Tesla says it is 'exposed' to retaliatory tariffs

Tesla warned U.S. trade representative (USTR) Jamieson Greer that the electric vehicle company and other American exporters are “inherently exposed” to retaliatory tariffs levied in response to ones from Trump administration.

“While Tesla recognizes and supports the importance of fair trade, the assessment undertaken by USTR of potential actions to rectify unfair trade should also take into account exports from the United States,” Tesla, which is owned by major Trump adviser and donor Elon Musk, wrote in a letter to Greer on Tuesday.

“U.S. exporters are inherently exposed to disproportionate impacts when other countries respond to U.S. trade actions,” it continued.

The EV company also urged Greer to take into account “existing limitations in the domestic supply chain,” noting that Tesla has sought to create a strong supply chain stateside, but some vehicle parts are “difficult or impossible” to source in the U.S.

It said it supports a process to ensure "U.S. manufacturers are not unduly burdened by trade actions that could result in the imposition of cost-prohibitive tariffs on necessary components, or other import restrictions on items essential to support U.S. manufacturing jobs."

“Trade actions should not (and need not) conflict with objectives to further increase and support domestic manufacturing,” it continued.

The letter from Musk’s company comes as President Trump has levied numerous tariffs on U.S. trading partners in recent weeks, prompting several countries to respond with their own tariffs on U.S. goods.

Trump has imposed a 20 percent tariff against China and 25 percent tariffs against both Canada and Mexico. However, he announced temporary exemptions last week for auto parts and goods covered by a North American trade agreement signed in 2020, during his first term.

The exemptions are set to end on April 2, when Trump plans to levy reciprocal tariffs on countries that have duties on U.S. goods.

Major tech companies, including Tesla, have seen their stocks tumble in recent weeks amid broader turmoil in the stock market.

The tech sector, which has seen massive gains over the past few years amid the artificial intelligence (AI) craze, is seeing its momentum slow as Trump’s tariffs weigh on the industry and new questions emerge about the future of AI.

Musk’s EV firm has been hit particularly hard, with its shares down nearly 33 percent over the past month. However, this appears to be at least partly driven by public pushback to Musk’s controversial role in the Trump administration, leading the Department of Government Efficiency.

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