Tesla Warns Trump’s Trade Policies Could Hurt U.S. Automakers

• Mar 14, 2025

Electric vehicle giant Tesla has cautioned that the Trump administration’s trade policies could negatively impact U.S. automakers, including itself. In a letter dated March 11 to the Office of the United States Trade Representative (USTR), Tesla urged policymakers to consider how certain trade actions might harm domestic car manufacturers.

Concerns Over Retaliatory Tariffs

Tesla’s letter, which was unsigned, expressed concerns that retaliatory tariffs from other countries could increase costs and weaken demand for U.S.-made vehicles abroad. The company specifically warned that President Trump’s new tariffs on steel and aluminum imports—set at 25%—could have unintended consequences.

While Trump argues that these tariffs will boost U.S. manufacturing and create jobs, Tesla pointed out that the automobile supply chain is complex, with some parts and components difficult or impossible to source domestically. The company urged the USTR to ensure that automakers are not unduly burdened by these policies.

International Response and Economic Impact

The European Union has already announced plans to impose retaliatory tariffs, which will take effect on April 1. Similar measures were previously applied to Canada and Mexico, raising concerns in the auto industry that such trade disputes could lead to higher car prices for consumers.

Tesla’s letter highlights the potential risks for its business, particularly in overseas markets where its vehicles could become more expensive due to trade policies. The company has invested heavily in domestic battery production and supply chain infrastructure, but it remains dependent on certain imported materials and components.

Musk’s Role in the Trump Administration

Elon Musk, Tesla’s CEO, has been appointed as a special adviser to President Trump and is leading the White House’s Department of Government Efficiency (DOGE), an agency created to cut federal spending. Over the past three weeks, DOGE has laid off thousands of federal workers, leading to disruptions across multiple government agencies.

Despite Tesla’s concerns about trade policies, Trump recently posted on social media that he plans to buy a Tesla to show support for Musk and the company, which has faced declining sales. Some customers have reportedly been discouraged from purchasing Tesla vehicles due to Musk’s political involvement, which appears to be affecting sales both in the U.S. and internationally.