Musk asks Trump to reverse sweeping new tariffs - WP

Elon Musk exploded with a stream of social media posts criticizing one of the White House's leading advisors regarding Trump's aggressive tariff plan. Musk had been communicating with that same official and made personal appeals to Trump.

The attempt at intervention, confirmed by two people familiar with the matter, has so far been unsuccessful. On April 7, Trump threatened to impose new 50% tariffs on imports from China in addition to the 34% taxes he had announced last week. Although he made it clear that he was open to negotiating certain aspects of his policy.

Loud disagreement

Musk's break with Trump over the priority of the US administration marks the loudest disagreement between the president and one of his key advisors, who invested nearly $290 million in supporting Trump during the elections. He led efforts to cut spending in the US DOGE service since January.

Musk also disagreed with other members of Trump's coalition on issues such as H1-B visas for skilled immigrants and DOGE's approach to government spending.

Musk launched a critique against a government official who played a key role in drafting the tariff plans, White House trade advisor Peter Navarro, criticizing his credentials. "A PhD in Econ from Harvard is a bad thing, not a good thing," Musk wrote.

In a conversation with Italian Deputy Prime Minister Matteo Salvini last weekend, Musk also said he would like to see a "free trade zone" between Europe and the US: "At the end of the day, I hope it's agreed that both Europe and the United States should move ideally, in my view, to a zero-tariff situation."

Musk also stated that he would like to give people more freedom to move between European countries and the US and work in either, "if they wish." "That has certainly been my advice to the president," the billionaire said.

Billionaire conspiracy

Many business and tech leaders who supported Trump were stunned by the US president's decision to impose such high tariffs and equally disappointed that they could not exert more influence over the policy, said two people familiar with the matter.

Musk's associates directly approached friends in the Trump administration, including Vice President JD Vance and Musk, advocating for what they considered to be a more reasonable free trade policy. One of Musk's friends, investor Joe Lonsdale, posted on X that in recent days he had been telling "friends in the administration" that tariffs would cause more harm to American companies than to Chinese ones.

According to one source, a group of business executives worked over the weekend to create an informal group that would lobby for a more moderate policy among Trump administration members.

Many supported Trump last year, even knowing that the high tariffs he had long promised could be destructive both for the tech industry and for the economy in general. However, they felt that advisors like Treasury Secretary Scott Bessent could sway Trump to adopt a softer approach, sources say.

Business leaders also did not expect Commerce Secretary Howard Lutnik, one of Musk’s conduits in Trump’s orbit, to be such a strong advocate of protectionist policies.

Musk's position

Musk, the CEO of electric car manufacturer Tesla, has long believed that tariffs harm the business goals of the company, which considers the US and China key production and consumer centers. However, other automakers are likely to be more affected by the new tariffs, analysts say.

Nonetheless, Musk has opposed tariffs, at least since Trump's first term when Tesla filed a lawsuit to try to overturn the import tax on Tesla from China to the US.

In 2020, Tesla executives wanted the company to sue the Trump administration over its tariffs on China. Musk initially agreed, saying parts of Trump's package were unfair to the automaker. But after Tesla filed the lawsuit in September 2020, Musk reacted to the decision in a "super negative way," even berating some employees for suggesting Tesla file the suit.

The dispute between the president and one of his most influential advisors comes just weeks before Musk, the richest person in the world, is expected to leave his position in the administration. It also comes amid growing pressure on Tesla to reverse signs of slumping demand - partly caused by Musk's entry into politics.

"The backlash from Trump tariff policies in China and Musk's association will be hard to understate," said Dan Ives, an analyst with Wedbush Securities, an enthusiastic Tesla backer who lowered Tesla's stock price target - a measure of its viability - from $550 to $315 "to reflect these new softer demand estimates."

"Tesla has essentially become a political symbol globally … and that is a very bad thing for the future of this disruptive tech stalwart and the brand crisis tornado that has now turned into an F5 tornado," Ives stated.

As previously reported, Tesla's stock closed at $233 per share on April 7, dropping more than 2.5%. This year, the stock has lost over 38% of its value.