Donald Trump’s tariff war with China is putting pressure on Elon Musk’s wealth, particularly through its impact on Tesla.
- Trump’s tariff war with China is impacting Elon Musk’s wealth through its impact on Tesla
- Musk’s net worth dropped by $7.1 billion due to decline in Tesla’s stock, caused by the trade tensions
- Tesla could face severe disruptions in its raw material supply if trade tensions escalate further
As one of Tesla’s largest markets and key production hubs, China plays a vital role in the company’s success, making Trump’s tariff policies a major challenge for Musk.
The increased tariffs on Chinese imports under Trump’s policies have raised Tesla’s production costs, disrupted supply chains, and driven up consumer prices.
Investor concerns over these geopolitical risks have contributed to a decline in Tesla’s stock, causing Musk’s net worth to drop by $7.1 billion.
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If trade tensions escalate further, Tesla could face severe disruptions in its raw material supply, adding uncertainty to its global operations and further threatening Musk’s financial standing.
Musk’s wealth takes a dip
As Trump’s right-hand man, Elon Musk now finds himself caught in the crossfire of the administration’s trade policies, which were initially designed to protect American industries but are now backfiring on Tesla.
The tariffs, intended to curb Chinese competition, have instead increased Tesla’s operational costs and strained its supply chains, making it harder for the company to maintain its competitive edge in the global market.
According to Forbes’ real-time estimates, Elon Musk’s net worth plummeted $7.1 billion on Tuesday, reaching $347.7 billion. This significant drop reveals that Musk’s fortune has now declined $116.3 billion from its record high of $464 billion on December 17, 2024.
The decline is largely attributed to Tesla’s struggling stock, which closed at $272 on Tuesday, marking its lowest end-of-day share price since Election Day.
The Tesla slump coincided with the S&P 500 falling over 1% to a 2025 low, triggered by Trump’s tariffs on Canada, China, and Mexico.
To put Musk’s $116 billion loss into perspective, Forbes noted that Microsoft co-founder Bill Gates, the 13th-wealthiest person globally, has an estimated net worth of $108.1 billion. Meanwhile, Asia’s wealthiest person, Mukesh Ambani, has a fortune of $85.6 billion.
Despite this significant hit, Musk remains $83.3 billion wealthier than he was on Election Day, partly due to higher valuations for his private companies SpaceX and xAI.
Tesla stumbles under weight of U.S. tariffs
Donald Trump’s tariff war with China aims to reduce the U.S. trade deficit, counter unfair trade practices, and protect American industries.
Initiated during his first presidency, it has escalated since his return to office.
Following Trump’s tariff executive orders, Tesla’s Chief Financial Officer, Vaibhav Taneja, warned in January that tariffs “will have an impact on our business and profitability,” emphasizing that Tesla remains “reliant on parts from across the world for all our businesses.”
Forbes reports that China is Tesla’s second-largest market globally, making the company particularly vulnerable to tariffs. Tesla relies on imports from Canada and other sources for car production, making it sensitive to trade policies.
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According to the China Passenger Car Association (CPCA), Tesla’s shipments from China dropped to 30,688 in February, a staggering 49% decline from the same period last year, Bloomberg News reports.
This follows a significant decrease from January’s shipments, which totaled 63,238.
In contrast, China’s wholesale sales of new energy vehicles surged to 840,000 units in February, marking an impressive 82% year-over-year increase.
This notable disparity suggests Tesla is facing intense competition in the Chinese EV market.
