The trade representative of United States has denied requests by electric carmaker Tesla for tariff waivers on its Model 3 car’s center display screen and automobile computer that were made in China. The office had earlier declared that Tesla’s request for waiver on its autopilot brain during May had also been denied. The carmaker is seeking exemption from the 25% tariffs that US govt. has imposed on import of certain products from China. The company’s shares fell by 1 % on publication of this report though it rebounded by 1.5 % higher on the same day.
Tesla expects to produce and deliver between 90000–100,000 vehicles during this quarter and is concentrating all its energies on making a factory in China for its Model 3 electric car. The carmaker has warned investors that this increase in tariffs will cause economic harm due to increase in costs that will impact profitability. The official requests for waiver were sent by Tesla on 29th May stating that the product was strategically important but were rejected by US Trade Representative’s Office. The US government is not likely to compromise on its tariffs policy against Chinese imports as it rejected appeals by Uber and General Motors too for excuse on key components.
After United States recently imposed additional 25 % trade tariffs on Chinese imports worth $50 billion, the US Trade Representative (USTR) allowed firms to make petitions for seeking exemptions that would be considered on case to case basis. The requests of Tesla were however rejected by USTR as there were related to Chinese industrial program like “Made in China 2025”. The Chinese program is focused on improving manufacturing industries and new energy sector in which it aims to a global leader. Nearly 50 requests by GM have been rejected by USTR for exemptions related to vehicle parts like electronic controllers, antenna, battery cables and several spare parts.