Trump being "undermined"? Tesla warns the US government in a letter that tariffs must not mistakenly harm allies!

CCTV News reported that on the 13th local time, Tesla, the American automotive company led by CEO Elon Musk, warned that President Trump's trade war could make it a target for retaliatory tariffs imposed by the United States and increase the cost of manufacturing cars in the U.S.

According to the media, Tesla warned in a letter to the Office of the United States Trade Representative (USTR) this week that any actions to increase tariffs could raise manufacturing costs and reduce its competitiveness in international markets. Tesla stated that it is essential to ensure that the Trump administration's efforts to address trade issues do not inadvertently harm American businesses. It emphasized that the company hopes to avoid facing similar retaliatory measures from previous trade disputes, which led countries affected by U.S. tariffs to raise tariffs on imported electric vehicles.

Tesla stated in the letter:

"U.S. exporters often face disproportionate impacts when other countries respond to U.S. trade actions."

"Past U.S. trade actions have led relevant countries to respond swiftly, including raising tariffs on electric vehicles imported into those countries."

The Trump administration plans to impose significant tariffs on automobiles and parts produced globally in early April. Tesla warned that even with proactive localization measures in the supply chain, certain parts and components remain difficult or impossible to source in the U.S. The company added:

"If tariff actions can be implemented in phases, businesses will benefit, allowing them to prepare accordingly and ensure appropriate supply chain and compliance measures are in place."

"As an American manufacturer and exporter, Tesla urges the USTR to consider the downstream impacts of certain proposed actions to address unfair trade practices."

This letter was included in the public comments of the USTR as part of the agency's review of whether American businesses might be affected by trade policies. Analysts believe that this letter reflects the concerns of many American companies regarding Trump's tariff policies, but it is noteworthy that the letter comes from Tesla, and Musk is a close ally of Trump. It is currently unclear who specifically authored the letter, as it was unsigned but used Tesla's company letterhead.

As of now, neither Musk nor Trump has commented on Tesla's related warnings. However, Tesla's remarks echo the concerns expressed by the company's Chief Financial Officer (CFO) Vaibhav Taneja during the earnings call at the end of January, when he stated:

"The implementation of tariffs is very likely to occur, and any retaliatory measures will impact our business and profitability."

Recently, several American media outlets have reported multiple rumors of discord between Musk and Trump, including inconsistent statements regarding the "Gateway to the Stars" plan in January this year; and subsequent layoffs at federal agencies led by Musk as the head of the "Government Efficiency Department," which caused dissatisfaction among Trump administration personnel regarding Musk's handling of the related layoffs.

Tesla's stock price fell 2.99% on Thursday, closing at $240.68, and the stock has dropped over 36% year-to-date

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