Elon Musk criticizes taxes amid US-China trade tensions

Tesla chief Elon Musk says he opposes US taxes on Chinese electric vehicles (EVs), only days after President Joe Biden quadrupled levies on EVs imported from China.

Musk’s Unexpected Stance

“Neither Tesla nor I asked for these tariffs,” declared multi-billionaire Elon Musk during a technology conference in Paris, addressing the issue via video link. 

Musk’s remarks contrast starkly with his January warning that Chinese car manufacturers would “demolish” competitors from other nations in the absence of trade barriers. 

Last week, the White House introduced new measures, including a 100% tariff on electric vehicles (EVs) imported from China, citing the need to counter unfair policies and protect US jobs.

Surprise at Tariff Announcement

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Musk expressed his surprise at the announcement of the tariffs. “In fact, I was surprised when they were announced. Things that inhibit freedom of exchange or distort the market are not good,” he said on Thursday.

Musk emphasized that Tesla performs well in the Chinese market without the need for tariffs or preferential support. “I’m in favour of no tariffs,” he added, advocating for free market competition.

US Trade Policies and Biden’s Stance

President Joe Biden has continued several tariffs on China that were initially implemented by his predecessor, Donald Trump. Moreover, Biden has intensified trade pressure on Beijing. 

Last week, Biden vowed to prevent China from “unfairly controlling the market” for EVs and other critical goods, including batteries, computer chips, and basic medical supplies. In response, China opposed the tariff hikes and promised retaliatory measures.

China’s Retaliatory Moves

China’s Ministry of Commerce announced an anti-dumping probe into imports of polyoxymethylene copolymer, a plastic widely used in electronics and cars, from the US, EU, Taiwan, and Japan. 

This investigation signals China’s readiness to counteract in its trade disputes with the US and Europe. Additionally, China hinted at imposing tariffs of up to 25% on cars with large engines imported from the EU and US.

EU’s Potential Measures Against Chinese EVs

The European Commission (EC), responsible for the EU’s trade policies, has set a deadline of July 4 to decide on potential measures against imports of Chinese-made EVs. 

The China Chamber of Commerce to the EU reported insider information about possible tariffs, indicating escalating trade tensions.

Conclusion

As the global trade environment becomes increasingly complex, Musk’s comments highlight the challenges and debates surrounding tariffs and market freedoms. 

His stance reflects a broader concern about market distortions and the impact of trade policies on international business dynamics.