Tesla’s caught in a trade war trap. Blame Musk

Like many American manufacturers, Tesla is caught in a bind thanks to President Donald Trump’s trade war.

Like many American manufacturers, Tesla is caught in a bind thanks to President Donald Trump’s trade war. Unlike most of those other companies, though, Tesla has an added wrinkle – its CEO, Elon Musk, sometimes called the First Buddy for the close relationship he’s cultivated with the president. On Tuesday, Tesla reports earnings; that afternoon, Musk will take questions from investors. But there is a catch-22: If Musk continues his close ties to Trump, the company could alienate potential customers, both at home and overseas, who dislike Trump’s policies. If he distances himself from Trump, though, he risks the ire of the White House. It’s a lose-lose situation, and it’s a trap of Musk’s own making. The first quarter saw the company’s largest drop in sales after virtually nonstop double-digit sales growth. But the automaker’s finances are only part of what of what investors will want to know. Reassuring responses on any these topics could help reverse the slide that has wiped out about half of Tesla’s share value (TSLA) since mid-December — and perhaps restore some faith in the company. Tesla currently faces growing competition from other EV automakers, especially in China, while Musk has drawn backlash for his high profile in the Trump administration. Bad news on any of these fronts could cause a new downward spiral for the shares. “It’s turned into a nightmare for Tesla and for investors,” said Dan Ives, an analyst for Wedbush Securities, a longtime Tesla bull who nonetheless recently slashed his price target for Tesla shares. “The tariffs, the DOGE controversies, the brand damage — it’s been a perfect storm.”