Tesla Sues US Government Over Trump's China Tariffs

Industry News / Comments

Several other major automakers have also filed lawsuits.

The ongoing trade war between the US and China led to President Trump imposing tariffs on imported Chinese goods including auto parts. Unsurprisingly, these increased costs have riled major automakers that rely on importing parts from China to manufacture cars. Now, several automakers are taking action by suing the US government. CNBC reports that Tesla is suing the US government and US Trade Representative Robert Lighthizer over the Trump administration's tariffs on parts Tesla imports from China to manufacture its electric cars like the Model 3 and Model Y.

According to the lawsuit filed in the US Court of International Trade, Tesla wants the court to declare two batches of Trump administration tariffs to be void, and refund Tesla the tariffs it paid with interest.

2017-2020 Tesla Model 3 Front View Driving Tesla
2017-2020 Tesla Model 3 Front View Driving Tesla

The specific tariffs Tesla has issues with are known as List 3 and List 4. Since it was introduced in 2018, List 3 places 25 percent duties on $200 billion of imported goods from China. List 4, on the other hand, imposes a 7.5 percent tariff on $120 billion of Chinese imports and went into effect in 2019.

Tesla's lawsuit doesn't specify which parts Tesla paid tariffs on or how much it paid, but the company's lawyers argue that the "imposition of List 3 and List 4 duties was 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."

Vaughn Gittin Jr. Tells Us The Mustang Mach-E 1400 Is The Greatest Thing He's Ever Built
Vaughn Gittin Jr. Tells Us The Mustang Mach-E 1400 Is The Greatest Thing He's Ever Built
We Drove The Land Rover Defender From James Bond's 'No Time To Die'
We Drove The Land Rover Defender From James Bond's 'No Time To Die'
2017-2020 Tesla Model 3 Side View Driving Tesla
Rear View Driving Mercedes-Benz
Side Angle Driving Mercedes-Benz

Tesla also applied for waivers in 2019 on artificial graphite, silicon oxide and door ring tailor welded blanks. The waivers for these expired in August 2020.

Tesla isn't the only automaker taking action against the US government, either. Mercedes-Benz has also filed a lawsuit accusing the US government of "prosecution of an unprecedented, unbounded, and unlimited trade war impacting over $500bn in imports from the People's Republic of China."

Volvo, which is now owned by China's Geely, has also filed a lawsuit as the automaker "believes the way to reach economic growth is to reduce tariffs and harmonize international trade."

Front View Driving Mercedes-Benz
2018-2021 Volvo XC60 SUV Three Quarter Front Left Dynamic Volvo
2018-2021 Volvo XC60 SUV Three Quarter Rear Right Dynamic Volvo
Source Credits: CNBC

Join The Discussion