The car companies that Elon Musk most respects are from China, as the Tesla CEO explained in January when discussing his company’s financial results with Wall Street analysts.
“The Chinese car companies are the most competitive car companies in the world,” Musk remarked. “I think they will have significant success outside of China depending on what kind of tariffs or trade barriers are established.”
It must be music to Musk’s ears, then, that his preferred U.S. presidential candidate, Donald Trump, has promised if elected to drastically raise tariffs on Chinese imports, which would include automobiles, to 60%.
The 60% rate is far above the Biden administration’s tariffs on China, and nearly triple the 25% that Trump imposed on Chinese goods during his time in office. Such a punitive measure would presumably short-circuit aggressive Chinese auto imports, a boon to Musk’s competitive outlook.
And yet, the reality of tariffs can swing both ways.
In July, Tesla’s chief financial officer, Vaibhav Taneja, noted the profit margin for Tesla’s “Cybertruck” and Model 3 cars are “affected by varying amounts of tariffs on both raw materials and finished goods.”
On the same conference call, Musk remarked that he had paused his company’s investment in production at Tesla facilities in Mexico because “Trump has said that he would put heavy tariffs on vehicles produced in Mexico.”
