Tesla warns that Trump’s trade war could hurt U.S. automakers

Electric vehicle maker Tesla is warning that the Trump administration’s trade policies could be detrimental to U.S.-based EV companies. 

In an unsigned March 11 letter to the Office of the United States Trade Representative (USTR), the company — owned by billionaire Elon Musk, who has become a close adviser to President Trump — encouraged the administration to consider how its trade policy could “harm” domestic automakers like Tesla. 

“As a U.S. manufacturer and exporter, Tesla encourages USTR to consider the downstream impacts of certain proposed actions taken to address unfair trade practices,” Tesla wrote. 

Specifically, the company raises concerns over retaliatory tariffs against the U.S. that would make their vehicles more expensive, and could dent overseas demand. President Trump officially increased tariffs on all steel and aluminum imports to 25% on Wednesday, promising they would help create U.S. factory jobs. 

The European Union quickly announced it would retaliate with steps that will take effect April 1.

Musk, who is CEO of Tesla, has spent the last few weeks heading the Trump White House’s Department of Government Efficiency, or DOGE, in culling the federal workforce in an effort to cut costs. Led by Musk, DOGE has abruptly terminated thousands of federal workers over the past three weeks, causing turmoil across multiple agencies. His name does not appear in the Tesla letter. 

Limitations of domestic supply chains

While underscoring its own ongoing commitment to “a domestic supply chain” Tesla urges the USTR to “further evaluate domestic supply chain limitations to ensure that U.S. manufacturers are not unduly burdened by trade actions.”

President Trump has claimed that the tariffs will spur more domestic manufacturing and create jobs for Americans, while Tesla argues in the letter that “even with aggressive localization of the supply chain, certain parts and components are difficult or impossible to source within the United States.” 

Tesla sent the letter to USTR the same day President Trump said on social media that he would purchase a Tesla to support Musk and his company’s slumping stock. 

Some buyers have been turned off by Musk’s political actions, which appear to be weighing on the company’s sales both in the U.S. and abroad.