Tesla Faces Turbulence Amid Escalating Trade War with Canada

Tesla, the electric vehicle giant founded by Elon Musk, is facing increasing pressures as the trade war initiated by former President Donald Trump escalates.

The company, which relies on Mexico for approximately 25% of its vehicle parts, is now under threat from retaliatory tariffs.

Recently, Tesla’s policy team expressed concerns in a letter to the U.S. Trade Representative, warning that it may become a target amid ongoing tensions between the U.S. and its North American neighbors.

Tensions between the U.S. and its North American neighbors.

Canada has already begun to take direct action against Tesla. The British Columbia Hydro agency excluded Tesla products from its electric vehicle infrastructure rebate programs, a decision reinforced by comments from BC Energy Minister Adrian Dix.

Notably, there are proposals under discussion for implementing a staggering 100% tariff on Tesla vehicles from U.S. manufacturing, particularly by influential political figures like NDP Leader Jagmeet Singh.

This situation is further complicated by Musk’s close relationship with Trump, which has led to perceptions that Tesla is synonymous with GOP policies. Musk, having invested over $250 million in Trump’s campaign, faces backlash against the administration’s trade practices.

Despite this connection, Musk has notably refrained from publicly addressing the potential fallout of Trump’s trade war, likely due to the detrimental implications for Tesla as well as the economic landscape in North America.

The irony is that Musk’s own support for Trump may be backfiring, putting Tesla in a precarious position within a politically charged environment. The automaker’s policy team has to tread carefully, balancing the need for diplomatic communication while grappling with the impacts of an increasingly volatile trade landscape.

Analysts suggest that a radical solution, such as Musk resigning or divesting from Tesla, may be the only way to alleviate the political toxicity surrounding the brand.