Published: Fri, March 09, 2018
Economy | By

Donald Trump and Elon Musk are slamming Obama's trade deficit

Donald Trump and Elon Musk are slamming Obama's trade deficit

Tesla CEO Elon Musk tweeted at USA president Donald Trump about the unfairness of the rules governing the vehicle trade between China and the US. The company wants to open up a factory in Shanghai, but Bloomberg reported last month that Tesla still hasn't landed a deal with local authorities to get it done.

Musk said in his Twitter rant that he had raised the issue with the Obama administration, but nothing was ever resolved.

Musk further noted that US companies are prohibited from owning a majority share of their Chinese production factories but that there are many Chinese owned automotive factories in the United States.

The new tariffs will initially exclude Canada and Mexico, Trump said Thursday.

In a series of tweets aimed at the president, Musk said he was "against import duties in general, but the current rules make things very hard".

"First production cargo trip of the Tesla Semi heavy duty truck, carrying battery packs from the Gigafactory in the Nevada mountains to the auto factory in California", Musk wrote on Instagram.

"Just want a fair outcome, ideally where tariffs/rules are equally moderate", Musk tweeted.

Finally, Musk capped his mini-tweetstorm lamenting that "no United States 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 USA". "It's like competing in an Olympic race wearing lead shoes", Musk wrote. The tweets came as Trump prepared to make an announcement on tariffs for imported steel and aluminum.

Tesla shares closed down 1 percent on Thursday and were off almost another percent in after-market trading.

Tesla vehicles shipped to China face a 25% import tax while a auto imported from China to the United States is only taxed about 2.5%, Musk said, "a tenfold difference".

China, the world's largest auto market, has required foreign automakers to build factories in 50-50 joint ventures with domestic Chinese automakers and not allowed them to establish wholly owned factories. The President did not specify which goods would be involved, and did not provide details, other than mentioning China and India, and saying of the reciprocal taxes, "We're going to be doing a lot of that".

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.

Inverse pointed out this is the first time since Tesla unveiled the Semi late past year we've glimpsed the vehicle with an attached trailer.

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