Featured Image Credit: Win McNamee / Staff / Getty
While it was all looking rosy for President Donald Trump and 'First Buddy' Elon Musk, all of that could be about to change. The SpaceX and Tesla CEO has been getting comfortable at the White House and has settled into his position as the Head of the Department of Government Efficiency.
Even though the POTUS and tech billionaire were once at each other's throats, they seem to have buried the hatchet and are enjoying the fruits of their symbiotic relationship. Unfortunately, the cracks could already be starting to show due to Donald Trump's new vehicle tariffs.
The USA is powering ahead with a promise to slap a 25% tariff on passenger vehicles and passenger vehicle parts not made in the USA. This will affect nearly half of all cars bought in the US and could generate up to $100 billion annually.
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Trump has extended an exemption to parts arriving from Canada and Mexico thanks to the USMCA free trade agreement until May 3.
Tesla shareholders were likely originally rubbing their hands that sales and profits could soar thanks to all its vehicles sold in the USA being assembled there. However, Elon Musk was quick to wade into the argument and referred to the impact of the tariffs as 'significant'. Despite Trump turning the front of the White House into a EV showroom, Teslas being assembled in the USA, and it proudly promoting itself as having "the most American-made vehicles," it imports a high number of foreign parts.
In particular, it sources steel and aluminum from Mexico and Canada, which have been hit with the Trump tariffs.
Posting on X, Musk wrote: "Important to note that Tesla is NOT unscathed here. The tariff impact on Tesla is still significant."
Responding to the tech billionaire, one supporter said: "Short term pain. Long term gain, don’t get distracted from noise."
Another cheered: "Thank you for putting America first."
Today, Trump introduced a 25% tariff on ALL vehicles not made in the United States. This tariff will go into effect on April 2nd. About 40% of all new cars sold in the US are imported, so this tariff is a big deal.
— Sawyer Merritt (@SawyerMerritt) March 26, 2025
This is a breakdown of where cars sold in the US are made:
•… pic.twitter.com/4afYiJvtph
Someone else suggested Musk has shot himself in the foot as they concluded: "There will come a day when President Trump will no longer need you, and that day may not be long in coming."
Musk's musings come after he was directly asked about his role in the government affecting his other business ventures and him losing $29 billion in a single day. It comes after violence has erupted across the country, and the FBI has warned that targeting Tesla will be seen as 'domestic terrorism'.
As reported by Electrek, Tesla imports more than 20% of its parts from Mexico, with an undisclosed sum coming from Canada.
What's even more worrying for Tesla is the fact that Trump has vowed to make these tariffs worse if countries attempt to retaliate. The Commander-in-Chief directly named Canada in his barbs, telling press at the White House that tariffs "far larger than currently planned" could be levied if the Great White North tries to team up with the EU.
Although the USMCA free trade agreement gives Musk and Tesla some room for maneuvering until May 3, the many rolls of red tape are unlikely to be cut through before then.
