Tesla Sounds Alarm: Trump's Tariffs Could Impact Global Trade and Electric Vehicle Market

Elon Musk’s Tesla has raised concerns about the potential negative effects of President Trump’s trade tariffs on US exporters, specifically highlighting fears of retaliatory actions from other countries that could harm businesses like Tesla. In an unsigned letter to the US trade representative, Tesla expressed its support for fair trade but emphasized that US companies are vulnerable to disproportionate consequences from international responses to tariffs. Interestingly, this letter coincided with an event at the White House where Trump vocally supported Musk and announced plans to buy a Tesla, raising questions about the letter’s authorship and Musk’s knowledge of it.

Tesla’s stock has taken a significant hit, dropping 40% since the beginning of the year, leading many analysts to speculate that concerns regarding production targets and declining sales are contributing factors, rather than Musk’s close ties to the Trump administration. In an attempt to mitigate risks associated with tariffs, Tesla indicated that it is actively working on sourcing local suppliers for its vehicle and battery components, although they acknowledged that some parts must still be imported due to the lack of domestic availability.

The backlash from trade policies has been evident, as seen in China’s retaliatory tariffs on American vehicles—which substantially affect Tesla as its second largest market—along with the responses from the EU and Canada. Recent weeks have also seen protests targeting Tesla’s showrooms, driven by dissatisfaction with Musk’s influence in the Trump administration’s cost-cutting strategies. During a recent White House event, Trump defended Tesla against the protestors, branding them as domestic terrorists and suggesting that violence against the company would lead to severe repercussions. Overall, Tesla’s situation illustrates the complexities and risks posed by current US trade policies on the company’s future.