Trump Pushes Tesla Into the Eye of the Storm: Canada Strikes Back With $43 Billion Blow, Elon Musk Caught in the CrossfireDonald Trump thought he was paving the way for Tesla with a 25% tariff on imported cars. Instead, the move backfired—hard—on Elon Musk. In an unprecedented retaliatory measure, Canada has frozen a $43 billion EV incentive program that directly benefited Tesla, plunging the electric giant into yet another crisis. As U.S.–Canada relations unravel with each tariff hike, Tesla’s future now hangs by a thread amid a rising tide of backlash across the continent.

When Trump’s 25% Tariff Hit, the Auto Industry Shuddered

In a bombshell announcement earlier this April, former President Donald Trump declared a sweeping 25% tariff on all vehicles not manufactured in the U.S. “If the car is made in America, there’s no tax. If not—get ready to pay,” Trump challenged. His justification? To “protect American industry” and “end the ridiculous supply chain running through Canada and Mexico.”

Markets shook instantly. General Motors stock tumbled nearly 8%, Ford dropped 3%, and Stellantis—the parent company of Jeep and Chrysler—lost almost 4%. Tesla and Rivian were rare exceptions, seeing modest gains as investors bet they’d benefit from the new tariffs.

But the story didn’t unfold that simply.

Canada Fires Back: “The Old Relationship With America Is Over”

Without missing a beat, Canadian Prime Minister Mark Carney convened an emergency cabinet meeting in Ottawa and declared: “The old relationship between Canada and the United States—based on deep economic integration and security cooperation—is over.” His message couldn’t have been clearer: Canada is ready to “rebuild its entire economy” to counter Trump’s aggressive protectionism.

And Canada’s first punch? A retaliatory tax package totaling $43 billion—the largest in U.S.–Canada trade history—targeted squarely at the American auto industry.

But what stunned the tech world was the Canadian government’s second blow: Tesla is now officially barred from its national EV incentive program.

Elon Musk Banned in Canada: $43 Billion Evaporates Overnight

Canadian Transport Minister Chrystia Freeland announced a complete freeze on Tesla’s EV rebate claims, slamming the company for allegedly filing thousands of “suspicious” refund requests just hours before the program ended—with Tesla reportedly selling cars at a pace of two per minute, 24/7.

“All Tesla vehicles will be excluded from future incentive programs,” Freeland declared. She didn’t mince words, calling Trump’s tariffs “illegal” and affirming that Canada’s retaliation was a direct response to America’s “irrational trade policy.”

Tesla: From EV Unicorn to Global Lightning Rod

Canada’s retaliation is just the latest blow in a string of setbacks hammering Tesla. The company’s stock plunged 5.4% in a single day amid falling sales across China and Europe. International lawmakers are growing increasingly wary of Elon Musk’s open political alignment with Trump and his attempts to influence policy.

Meanwhile, Chinese EV giant BYD has officially overtaken Tesla in both revenue and vehicle deliveries in Q4 2024, becoming the world’s top EV manufacturer. With low prices and strong government backing, BYD is dominating markets where Tesla is rapidly losing ground.

Trade War Escalates: America Isolated, Tesla Abandoned

Europe, China, Brazil—even Singapore—are now pushing back against Trump’s protectionist stance. European Commission President Ursula von der Leyen vowed the EU would “defend its businesses and consumers at all costs.” Hildegard Müller, head of the German Automotive Industry Association, warned: “These tariffs will destroy global supply chains and cripple North American growth.”

In this escalating conflict, Tesla isn’t just isolated in Canada—it’s losing traction globally. Partly due to Musk’s political missteps, and partly due to the dangerous gamble taken by the man he so publicly admires: Donald Trump.

OUTRO:
Trump thought he was “saving” the American auto industry—and indirectly handing Elon Musk a golden ticket. In reality, he’s triggered a global backlash now hitting Tesla hardest. Canada struck first, but it’s anyone’s guess how many more nations will follow. As the world spirals into a new wave of economic nationalism, Elon Musk—the poster child of innovation—is being swept away as a political casualty. The biggest question now: Can Tesla survive the storm Trump unleashed?