Tesla Stops Selling US-Built Cars in China as Tariff Battle Intensifies

Tesla has stopped accepting new orders in China for two of its vehicles that are made in the United States — the Model S and Model X — as Donald Trump’s intensifying trade war with Beijing begins to bite.

On Tesla’s Chinese website, the “Order Now” buttons for the two models have been removed and replaced with “View Available Cars.” Similarly, Tesla’s mini-program on WeChat no longer allows new orders for the Model S sedan or Model X SUV, according to a report from Reuters.

The company, led by Elon Musk, a close ally of Trump, has not publicly explained the change. But it comes just after the U.S. raised tariffs on Chinese imports to 145%, prompting Beijing to retaliate with its own sharp increase — tariffs on U.S. goods now stand at 125%.

The new border taxes have made trade between the two nations far more expensive, especially for cars that are imported rather than built locally. U.S.-made vehicles are now significantly less appealing to Chinese buyers due to these additional costs.

Shanghai Gigafactory Offers Some Protection

Tesla does have a buffer in the form of its Shanghai Gigafactory, which has been manufacturing the Model 3 and Model Y since 2020. These vehicles are not subject to the same tariffs and can still be sold competitively in the Chinese market. However, the company could still feel a substantial impact from the broader fallout of the trade dispute.

A 2023 analysis by Nikkei Asia found that around 40% of Tesla’s battery material suppliers were based in China. The firm has tried to diversify its supply chain, but deep economic ties with China remain.

Last month, Tesla even warned the U.S. government that its tariff policies could damage American companies. In a letter to the White House trade representative, Tesla emphasized the risks posed by escalating trade barriers.

Sales Pressure and Image Concerns

Tesla is already dealing with weaker demand, particularly in Europe. The company’s aging product line is struggling to keep up with newer, often cheaper electric vehicles, especially from Chinese competitors like BYD.

Analysts say that Elon Musk’s vocal support for Donald Trump has also damaged Tesla’s brand image in key markets, possibly contributing to the recent slump in sales. The decision to halt new orders for the Model S and X in China may signal further financial strain ahead.

If the trade war drags on, Tesla — like many other American manufacturers — may be forced to reconsider how and where it builds and sells its cars.