Tesla Sues Trump Administration Over Tariffs On Chinese Imports

Tesla Inc TSLA wants duties imposed on its imports from China declared unlawful and is demanding a refund in a lawsuit it filed Monday, Bloomberg reported. 

What Happened: The Elon Musk-led company named the United States Trade Representative Robert Lighthizer as a defendant in its lawsuit filed in the U.S. Court of International Trade in New York, according to Bloomberg.

The automaker had reportedly sought to be exempted from the 25% tariffs imposed on computer and display screens it imports from China for its Model 3 vehicle, but Lighthizer’s office didn't approve the move.

Why It Matters: The Palo Alto-based company claims the tariffs would cost it $50 million in decreased profits in the fourth quarter, Bloomberg noted.

Several other companies are reportedly also suing after the Trump administration piled tariffs on Chinese imports under Section 301 of the Trade Act of 1974.

Tesla has a significant presence in China. It was reported earlier this month that the automaker has finished building the second phase of its Gigafactory in Shanghai, where it is speculated that its Model Y would be manufactured starting February next year.

Price Action: Tesla shares closed nearly 10.3% lower at $380.36 on Wednesday and fell almost 3.3% in the after-hours session to $367.83.