Tesla has warned the Trump administration that imposing tariffs on trade partners could lead to increased costs for its cars and harm US companies. In a letter to the US Trade Representative, the automaker expressed concerns about the potential effects of retaliatory tariffs on its manufacturing processes.
The company, which has been a key supporter of President Donald Trump, cited past US special tariff actions that have increased costs to manufacture its vehicles in the US and exported them globally. Tesla warned that this could lead to a less competitive international market for US manufacturers.
Tesla’s CEO Elon Musk was named a “special government employee” by the administration, which has raised concerns about how his business interests may diverge from his political connections. The company’s share price has fallen by nearly half since its December peak due to Musk’s involvement with the White House.
The Trump administration has been considering tariffs on Canada and Mexico, which could have a significant impact on US automakers like Ford, General Motors, and Stellantis. Barclays analysts estimate that a 25% levy on goods from these countries could wipe out profits for these companies.
Tesla is also at risk due to its reliance on components sourced from Mexico, with 20-25% of the parts for its 2025 model year vehicles coming from the country. The company’s CFO Vaibhav Taneja expressed concerns about the impact of tariffs, stating that “there’s a lot of uncertainty around tariffs” and that they could have an effect on Tesla’s business and profitability.
The letter was uploaded to a public comment portal by an in-house lawyer at Tesla and marks one of the first times the company has taken a formal stance against the administration’s tariff plans.
Source: https://www.businessinsider.com/tesla-trump-trade-war-costly-tariffs-2025-3