The U.S. is doubling down on its refusal to exempt Tesla’s and Uber’s request to dodge a 25 percent tariff on key parts for its electric cars and entire e-scooters because they are coming from China.
Both companies submitted a request to the Office of the U.S. Trade Representative asking to be exempted from the new 25 percent import tariffs on the Chinese goods they use for their products, as Reuters reports:
The office of the U.S. Trade Representative (USTR) rejected requests to exempt the Model 3 car computer and center screen in May 29 letters, saying they both concern “a product strategically important or related to ‘Made in China 2025,’ or other Chinese industrial programs.”
In May, Reuters reported USTR had rejected a separate request by Tesla to exempt the Autopilot “brain” from the tariffs.
Separately, the USTR denied Uber Technologies Inc’s request on May 29 for an exemption from the 25% tariff for its Chinese-made electric bikes that customers rent through its app. Uber declined to comment.
The denials of relief for more than 1,000 products to date among $50 billion in imports hit last year with U.S. tariffs illustrate a systematic approach by the Trump administration to thwart China’s efforts to develop high-technology industries that Washington alleges benefited from theft and forced transfer of U.S. intellectual property.
It’s bad news for Tesla if it isn’t able to easily import what it calls the “brain” of its Model 3s, warning that the government’s decision will cause economic harm to Tesla by increasing the cost of its products. In its exemption request, Tesla noted that it required the use of the Chinese manufacturer; anything else would have delayed Model 3 production “by 18 months.”
It’s also not ideal when you take into consideration Tesla’s recent cost-cutting efforts with its $35,000 Model 3 (which have already been kind of redacted anyway). Or when you consider that the part it’s missing is crucial for the Autonomous mode it has been pushing.