The Trump administration ruled that Tesla will not be exempt from paying 25 percent tariffs on various parts imported from China that make up the interior of Tesla’s vehicles.
Reuters reported that the U.S. Trade Representative’s Office made the decision in late May, writing to Tesla in a pair of letters that the company would be forced to pay steep tariffs on the Tesla’s onboard computer and center screen, which are both manufactured in China.
{mosads}Bloomberg reported that the trade office told Tesla in the letters that the parts are “strategically important or related to ‘Made in China 2025’ or other Chinese industrial programs.”
Tesla did not immediately return a request for comment from The Hill on the administration’s decision.
The company previously argued in letters to the Trump administration that tariffs on Chinese technological imports cause “economic harm to Tesla, through the increase of costs and impact to profitability.”
News of the tariffs’ effects on Tesla’s line of vehicles, which could mean that the company would be forced to raise prices on the cars, come after Tesla announced earlier this year its cheaper Model 3 line of cars, while shifting sales to online-only to lower costs.
“The interior will be slightly better than was originally promised,” Tesla founder and CEO Elon Musk said at the time.
The Trump administration reignited a tariff war with China last month after weeks of negotiations over a landmark trade agreement stretched into months, with the U.S. accusing China of walking back parts of the deal already agreed upon.
President Trump said Monday that another round of duties on $300 billion in Chinese goods would go into effect immediately if he is unable to meet with China’s President Xi Jinping at an upcoming Group of 20 summit.