Britt Jones
US President Donald Trump’s latest tariffs have had a huge knock-on effect, that not even his pal Elon Musk can escape from.
China, Mexico, Canada, and the European Union have felt the full brunt of the trade war with the US after Trump increased its taxes by 25 percent on many of their imported goods.
The president signed an executive order which included 'catastrophic' tariffs on the country's trading partners, which in turn had awful ramifications on the stock market.
It was only yesterday (Wednesday April 2) that people in the US watched as the global stocks fell, tanking $2 trillion in less than 20 minutes.
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However, there’s a lot more that the tariffs could be putting at risk, such as Musk’s Tesla company.
Of course, he’s not got out of this year unscathed with his company, after his stocks plummeted following his appearance at the January 20 inauguration, but this might be worse for him.
The boss man himself spoke about the potential downside to the tariffs, and took to X to make a statement about it, writing: “Important to note that Tesla is NOT unscathed here. The tariff impact on Tesla is still significant.”
Of course, with Trump’s tariffs on auto parts, Tesla won’t be immune to the backlash, as some of its parts do not come from the United States.
But exactly how bad could it be?
Earlier this month, Tesla wrote a letter to US Trade Representative Jamieson Greer that some of its vehicle parts are ‘difficult or impossible’ to source locally, and as at least 20 to 25 per cent of Tesla parts are imported from other countries, as per the National Highway Traffic Safety Administration, it could become costly to make the cars.
Wedbush Securities analyst Dan Ives agreed that the tariffs still present a ‘headwind’ for Tesla, even if it’s not as bad as other companies.
“Tesla is getting hit … less than other automakers when it comes to the tariffs, but I see no way that they wouldn’t have to increase prices if the tariff stays in its current form,” Ives told The Hill.
Essentially, Trump’s tariff could add around $4,711 to the cost of buying a vehicle, according to a report from economist Arthur Laffer.
Trump has imposed 25 percent tariffs on all products imported from both Canada and Mexico, which will affect Musk’s Tesla as he has two battery manufacturing equipment warehouses in Canada and one next-gen vehicle warehouse in Mexico planned for the future.
Tesla is also vulnerable to retaliation from other countries should they accociate him with Trump’s tariffs.
Germany has already hit back at Tesla, with less customers buying his vehicles in the country due to his political affiliation.
The company shared this dear in its letter to Greer stating: “U.S. exporters are inherently exposed to disproportionate impacts when other countries respond to U.S. trade actions.”
All in all, Tesla has taken a $15 billion hit after siding with Trump during and after his election.
A major investor sold $585 million worth of shares as well, because of the tech billionaire’s inaction when splitting his time with DOGE and Tesla.
It’s safe to say that it’s been an interesting year for Tesla, indeed.