Elon Musk’s electric car company Tesla has joined several other American companies that could be attributed to the trade war that President Trump has promoted.
In a Tesla letterhead addressed to US trade representatives, Tesla warned that Trump’s actions “to deal with unfair trade practices” could “inadvertently harm American businesses.”
Trump has imposed a 25% tariff on goods from Canada and Mexico to mitigate “the threat posed by illegal aliens and drugs,” according to a. Tariffs are threatening to raise many costs.
Earlier this month, a trade group representing almost all major automakers except Tesla said tariffs in Canada and Mexico could lead to dramatic price increases and supply chain disruptions.
A Tesla letter posted on the US trade officials’ website said past US tariff measures have increased the costs of domestic manufacturing and increased tariffs on EVs exported to foreign countries.
“U.S. exporters are inherently exposed to disproportionate effects when other countries respond to US trade actions,” the letter from Tesla said. “Tesla encourages USTR to consider the downstream impacts of certain proposed actions.”
Representatives from Tesla, based in Austin, Texas, could not be immediately contacted for comment.
Tesla’s message to US trade representatives is noteworthy as Musk, the company’s chief executive, is Trump’s ally and a major effort to reduce the federal government. This week, at a show in support of Masks and Tesla, Trump bought a new red model at the White House lawn event.
Tesla shares, which have plummeted 34% since January, rose after the purchase of Trump’s vehicle, and closed at $249.98 at the end of Friday, up nearly 4%.
This letter comes as a few people by selling vehicles and adding musk bumper stickers to the vehicle.
Some politicians and celebrities who are Democrats in Arizona have publicly shared plans to remove Tesla’s vehicles.
The US Tesla facility supports more than 70,000 employees and is responsible for billions of dollars in economic activity each year, the letter said. The company has several manufacturing sites in California, including the Fremont assembly plant and Lathrop’s MegaFactory.
Tesla’s letter also warned of supply chain issues that could arise from existing and proposed trade policies.
“Even with aggressive supply chain localization, certain parts and components are difficult or impossible to source within the United States,” the letter states. “Trade measures should not be at odds with (and not necessary) the goals to further increase and support domestic manufacturing.”
Trade Group Group Autos Drive America, which represents foreign automakers, including Toyota and BMW, has warned US trade officials that widespread tariffs will disrupt US plant production and increase consumer prices.
