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Musk Calls On Trump To Up Car Tariffs To Level Playing Field

Tesla’s chief executive Elon Musk took to Twitter on Thursday to complain to U.S. President Donald Trump about the unfair trade rules on U.S. car sales in China, which make Tesla’s cars much more expensive in the growing Chinese electric vehicles (EVs) market.

Replying to a tweet of President Trump about the Chinese-U.S. trade, Musk addressed the President with “Do you think the US & China should have equal & fair rules for cars? Meaning, same import duties, ownership constraints & other factors.”

Tesla’s chief also tweeted to President Trump:

“For example, an American car going to China pays 25% import duty, but a Chinese car coming to the US only pays 2.5%, a tenfold difference,” and “Also, no US 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 US.”

Last month, reports suggested that Tesla and China disagree over the future ownership of a Tesla factory in Shanghai, which means that without local Chinese production, the U.S. electric vehicle maker continues to face high import taxes that make its cars much more expensive than those of local rivals on the world’s largest EV market.

China insists that all vehicle-manufacturing plants should be joint ventures with local partners, and currently all foreign carmakers must have a Chinese partner to manufacture vehicles locally. Tesla, on the other hand, wants to have full ownership of the future factory.

In November 2017, Musk said that the Chinese factory could start production in around three years.

In the series of tweets to President Trump on Thursday, Musk also said:

“I am against import duties in general, but the current rules make things very difficult. It’s like competing in an Olympic race wearing lead shoes.”

“We raised this with the prior administration and nothing happened. Just want a fair outcome, ideally where tariffs/rules are equally moderate. Nothing more. Hope this does not seem unreasonable,” Musk added.

Finally, he said that “To be clear, I think a fair outcome for all is quite likely. China has already shown a willingness to open their markets and I believe they will do the right thing.”

Trump took the bait, and while announcing a 25-percent tariff on steel imports and a 10-percent tariff on aluminum imports on Thursday, he quoted Musk’s tweet about the import duties of U.S. cars in China and of Chinese cars in the U.S.

By Tsvetana Paraskova for Oilprice.com

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