Former Tesla Inc. executive Rohan Patel on Sunday slammed President Donald Trump‘s decision to impose new tariffs of 25% on goods from Mexico and Canada and 10% on imports from China.
What Happened: “Lumping Mexico/Canada with China is just stupid,” Patel said in a post on social media platform X. Patel was Vice President of Global Public Policy and Business Development at Tesla for over 7 years until April. He was part of the executive team reporting to company CEO Elon Musk.
Patel also warned that the tariffs on imports will create “distrust that won’t soon be forgotten.”
“This creates distrust that won't soon be forgotten when the US needs help, needs partners or needs to win allies in a military and economic competition with China,” Patel said while also terming the tariffs a “trade bomb” at U.S.’s neighboring countries. “We've started a war with our neighbors and allies and can't define what the hell we want out of this war.”
“The short-term implications of a regressive tax on the economy are horrendous for many people and businesses. But there is a truly sad long term implication – distrust and uncertainty amongst allies throughout the globe,” he said. “Every friend of the US has to rethink its own situation and look elsewhere for stability and alternatives. If Trump is willing to launch trade bombs at countries with a free trade agreement signed by Trump, imagine how destabilizing this is for allies with no FTA.”
Why It Matters: The tariffs announced by Trump are due to take effect at 12:01 a.m. ET on Tuesday.
The President also warned of tariffs with the European Union without providing a timeline while admitting that the tariffs imposed may cause “short-term” pain for Americans. Canada and Mexico have also ordered retaliatory tariffs on American goods.
Automakers, including General Motors and Tesla, are expected to be hit by the tariffs.
Tesla CEO Musk, a Trump ally, said in June last year that the company is postponing plans for a gigafactory in Mexico due to concerns about potential heavy tariffs on vehicles produced in the neighboring country if Trump is re-elected.
GM, meanwhile, already produces a large number of vehicles in Mexico including its Chevrolet Equinox. Other car makers likely to be impacted by the tariffs include Stellantis, Toyota, Honda, and Volkswagen.
According to data from S&P Global Mobility, about 5.3 million light vehicles are built in Canada and Mexico, of which about 70% are sold in the U.S.
“A 25% duty on the average $25,000 landed cost of a vehicle from Mexico and Canada would add $6,250. Importers are likely to pass most, if not all, of this increase to consumers. With average vehicle prices near all-time highs, this additional tariff would put further strain on affordability,” the automotive research firm said last week.
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