Tesla Is Reportedly Suing Trump Government Over Blocking Tariffs
The trade war between the U.S. and China has been affecting companies on both the side. President Trump’s decision to levy heavy tariffs on the imports of Chinese products has made it difficult for U.S. companies. Meanwhile, the Chinese government is also hitting back by imposing some serious tariffs.
On Wednesday, Tesla filed a lawsuit against the U.S. government and U.S. Trade Representative Robert Lighthizer over levying tariffs on its electrical components for its cars. According to the lawsuit filed in the U.S. Court of International Trade, the company is asking the Trump administration to null two batches of tariffs and return its paid tariffs with interest, Bloomberg reported. Tesla is now one of the hundred companies that have filed lawsuits against the Trump administration including Mercedes Benz, Volvo, and Ford.
In 2018, the Trump administration issued List 3 which places around 25% duties on the USD 200 Billion goods imported from China. Next year, the U.S. government added a tariff of 7.5% on imports worth USD 120 Billion from China. Both these lists contain hundreds of items ranging from raw materials to electronic components. According to the reports, Tesla’s lawsuit didn’t include how much tariffs and on what items they had paid tariffs on.
In the Wednesday’s filing, Tesla’s lawyer Mark Morgan argued that U.S. trade officials “imposition of List 3 and List 4 duties were arbitrary and capricious because USTR did not provide meaningful opportunity to comment, failed to consider relevant factors when making its decision, and failed to draw a rational connection between the facts found and the choices made.”
When List 3 and List 4 came into the effect, the U.S. trade officials were given an opportunity to request a waiver on particular items. During the time, Tesla applied for waivers on silicon oxide, artificial graphite, and door ring tailor welded blank. As per the USTR website, all three items were due to expire in August 2020. Back in 2019, U.S. trade officials rejected the request of Tesla to void 25% tariffs on the Chinese-made parts for the Model 3 car which includes a custom-built chip that intends to give self-driving experience to its cars.
Tesla said that it’s requesting the exception as they couldn’t find a supplier that would produce Autopilot ECU 3.0 with the required specifications. It also added that taking the crucial decision to change suppliers can hamper the Tesla experience. Moreover, choosing another supplier would have delayed the (Model 3) program by 18 months.
Besides the lawsuit filing, the American automaker operations experienced an outage on its Battery day which plummeted its share by 10% on Wednesday. The outage alienated Tesla’s owners to connect with the car’s internal systems. The issue was solved after 5 hours. On its Battery Day event, Tesla unveiled its strategy to bring down the production cost of battery cells by 56%. During the event, Musk announced that the company has developed the new cell named Tesla 4680 Battery cell which increases the range by 16% and will make its batteries 6X powerful.
Elon Musk announced that it is building a new cathode plant and eliminate the usage of cobalt as it is often mined under harsh conditions, violating human rights. By the end of the event, he made promises such as building a USD 25,000 Tesla electric car that is expected to hit the road in about three years.