Tesla Raises Alarm Over Trump's Tariffs Amid Trade Tensions

In a letter to the U.S. trade representative, Tesla expressed concerns over the impact of Trump’s tariffs on American exporters, stating that retaliatory measures could disproportionately affect them. Despite Trump's support for Musk, analysts suggest the company's declining stock is more related to production and sales issues than political affiliation.

In a recent unsigned letter to the U.S. trade representative, Tesla, the electric car manufacturer helmed by Elon Musk, has voiced significant concerns regarding the potential repercussions of trade tariffs imposed by former President Donald Trump. While Musk is known to be a close ally of Trump and is leading efforts within the administration to streamline federal operations, the company warns that retaliatory actions from other countries due to these tariffs could seriously affect U.S. exporters.

The letter coincided with Trump's event at the White House, wherein he declared his intention to purchase a Tesla, marking his support for Musk publicly. However, it remains uncertain who authored the letter or if Musk was even aware of its content. Tesla's stock has plummeted 40% this year, creating speculation among analysts that the decline is more about the company's struggle to meet production targets and declining sales than any negative impact from Musk's political associations.

In the letter, Tesla outlined its proactive steps toward localizing its supply chains to lessen dependence on international suppliers for components essential to their vehicles. Nevertheless, they cautioned that sourcing certain parts within the U.S. remains a considerable challenge.

The U.S. government has recently increased tariffs by 20% on all imports from China, prompting retaliatory tariffs from Beijing, which specifically target cars—a critical market for Tesla, as China represents its second-largest customer base after the United States.

The letter highlighted apprehensions about these trade actions, noting that previous U.S. tariffs have historically spurred immediate retaliations from affected countries, including heightened tariffs on electric vehicles. Notably, the European Union and Canada have voiced intentions to enact significant retaliatory measures against U.S. tariffs on steel and aluminum imports.

Beyond trade concerns, Trump's administration has faced protest against Tesla, with demonstrators targeting the company's showrooms in recent weeks. Trump himself has been outspoken against these protests, labeling demonstrators as "domestic terrorists" during a recent address, wherein he also reiterated his loyalty to Tesla.