Elon Musk’s electric vehicle company, Tesla, has joined a growing number of American businesses expressing concern over the potential fallout from President Donald Trump’s trade policies, particularly retaliatory tariffs.
In an unsigned letter addressed to the U.S. Trade Representative, Tesla cautioned that Trump’s efforts to counter alleged unfair trade practices could inadvertently hurt American companies.
The company noted that previous tariff measures had already increased production costs and triggered higher tariffs on U.S. exports, including electric vehicles.
The letter specifically addressed Trump’s decision to impose a 25% tariff on imports from Canada and Mexico, which the administration justified as a response to illegal immigration and drug trafficking concerns.
However, these tariffs have intensified trade tensions and raised the cost of consumer goods.
A trade group representing major automakers, excluding Tesla, previously warned that the tariffs could disrupt supply chains and lead to significant price increases, according to Reuters.
Tesla’s letter, published on the U.S. Trade Representative’s website, underscored the risks faced by American exporters when foreign governments retaliate against U.S. trade policies.
The company urged the administration to evaluate the broader economic consequences of its actions.
“U.S. exporters are inherently vulnerable to disproportionate consequences when other nations react to American trade measures,” the letter stated.
“Tesla encourages USTR to consider the downstream effects of certain proposed policies.”
The letter’s release comes amid controversy surrounding Musk’s political alignment with Trump. Despite Musk’s close ties to the administration and his push for federal deregulation, Tesla has faced backlash from some customers.
In response to Musk’s political stance, certain Tesla owners have sold their vehicles or displayed anti-Musk bumper stickers.
Tesla’s stock, which had declined by 34% since January, saw a brief resurgence after Trump publicly purchased a red Model S at a White House event, closing nearly 4% higher at $249.98 on Friday.
Tesla also highlighted its substantial contribution to the U.S. economy, stating that its facilities employ over 70,000 workers and generate billions in economic activity.
The company operates several manufacturing sites, including an assembly plant in Fremont, California, and a megafactory in Lathrop.
The letter further warned of supply chain disruptions caused by existing and proposed trade measures.
“Even with aggressive efforts to localize supply chains, certain parts and components remain difficult or impossible to source domestically,” Tesla wrote.
“Trade actions should align with, not contradict, efforts to strengthen and support domestic manufacturing.”
Meanwhile, Autos Drive America, a trade group representing foreign automakers such as Toyota and BMW, also urged the U.S. Trade Representative to reconsider broad tariff measures, warning that such policies could disrupt U.S. manufacturing and increase costs for consumers.
