Elon Musk’s Tesla in line of fire amid US tariff war, says facing retaliation after Canada province pulls back subsidies

Elon Musk's auto company Tesla Inc. has raised the alarm over potential regulatory “retaliation” from other countries amid United States President Donald Trump's tariff rampage, Bloomberg reported, citing a company letter to US Trade Representative Jamieson Greer.

Musk, the world's richest man who owns electric vehicle (EV) maker Tesla, rocket company SpaceX and social media platform X,  has been firmly supportive of Donald Trump's policies, his auto company has taken hit after hit from the two men's close association.

The tariff war is expected to heavily hit the auto industry, threatening supply chains and potentially adding thousands of dollars to car prices.

The letter was included in public comments to the US Trade Representative’s office, as per the report. It added that Tesla did not respond to queries.

‘Disproportionate Impacts From Response to US Trade Actions,’ Says Tesla Letter

In its letter, dated March 11, Tesla warned that potential retaliatory moves by other countries in response to US tariffs could drive up manufacturing costs and make its vehicles less competitive in international markets, the report added.

“US exporters are inherently exposed to disproportionate impacts when other countries respond to US trade actions. Past trade actions by the United States have resulted in immediate reactions by the targeted countries, including increased tariffs on EVs imported into those countries,” it said.

The company urged the Trump administration to consider the impact of its decisions on the EV and battery supply chain — both of which are highly dependent on other countries. “Even with aggressive localisation of the supply chain, certain parts and components are difficult or impossible to source within the US,” the letter pointed out.

Canada's British Columbia Pulls Back EV Subsidies for Tesla

Notably, on March 12, British Columbia, the third-most populous state in Canada, said it was pulling back government subsidies extended to Tesla. The subsidies included rebates on Tesla's batteries, inverters, and vehicle chargers and allowed people to install Tesla chargers for EV cars in their homes, another Bloomberg report noted.

BC Premier David Eby on March 13 explicitly said the move targets Elon Musk, who is Donald Trump's most prominent backer. “It’s just for Tesla, and it’s because of Elon Musk. I think that if British Columbians heard that C$10,000 of taxpayer money was going to Elon Musk, they’d want to throw up, so we removed them from the program.”

The rebates Tesla lost covered as much as 50 per cent of the purchase and installation cost for a home charger, according to the official notice on the BC website.

Donald Trump Endorses Tesla Amid Falling Sales, Protests

Meanwhile, amid falling sales and nationwide protests due to his role in the federal spending trims and job cuts, Donald Trump on March 11 selected Tesla Model S car on the White House driveway in a show of support. In a video posted to the social media platform X, Donald Trump can been seen telling reporters Elon Musk “has been treated very unfairly”.

(With inputs from Bloomberg)