April 3, 2025
Newsweek recently published an article featuring Mark Williams, Master Lecturer of Finance, discussing how while Tesla may benefit slightly from domestic production, the broader economic impact of Trump’s tariffs will ultimately hurt all automakers, including Tesla.
While Tesla may be better positioned than many automakers, thanks to its domestic production footprint, it’s far from insulated. The company still relies on imported components like brakes, glass, and headlamps, making it vulnerable to rising input costs and margin pressure. And beyond individual companies, the broader economic stakes are significant. The tariff war is a high-risk move that could spark a recession, suppressing demand across the entire auto industry.
“Should Trump’s tariff war trigger a full-fledged recession, demand for any car, whether a Tesla or a Ford, will fall. A tariff war is a high-stakes gamble that our largest trading partners will acquiesce and accept trade terms that help the U.S. but harm them,” Williams adds.
Even with a domestic edge, Tesla isn’t immune to the ripple effects of a slowing global economy.
