Tesla Execs Want Trade War Relief, Just Don’t Tell Elon Which Execs

There’s a certain poetry to Tesla executives discovering that trade wars are, in fact, not good and easy to win. Last week, someone at Tesla sent a detailed letter to the US Trade Representative essentially begging for relief from the very policies their CEO has been championing as he destroys the traditional institutions of government. The internet has many ways to describe this kind of karmic moment — from the “Leopards Eating People’s Faces Party” to “Me Sowing/Me Reaping” to the elegantly concise “FAFO.” But perhaps the most interesting part isn’t that Tesla’s executives are learning about consequences — it’s that they’re apparently too afraid of their own boss to put their names on that learning experience.

The letter reads like a crash course in “Economics 101 for Tech Bros.” After the obligatory corporate chest-thumping about Tesla’s US manufacturing prowess, it gets to the awkward reality that seems to have escaped their CEO’s notice: Tesla very much relies on global open access to markets, both for parts that are made in other countries, and to be able to sell Teslas outside of the United States:

As a U.S. manufacturer and exporter, Tesla encourages USTR to consider the downstream impacts of certain proposed actions taken to address unfair trade practices.

Translation: “Hey, remember how global supply chains and open markets work? You know, the thing every first-year economics student learns about comparative advantage?” It’s the kind of explanation you might expect from executives desperately trying to point out that their company — which relies on international suppliers for parts and foreign markets for sales — probably shouldn’t be cheerleading for policies explicitly designed to disrupt global trade.

The crazy part isn’t just that they’re right — it’s that they had to write this letter at all. But given Musk’s documented history of firing anyone who delivers unwelcome news (just ask Tesla’s former Supercharger team), perhaps it’s not surprising they waited until the leopards were literally at the factory door before speaking up.

The letter goes on to explain, in painfully careful detail, how trade wars actually work:

While Tesla recognizes and supports the importance of fair trade, the assessment undertaken by USTR of potential actions to rectify unfair trade should also take into account exports from the United States. U.S. exporters are inherently exposed to disproportionate impacts when other countries respond to U.S. trade actions. For example, past trade actions by the United States have resulted in immediate reactions by the targeted countries, including increased tariffs on EVs imported into those countries. Past U.S. special tariff actions have thus (1) increased costs to Tesla for vehicles manufactured in the United States, and (2) increased costs for those same vehicles when exported from the United States, resulting in less competitive international marketplace for U.S. manufacturers. USTR should investigate ways to avoid these pitfalls in future actions.

I mean, it’s kinda shocking that this lesson needs to be taught, and that Tesla is delivering the lesson: You put tariffs on their stuff, they put tariffs on your stuff, everybody’s costs go up, nobody wins. It’s the kind of obvious cause-and-effect that you’d think wouldn’t need explaining to the people running the government.

Unfortunately, the most likely outcome here is that Musk will leverage his relationship with the administration to get Tesla some sort of carve-out. But other countries aren’t playing that game. Canada, for instance, is already targeting Tesla in response to US threats. And Musk, showing his characteristic inability to think more than one move ahead, responded by threatening to cut off Canadian access to Starlink. Because nothing fixes a trade dispute like escalating it into a tech infrastructure fight.

This pattern of short-term thinking followed by predictable blowback has become a hallmark of Musk’s leadership basically everywhere he’s been in charge. Whether it’s antagonizing the very regulators SpaceX needs to work with, alienating core customer bases at both Twitter and Tesla through erratic political posturing, or now running point for a president escalating trade disputes that directly threaten Tesla’s business model, there’s a consistent inability to think more than one move ahead. And his response to the Canada situation — threatening to cut off Starlink access in retaliation for policies affecting Tesla — perfectly exemplifies this consistently self-defeating approach to international relations.

Which brings us back to that unsigned letter. The Financial Times got the scoop on why nobody wanted to put their name on it, and the explanation is exactly what you’d expect from executives who’ve learned the hard way about delivering unwelcome news to Elon:

One person familiar with the process of sending the letter said: “It’s a polite way to say that the bipolar tariff regime is screwing over Tesla.”

The person added: “It is unsigned because nobody at the company wants to be fired for sending it.”

I mean, good luck with that. Musk has a history of erratically firing entire teams of people because of randomly getting upset at them. He did that just last year with Tesla’s Supercharger team. So I’m not sure not signing the letter will protect whoever did this at Tesla.

It turns out that when you spend years cheering on the “Leopards Eating People’s Faces Party,” you shouldn’t be surprised when the leopards show up at your factory door. Tesla executives are now discovering what “FAFO” means in practice — though they’re apparently too afraid of their own CEO to put their name on it.