Elon Musk’s big Tesla production plans hit a speed bump thanks to President Donald Trump’s escalating trade war.
According to Reuters, the tech mogul’s plans to begin production of the Cybercab and Semi trucks in the U.S. have been thrown into disarray. With fresh tariffs slapped on key Chinese parts, the Tesla CEO has been forced to hit the brakes and suspend shipments of parts for the vehicles, a source with direct knowledge of the matter told the news wire.
The Daily Beast has reached out to Tesla for comment.
Late on Tuesday, the White House escalated its trade war with China, announcing that the country is now facing a 245 percent tariff on imports to the U.S. “as a result of its retaliatory actions.” It’s a drastically higher figure than the 145 percent outlined in a published fact sheet.
Musk’s Tesla was no longer prepared to swallow the skyrocketing costs beyond Trump’s earlier imposition of a 34 percent tariff on Chinese goods, the source told Reuters.
The tariffs now put Tesla’s timeline in serious jeopardy, the source said, noting that Musk planned to begin trial production of the two Tesla models in October and begin mass production in 2026.
Musk publicly expressed disdain for Trump’s tariff policies by posting a clip of free trade economist Milton Friedman on X. The Washington Post also reported on April 8 that Musk directly appealed to Trump to reverse his sweeping tariffs.
The billionaire’s brother similarly criticized Trump’s decision to slap tariffs on a large number of countries.
“Who would have thought that Trump was actually the most high tax American President in generations,” Kimbal Musk wrote on X.
“Through his tariff strategy, Trump has implemented a structural, permanent tax on the American consumer,” he continued. “Even if he is successful in bringing jobs on shore through the tariff tax, prices will remain high and the tax on consumption will remain the form of higher prices because we are simply not as good at making all things.”
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