Tesla warns of retaliatory tariffs amid Trump's aggressive trade policies
What's the story
Tesla has warned that retaliatory tariffs could impact not just itself but also other major American exporters. The warning comes in light of President Donald Trump's aggressive tariff strategy, which has alarmed many US businesses. The warning was issued in a letter to the US Trade Representative (USTR)'s office and is now available on their website.
Trade caution
Letter emphasizes need for careful trade policies
Tesla's letter emphasizes the need to ensure that the administration's efforts to address trade concerns "do not inadvertently harm US companies." Tesla is eager to avoid retaliation like in past trade disputes which resulted in higher tariffs on electric vehicles (EVs) imported into countries impacted by US tariffs. The company stressed in its letter, "US exporters are inherently exposed to disproportionate impacts when other countries respond to US trade actions."
Supply chain concerns
Tesla warns about sourcing challenges in US
Despite attempts to localize its supply chain, Tesla warned "certain parts and components are difficult or impossible to source within the United States." The company advised a phased approach would help businesses by giving them time to prepare and implement required supply chain and compliance measures. As a US manufacturer and exporter, Tesla urged the USTR to consider the downstream effects of certain proposed actions to address unfair trade practices.
Industry impact
Autos Drive America warns against broad-based tariffs
Autos Drive America, a trade group representing major foreign automakers including Toyota, Volkswagen, BMW, Honda, and Hyundai also expressed concerns. The group warned the USTR that "broad-based tariffs will disrupt production at US assembly plants." They added "automakers cannot shift their supply chains overnight," and the cost increases would inevitably lead to higher consumer prices, fewer models offered to consumers and potential job losses across the supply chain.
Recent incident
British Columbia cuts EV subsidies for Tesla
Earlier this week, British Columbia, Canada's third-most populous province, announced it was scaling back government subsidies for Tesla. These subsidies included rebates on Tesla's batteries, inverters, and vehicle chargers, allowing homeowners to install Tesla EV chargers with financial assistance, according to Bloomberg. According to an official notice on the BC government website, the revoked rebates previously covered up to 50% of the purchase and installation cost for a home Tesla charger.