Elon Musk's Tesla has warned the Trump administration that it could face retaliatory tariffs in a letter uncovered by the Financial Times. Tariffs are the driving force behind the stock market these days, and Tesla believes that its stature as a US manufacturer could expose it to tariffs against America and increase the costs of manufacturing vehicles in the US.
The letter comes after Musk outlined his goal to significantly increase Tesla's US manufacturing footprint in the midst of the a massive share price drop that has eroded more than a third of his company's value. Tesla's shares fell by 3% in today's trading reversing a two day green run after the stock shed 14% during Monday's stock market selloff.
Tesla Sends Unsigned Letter To US Trade Representative Warning Of Retaliatory Tariffs
The letter is dated Tuesday, a day after the 14% share price drop that wipe out all gains made by the firm since Trump's November victory. As per the FT, the letter is unsigned in a possible outcome of Tesla CEO Elon Musk's proximity to President Trump and his team. A source quoted by the publication notes that the letter is unsigned because no one wants to lose their job for sending it. Tesla did not respond to a Reuters request for comment on the report.
Thursday, President Trump fired another salvo from his tariff ammunition. In a bid to stop Europe from targeting American whiskey, the President warned about steep tariffs against European alcoholic beverages.
In the letter, Tesla notes that while it has exerted significant effort into localizing its supply chain in America, some parts have to be imported. The firm added that these components could be the target of retaliatory tariffs against the US.
Following Monday's bloodbath, the President sought to support his key ally, Musk, who has also been tasked with leading an efficiency initiative at the US government. Trump posted on his social media platform Truth Social that he would buy a Tesla. Later in the day, the President announced his intention to target Tesla car vandals as domestic terrorists.
Tesla's stock has come under significant selling pressure in 2025 due to worries about the firm's vehicle deliveries. Wall Street believes that the firm will miss its first-quarter estimates, with analysts torn between Musk's politics and a production slowdown due to factory retooling as the reason behind the slowdown.
The delivery troubles, which also drove the narrative last year, have placed Tesla's growth initiatives, namely artificial intelligence and humanoid robots, on the backburner. In return for Trump's solidarity, Musk announced that he would double US Tesla production over the next two years. His company is currently capable of producing one million vehicles in America annually, and it also produces cars through its factories in China and Germany.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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