Published: Mon, March 12, 2018
Business | By Kate Woods

Musk Invites Trump to Prod China Over Auto Trade Practices

Musk Invites Trump to Prod China Over Auto Trade Practices

President Donald Trump read a tweet from Tesla CEO Elon Musk about Chinese import taxes on American cars during a signing ceremony for his steel and aluminum tariffs on Thursday. In a series of tweets directed at the president, Musk cited China's 25 percent import duty on American cars which is exponentially higher than the 2.5 percent the U.S. charges for Chinese cars.

Amid a series of tweets Thursday, Musk - apparently frustrated by the Asian nation's import duties - compared China's trade policy to "competing in an Olympic race wearing lead shoes".

Politicians "have known it for years and never did anything about it".

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The tweet followed Musk's initial message to Trump, where Musk asked Trump's opinion of the disparity between the USA and China's vehicle import policies.

Tesla has been pushing hard to build cars in China, the world's largest auto market, but has hit roadblocks in negotiations with local authorities, in part because Musk is keen to keep full control of any local venture.

Musk's lobbying-by-tweet hinted at his frustration over struggling to get a deal done with Shanghai's government to assemble cars in the city. "Just want a fair outcome, ideally where tariffs/rules are equally moderate".

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China has said it will look to lower import taxes for cars and carry out a pilot scheme to loosen foreign ownership rules for new energy vehicles, a term China uses to refer to fully-electric and plug-in hybrid cars. But Tesla's growth in the country has been slowed a couple main factors: that "tenfold [tariff] difference" Musk tweeted about, and Chinese laws requiring foreign automakers to partner with domestic companies. "Nothing more. Hope this does not seem unreasonable", he added. "First thing you need to think about those who can't afford a car" - said Musk.

Trump later responded to Musk's comments during his steel and aluminum tariff press conference.

But when Trump read Musk's tweets during a press event, he said that "at some point", the President was likely to enforce what he called a "reciprocal or mirror tax", where he would match the tariffs China has put on USA imports.

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Trump and Musk have a rocky history. The plans are so far unspecified, though Trump said "we're going to be doing a lot of that". The Tesla chief executive officer served on two White House advisory councils before stepping down in June after the president announced he would pull the USA out of the Paris climate accord.

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