Elon Musk challenges Trump on US-China import duties, ownership rules

Tesla CEO Elon Musk was on fire on Thursday, lecturing US President Donald Trump by tweeting a series of messages about the existing US-China import duties and ownership constraints for car manufacturers. Musk’s strong response was triggered by Trump’s announcement about China’s $1 billion plan to reduce their trade deficit with the United States, which the president supported.

China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States. Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!

— Donald J. Trump (@realDonaldTrump) March 7, 2018

It did not take long before the billionaire entrepreneur Elon Musk decided to speak his mind. Posting a series of messages on Twitter, Musk explained the existing imbalance in the import duties between American and Chinese automakers. In classic Musk fashion, the Tesla CEO’s tweets were sharp with wit, direct to the point, and filled with facts.

“Do you think the US & China should have equal & fair rules for cars? Meaning, same import duties, ownership constraints & other factors. For example, an American car going to China pays 25% import duty, but a Chinese car coming to the US only pays 2.5%, a tenfold difference.”

Musk then went on to describe how ownership rules among American automakers operating in China are skewed against the US-based firms. According to Musk, under the current ownership rules between the two countries, American automakers are perpetually facing an unfair challenge.

“Also, no US auto company is allowed to own even 50% of their own factory in China, but there are five 100% China-owned EV auto companies in the US. I am against import duties in general, but the current rules make things very difficult. It’s like competing in an Olympic race wearing lead shoes.”

Musk ended his Twitter statement with a proverbial mic drop, stating that all he really wants is a fair balance between American businesses operating in China and Chinese businesses operating in the United States. Musk even noted that he hopes his request was not “unreasonable.”

“We raised this with the prior administration and nothing happened. Just want a fair outcome, ideally where tariffs/rules are equally moderate. Nothing more. Hope this does not seem unreasonable.”

As we noted in a previous report, Tesla is currently facing a possible roadblock with its plan to open a factory in China. According to individuals who claim to have direct knowledge of the matter, Tesla and Shanghai officials have disagreed about the ownership of the proposed electric car factory. The Chinese regulations were reportedly firm on their rule of requiring foreign car makers to engage in a joint venture with a local firm. Tesla, however, is firmly opposed to the idea and would like sole ownership of the facility, which is reportedly the factory that will manufacture the Model Y and, to some degree, the Model 3.

We raised this with the prior administration and nothing happened. Just want a fair outcome, ideally where tariffs/rules are equally moderate. Nothing more. Hope this does not seem unreasonable.

— Elon Musk (@elonmusk) March 8, 2018

Tesla’s vehicles are also competing with a handicap in China.  Due to its cars not being manufactured locally, Tesla’s offerings have been weighed down in the market with a steep 25% import tax, making them far more expensive than electric cars from local competitors.

While Donald Trump is yet to issue a direct response to Musk’s statements on Twitter, the US President has been quite open about his support for Elon Musk. In a recent statement on NASA and America’s space initiatives, the US President candidly referred to Musk and SpaceX’s recent milestones. Trump even expressed his amazement at the recent Falcon Heavy launch, stating that he has never seen anything like it before.  

“Rich guys, you know, they love rocket ships. That’s good. That’s better than us paying for them,” Trump said.

“I don’t know if you saw last, with Elon, with these rocket boosters, where they’re coming back down. For me, that’s more amazing than watching the rocket go up, ‘cause I’ve never seen that before. Nobody’s seen that before. They’re saving the boosters. They came back, without wings, without anything. They landed so beautifully,” Trump added.

Watch the president talk about NASA and SpaceX in the clip below.

President Trump’s full comments on NASA, commercial space: “It’s really amazing what’s happening in regards to space and our country.” pic.twitter.com/ygHmtEVJzS

— Michael Sheetz (@thesheetztweetz) March 8, 2018

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