Tesla Says It Could Be Exposed to Retaliatory Tariffs

Tesla has warned that they may be exposed to retaliatory tariffs as a result of the Trump administrations tough trade policies.

According to Reuters, the company, owned by billionaire and top adviser to President Donald Trump, 👤Elon Musk, has emphasized that it could face difficulties in sourcing parts domestically.

The Autos Drive America trade group has also warned that the tariffs could affect U.S. production. Reuters reported that other American exporters could also be in tough position.

The trade group made the comments in a letter to the U.S. Trade Representative’s Office Tuesday. However, it is unknown who exactly at Telsa wrote the complaint.

The letter said that it’s important that the trade measures “do not inadvertently harm U.S. companies,” and wants to avoid any retaliation that could lead to increased tariffs on electric vehicles.

“U.S. exporters are inherently exposed to disproportionate impacts when other countries respond to U.S. trade actions,” the letter from Tesla said. “For example, past trade actions by the United States have resulted in immediate reactions by the targeted countries, including increased tariffs on EVs imported into those countries.”

Reuters further reported that Trump had been considering imposing tariffs in April on parts made in various parts of the world, which includes the largest electric battery manufacturer, China, who holds over 60% of the world’s market share.

“Certain parts and components are difficult or impossible to source within the United States,” Tesla warned, adding that companies will, “benefit from a phased approach that enables them to prepare accordingly and ensure appropriate supply chain and compliance measures are taken.”

“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.” Tesla added.

Autos Drive America, who represents foreign automakers including Toyota, Volkswagen, BMW, and Honda, gave its own comments on the potential retaliatory tariffs.

“Broad-based tariffs will disrupt production at U.S. assembly plants,” the group said. “Automakers cannot shift their supply chains overnight, and cost increases will inevitably lead to some combination of higher consumer prices, fewer models offered to consumers and shut-down U.S. production lines, leading to potential job losses across the supply chain.”