Tesla warns that IT and other major US exporters are exposed to retaliatory tariffs that can be levelled in response to President Trump's aggressive use of tariffs.
Tesla CEO Elon Musk, Trump's close ally, has led the White House efforts to reduce the size of the federal government. The billionaires lead the so-called government efficiency sector.
The letter to the US trade representative's office reflects comments by many US companies related to Trump's tariffs and is noteworthy as it comes from Tesla. It is not clear who wrote the letter. This is not signed, but is in the company's letterhead.
Tesla said it is important to ensure that the Trump administration's efforts to address trade issues will “not inadvertently harm American businesses.” It said it wanted to avoid the type of retaliation they faced in previous trade disputes, which resulted in increased tariffs on electric vehicles imported to countries subject to US tariffs.
“U.S. exporters are exposed to inherently disproportionate effects when other countries respond to US trading behavior,” Tesla said in the letter. “For example, past trade measures by the United States have led to immediate responses by target countries, including increased tariffs on EVs imported to these countries.”
Trump is considering imposes heavy tariffs on vehicles and parts made around the world in early April.
Tesla warned that even aggressive localization of the supply chain “certain parts and components are difficult or impossible to source within the United States.”
The automaker added that it will “benefit from a gradual approach that will allow businesses to “prepare accordingly and ensure that appropriate supply chain and compliance measures are taken.”
Tesla did not immediately respond to requests for comment.
“As a US manufacturer and exporter, Tesla encourages USTR to consider the downstream impacts of certain proposed actions taken to address unfair trade practices,” the EV maker said in a letter Tuesday.
Autos Drive America, a trading group representing major foreign automakers such as Toyota, Volkswagen, BMW, Honda and Hyundai, warned USTR in separate comments that “wide range of tariffs will disrupt production at US assembly plants.”
The group added, “Automobile manufacturers cannot shift their supply chains overnight, and rising costs will inevitably lead to increased consumer prices, fewer models offered to consumers, closing US production lines, and potential unemployment across the supply chain.”
