s declining stock performance. However, Tesla’s European sales have dropped significantly, and the company faces challenges in sourcing certain components domestically, which could be exacerbated by trade policies.
The letter underscores Tesla’s commitment to fair trade while urging caution in implementing tariffs that could harm U.S. businesses. It suggests that the U.S. Trade Representative should investigate ways to mitigate these risks and consider the limitations of the domestic supply chain, particularly for electric vehicles and lithium-ion batteries. Despite Tesla’s efforts to localize its supply chain, some components remain difficult or impossible to source within the U.S..
Tesla’s warning reflects broader industry concerns about the impact of tariffs on U.S. manufacturers. The company operates several facilities across the U.S., employing over 70,000 people, and is a significant player in the automotive sector. As trade tensions escalate, Tesla’s stance highlights the need for a balanced approach to trade policy that supports both domestic manufacturing and international competitiveness.