The billionaire said the president’s new car tariffs will impact the cost of parts that are vital to the construction of Tesla vehicles.
Tesla CEO Elon Musk has cautioned that newly announced car tariffs by President Donald Trump will significantly impact the electric carmaker, particularly due to its reliance on foreign-made parts.
The remarks, shared on Musk’s social media platform, X, followed Trump’s announcement of sweeping 25 percent tariffs on all imported vehicles into the U.S.Why It Matters
Trump’s tariffs are aimed at reducing the U.S. trade deficit and incentivizing domestic manufacturing. While Tesla builds vehicles in California and Texas, its globalized supply chain leaves it vulnerable to cost hikes from tariffs on imported parts.
The U.S. imported $474 billion in automotive products last year, with $220 billion of that being passenger cars. Key trading partners affected include Mexico, Canada, Germany, Japan and South Korea, all of which have raised concerns or threatened retaliatory measures.What to Know
The tariffs, which Trump said would take effect April 3, target all non-U.S.-made vehicles and parts, directly hitting supply chains used by domestic manufacturers, including Tesla.
After the announcement, the pro-Musk X account Tesla Owners Silicon Valley suggested that Tesla could benefit from the tariffs, as the bulk of its assembly process happens in the U.
