Tesla, Elon Musk's 'Close Friend' in Trump Trade War, Also "Worries About Retaliatory Tariffs"

Letter to USTR:
"Retaliation Measures Such as Tariff Increases on Electric Vehicles"

As U.S. President Donald Trump's aggressive tariff policies escalate through cycles of retaliation and counter-retaliation, Elon Musk, a close ally and CEO of the electric vehicle company Tesla, has also expressed concerns.

According to Bloomberg and other sources on the 13th (local time), Tesla warned in a letter sent on the 11th to Jamie Gorelick, U.S. Trade Representative (USTR), that tariffs could increase manufacturing costs and reduce competitiveness in the global market.

AP Yonhap News

In the letter, Tesla stated, "U.S. exporters are inherently disproportionately affected when other countries respond to U.S. trade actions," adding, "Past U.S. trade measures have triggered immediate backlash from target countries, including tariff increases on electric vehicles imported into those countries."

The company urged consideration of the electric vehicle and battery supply chains, which are highly dependent on overseas sources, noting that "despite aggressive supply chain localization, certain parts and components are difficult or impossible to procure domestically in the U.S."

This letter was submitted during the USTR's process of gathering industry opinions to review potential trade damages to U.S. companies caused by tariff policies. Foreign media pointed out that Musk's company, a close associate of President Trump, is also concerned about the broad impact of tariffs.

The Trump administration has intensified the global trade war by raising additional tariffs on China to 20% and imposing 25% tariffs on steel and aluminum. China and the European Union (EU) have announced retaliatory tariffs, and boycotts of U.S. products have emerged in Canada and Europe. As President Trump strongly confronts the EU with threats of further retaliation, mutual tariff impositions scheduled for July 2nd have been reaffirmed, signaling a further escalation of the tariff war.

Earlier in January, Tesla Chief Financial Officer (CFO) Vaibhav Taneja expressed concerns during an earnings conference call, stating, "The likelihood of tariffs being imposed is very high, and any reciprocal measures will impact our business and profitability."

Despite Musk's efforts to support President Trump, even risking being labeled 'unpopular,' Tesla has not escaped the effects of tariffs. Recently, Tesla has been struggling due to Musk's political activities in the Department of Government Efficiency (DOGE). Sales have declined in key overseas markets such as Germany, and in the U.S., Tesla vehicles, stores, and charging stations have been targeted by arson and shootings. On the 10th, Tesla's market capitalization dropped by $130 billion (approximately 189 trillion KRW) compared to the previous day’s closing price.

Bloomberg analyzed that the Trump administration's tariff policies are already impacting Tesla. British Columbia, the third most populous province in Canada, recently withdrew government subsidies that helped residents install Tesla chargers at home. David Eby, Premier of British Columbia, said this move was aimed at Musk, stating, "Residents do not want their money going to Musk."

Tesla is not alone. Recently, concerns about tariffs have been rising across the automotive industry. According to White House officials, Mary Barra, CEO of General Motors (GM), met with President Trump at the White House on the 12th to discuss investment plans. GM did not disclose specific details of the meeting, but automakers have long urged the White House for certainty regarding tariffs and emissions policies before expanding U.S. investments.

Autodrive America, a representative group of major foreign automakers including Hyundai, Toyota, and Volkswagen, warned USTR in a separate statement that "imposing broad tariffs would disrupt production at U.S. assembly plants," adding, "Automakers cannot switch supply chains overnight, and cost increases will inevitably lead to higher consumer prices, fewer available models, closures of U.S. production lines, and potential job losses throughout the supply chain."

This content was produced with the assistance of AI translation services.