Elon Musk’s electric-car maker Tesla has warned that president Donald Trump’s trade war could make it a target for retaliatory tariffs against the US and increase the cost of making vehicles in America.
In an unsigned letter addressed to US trade representative Jamieson Greer, Tesla said that it “supports” fair trade but warned that US exporters were “exposed to disproportionate impacts when other countries respond to US trade actions”.
“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 Austin, Texas-based company wrote in the letter dated March 11th.
Tesla’s letter follows two weeks of erratic trade policy announcements that have rattled businesses and financial markets as investors worry about the growing risks of the world’s largest economy being plunged into a recession.
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The letter underscores how even Tesla, a group led by close Trump ally Mr Musk, is concerned about the potential effects of the wide-ranging tariffs.
The EU and Canada have both threatened sweeping retaliations for tariffs on steel and aluminium imports into the US, which went into effect earlier this week.
One person familiar with the process of sending the letter said: “It’s a polite way to say that the bipolar tariff regime is screwing over Tesla.”
The person added: “It is unsigned because nobody at the company wants to be fired for sending it.”
Tesla did not immediately respond to a request for comment.
The group said in its letter to the Trump administration that tariffs could increase the costs of making vehicles in the US and make them less competitive when exported overseas. It also urged the administration to avoid making minerals that are in short supply in the US – such as lithium and cobalt – even more expensive to import.
Tesla said it has been overhauling its global supply chain to find and build as many materials and components in the US for its EVs and lithium-ion batteries, pointing to its battery manufacturing plant in Reno, Nevada, and its lithium processing in Corpus Christi, Texas.
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“Nonetheless, even with aggressive localisation of the supply chain, certain parts and components are difficult or impossible to source within the US,” the company added. It urged Mr Greer to “further evaluate domestic supply chain limitations to ensure that US manufacturers are not unduly burdened by trade actions that could result in the imposition of cost-prohibitive tariffs on necessary components”.
The letter was filed to the trade representative’s office as part of the agency’s broad request for comment from US businesses as it reviews foreign trade practices and tries to identify any tariffs, taxes, regulations or subsidies that could be harming companies.
Tesla sent a similar letter in response to widespread tariffs imposed during the first Trump administration, a person familiar with the process said. The March 11th letter was uploaded to the USTR website by Miriam Eqab, an associate general counsel at Tesla.
Musk has emerged as one of Mr Trump’s top advisers after spending more than $250 million to help his re-election campaign. In return, the world’s richest man has received a broad mandate to influence policy and slash the federal government, being named head of the so-called Department of Government Efficiency (Doge). – Copyright The Financial Times
