Tesla has raised concerns over the escalating trade war sparked by President Donald Trump’s recent tariff policies, warning that retaliatory measures could negatively impact American businesses, including the electric vehicle giant itself.
In a formal letter addressed to the U.S. Trade Representative (USTR), Tesla cautioned that Trump’s push to “address unfair trade practices” could backfire, increasing costs for domestic manufacturing and disrupting international exports. The letter, which was posted on the USTR’s website, highlighted the unintended consequences of the new 25% tariffs imposed on goods from Canada and Mexico.
Tesla’s Warning: Higher Costs and Supply Chain Disruptions
Tesla’s letter noted that previous U.S. tariff actions have led to inflated production costs and rising tariffs on U.S. electric vehicles (EVs) exported abroad.
“U.S. exporters are inherently exposed to disproportionate impacts when other countries respond to U.S. trade actions,” the company stated. “Tesla encourages USTR to consider the downstream impacts of certain proposed actions.”
Tesla is not alone in voicing concerns. A major automotive trade group, which represents nearly all major car manufacturers except Tesla, has also warned that these tariffs could lead to drastic price hikes and supply chain interruptions, according to a Reuters report.
Musk’s Trump Ties and Tesla’s Balancing Act
Tesla’s pushback is particularly notable given CEO Elon Musk’s close ties to Trump. Musk has been a vocal supporter of Trump’s initiatives to reduce federal regulations, and his company has benefitted from past government incentives. In a show of support for Musk, Trump recently purchased a red Tesla Model S at an event on the White House lawn, a move that briefly boosted Tesla’s struggling stock price.
Tesla shares, which had fallen 34% since January, saw a nearly 4% gain after the high-profile purchase, closing at $249.98 on Friday.
Tesla Owners React as Political Tensions Mount
Despite Trump’s endorsement, not all Tesla customers are pleased with Musk’s political associations. A growing number of Tesla owners have begun protesting Musk’s political moves, with some selling their vehicles or adding anti-Musk bumper stickers. Public figures, including Arizona Senator Mark Kelly, have openly shared their decisions to ditch their Teslas in response to Musk’s actions.
The ongoing tariff dispute adds yet another layer of complexity to Tesla’s challenges as the company navigates a shifting economic and political landscape. With increasing costs, supply chain concerns, and potential international retaliation looming, Tesla is walking a fine line between political alliances and business realities.
