Elon Musk’s Tesla is waving a red flag, warning that Donald Trump’s trade war risks dooming US electric vehicle makers, triggering job losses, and hurting the economy.
In an unsigned letter to the US Trade Representative (USTR), Tesla cautioned that Trump’s tariffs could increase costs of manufacturing EVs in the US and forecast that any retaliatory tariffs from other nations could spike costs of exports.
“Tesla supports a robust and thorough process” to “address unfair trade practices,” but only those “which, in the process, do not inadvertently harm US companies,” the letter said.
The carmaker recommended that the USTR—in its ongoing review of unfair trade practices and investigation into harms of non-reciprocal trade agreements—”consider the downstream impacts of certain proposed actions taken to address unfair trade practices.”
According to Tesla, the current process to address unfair trade threatens to harm its more than 70,000 employees, and more broadly could trigger job losses and revenue dips in the US auto industry. It could also disrupt supply chains, as Tesla claims that even its best efforts prove it would be “impossible” to source all parts from the US currently.
“Even with aggressive localization of the supply chain, certain parts and components are difficult or impossible to source within the United States,” the letter said, asking the USTR to “evaluate domestic supply chain limitations.”
If left unchanged, the process could make the US less competitive in global auto markets, Tesla warned, recommending that the “USTR should investigate ways to avoid these pitfalls in future actions.”
Moving forward, Tesla recommends that the USTR “take into account” how the trade war could hurt US exporters, as “US exporters are inherently exposed to disproportionate impacts when other countries respond to US trade actions.”
