Michelle ThompsonElon Musk’s electric vehicle company, Tesla, has cautioned that it and other U.S. exporters could suffer from retaliatory actions by other countries in response to Donald Trump’s trade tariffs.
Musk, a strong supporter of the U.S. president, is involved in efforts to downsize the federal government. However, in an unsigned letter to the U.S. trade representative, Tesla expressed its support for fair trade but voiced concerns that U.S. exporters might face “disproportionate impacts” if foreign nations retaliate against the tariffs.
The letter, written on the same day Trump held an event at the White House where he promised to purchase a Tesla in support of Musk, did not specify who at Tesla authored it or whether Musk was aware of it.
Tesla’s stock has dropped 40% this year. While some critics suggest Musk’s close ties to the Trump administration may harm the company’s brand, analysts attribute the stock decline mainly to concerns about Tesla’s ability to meet production goals and a drop in sales over the past year.
Tesla mentioned that it is adapting its supply chain by seeking more local suppliers for its cars and batteries to reduce reliance on foreign markets. However, it acknowledged that despite these efforts, some parts and components remain difficult or impossible to source domestically.
Trump’s additional 20% tariff on imports from China has led to retaliatory tariffs, including on cars. China, Tesla’s second-largest market after the U.S., has responded with these measures.
The letter also highlighted that previous U.S. trade actions had resulted in immediate retaliation from other countries, including increased tariffs on electric vehicles (EVs) imported into those nations.
Both the EU and Canada have threatened major retaliatory measures in response to U.S. tariffs on steel and aluminum, which were enforced earlier this week. Tesla showrooms have been targeted by demonstrators protesting Musk’s involvement in the Trump administration’s cost-cutting efforts, where he heads the Department of Government Efficiency (Doge).
At the White House event, Trump criticized the demonstrators, suggesting they should be labeled domestic terrorists. He also expressed support for Tesla, saying anyone using violence against the company would “go through hell.”
