Key Points:

• Tesla warns that Trump's trade tariffs may increase production costs and hurt U.S. automakers.
• The company cites potential retaliatory actions from foreign markets, particularly China and the EU.
• Elon Musk's political ties to Trump may be influencing Tesla’s market perception and stock value, which has dropped significantly.
• Despite efforts to localize its supply chain, Tesla acknowledges challenges in sourcing all necessary components domestically.
• The company is advocating for a careful evaluation of trade policies by the U.S. Trade Representative (USTR).

In a letter addressed to the Office of the United States Trade Representative (USTR) on March 11, CBS News reported that Tesla expressed its concerns regarding the implications of the Trump administration's trade policies on U.S. automakers, including itself. Tesla highlighted how proposed retaliatory tariffs could be detrimental, resulting in higher vehicle costs and decreased demand in international markets.

The letter, which was unsigned, underlines Tesla's position as a U.S.-based manufacturer amid increasing tensions from the Trump administration's trade actions, particularly a newly imposed 25% tariff on steel and aluminum imports. Tesla's CEO, Elon Musk, a close ally to President Trump, pointed out that, while localizing supply chains is crucial, certain components remain challenging to source domestically. This reality poses a risk to Tesla’s competitive edge in a global marketplace that is already sensitive to trade conflicts.

During a recent White House event, Trump expressed his support for Musk and Tesla, promising to purchase a Tesla vehicle but simultaneously underscored the greater context of rising tensions with other countries that could retaliate against U.S. tariffs, especially in the automotive sector. Business Insider noted that this trade war could lead to retaliatory tariffs that have previously targeted electric vehicles, hinting at potential repercussions for Tesla's operations in key markets like China.

Market analysts, aligning with the concerns raised in the letter, noted that the implications of these tariffs extend beyond Tesla, posing risks for the broader U.S. automotive industry. The ongoing adjustments in trade policy could result in an increasingly unfavorable environment for domestic manufacturers, and with Tesla's stock down nearly 40% since the start of the year, the timing of these trade discussions is particularly critical.

Amid all this, Tesla remains committed to a *robust domestic supply chain* but reiterates that not all parts can be sourced within the U.S. Even with aggressive localization efforts, the company fears that the burdensome nature of trade actions may put further strain on its financial stability and market positioning.

For more details, you can read the full articles on BBC, CBS News, and Business Insider.