As Tesla moves forward with plans for an India manufacturing hub, President Trump has raised concerns over trade imbalances, particularly India’s steep 100% import tariffs on U.S. automobiles. Will his push for ‘reciprocal tariffs’ change the game?
BY PC Bureau
With Elon Musk by his side, U.S. President Donald Trump has criticized Tesla’s potential expansion into India, calling it “very unfair” to the United States.
Speaking in a recent Fox News interview with Sean Hannity, Trump expressed concerns over what he sees as an imbalanced trade relationship, particularly India’s high tariffs on imported vehicles. His remarks came shortly after Tesla CEO Elon Musk recently met with Indian Prime Minister Narendra Modi during Modi’s visit to the U.S.
Trump argued that foreign nations—India in particular—use high tariffs to exploit American businesses. “Every country in the world takes advantage of us, and they do it with tariffs,” he said. “They make it practically impossible for him [Musk] to sell a car in India.” While he acknowledged that setting up a Tesla factory in India might make business sense, he insisted it would come at the expense of American manufacturers. “If he builds the factory in India, that’s okay, but it’s unfair to us. It’s very unfair,” he added.
Musk Backs Trump on Trade Barriers
Elon Musk echoed Trump’s concerns, highlighting India’s 100% import duty on automobiles, a policy that has long frustrated foreign automakers. “The tariffs are like 100 percent,” Musk confirmed, underscoring the challenges Tesla has faced in entering the Indian market.
Here’s the full President TRUMP & ELON Musk, interview from earlier today on Fox News pic.twitter.com/SfavuRexXq
— Nathan Storm🇺🇸 (@Teamhumanitygo2) February 19, 2025
Tariff Disparities and Calls for Reciprocity
A White House fact sheet points out that India imposes a 100% tariff on U.S. motorcycle imports, while the U.S. levies just 2.4% on motorcycles from India.
Trump also reiterated his commitment to implementing reciprocal tariffs, revealing details of his conversation with Modi. “I told Prime Minister Modi yesterday, ‘Here’s what we’re going to do: reciprocal. Whatever you charge, I’m charging,’” he said, asserting that such a policy would create a fairer trade environment. “Nobody can argue with me,” he added.
Tesla’s India Strategy Moves Forward
Despite these concerns, Tesla is actively advancing its India plans. Reuters reported that the company has identified locations for two showrooms in New Delhi and Mumbai and has posted job openings for 13 mid-level positions in India. Currently, Tesla does not manufacture vehicles in the country.
According to reports, Tesla executives are set to visit India in April to assess operations and engage with key government agencies, including the Prime Minister’s Office (PMO), the Ministry of Heavy Industries, and the Ministry of Road Transport and Highways (MoRTH).
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Tesla has reportedly shortlisted Maharashtra’s Chakan and Sambhaji Nagar, as well as Gujarat, as potential sites for its manufacturing hub. The company is expected to invest between $3 billion and $5 billion to establish production facilities.
Trade Tensions and Economic Implications
As trade discussions between the U.S. and India continue, Trump’s stance on tariffs and his push for reciprocity could have significant implications for economic relations between the two nations. For Tesla and other American companies, evolving trade policies will play a crucial role in shaping investment decisions and market strategies in India.
HERE IS The Excerpts of the Interview:
INTERVIEW OF PRESIDENT TRUMP
AND ELON MUSK
BY SEAN HANNITY, “THE SEAN HANNITY SHOW”
February 18, 2025
Roosevelt Room
Excerpts
THE PRESIDENT: And I was doing it — you know, I charged China tariffs. I took in hundreds of billions of dollars, and I was doing that. But when we got — we had the greatest economy in history. But then we got hit with COVID, and we had to solve that problem, because I was doing it — and now I said, I want to come back and do the recipri- — because every country in the world almost — we have a deficit with almost every country — not every one, but just about, pretty close.
And — but every country in the world takes advantage of us, and they do it with tariffs. They makes — make it — it’s impossible for him to sell a car, practically, in, as an example, India. I don’t know if that’s true or not, but I think —
- MUSK: The tariffs are like 100 percent import duty.
THE PRESIDENT: The tariffs are so high —
- MUSK: Yeah.
THE PRESIDENT: — they don’t want to — now, if he built the factory in India, that’s okay, but that’s unfair to us. It’s very unfair.
And I said, “You know what we do?” I told Prime Minister Modi yesterday — he was here. I said, “Here’s what you do. We’re going to do — be very fair with you.” They charge the highest tariffs in the world, just about.
Q 36 percent?
THE PRESIDENT: Oh, much — much higher.
- MUSK: It’s 100 percent on — auto imports are 100 percent.
THE PRESIDENT: Yeah, that’s peanuts. So, much higher. And — and others too. I said, “Here’s what we’re going to do: reciprocal. Whatever you charge, I’m charging.” He goes, “No, no, I don’t like that.” “No, no, whatever you charge, I’m going to charge.” I’m doing that with every country.
- MUSK: It seems fair.
Q Don’t you —
THE PRESIDENT: (Laughs.) It does.
- MUSK: It’s — it’s like fair is fair.
THE PRESIDENT: Nobody can argue with me. You know, the media can’t argue — I said — they said, “Tariffs — you’re going to charge tariffs?” You know, if I said, like, 25 percent they’d say, “Oh, that’s terrible.” I don’t say that anymore —
Q Can I — (inaudible) —
THE PRESIDENT: — because I say, “Whatever they charge, we’ll charge.” And you know what?
Q They stop.
THE PRESIDENT: They — then they say, “Oh, that sounds fair.”
- MUSK: All the president is saying is that —Q (Inaudible.)
MR. MUSK: — it needs to be at a level playing field and — and fair and square.
Q Yeah. And how does — how —
THE PRESIDENT: And we’re going to make a lot of money and a lot of businesses are going to come pouring in.
- MUSK: How can you argue with a fair and square situation?
Q Don’t — don’t you think most of them will look at the — the — for example, without America, China’s economy will tank. They need our business.
THE PRESIDENT: They do. Everybody needs us.
Q Everybody needs it.
THE PRESIDENT: And you know what?
Q Do- — don’t you think they’ll stop?
THE PRESIDENT: We only have so long left where we’re in this position. We’re the bank, and the bank is getting smaller and smaller and smaller. We — we’re the bank. We got to do this now. We can’t wait another 10 years and have a shell of a country left, because that’s what was going to happen.
