Is Elon Musk’s relationship with Donald Trump unraveling over tariffs?

Tesla Chief Executive Elon Musk’s latest overture to President Donald Trump, reportedly aimed at halting a new wave of U.S. tariffs, appears to have failed—marking what many observers see as a deepening divide between the billionaire entrepreneur and the U.S. President. According to a Washington Post report citing two people familiar with the matter, Musk made a direct personal appeal to Trump over the weekend, urging the President to reconsider his aggressive stance on tariffs that has unsettled global trade partners and sent markets reeling.

The appeal came ahead of a volatile Monday (April 7), during which Trump threatened a dramatic escalation—additional 50% tariffs on Chinese imports—unless Beijing rolled back its existing 34% retaliatory tariffs on American goods. Though Trump appeared marginally open to modifying aspects of his plan, sources said Musk’s intervention had not changed the administration’s course of action. The growing fallout between the two powerful figures signals a larger rift, not just on policy, but on the vision for America’s role in global commerce.

What’s behind Elon Musk’s opposition to Trump’s trade tariffs?

Musk has long been an advocate for free trade, often drawing from the ideas of free-market economists to underscore his position. In recent days, he took to social media to post a video of renowned conservative economist Milton Friedman explaining how global cooperation enables the production of a simple pencil. Friedman’s metaphor illustrated Musk’s broader concern: that international trade drives efficiency, innovation, and economic growth through the “impersonal operation of prices”—a system that, in Musk’s view, is jeopardized by escalating protectionism.

Tesla, which relies on both U.S.-based manufacturing and global supply chains, is especially exposed to the effects of tariffs. From lithium for its batteries to electronics components and assembly operations, the company’s ecosystem spans continents. With rising import costs and uncertain access to key international markets—particularly China—any new tariffs threaten to disrupt Tesla’s business model and squeeze profit margins.

Musk’s public criticism of Trump’s trade policy intensified following a notable decline in his own net worth, reportedly falling by $300 billion for the first time since last year, largely due to investor panic over the economic fallout from the tariff escalation. The broader U.S. stock market also responded negatively to the renewed trade tensions, with the S&P 500 sliding into bear market territory on the same day.

How did Musk’s clash with Trump’s trade adviser Peter Navarro unfold?

Tensions spilled over onto social media on Monday as Musk publicly exchanged barbs with Peter Navarro, Trump’s senior trade adviser and a key architect of the current tariff campaign. Navarro, known for his hawkish trade views and authorship of the book Death by China, has championed aggressive tariffs as a tool to rebuild American manufacturing and reduce the country’s trade deficit.

According to reports, Navarro dismissed Tesla as merely an “assembler” reliant on foreign-made components, arguing that companies like Musk’s benefited from trade practices that disadvantaged American workers. Musk responded forcefully on X, formerly Twitter, calling Navarro “dumber than a sack of bricks” and mocking his Harvard PhD in economics. The Tesla CEO also rebuked a user who defended Navarro, stating bluntly: “He ain’t built sh*t.”

While this spat may appear personal, it reflects a fundamental ideological divide. Musk sees technology and innovation as global pursuits requiring open borders for talent and materials. Navarro, by contrast, views economic nationalism as essential to America’s long-term prosperity and geopolitical strength.

Could this feud signal a political realignment for Elon Musk?

Until recently, Musk had been seen as an informal ally of Trump, especially on issues such as deregulation, energy independence, and entrepreneurialism. Despite past disagreements—including over climate change and pandemic policies—Musk had praised Trump’s business acumen and America-first agenda, even attending several high-level meetings during the Trump administration.

However, the current divergence over trade policy may be pushing Musk away from the Trump camp. The Tesla executive recently appeared at a conference organized by Italy’s right-wing party, where he advocated for the creation of a tariff-free economic zone between the U.S. and the European Union. “That has certainly been my advice to the President,” Musk told attendees, implying that his push for liberalized trade frameworks now stands in direct contrast to Trump’s protectionist escalation.

This ideological departure comes at a time when other major business leaders—particularly in the technology sector—are also expressing unease with the administration’s economic nationalism. Analysts say Musk’s high-profile defiance could signal a broader shift in elite business sentiment, particularly among those whose global operations hinge on seamless cross-border collaboration.

How do tariffs affect Tesla and global markets more broadly?

For Tesla, the cost of protectionism is more than theoretical. The company sources key raw materials such as cobalt, lithium, and nickel from overseas, and many of its vehicles are assembled using parts manufactured in Asia and Europe. As global supply chains grow more integrated, any disruption—such as increased import duties—introduces cost volatility and production delays.

China is a critical market for Tesla, both in terms of revenue and production. The company operates a gigafactory in Shanghai, which not only supplies domestic demand but also exports vehicles to other countries. A renewed tariff war with China could prompt Beijing to impose countermeasures, including restrictions on U.S. companies operating in the region. That would put Tesla’s Chinese operations—and its broader growth ambitions in Asia—at risk.

Historically, trade wars have produced unintended economic consequences. The Smoot-Hawley Tariff Act of 1930, often cited as a cautionary tale, deepened the Great Depression by choking off international trade. While today’s global economy is more resilient and diversified, some economists worry that a sustained tariff standoff between major powers like the U.S. and China could trigger recessionary pressures, especially if supply chain constraints worsen.

Is Musk’s influence in Washington waning?

Musk’s inability to sway Trump on tariffs—despite their previously cordial relationship—raises questions about the billionaire’s political capital in Washington. In recent years, Musk has cultivated a reputation as a power player in policy circles, particularly on topics such as EV tax credits, AI regulation, and space exploration. But the failure of his recent appeal suggests a potential cooling of that influence.

The White House, for its part, has sought to downplay the dispute. Press Secretary Karoline Leavitt reportedly brushed off the Musk-Navarro clash, stating, “Boys will be boys, and we will let their public sparring continue.” However, insiders say the administration is unlikely to budge on its tariff plans, particularly as Trump views them as central to his re-election strategy and positioning on China.

Some observers believe Musk’s next steps could involve building broader coalitions of business leaders and policymakers who share his vision of tariff-free trade. Whether this leads to tangible policy shifts remains uncertain. What is clear is that the once-aligned interests of America’s most powerful businessman and its President are now heading in different directions.