Tesla has raised alarms about potential retaliatory tariffs as President Trump considers imposing significant tariffs on vehicles and parts manufactured worldwide. This move has sparked concerns among major US exporters, including Tesla, about possible reciprocal actions from other countries.
The electric vehicle manufacturer's policy team has voiced apprehensions in a letter to the US Trade Representative's Office, highlighting the risk of adverse effects on US companies due to the trade war initiated by Trump. "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 letter stated.
Tesla's concerns are well-founded, as Canada has already begun implementing policy changes directly targeting the automaker. For instance, British Columbia's BC Hydro has announced it will exclude Tesla products from its EV charging station rebate programme. Adrian Dix, British Columbia's Energy Minister, justified the move by stating, "I thought they [Tesla products] shouldn’t be made available on a public subsidy programme right now. I don’t think anyone in British Columbia needs to be told why, and I think most people would support their removal from that list."
The automaker's letter to the US Trade Representative warned of the disproportionate impacts faced by US exporters when other nations retaliate. "US exporters are inherently exposed to disproportionate impacts when other countries respond to US trade actions," Tesla explained, citing past trade actions by the US that led to increased tariffs on imported electric vehicles.
Tesla, which sources about 25% of its vehicle parts from Mexico and also relies on Canadian parts, emphasized the challenge of sourcing certain components domestically. "Certain parts and components are difficult or impossible to source within the United States," the company noted.
In light of these developments, the policy team's role becomes increasingly complex, especially as Tesla's CEO, Elon Musk, is a notable Trump supporter. The letter emphasized that Tesla has been impacted by Trump's trade war, even though the CEO is close to Trump, The Financial Times said.
Despite his alliance with Trump, Musk has remained silent on the trade war. However, the automaker's policy team stresses the necessity of ensuring that Trump's policies do not inadvertently harm US companies.
Additionally, the trade group Autos Drive America, representing major foreign automakers, has warned that broad-based tariffs could disrupt production at US assembly plants and lead to potential job losses.
Canadian politicians are considering further measures, with NDP Leader Jagmeet Singh proposing a 100% tariff on Tesla vehicles imported from the US. This proposal marks a significant escalation in the trade conflict initiated by Trump's aggressive tariff policies.
Tesla's policy team continues to navigate these challenges, highlighting the need for a phased approach to allow companies to prepare for potential changes. "The automaker adds that companies will 'benefit from a phased approach that enables them to prepare accordingly and ensure appropriate supply chain and compliance measures are taken,'" the letter conveyed.