Trump Revives US Auto Industry with Import Tariffs

Uncharacteristically, the White House lawn on Tuesday (11/3/2025) resembled an exhibition space. Several Tesla electric cars were lined up there, including one of them being the Cybertruck.

After taking a look around, the President of the United States, Donald Trump, entered one of them, a shiny red sedan. "Wow..." said Trump as he stepped into the driver's cabin of the Tesla Model S. "So beautiful," he added.

Engaging in a brief conversation with Tesla's boss and his trusted confidant, Elon Musk, Trup stated that he would write a check worth 80,000 US dollars or approximately Rp 1.322 billion to purchase the car.

However, he will not be driving it. Trump admitted that he cannot drive a car. "This is a great product," said Trump, praising the four products displayed before him.

After that, on his social media platform Truth Social, Trump posted about the purchase of a Tesla unit. The purchase signifies trust and support for Musk.

"To the Republican Party, Conservatives, and all the great American citizens, Elon Musk 'is betting on his goal' to help our Nation, and he is doing an OUTSTANDING JOB!" wrote Trump.

The purchase was made after Tesla's stock plummeted. Tesla's sales dropped significantly in Europe, along with numerous reports of vandalism against its products.

Not only did he express his support for Tesla products, but Trump also threatened that perpetrators of vandalism would be labeled as domestic terrorists. "You do it to Tesla, and you do it to any company, we will catch you, and you will go through hell," he said.

A week later, shares of Chinese automaker BYD soared to a record high on Tuesday (3/18/2025). The surge occurred after the company launched new battery technology with super-fast charging.

The new battery technology and charging system called the Super e-platform has a peak power of 1,000 kilowatts (kW), making the battery fully charged in just five minutes. This power allows the car to travel up to 470 kilometers. BYD will use the new technology in its two new electric cars, the Han L sedan and the Tang L SUV.

Trump's purchase of the Tesla Model S has raised questions about his stance on "green mobility", the energy transition, especially in the automotive sector. During Joe Biden's administration, the US is pushing for the transition from fuel-powered cars to electric cars. The push is part of reducing emissions.

Shortly after taking office, Trump wanted to change that policy. He stopped the mandate to switch from gasoline cars to electric cars. Subsidies of up to $7,500 for electric car purchases were stopped. He also stopped the Green New Deal, the US clean energy transition policy created by Joe Biden.

On the other hand, he ordered massive mining of oil, natural gas, and coal. He argued that the US needed fuel for innovation and economic growth. "The rise of America is energy dominance. We repeal all the regulations that hinder manufacturing industry," EPA Director Lee Zeldin said in a Wall Street Journal op-ed.

Nanto Sriyanto, an observer of international relations at BRIN, said that this action shows Trump's true character, namely a businessman. On the one hand, according to him, Trump feels that he is still superior in fossil-based vehicle technology. On the other hand, Trump also wants to maintain the US's superiority in the use of new renewable energy.

Analysts say the US electric vehicle industry is lagging behind, especially China and South Korea, both in terms of battery production and product distribution.

China is very dominant in the lithium-ion battery technology supply chain, from mining (extraction) to manufacturing. China is estimated to control between 60 and 80 percent of the low-carbon technology supply chain.

Beijing is not only leading in the production and supply chain of electric vehicles. China is leading in the production of solar panels to green hydrogen.

Lydia Powell, a researcher at the ORF Center for Resource Management, said that almost 100 percent of the production capacity of Lithium-Ferrous Phosphate (LFP) batteries, a type of electric car battery. The "Bamboo Curtain Country" also controls 75 percent of the production capacity of lithium nickel manganese cobalt oxide (NMC) batteries.

China's battery production can supply not only automotive manufacturers in China itself. China's production can supply the needs of the US and Europe.

This is possible, Powell said, because China dominates and controls the processing of all the minerals essential for battery production. These include lithium, nickel, cobalt, high-purity manganese and graphite.

Powell said the combined production capacity of the US and Europe only accounts for 13 percent of global EV production, while Japan and South Korea, also known as battery and EV manufacturers, hold a minority market share.

The lag in mastering minerals for battery production is one of the reasons Trump controls important mineral mines outside the US. Ukraine and Greenland in Denmark are Trump's targets.

Three times the size of Texas, Greenland is known to have reserves of rare earth minerals, oil, and gas. Greenland also has a strategic position on trade routes.

The results of the study by the US Geological Survey (USGS), Greenland is estimated to have 1.5 million tons of rare earth metal reserves. In addition, there are about 17.5 billion barrels of untapped oil and 148.2 trillion cubic feet of natural gas off the coast of Greenland.

While Ukraine is known to have uranium, lithium, and titanium reserves. Control of mineral reserves in Ukraine and Greenland is believed to improve the US position in the renewable energy transition technology competition.

China is not only superior in terms of supply chain. China is superior because its products are competitively priced. Chinese electric cars can cost up to 40 percent less than US or European vehicles.

This will ultimately disrupt the revenues of US auto companies, which could lead to layoffs. This could cause unrest in the US working class.

The US, since the Biden era, has tried to turn things around, among other things, by imposing import duties (IDR) of up to 100 percent on Chinese electric vehicles. Trump has increased the IDR for various Chinese commodities. The hope is that the increase in IDR will increase the price of Chinese commodities. Thus, US commodities can compete.

The US, through the Inflation Reduction Act (IRA), also provides large incentives for the US auto industry. According to Powell, the incentives are expected to encourage the US auto industry to make electric vehicles that can compete with those made in China.

The US is also trying to dampen China with semiconductor export barriers. The barriers, according to an analyst at the Lee Kuan Yew School of Public Policy in an article in The Diplomat, are also to give the US auto industry time to develop electric vehicle manufacturing capabilities. Not just to make products, but to create cheaper supply chains and products.

In an article in Foreign Policy, Charles Yang said Trump has a chance to save the US auto industry. The Executive Director of the Center for Industrial Strategy said that his rescue method is similar to that implemented by US President Ronald Reagan.

Back then, Reagan asked Japan to build factories in the US if it wanted to access the US market. The factories had to partner with US companies and employ Americans.

Trump has repeatedly said the same thing. If foreign manufacturers want their products cheap in the US, build factories in the US and hire Americans.

The writer, the obligation to build factories must still be followed by tariffs and various other restrictions. In that way, the glory of the US automotive industry can be restored. (AP/AFP)