Tesla Braces for Backlash: US Trade Policies Raise Concerns for Musk and Co.
Uncertainty Over Imposed U.S. Customs Duties According to Tesla's Statement
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In the face of escalating trade tensions, Tesla has voiced its apprehensions over potential retaliatory tariffs imposed on the electric vehicle manufacturer. CEO Elon Musk and the company penned an appeal to the United States Trade Representative's office, expressing concern that the Trump administration's attempts to address trade issues might inadvertently harm American businesses.
Tesla's letter, dated March 9th, joins a wave of similar correspondence from companies expressing their concerns regarding US trade policy. The electric car industry heavyweight did not respond immediately to a request for comment.
As a preventative measure, Tesla aims to steer clear of retaliatory tariffs that historically surfaced in the wake of trade disputes, resulting in increased tariffs on electric vehicles entering countries subject to US duties. "US exporters bear the brunt when other countries respond to US trade actions," the letter stated. Tesla added that past US trade actions have prompted immediate reactions from affected countries.
The company advocated for a phased approach to supply chain localization, recognizing the difficulties in sourcing necessary parts and components domestically. A phased approach, Tesla suggested, would afford companies the opportunity to prepare and implement suitable measures to accommodate supply chain disruptions and regulatory compliance.
Economy: Elon Musk in Rough Waters? Tesla Stock Plummets The unfavorable news hasn't abated for Tesla. Despite robust demand for electric vehicles, the German market saw a sharp decline in Tesla sales in February, with a whopping 75% slump resulting in only 1429 units sold. Sales in other countries, including European ones, have taken a hit as well.
The company's financial standing took a tumble at the beginning of the week, with the stock shedding 15 percent and wiping out the growth achieved since Trump assumed the US presidency in early November. Trump—a strong supporter of Tesla, both media-wise and financially—during the US election campaign, now finds himself at the center of controversy surrounding US trade policies.
Economy: Autos Drive America Speaks Out: Broad Tariffs Pose Threat to US Production Autos Drive America, a trade group representing major foreign automakers like Toyota, Volkswagen, BMW, Honda, and Hyundai, expressed worries over the imposition of broad tariffs in a separate letter to the US Trade Representative's office. The group contended that such tariffs would disrupt production in US assembly plants. The letter further stated: "Automakers cannot quickly switch their supply chains, and cost increases will inevitably lead to higher consumer prices, fewer available models, and the closure of US production lines, potentially impacting job security throughout the supply chain."
US President Donald Trump announced his intention to impose substantial tariffs on vehicles and parts from around the world starting in early April.
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- In a similar tone, the Commission has also been asked to submit a proposal for a directive on the protection of workers from the risks related to exposure to ionizing radiation, as the unpredictable tariffs imposed might inadvertently harm some other sectors.
- Meanwhile, electrobauer, a German company specializing in electrical engineering and automation, warned its employees via WhatsApp on Tuesday about potential implications of the ongoing trade disputes and possible increase in tariffs on their products.
- Despite facing backlash over potential tariffs, Tesla and its CEO, Elon Musk, remain focused on advocating for a phased approach to supply chain localization, hoping to steer clear of similar complications in the future.
