Tesla is expected to be one of the few beneficiaries of President Donald Trump's newly announced 25% tariff on imported cars and light trucks, even as CEO Elon Musk warns that the impact on his company is still "significant."
Upon returning to the White House, Trump reignited global trade tensions by imposing a broad range of tariffs, including new duties on automobiles set to take effect next week, according to Reuters.
Despite a clear advantage due to the company's U.S.-based production, Musk cautions that Tesla will still feel the impact due to increased costs for imported components.
"Important to note that Tesla is not unscathed here. The tariff impact on Tesla is still significant," Musk told the outlet. "This will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial."
While most car manufacturers will suffer from higher costs, Tesla, which builds its vehicles in California and Texas, is positioned to benefit as competitors face larger effects. With no reliance on foreign-made cars for its U.S. sales, Tesla avoids the worst of the new tariffs, unlike competitors such as Hyundai, Volkswagen and even General Motors, which import a significant number of vehicles and parts, as reported by Bloomberg Law.
The move, aimed at protecting American manufacturers, has drawn criticism from world leaders, auto industry experts and even some U.S. automakers, who warn of rising costs and disrupted supply chains. Countries like Japan, Canada and Germany have already voiced strong opposition, signaling potential retaliatory measures.
The tariffs are expected to raise car prices for U.S. consumers, with companies passing on higher costs to buyers.
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