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Trump Tariff’s Effect on Tesla and Electric Cars

Trump administration is proposing a new tariff on solar panels and its major components that are imported into the United States. The tariff will start at 30% and will phase out over the next 4 years by decreasing at 5% per year. This is strange since the idea behind it is to bring manufacturing jobs into the United States while 4 years is a short enough period for solar panel makers to simply wait it out.

This move is most likely a start of a bigger tariff war which will affect electric car prices since currently the balance of import tax rates between China and the United States is very one sided. US taxes the imported cars at 2.5% rate, while China’s rate is 10 times of that at 25%. It makes it much tougher for American companies like Tesla to compete in Chinese market with such high markup on their cars.

It is also unclear whether or not this will bring solar related jobs to the United States or cut them because the solar installation prices will have to go up and the demand is most likely to go down.

I’ll keep my eye on this story and report any new developments as they happen.

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