Tesla, a leading American electric vehicle manufacturer, has expressed concerns over potential repercussions from retaliatory measures by other countries in response to trade tariffs imposed by the Trump administration. The company, which has been closely allied with Donald Trump, warned that these tariffs could adversely affect Tesla and other U.S. exporters.
The warning from Tesla comes amid growing tension between the United States and its trading partners. The EU and Canada have both threatened significant retaliations for tariffs on steel and aluminum imports into the U.S. Additionally, the U.S. recently imposed a 20% tariff on all imports from China, prompting Beijing to respond with retaliatory levies, including those on cars.
Demonstrations have erupted outside Tesla showrooms in recent weeks, with protestors targeting Elon Musk's involvement in Trump's administration, particularly his cost-cutting strategies. In response to these demonstrations, Trump declared at a White House event that individuals protesting against Tesla should be labeled as domestic terrorists.
At the same White House event, Donald Trump showcased his support for Tesla by sitting in the driver's seat of a brand new red Tesla vehicle. He went on to reveal his intention to purchase one, emphasizing his backing of the company.
Despite the backing from Trump, Tesla's share price has seen a sharp decline, dropping 40% since the start of the year. The company is actively working to mitigate its vulnerability to foreign market fluctuations by altering its supply chains. By sourcing more local suppliers for its cars and batteries, Tesla aims to reduce its dependency on international markets.
China remains Tesla's second-largest market after the United States, making the trade tensions particularly significant for the company. In a statement reflecting on the impact of trade actions, Tesla noted, "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."