Tesla Sues US Government over Tariffs on Chinese Imports

(Source: Gadgets NDTV)

Electric vehicle manufacturer Tesla has filed a lawsuit against the U.S. government and U.S. Trade Representative Robert Lighthizer over tariffs imposed on certain parts that Tesla imports from China.

According to the complaint filed with the US Court of International Trade, Tesla called the Trump administration’s imposed tariffs on some parts imported from China as “unlawful,” and requested a refund of the duties and taxes paid and compensation for paid interest during the period.

Tesla’s lawyers stated in the complaint that the list of tariffs on China implemented by the U.S. trade negotiators in 2018 and 2019 was “arbitrary, capricious, and an abuse of discretion.”

The company added that the relevant agencies did not provide companies with an opportunity to evaluate the list in a real sense and were simply making tax collections.

In August 2018, the Office of the U.S. Trade Representative announced and implemented a list of tax levies on $16 billion worth of Chinese imports, and stated that it would impose an additional 25% tariff on these products. Chinese-made computers and displays used in the assembly of Tesla’s Fremont factory’s Model 3 electric car were also listed.

In July 2018, Tesla filed an application for tax exemption for the first time, and stated, “Increased tariffs on this particular part cause economic harm to Tesla, through the increase of costs and impact on profitability.”

Tesla described the above-mentioned on-board computer as the “brain” of the Model 3 and informed the Office of the U.S. Trade Negotiation Representative that it could not find an alternative manufacturer of related products in the US. However, this request for tariff exemption was rejected by the U.S. Trade Office in 2019.

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According to CNBC reports, about 3,400 US companies, including Ford, Home Depot, and Ann Taylor, have taken legal actions on Trump’s tariff policies, demanding repayment of taxes paid and calling on the government to change tariff policies.

On Wednesday, Tesla’s stock price plummeted 10% and closed at $380.36, down about 24% from the record high of $498.32 set on Aug. 31.