U.S. electric vehicle giant Tesla warned that the company and other major American exporters could face retaliatory tariffs due to President Donald Trump’s aggressive trade policies.
Many U.S. businesses have expressed concerns about Trump’s tariffs, but Tesla’s statement stands out because the company is led by Elon Musk, a close ally of the president, Reuters reported.
“As a U.S. manufacturer and exporter, Tesla encourages USTR [U.S. Trade Representative] to consider the downstream impacts of certain proposed actions taken to address unfair trade practices,” company representatives wrote in a March 11 letter to the US Trade Representative Jamieson Greer, as per CNN.
They added, “While Tesla recognizes and supports the importance of fair trade, the assessment undertaken by USTR of potential actions to rectify unfair trade should also take into account exports from the United States.”
Tesla Faces Trade Risks Amid U.S. Tariff Policies and Trump’s Public Endorsement
Tesla warned that previous U.S. tariffs have led to quick responses from affected countries, including higher tariffs on electric vehicles imported into those markets. The letter was not signed.
Under the Trump administration, Tesla has received significant attention, as tariffs have been a key part of the government’s economic policy. On Tuesday, President Trump posed in front of a group of Tesla cars and mentioned that he would buy one at full price.
A photo from Getty Images showed him holding what looked like a Tesla showroom price list while speaking. Despite this spotlight, Tesla’s stock has been struggling, losing all gains made since Election Day.
Tesla Struggles with European Sales Drop, Trade Policy Challenges, and Supply Chain Issues
Earlier this year, the company’s European sales fell by 45%, according to the European Automobile Manufacturers’ Association. Although Musk has had a strong influence in the government, he remains a divisive political figure. On Thursday, Tesla’s stock dropped by 3%.
Tesla stated that previous U.S. tariffs have raised the cost of its U.S.-made vehicles, especially when exporting them to other countries. The company urged the U.S. Trade Representative’s office to find ways to prevent these issues in future trade decisions.
The company also pointed out that trade policies should consider the challenges within the domestic supply chain for electric vehicles and lithium-ion batteries. Some of these materials cannot be sourced within the U.S. at all.
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