Musk: I oppose imposing huge tariffs abruptly. The supply chain is very complex, and if the price of one component suddenly doubles, it will disrupt the entire system. Tariff policies must be predictable so that companies can adjust their supply chains in time. Building a factory in the U.S. requires constructing buildings, installing equipment, and training employees. A sudden sharp increase in tariffs would impact the entire system, potentially leading to collapse.
This was Musk's statement during an interview on April 15th.
Musk's remarks hit the nail on the head regarding how tariff policies affect corporate supply chains. In today's deeply globalized world, supply chains have become intricate networks where a single change can trigger a series of reactions. Take Tesla as an example; its supply chain spans across the globe, with numerous components sourced from different countries and regions. Any sudden increase in costs due to tariffs could trigger a domino effect, causing a series of chain reactions.
Building a factory in the U.S. is indeed a massive undertaking, requiring significant time and capital investment at every step, from purchasing land to building facilities, installing equipment, and training staff. A sudden sharp rise in tariffs would put the company's initial investments at risk, disrupt strategic rhythms, and even deter businesses from entering the U.S. market. This would be counterproductive to America's goals of attracting investment and promoting industrial development.
Original source: https://www.toutiao.com/article/1829523346733132/
Disclaimer: The article represents the views of the author alone.