Tesla Says Trump’s Tariffs May Have A Harmful Impact On Its Company & Other Automakers

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

---

What a difference a day makes. Tesla now says that Trump’s tariffs are bad for business. How can this public statement make any sense, since the company’s CEO is leading the federal dismemberment?

The only way to figure out what’s really happening behind the scenes is to do a methodical, step-by-step review of the events leading up to the announcement. Let’s get the chronology straight, shall we?

First, the SEC filings started pouring in. Robyn Denholm, the chair of the Tesla board of directors, sold 112,390 shares valued at approximately $33.7 million. CFO Vaibhav Taneja sold 6,000 shares on the same day, valued at approximately $1.76 million. Kimbal Musk, the brother of CEO Elon Musk, had already sold 75,000 shares of Tesla stock in early February, pocketing nearly $27.6 million.

Next, President Donald J. Trump transformed the beloved White House lawn into a car lot, and he smothered his best bud/campaign contributor, Elon Musk, with lots of fawning compliments. The Mad King spent about 30 minutes talking with reporters about the value of a Tesla. Those accolades came after he had trashed electric vehicles for his entire campaign — he had equated the rise of EVs with a violent demise of the auto industry.

Then, reports flooded media spaces yesterday that Tesla had sent a letter to US trade representative Jamieson Greer with a warning about the harmful impact on automakers and consumers of Trump’s tariffs against the US. The letter assured Greer that Tesla supports fair trade, yet they wanted to remind him that, as other countries respond to US trade sanctions, US exporters can be exposed to disproportionate impacts. Those impacts, the anonymous but empowered Tesla writers fear, could be particularly onerous for the electric vehicle industry.

Here are excerpts from the letter, dated March 11:

As a US manufacturer and exporter, Tesla encourages USTR to consider the downstream impacts of certain proposed actions taken to address unfair trade practices…

For example, past trade actions by the United States have resulted in immediate reactions by the targeted countries, including increased tariffs on EVs imported into those countries…

Even with aggressive localization of the supply chain, certain parts and components are difficult or impossible to source within the US.

The letter was left unsigned by Tesla representatives. Asking Greer to further evaluate domestic supply chain limitations, the senders want to ensure that US manufacturers are not unduly burdened by Trump’s tariffs, which could result in the imposition of cost-prohibitive fees on necessary components.

So — what are we to take away from these three events? Because there is really no such thing as coincidence in the intersection of politics and business, we have to assume they’re interrelated. Let’s hypothesize, shall we?

Deductions about Trump’s Tariffs and the Tesla Effect

As Wired outlined so eloquently, Trump has always been a salesman, lending his name to real estate, casinos, restaurants, steaks, vitamins, a fragrance for men, watches, water, a bicycle race, office chairs, sneakers, vodka, coins, another fragrance, NFTs, pickleball paddle, and a sea mist & sage candle — among other things!

Elon Musk isn’t far behind. He loves to be in the limelight. Remember the “pedo” comment during the Thai soccer team rescue? The “funding secured” tweet? His proclamation two years ago that Zelensky had no hope to hold onto Ukraine? His over-the-top Universal Studios unveilings of solar roof tiles and the Cybertruck?

And now Musk is ranting about US federal government waste. Wired continues that Musk’s transformation of X has led to an online MAGAtopia. “What started as a self-serving bromance has become more volatile, and it goes deeper than DOGE,” the article says, pointing out the reframing of protesters as “domestic terrorists” and the foreign minister of Poland as a “small man.” He is co-Mad King with Trump, having donated nearly $300 million to his presidential campaign, and now he has funded a Wisconsin Supreme Court conservative candidate.

Trump’s decision “to give vast power to Elon Musk,” Paul Krugman analyzes in his Substack today, points to someone “who is displaying a combination of arrogance, ignorance, and incompetence worthy of Trump himself.” Krugman admits that a variety of factors contribute to the current national economic malaise, including initial disbelief that Trump would actually implement federal cuts, a fall in consumer sentiment, and a shift in conservative media away from Trump’s policies. Nonetheless, Krugman continues to place enormous responsibility on Musk’s shoulders, saying, “And here’s the thing: while there’s still a dwindling Musk/Tesla cult, to a first approximation everyone else hates Elon.”

Trump insisted this week that he will stick with a 25% tariff on steel and aluminum imports from Canada and Mexico despite lots of negative feedback across the aisle. In response, Canada has threatened retaliatory tariffs, potentially targeting US-made electric vehicles, including Teslas. Musk is CEO of a company that is reliant on external suppliers for thousands of parts — and a substantial number of those parts are imported from abroad.

What do these unnamed Tesla reps have to gain by sending the letter to the US trade representative? It only heightens concern about the valuation of Tesla, which is a tumbling mess.

Ah, there may be the rub.

At first glance, it seems as if Tesla wants the Trump administration to develop policies that benefit Tesla’s business model — not push its stock value to record lows. The letter’s call for restraint has a subtext of acknowledgement that the Musk–Trump relationship has contributed to US financial uncertainty and tremendous scrutiny from global financial institutions. It’s clear that Musk’s DOGE role has invited the exodus of many shareholders from Tesla, and, concurrently, its EV sales have fallen sharply across the UK and Europe.

Wasn’t it CFO Taneja who stated during the most recent earnings call that “the imposition of tariffs, which is very likely, and any reciprocity will have an impact on our business and profitability?” But wait — isn’t Taneja one of three Tesla yuckity-yucks who sold lots and lots of shares of their Tesla stock recently?

Market manipulation may involve techniques including spreading false or misleading information about a company or rigging quotes, prices, or trades to make it look like there is more or less demand for a security than is actually the reality. Can the case be made that the Tesla leadership — Elon Musk, Tom Zhu, and Vaibhav Taneja — and the Board of Directors — Elon Musk, Robyn M. Denholm, Ira Ehrenpreis, Joe Gebbia, James Murdoch, Kimbal Musk, JB Straubel, and Kathleen Wilson-Thompson — have a long-range plan to sell high, watch the stock tumble, and buy low? Is this a convoluted version of a pump-and-dump?

The letter, which follows the White House car lot auction and Musk’s personal funding of Trump’s campaign, whitewashes all the bad stuff as it calls out Trump’s tariffs. It could induce other investors to buy heavily, pumping the share price higher.

This is all speculation, of course, but the Tesla board’s conscious decision not to sanction Musk over the years for his counterproductive antics adds fuel to the proverbial Tesla fire.

Want to read a book that captures a similar phenomenon? Read the fictitious (2008) The Appeal, by John Grisham. You may no longer be a skeptic about the behind-the-scenes machinations that companies undergo to reach profitability.