Elon Musk’s clash with President Donald Trump over new 50% tariffs on Chinese imports has put the tech industry on high alert.
The world’s richest man is pushing back as sweeping protectionist measures threaten US-China supply chains, raising costs for manufacturers and consumers alike.
Tesla, which has lost more than 38% of its value this year, now faces a worsening demand outlook in China, a key market.
As pressure mounts, tech leaders are reportedly forming informal lobbying efforts behind closed doors, trying to persuade the administration to adopt a softer stance.
But internal divisions and key personnel shifts complicate the road ahead.
Tesla down 38% as demand drops
Tesla shares fell over 2.5% on Monday to $233.29, a significant drop that reflects mounting investor concerns.
Analysts have reduced Tesla’s price target from $550 to $315, citing declining demand and growing reputational issues in China.
The company’s reliance on Chinese production and sales makes it particularly vulnerable to the latest wave of tariffs, which could directly impact pricing and profitability.
Tesla’s market struggles come in parallel with CEO Elon Musk’s increasing political activity.
Once a high-profile supporter of deregulation, Musk has used his platform to criticise Trump’s latest tariff measures while simultaneously trying to influence policy decisions.
His dual role as business magnate and political interlocutor has placed Tesla at the centre of a broader geopolitical and economic dispute between Washington and Beijing.
Tech leaders lobby to ease tariffs
Behind the scenes, several prominent business leaders are reportedly lobbying for more moderate trade policies.
According to The Washington Post, there have been efforts to form an informal coalition aimed at influencing Trump’s decision-making.
Investor Joe Lonsdale and other Musk allies are said to have reached out to administration officials, including Vice President JD Vance.
However, internal dynamics within the Trump administration are shifting. Commerce Secretary Howard Lutnick, previously seen as sympathetic to Silicon Valley, has now become a staunch proponent of protectionist policies.
His presence, alongside trade adviser Peter Navarro, has created obstacles for those seeking policy moderation.
Musk’s limited success in lobbying efforts was evident when he posted on X in response to the US trade representative’s defence of the tariffs.
Though previously critical, Musk commented “Good points,” suggesting a potential recalibration of his public tone.
Still, the larger implications for Tesla and the wider tech industry remain unchanged.
Tariffs raise long-term consumer costs
One of the most significant criticisms of the new tariffs is their long-term effect on American consumers.
Kimbal Musk, a Tesla board member and Elon Musk’s brother, described the tariffs as a “permanent tax” in a post on X.
