Featured Image Credit: Getty Images/Andrew Harnik
Topics: Donald Trump, Elon Musk, Tesla, Business
Gerrard Kaonga
Topics: Donald Trump, Elon Musk, Tesla, Business
Tesla have pleaded with Trump administration to reconsider tariffs that could potentially harm the electric car company.
Despite Elon Musk being the ‘First Buddy’ in the White House (whatever that means), his companies may not benefit from the impacts of Donald Trump’s tariffs.
Since taking office, Donald Trump has been engaged in trade wars with allies of the US, most notably Canada, Mexico, and the European Union.
While Trump has insisted his moves would ultimately be better for American citizens and businesses, there have been some reservations.
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Elon Musk’s company, Tesla has now sent a letter to the administration hoping they will consider tariffs that could negatively affect them.
In an unsigned letter sent to US Trade Representative Jamieson Greer, Tesla warned that the ongoing feud with Mexico and Canada could see the cost of metal for automakers increase.
Uploaded to the public comment portal for Greer by one of Tesla's lawyers on Tuesday, the letter warned that the tariff moves could ‘inadvertently harm US companies.
It continued: “U.S. exporters are inherently exposed to disproportionate impacts when other countries respond to U.S. trade actions.
“For example, past trade actions by the United States have resulted in immediate reactions by the targeted countries, including increased tariffs on EVs imported into those countries.
“As a U.S. manufacturer and exporter, Tesla encourages USTR to consider the downstream impacts of certain proposed actions taken to address unfair trade practices.”
There is no surprise that Tesla is concerned about potentially rising costs, as the company is in the middle of an alleged boycott.
Tesla's share price has dropped 40 percent since the start of the year. While some have remarked that Musk’s fading popularity due to his proximity to Trump is the cause, market analysts have come to different conclusion.
The fall in price is more about the worries the company will fail to meet production targets and as well as a drop in sales over the past year.
With that said, Tesla is not the only company to express anxiety about the matter, with Autos Drive America, representing Toyota, Volkswagen, BMW, Honda and Hyundai, warning 'broad-based tariffs will disrupt production at U.S. assembly plants'.
The trade group added: "Automakers cannot shift their supply chains overnight, and cost increases will inevitably lead to some combination of higher consumer prices, fewer models offered to consumers and shutting down U.S. production lines, leading to potential job losses across the supply chain."