Trump's New Tariff Rule Is Wildly Convenient for Tesla

The Trump administration has carefully altered its existing auto tariff policy in an apparent attempt to spare Elon Musk's Tesla. This week, US commerce secretary Howard Lutnick announced a new rule, stating that any car that's composed of 85 percent United States or US-Mexico-Canada Agreement (USMCA) parts would be excluded from steep auto tariffs previously implemented by the president. "Finish your cars in America and you win," Lutnick said, as quoted by The Guardian. As automotive publication Fuel Arc points out, the new rule appears to be directly aimed at Tesla. Total domestic content of the EV maker's top-selling vehicles […]

Apr 30, 2025 - 17:20

Trump's New Tariff Rule Is Wildly Convenient for Tesla

The Trump administration has carefully altered its existing auto tariff policy in an apparent attempt to spare Elon Musk's Tesla.

The Trump administration has carefully altered its existing auto tariff policy — in a way that seems very specifically designed to spare Tesla, the automaker run by Trump's close ally Elon Musk.

This week, US commerce secretary Howard Lutnick announced a new rule stating that any car that's composed of 85 percent or more parts build in the United States or under the US-Mexico-Canada Agreement (USMCA) would be excluded from the president's steep auto tariffs.

"Finish your cars in America and you win," Lutnick said, as quoted by The Guardian.

As automotive publication Fuel Arc points out, the new rule appears to be directly aimed at benefiting Tesla. Total domestic content of the EV maker's top-selling vehicles ranges from 85 to 87.5 percent, according to American University’s Made in America Auto Index. Competing vehicles by the likes of Ford and Honda happen to neatly fall below the 85 percent threshold, suggesting the Trump administration is nakedly trying to protect Musk's ailing automaker.

In other words, it sure looks like the Trump administration is directly shaping policy to benefit Musk and Tesla, in yet another instance of naked corruption designed to protect the president's closest allies.

That shouldn't come as too much of a surprise at this point, considering the president personally shilled the EV maker's offerings during a bizarre sales pitch in front of the White House earlier this year.

Whether the new rules will be able to rescue Tesla remains to be seen. The EV maker has seen sales drop off a cliff worldwide, in large part due to Musk's extremist views and highly controversial work with the Department of Government Efficiency.

The company missed analysts' expectations by a mile in its first-quarter earnings posted last week, reporting that its net income had slid an astonishing 71 percent since the first quarter of last year.

But in another extremely convenient twist for Tesla, Trump overshadowed the bad news by proclaiming that he would be "very nice" to China, hinting at a possible U-turn in the country's disastrous trade war and lifting markets, distracting Tesla investors from the disastrous earnings.

Earlier this month, Musk reportedly begged Trump to reconsider his brutal tariff war behind closed doors after railing against the war's architect, advisor on trade and manufacturing, Peter Navarro.

Tesla's shares have rallied after dropping precipitously earlier this year, following Musk's announcement that he would be spending more time overseeing the company. However, the stock price is still down over 31 percent year to date.

Trump's sizable 25 percent tariffs aimed at the automotive industry have proven disastrous for it. On Tuesday, the president announced that he would be weakening tariffs on automakers, modifying existing tariffs on foreign auto parts and duties on steel and aluminum.

Even with some strong assistance from the White House, Tesla will still have to sell enough cars. Musk's divisive behavior — and precipitously dropping popularity — have greatly tarnished the company's brand, scaring off buyers in the US and abroad.

More on Tesla: Elon Musk Has Become Toxic Waste to the Average Person, New Poll Shows

The post Trump's New Tariff Rule Is Wildly Convenient for Tesla appeared first on Futurism.