Tesla sends letter of warning that retaliatory tariffs could cost the company

Elon Musk’s Tesla is warning about the potential impact of retaliatory tariffs as President Donald Trump continues to address unfair trade with America’s partners.

The company sent a letter to U.S. Trade Representative Jamieson Greer, where Tesla noted that it “supports a robust and thorough process to gather information to ensure appropriate actions are taken to address unfair trade practices and which, in the process, do not inadvertently harm U.S. companies.”

“As a U.S. manufacturer and exporter, Tesla encourages USTR to consider the downstream impacts taken to address unfair trade practices,” the letter continues. “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.”

“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 targeted countries, including increased tariffs on EVs imported into those countries,” the company cautioned.

Tesla also pointed out that previous tariffs have impacted their company personally, including making exported vehicles more expensive as well as making them less competitive.

“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 U.S. manufacturers.”

While not explicitly calling for an end to retaliatory tariffs, the business said: “Future trade policy actions should take into consideration existing limitations in the domestic supply chain.” This is because while Tesla can source a large number of vehicle components domestically, a number of parts have to be imported from one of America’s trade allies.

“Even with aggressive localization of the supply chain, certain parts and components are difficult or impossible to source within the United States. Tesla supports a process by USTR to further evaluate domestic supply chain limitations to ensure that 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,” the letter reads. “Trade actions should not (and need not) conflict with objectives to further increase and support domestic manufacturing.”

Tesla suggested a “phased approach” for trade actions that would allow American companies to adapt to potential changes in the supply chain resulting from tariffs.

“As USTR continues to evaluate possible trade actions to rectify unfair trade practices, consideration should also be given to the timeline of implementation. U.S. companies will benefit from a phased approach that enables them to prepare accordingly and ensure appropriate supply chain and compliance measures are taken.”

Writer/Columnist

Sierra Marlee is a millennial whose hunger for the truth in a world of fake news has led her to BizPac Review.

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