Tesla is warning that it and other U.S. exporters could be hit with retaliatory tariffs as President Donald Trump imposes levies on American trading partners.
In a letter sent to U.S. Trade Representative Jamieson Greer earlier this week, Tesla wrote that it “supports a robust and thorough process to gather information to ensure appropriate actions are taken to address unfair trade practices and which, in the process, do not inadvertently harm U.S. companies.”
Tesla CEO Elon Musk is a close ally of Trump, who tasked him with leading the Department of Government Efficiency (DOGE), and the company’s concerns are similar to those raised by other U.S. exporters amid the widening trade war.
“As a U.S. manufacturer and exporter, Tesla encourages USTR to consider the downstream impacts taken to address unfair trade practices,” Tesla wrote.
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“While Tesla recognizes and supports the importance of fair trade, the assessment undertaken by USTR of potential actions to rectify unfair trade should also take into account exports from the United States,” the letter said.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 240.68 | -7.41 | -2.99% |
“U.S. exporters are inherently exposed to disproportionate impacts when other countries respond to U.S. trade actions. For example, past trade actions by the United States have resulted in immediate reactions by targeted countries, including increased tariffs on EVs imported into those countries,” the company added.
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Tesla’s letter also outlined how past tariff fights have resulted in higher manufacturing costs and higher overseas sales prices, which make the company’s vehicles less competitive.
“Past U.S. special tariff actions have thus (1) increased costs to Tesla for vehicles manufactured in the United States, and (2) increased costs for those same vehicles when exported from the United States, resulting in [a] less competitive international marketplace for U.S. manufacturers,” Tesla explained.
Tesla also wrote that “future trade policy actions should take into consideration existing limitations in the domestic supply chain.”
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Tesla noted that its supply chain has a large degree of domestic components, but some auto parts can’t be sourced in the U.S., which leaves automakers exposed to an onerous burden that makes it more difficult to sustain American manufacturing jobs.
“Even with aggressive localization of the supply chain, certain parts and components are difficult or impossible to source within the United States. Tesla supports a process by USTR to further evaluate domestic supply chain limitations to ensure that U.S. manufacturers are not unduly burdened by trade actions that could result in the imposition of cost-prohibitive tariffs on necessary components, or other import restrictions on items essential to support U.S. manufacturing jobs,” the company wrote.
“Trade actions should not (and need not) conflict with objectives to further increase and support domestic manufacturing.”
“As USTR continues to evaluate possible trade actions to rectify unfair trade practices, consideration should also be given to the timeline of implementation. U.S. companies will benefit from a phased approach that enables them to prepare accordingly and ensure appropriate supply chain and compliance measures are taken,” Tesla’s letter concluded.
Reuters contributed to this report.
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