Breaking news: After China, Europe could be the next market that Tesla could have to close down completely due to tariffs. Elon Musk asked the US president for help but received the answer that…
The electric vehicle giant Tesla, led by billionaire entrepreneur Elon Musk, is facing an unprecedented crisis that threatens its global dominance. Following severe setbacks in China due to escalating trade tensions and retaliatory tariffs, Europe is now emerging as the next battleground where Tesla’s operations could be at risk of a complete shutdown. The catalyst? Punitive tariffs and shifting trade policies that are squeezing Tesla’s market viability. In a desperate bid to mitigate the damage, Musk has turned to U.S. President Donald Trump for assistance, only to receive a response that has left the tech mogul reeling.
The trouble began with the U.S. administration’s aggressive tariff policies, which imposed steep duties on Chinese imports, including a staggering 145% on certain goods. These measures, championed by Trump’s trade advisor Peter Navarro, aimed to bolster domestic manufacturing but inadvertently triggered a trade war. China retaliated with 125% tariffs on U.S.-built Tesla models, forcing the company to halt orders for its Model S and Model X in the Chinese market. This move dealt a significant blow to Tesla, as China represents a critical revenue stream. The company’s stock plummeted, erasing billions in market capitalization, and Musk publicly criticized Navarro, calling him “dumber than a sack of bricks” in a heated social media outburst.
Now, Europe is poised to deliver another devastating hit. Recent reports indicate that the European Union is in talks with China to eliminate tariffs on Chinese electric vehicles (EVs) in favor of setting minimum price thresholds. This development could flood the European market with affordable Chinese EVs, while European manufacturers gain reciprocal access to China’s market. Tesla, caught in the crossfire, faces a double threat: intensified competition from Chinese brands like BYD and NIO, and potential new EU tariffs on U.S.-made vehicles. A post on X speculated that this could “squeeze” Tesla out of both Europe and China, a sentiment echoed by industry analysts who warn of a dire outlook for the company.
Musk, known for his close alliance with Trump, reportedly pleaded with the president over the weekend to reconsider the tariff strategy. According to sources cited by The Washington Post, Musk argued that the trade war was crippling Tesla’s global operations and undermining its ability to compete. However, Trump’s response was unequivocal: the tariffs were a cornerstone of his “Make America Wealthy Again” agenda, and no immediate relief would be granted. The president’s decision to pause tariffs for 90 days on 75 trading partners, excluding China, offered little solace to Tesla, as the baseline 10% duties and specific levies on imported cars remained in place.
The fallout has been swift. Tesla’s share price, already down 50% from its December peak, continues to slide as investors grapple with the company’s precarious position. Sales have suffered not only from tariffs but also from a consumer backlash linked to Musk’s political ties with Trump. Reports indicate that some Tesla customers are boycotting the brand, with drivers in China and Europe displaying stickers declaring their regret over purchasing Tesla vehicles. Meanwhile, Musk’s brother, Kimbal Musk, publicly criticized the tariffs as a “permanent tax on the American consumer,” highlighting a growing rift within the Musk family and Trump’s inner circle.
The EU-China trade negotiations add another layer of complexity. French President Emmanuel Macron described the U.S. tariff pause as “fragile,” signaling skepticism about long-term trade stability. If the EU and China finalize their agreement, Tesla’s U.S.-built vehicles could face higher costs in Europe, while its China-produced models may struggle against cheaper local competitors. This scenario leaves Tesla with limited options: relocate manufacturing to Europe, absorb crippling tariffs, or risk losing market share.
As Tesla teeters on the edge, Musk’s public spat with Navarro underscores deeper tensions within the Trump administration. Navarro, defending the tariffs, dismissed Musk as a “car assembler” reliant on foreign parts, while Musk retorted that Tesla’s vehicles are the most American-made, citing a Cars.com study. The White House, attempting to downplay the feud, called it a case of “boys being boys,” but the damage to Tesla’s brand and financial health is undeniable.
With Europe and China aligning against U.S. trade policies, Tesla’s global ambitions hang in the balance. Musk’s plea for intervention has fallen on deaf ears, and the company now faces a critical juncture. Will Tesla adapt to this new reality, or will tariffs and trade wars force it to retreat from two of the world’s largest markets? The coming months will be decisive for the EV pioneer and its embattled CEO.
