Potential Retaliatory Trade Taxes Threaten Elon Musk's Tesla Enterprise
Talkin' Tariffs and Tesla's Take
Elon Musk's electric vehicle empire, Tesla, shook things up this week, voiceing concerns over retaliatory tariffs on US manufacturers. In a letter penned to US Trade Representative Jamieson Greer, the company pleaded for a thoughtful approach to trade policies, breaking ranks with their presidential ally, Donald Trump.
The letter, unsigned and brimming with apprehension, states: "As a U.S. manufacturer and exporter, Tesla encourages USTR to consider the downstream impacts of certain proposed actions taken to address unfair trade practices."
The company acknowledges the necessity of fair trade yet underscores the need for a comprehensive assessment of American exports. It fears that past tariff actions have instigated immediate reactions from targeted countries, with elevated tariffs on imported electric vehicles being a prime example.
Tesla's warning comes amid a slide in their shares, erasing the gains since the election day. European sales plummeted by an astounding 45% in January, as per the European Automobile Manufacturers' Association. Despite Musk's significant role in the government, he's become a divisive political figure, sparking speculation and debate. Tesla's shares closed down 3% Thursday.
Trump, ever the showman, posed before a fleet of Teslas earlier this week, hinting at a potential purchase. In a seemingly rehearsed move reminiscent of a car dealership sales pitch, Trump held a list of vehicle prices, according to a Getty Images photo.
However, Tesla's past experiences with tariffs have seen the cost of US-manufactured vehicles increase for the company, particularly when exported out of the US. The letter suggests that the Office of the US Trade Representative should explore mechanisms to avoid these hurdles in future actions.
The letter also highlights the need for trade policies to account for the "limits in the domestic supply chain" concerning electric vehicles and lithium-ion batteries. Some of these items are virtually impossible to source domestically, as argued in the letter.
Tesla boasts numerous U.S. facilities that jointly employ over 70,000 people. The Fremont, California factory produces vehicles as well as lithium-ion battery cells. The company also has facilities in Austin, Texas; Sparks, Nevada; Buffalo, New York; Brooklyn Park, Minnesota; and Grand Rapids, Michigan.
As of now, Tesla has yet to comment on the matter. CNN has reached out for their thoughts but has yet to receive a response.
- Elon Musk's electric vehicle company, Tesla, has raised concerns about retaliatory tariffs on US manufacturers, fearing that escalating tariffs on imported electric vehicles could be a consequence.
- In the letter to US Trade Representative Jamieson Greer, Tesla emphasized the importance of a comprehensive assessment of American exports and the downstream impacts of trade policies, even as they acknowledge the necessity of fair trade.
- Tesla suggested that the Office of the US Trade Representative should explore ways to avoid tariff-related hurdles while drafting future trade policies, considering the limitations in the domestic supply chain for electric vehicles and lithium-ion batteries.
