As Elon Musk revealed he was trying to convince President Donald Trump not to impose sweeping tariffs, U.S. manufacturers are linking the tariffs to industry problems.
In an interview with investor and entrepreneur Nikhil Kamath released Sunday, Musk said he warned Trump against imposing tariffs, saying they “would create market distortions.” Tesla’s CEO has previously expressed concern that import taxes will cause a recession and drive up commodity prices. In April, the electric car maker stopped taking orders for some models in China and subsequently faced retaliatory tariffs of 125%.
“The president has made it clear that he likes tariffs,” Musk said in the interview. “I tried to dissuade him from that perspective but without success.”
“Do you want tariffs on a personal level between you and other people? That would make life very difficult,” he continued. “Do you want tariffs between every city? No, that would be annoying. Do you want tariffs between every state in America? No, that would be catastrophic for the economy. So why do you want tariffs between countries?”
There was no immediate response from the White House wealthRequest for comment.
In addition to the tariffs threatening Musk’s own company, U.S. manufacturers are now linking Trump’s tariffs to a shrinking industry and the harsh layoffs they will need to make to stay in business. This is contrary to Trump’s intention to impose tariffs, which he claimed would be a catalyst for the return of U.S. factory jobs.
U.S. manufacturing contracted for the ninth consecutive month in November, according to the Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index Reports released on Monday showed declines in new orders and supplier deliveries, as well as employment. Some manufacturing workers surveyed attributed the slowdown in business and labor crunch to the tax and even said they had increased production overseas.
“We are starting to implement more permanent changes because of the tariff environment,” said one survey respondent in the transportation equipment industry, the report said. “This includes reducing staff, providing new guidance to shareholders, and developing more offshore manufacturing that would otherwise be used for U.S. exports.”
Recent employment data confirms the concerns of some manufacturers. Last month’s U.S. Bureau of Labor Statistics employment report showed that manufacturing employment fell by 6,000 jobs in October, although nonfarm payrolls increased by 119,000. Data show that the loss of factory jobs has led to the loss of 59,000 manufacturing jobs since Trump introduced tariffs in April.
