President Trump is stirring up a different type of war with China and it may impact Tesla more so than any other U.S. automaker.

This trade war between the two nations began with Trump announcing that tariffs would be placed on some $50 billion in Chinese goods.

It's What Musk Wanted - Musk Urges Trump To Push For Fair Auto Trade Policies With China

It was believed China wouldn't retaliate, or at least wouldn't do so swiftly, but that wasn't the case.

China immediately fired back, saying that it too would place import duties on U.S. items such as soy beans, planes, cars, chemicals and beef.

Related - China Is Second To Only U.S. In Tesla Model 3 Pre-Orders

Trump then Tweeted the following early this morning:

On the automotive front, just a few U.S. makes import vehicles into China (most automakers have joint venture with Chinese manufacturers to avoid import duties) in volume. Ford's Lincoln brand and Tesla appear to be most impacted if China moves forward with its retaliatory import duties.

Oddly enough, Tesla CEO Elon Musk urged Trump to push hard in regards to equal import duties for China & the U.S., but the result may be less than ideal. In trying to equalize import duties on autos, China seems to now be willing to strike back hard by upping those duties even more for automakers like Tesla.

Trump And Musk Tweets from March 7 And 8

Trump And Musk Tweets from March 7 And 8

It took the electric automaker quite some time to gain a foothold in China in regards to sales, but now it's a large market for the U.S. automaker, who even today must deal with significant import duties. If those duties increase even more due to this trade war, Tesla will almost certainly see sales fall in China and/or it will have to reconsider its no-joint-venture-with-a-Chinese-automaker position.

Source: Reuters

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