This overview examines how tariff policies under Trump’s second term impacted Tesla, focusing on the power struggle between Commerce Secretary nominees Scott Bessent and Howard Lutnick, and the role of market manipulation in shaping policy decisions.
It highlights the interplay between political dynamics and economic pressures in influencing Tesla’s strategic position.
1. Tesla and Tariff Policies Under Trump’s Second Term
After Trump’s re-election, the likelihood of Tesla CEO Elon Musk taking a significant role in the administration increased.
Musk argued that universal tariffs would reduce the trade deficit, but he also stated that subsidies and tax benefits for Tesla should be reduced to ensure fair competition with other automakers.
This stance raised concerns that Tesla could be at a disadvantage when competing with other carmakers, particularly Chinese electric vehicle manufacturers.
The nominee for Commerce Secretary, Scott Bessent, is the CEO of Larry Kahn Capital Partners and a staunch advocate of America-first policies with a hardline stance on the trade deficit.
If Bessent becomes Commerce Secretary, there’s a high chance he’ll impose heavy tariffs on foreign products like Chinese electric vehicles.
This could negatively impact Tesla’s exports of vehicles produced in China to the U.S. However, if Tesla ramps up production within the U.S., it could position itself more favorably in this scenario, making it a double-edged sword.
2. Conflict Between Bessent and Lutnick
Both Bessent and Howard Lutnick, who was appointed as Commerce Secretary, come from Wall Street, but they clashed repeatedly over tariff policies. Lutnick, a tariff hardliner, strongly pushed Trump’s protectionist agenda.
On the other hand, Bessent took a more cautious approach to tariffs.
Initially, Lutnick held the upper hand as the key power player in the administration, while Bessent was sidelined and treated as irrelevant, with reports even suggesting he might leave the White House.
3. Tariff Implementation and Market Panic
Trump announced the implementation of reciprocal tariffs starting April 9, 2025.
This news sent the market into a panic, and hedge fund CEOs flocked to Bessent, pleading with him to block the tariffs.
However, with Lutnick firmly in control and driving the tariff agenda, Bessent had little influence.
At this point, Trump’s rhetoric remained hardline, and it seemed no one could stop the tariff policy.
4. April 7 Market Bombshell: 90-Day Tariff Suspension Rumor
On April 7, a rumor surfaced that Trump was considering a 90-day tariff suspension.
The market skyrocketed on this news, but within 10 minutes, a correction was issued. In just 30 minutes, the market experienced unprecedented volatility.
When the source of the rumor was revealed, it turned out Goldman Sachs had deliberately spread fake news to shake up the market.
At the time, this was brushed off as a typical hedge fund maneuver, but it later became a critical clue in understanding the broader developments.
5. Trump’s Discontent with Lutnick and a Shift in Dynamics
After April 7, strange rumors began circulating.
Reports emerged that Trump was growing dissatisfied with Lutnick and even showing frustration toward him.
Lutnick’s aggressive push for tariffs had apparently strained his relationship with Trump. From this point, the dynamics started to shift.
6. April 10 Bombshell Announcement 90-Day Tariff Suspension Confirmed
Today, on April 10, 2025, Trump officially announced a 90-day tariff suspension.
What’s surprising is that Bessent, not Lutnick, took the lead in the briefing, stepping into the spotlight and seizing control.
Trump commented during the announcement that he hadn’t anticipated the tariff suspension would have such a significant impact on the market.
While this statement was in response to today’s market volatility, it carries deeper implications when considering the fake news incident on April 7.
7. Why Did Bessent Gain the Upper Hand?
Looking at this sequence of events, the fake news on April 7 likely wasn’t just a market manipulation tactic.
With hedge funds pleading with Bessent to stop the tariffs, this fake news may have been a desperate move to convince Trump.
By demonstrating a market surge in response to the rumor, they likely aimed to show Trump that a tariff suspension could have a positive effect on the market.
This appears to have swayed Trump, leading to Bessent taking the lead over Lutnick.
Core and Essence
Trump’s tariff policy had a major impact on Tesla and the market.
Amid the conflict between Lutnick and Bessent, hedge funds used market manipulation (fake news) to influence Trump.
Ultimately, Trump’s decision to suspend tariffs allowed Bessent to take the lead.
This episode highlights how economic policy can be shaped by political power struggles and market pressures.
The fact that hedge funds used fake news to influence policy direction underscores the deep interconnection between markets and politics.
Conclusion
This entire process reflects a mix of power struggles within the Trump administration and market pressures.
For Tesla, the tariff suspension provides some breathing room for exporting vehicles from China, but in the long term, increasing U.S.-based production might be a more advantageous strategy.
The full truth may come to light later through a memoir from someone close to the administration, but for now, it seems plausible that the hedge funds’ desperate tactics were the decisive factor in shifting Trump’s decision.
Let me know if you’d like to dive deeper into any part of this.