Elon Musk’s car company, Tesla, has warned that it and other U.S. exporters could face financial losses if countries retaliate against tariffs imposed by President Donald Trump.
Musk, a close ally of the president, has been actively advocating for lower taxes.
However, in an unsigned letter to the U.S. Trade Representative, Tesla stated that while it supports fair trade, it is concerned that U.S. exporters “could be disproportionately affected” if other nations respond with tariffs of their own.
Notably, the letter was dated the same day President Trump hosted an event at the White House, where he pledged to purchase a Tesla as a gesture of his strong support for Musk.
#1Tesla's Uncertain Future: Stock Decline, Political Ties, and Supply Chain Shifts
It remains unclear who authored the letter at Tesla, as it was unsigned, or whether Mr. Musk was aware of it.
Additionally, Tesla's stock price has dropped by 40% since the beginning of the year. Intense debate has emerged over Musk’s alliance with the Trump administration, raising concerns that it could damage the brand. Market analysts warn that a significant decline may continue, fueling fears about Tesla’s ability to meet its production targets and the drop in sales over the past year.
The letter also stated that Tesla is adjusting its supply chain strategy to source more components from local suppliers for its cars and batteries, aiming to reduce the risks associated with relying on foreign markets.
#2Tesla's Trade Troubles: Tariffs, Supply Chain Risks, and Global Retaliation
However, the letter warned that "even with full control over the supply chain, it would still be difficult or even impossible to source certain essential components and parts from the domestic market."
Following President Trump's decision to impose an additional 20% tariff on imports from China, Beijing responded with retaliatory tariffs, including on automobiles. This poses a significant challenge for Tesla, as China is its second-largest market after the United States.
For instance, the letter cited past instances where similar actions led to immediate retaliatory measures from other nations, including tariffs on imported vehicles.
Moreover, both the European Union and Canada have confirmed they will take retaliatory action in response to U.S. tariffs on steel and aluminum, which were implemented earlier this week.
#3Tesla Under Fire: Protests, Political Endorsements, and Rising Tensions
In recent weeks, protests against Mr. Musk have targeted Tesla showrooms as a form of intense backlash.
Earlier, Trump hosted an event at the White House, where he referred to the protesters as "domestic haters." He arrived at the event in a brand-new red Tesla and announced his intention to purchase it.
The U.S. president reiterated that the protesters are "negatively impacting a great company" and warned that those engaging in violence against Tesla "will face a tragic fate."
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