Tesla CEO Elon Musk has weighed in on Donald Trump’s newly announced 25% tariffs on imported vehicles and automobile parts, warning of their substantial impact on the industry.
On March 26, Trump revealed the latest tariff, set to take effect on April 2, which will apply to imported passenger vehicles, light trucks, and key automobile components. The White House described the move as a measure to protect U.S. national security, arguing that excessive imports have weakened America’s industrial base and supply chains.
According to a White House fact sheet, the 25% tariff will cover a broad range of imported vehicles—including sedans, SUVs, crossovers, minivans, and cargo vans—as well as critical components such as engines, transmissions, and electrical parts. There is also a provision allowing importers under the United States-Mexico-Canada Agreement (USMCA) to certify their U.S. content, ensuring the tariff applies only to non-U.S. portions of their vehicles.
“But if you build your car in the U.S., there is no tariff,” Trump emphasized.
A Twitter post by Sawyer Merritt, citing data from Visual Capitalist, highlighted that Tesla vehicles are 100% made in the U.S., compared to Ford, which produces 77% of its vehicles domestically, with 21% manufactured in Canada and Mexico, and the remaining 2% elsewhere.
The Tesla CEO has spoken out about the tariffs (Nora Tam/South China Morning Post via Getty Images)
Earlier today (March 27), Musk responded to the post: “Important to note that Tesla is NOT unscathed here. The tariff impact on Tesla is still significant.”
And his post follows a letter from Tesla to United States Trade Representative Jamieson Greer.
Submitted by Tesla’s associate general counsel Miriam Eqab on March 11, the letter states: “While Tesla recognizes and supports the importance of fair trade, the assessment undertaken by USTR of potential actions to rectify unfair trade should also take into account exports from the United States.
Elon Musk says Tesla is ‘not unscathed’ (Twitter/@elonmusk)
“US exporters are inherently exposed to disproportionate impacts when other countries respond to US trade actions.
“Past U.S. special tariff actions have thus (1) increased costs to Tesla for vehicles manufactured in the United States, and (2) increased costs for those same vehicles when exported from the United States, resulting in less competitive international marketplace for US manufacturers.
“USTR should investigate ways to avoid these pitfalls in future action.”
The comments follow Trump stating he had not gone to Musk to advise him on the tariffs given ‘he may have a conflict’ in the matter.
