Tesla’s Letter to USTR: Tariff Pressures May Trigger Foreign Retaliation

American electric car company Tesla stated that as the trade war escalates in the United States with the Trump administration imposing tariffs on various imported products, the company could be vulnerable to potential retaliatory actions from other countries.

In a public letter addressed to the United States Trade Representative’s Office (USTR) this week, the electric car manufacturer expressed concerns that any tariff hikes could raise manufacturing costs and weaken its car’s competitiveness in the international market.

In the letter dated March 11, Tesla acknowledged the importance of fair trade and supported it, but also emphasized that the USTR’s assessment of potential actions to rectify unfair trade practices should take into account American exports as well.

“When other countries react to U.S. trade actions, American exporters inevitably suffer disproportionately,” the letter stated. “Past U.S. trade actions have led target countries to retaliate immediately, including imposing higher tariffs on electric cars imported into these countries.”

Tesla highlighted that previous special tariff actions in the U.S. have increased the cost of producing cars in the country as well as the cost of exporting Tesla vehicles from the U.S.

Therefore, Tesla urged the USTR to study how to avoid these pitfalls in future actions.

The USTR is currently reviewing whether American businesses would suffer harm due to trade actions, and this letter is one among many public comments. The Financial Times of the UK was the first to report on Tesla’s public letter.

Tesla’s Chief Financial Officer Vaibhav Taneja, during the company’s earnings conference call at the end of January, expressed that “the likelihood of imposing tariffs is high, and any reciprocal actions will impact our business and profitability.”

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This news article covers Tesla’s concerns over potential trade war impacts on its operations and competitiveness. The company’s letter to the USTR emphasizes the need to consider American exports amidst trade actions, outlining the risks posed by tariff hikes. Tesla’s call for caution in future trade decisions reflects the broader anxieties within the business community regarding the evolving global trade landscape.