Tesla (TSLA, Financial) saw its stock fall by 2% in early Wednesday trading after the company halted importing essential parts from China for its Cybercab and Semi trucks, according to a Reuters report. The move comes amid a fresh flare-up in the ongoing U.S.-China trade war, with President Donald Trump increasing tariffs on Chinese imports.
Earlier this month, Trump raised tariffs to a total of 145%, putting pressure on Tesla's supply chain. While the company had absorbed a 34% tariff before, it could not absorb the additional costs that the latest hikes brought.
This pause in imports could disrupt Tesla's efforts to expand into autonomous vehicles, a sector CEO Elon Musk has frequently highlighted as a key growth opportunity. Although Tesla manufactures its U.S. vehicles locally, it still relies on imports for certain critical components, many of which come from China.
The company is already grappling with declining sales, fierce competition from Chinese automakers, and a shift in consumer preference toward hybrid cars. Adding to the pressure is a consumer boycott in Europe, fueled by Musk's political stances.
