President Donald Trump’s tariffs have already had a huge impact on the U.S. economy — so much so that the Trump administration appears to be backing off a bit on some tariffs.
As President Trump celebrated the 100th day of his second term, Commerce Secretary Howard Lutnick announced that Trump would ease the 25 percent tariff on automobiles. The move was designed to give car companies an opportunity to move production to the United States.
According to Lutnick, there would even be a way for auto companies to completely avoid tariffs on their vehicles. And a fact sheet issued by The White House yesterday said that vehicles finished in the U.S. with 85 percent or more domestic content would be fully exempt from the automotive tariff.
Interestingly, only one company qualifies for this new tariff exemption: Tesla.
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According to the 2024 Made in America Auto Index from Kogod School of Business at American University, only three vehicles hit the 85 percent domestic content threshold: the Tesla Model 3 Performance, Tesla Model Y Long Range, and Tesla Model Y.
The fact that Trump’s automotive tariff exemption only benefits Tesla was first noticed by the online automotive news site FuelArc. The outlet also pointed out how oddly specific the 85 percent number was, especially considering that three of Ford’s Mustang models have 80% domestic content.
Tesla CEO Elon Musk has been extremely close to the administration, including President Trump himself. Musk openly endorsed and campaigned for Trump during the 2024 election season. Musk also donated a reported $288 million to Trump and other Republicans’ campaigns. Musk’s relationship with Trump has extended into the administration, with Trump bringing Musk into the fold as a special government employee in order to cut federal programs and spending under DOGE.
However, Musk’s coziness with the president has also hurt Tesla. The company recently reported a 71 percent decline in profit amid boycotts and protests against Musk and Tesla. In addition, many liberal Tesla customers appear to be rejecting Musk through Tesla, and a record number of Tesla vehicles have gone onto the resale market this year.
