Tesla has warned US trade tariffs could hurt American exporters if other countries retaliate.
The electric carmaker expressed its concerns in an unsigned letter to the US trade representative, stating while it supports fair trade, companies could face “disproportionate impacts” from retaliatory measures.
The letter was dated the same day former President Donald Trump held an event at the White House, where he publicly supported Tesla and said he planned to buy one of its cars.
However, it remains unclear who at Tesla authored the letter or whether CEO Elon Musk was aware of it.
Musk has proved to be a close ally of Trump, and has been working closely with the administration to head up the Department of Government Efficiency.
Thousands of federal roles have been cut under Musk’s watch, and his company speaking up against Trump’s much-vaunted tariff plan could prove embarrassing for the world’s richest man.
Tesla’s Struggles and Market Concerns
Tesla’s stock price has dropped 40% since the beginning of the year. While some critics argue that Musk’s alignment with Trump has damaged the company’s reputation, market analysts cite different reasons.
Concerns over Tesla’s ability to meet production targets and declining sales have played a bigger role in the stock decline.
In the letter, Tesla noted it is working to shift its supply chain to local sources for car parts and batteries.
However, it acknowledged “even with aggressive localisation of the supply chain, certain parts and components are difficult or impossible to source within the US.”
Trade War Impact on Tesla
Trump’s administration imposed a 20% tariff on all imports from China, prompting Beijing to introduce retaliatory tariffs, including on US-made cars.
China is Tesla’s second-largest market after the US.
The letter referenced past trade actions, warning that such measures have previously led to immediate responses from other countries.
“For example, past trade actions by the United States have resulted in immediate reactions by the targeted countries, including increased tariffs on EVs imported into those countries.”
The European Union and Canada have also threatened countermeasures in response to US tariffs on steel and aluminum imports, which went into effect earlier this week.
Protests and White House Response
Tesla has also faced backlash from protesters opposed to Musk’s role in Trump’s administration, where he serves as head of the Department of Government Efficiency (Doge).
Demonstrators have targeted Tesla showrooms in recent weeks, protesting against Musk’s cost-cutting efforts.
Earlier this week, Trump responded to the protests while sitting in a new red Tesla at the White House event.
He declared that those demonstrating against Tesla should be considered “domestic terrorists” and warned that anyone attacking the carmaker “would go through hell.”
Tesla’s Uncertain Future
With ongoing trade tensions, shifting supply chains, and political controversies, Tesla faces mounting challenges.
While the company works to reduce its reliance on foreign markets, the broader economic and political landscape remains uncertain.
The impact of tariffs, protests, and Musk’s ties to the former president could continue to shape Tesla’s trajectory in the coming months.
