Elon Musk, the CEO of Tesla, has provided his perspective following Donald Trump’s announcement of new 25 percent tariffs on imported vehicles and auto parts.
On March 26, Trump disclosed that tariffs would be imposed on imported passenger vehicles, light trucks, and essential automobile parts effective April 2.
The White House released a fact sheet describing the measure as a response to a “critical threat to US national security.” It explained that the action aims to safeguard the American automobile industry, which is considered vital to national security and has been jeopardized by excessive imports affecting the domestic industrial base and supply chains.
The statement from the White House elaborates: “The 25 percent tariff will be applied to imported passenger vehicles (sedans, SUVs, crossovers, minivans, cargo vans) and light trucks, as well as key automobile parts (engines, transmissions, powertrain parts, and electrical components), with processes to expand tariffs on additional parts if necessary.
“Importers of automobiles under the United States-Mexico-Canada Agreement will be given the opportunity to certify their U.S. content and systems will be implemented such that the 25 percent tariff will only apply to the value of their non-US content.”
Trump also noted, “But if you build your car in the US, there is no tariff.”
On Twitter, user Sawyer Meritt shared an analysis by Visual Cap indicating that Tesla vehicles are “100 percent” manufactured in the US, unlike Ford, which has “77 percent” made in the US, with “21 percent” in Canada and Mexico, and the remaining two percent elsewhere.
Musk responded earlier today (March 27) to this post, stating, “Important to note that Tesla is NOT unscathed here. The tariff impact on Tesla is still significant.”
This comment comes in the wake of a letter Tesla sent to the United States Trade Representative, Jamieson Greer.
The letter, submitted on March 11 by Tesla’s associate general counsel, Miriam Eqab, states: “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.
“US exporters are inherently exposed to disproportionate impacts when other countries respond to US trade actions.
“Past U.S. special tariff actions have thus (1) increased costs to Tesla for vehicles manufactured in the United States, and (2) increased costs for those same vehicles when exported from the United States, resulting in a less competitive international marketplace for US manufacturers.
“USTR should investigate ways to avoid these pitfalls in future action.”
The remarks come after Trump mentioned he did not consult Musk regarding the tariffs, as he believes Musk “may have a conflict” in the matter.
The president also noted that Musk has never “asked [him] for a favor in business whatsoever.”