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      Is Trump driving the US into a recession? – in charts

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      Prospects for the US economy have cooled significantly in a matter of months. After outperforming its international peers last year, warning lights are flashing on a dashboard of economic indicators as analysts warn that Donald Trump’s erratic approach is hitting the world’s largest economy.Fears of a US recession this year are growing, in what is being called a “Trumpcession”, amid a sharp decline in business and consumer confidence as the president threatens punitive import tariffs on US allies and enemies alike.Most economists reckon a recession – defined as two consecutive quarters of shrinking economic output – can be avoided. But it is clear there are storm clouds gathering within the president’s first 100 days back in the White House.GDPUS growth in gross domestic product (GDP) had outpaced international peers in recent years, and since the Covid pandemic in particular – helped by the Biden administration pumping billions of dollars into the economy through the Inflation Reduction Act. The former president did not get much credit, though, as voters felt the squeeze from the period of high inflation triggered by the pandemic and Russia’s war in Ukraine.This week, the Atlanta Federal Reserve’s GDPNow, which measures GDP economic growth in real time, suggested the US economy would contract at an annual rate of 2% in the first quarter. However, this widely followed indicator can be volatile, and it is heavily influenced by the US trade deficit, which soared in January.Trade balanceThe US goods trade gap surged to $153.3bn in January. This was driven by record import volumes, an increase of $36.2bn to $329.5bn in total, as US businesses rushed to bring shipments into the country to avoid potential tariffs.US gold importsA significant driver of the import rise was inbound shipments of “finished metal shapes”, which include bars of gold. The trend is also attributed to traders rushing to get ahead of potential US tariffs. A widening trade deficit would normally weigh on a country’s GDP, because imports are subtracted from the measurement. But because gold bought to sit in a vault is not consumed or used in production, it is excluded.This means the Atlanta Fed is likely to be overestimating the hit to first-quarter GDP. Still, there are other signs that the US economy is cooling.InflationTrump had promised to “bring prices down, starting on day one” and “cut energy costs in half within 12 months after taking office”.Official figures show the headline annual rate as measured by the consumer price index was 2.8% in February, after an unexpected rise to 3% in January from 2.9% in December. Energy costs are down by 0.2% on an annual basis.The Organisation for Economic Co-operation and Development (OECD) said on Monday that Trump’s trade wars risked stoking inflation. It increased its US inflation forecast for 2025 to 2.8%, up from a previous estimate of 2.1% made in December.EmploymentThe US jobs market has boomed in recent years, and the unemployment rate dropped to 3.5% in early 2023, the lowest level since the year of the first moon landing in 1969. The rate has ticked higher in recent months, but remains historically low at 4.1%. This has been spurred by rapid growth in the numbers of jobs being added to the economy.Wage growth has also strengthened, and has remained above inflation since early 2023, helping households to rebuild some of their purchasing power lost during the recent rise in living costs.StocksThe US stock market has powered to record highs in recent years. Tech stocks and the “magnificent seven” – Alphabet, Amazon, Apple, Microsoft, Meta, Nvidia and Tesla – have led the charge in particular, buoyed up by investors betting on the growth of artificial intelligence.The Biden administration oversaw a strong stock market performance, helped by the economic recovery from the pandemic. However, Wall Street surged after Trump’s election victory in November, amid investor expectations for tax cuts that could increase company profits. Markets have been rattled in Trump’s first 100 days amid concerns over his erratic approach to the economy and the threat of tariffs hitting growth and stoking inflation.The US dollarThe US dollar had been rising sharply against other leading currencies, reflecting the strength of the economy and investor concerns that Trump’s policies could stoke inflation. Tariffs pushing up the price of imported goods, driving up inflation, could force the US Federal Reserve to hold back from cutting interest rates.With inflation having fallen back, the Fed cut its benchmark rate last year by a whole percentage point – from a range between 5.25% and 5% to between 4.25% and 4.5%. Higher inflation could limit its capacity for further rate cuts.A dramatically slowing economy could force the central bank to take action to lower borrowing costs. This has led to a pullback in the dollar in recent weeks.Washington has long held a “strong dollar” policy in the view that it supports the purchasing power of US consumers, helping to keep inflation low. The dollar is also used as the currency of choice for world trade and underpins the financial system. The US Treasury secretary, Scott Bessent, has said this approach is not changing. But Trump has argued that a weaker dollar would benefit US manufacturing by making exports cheaper for overseas buyers.Prices of inputs for manufactured productsBusiness surveys have shown a marked increase in input costs for US manufacturers, providing an early warning sign for growth and inflation. The price gauge on the Institute for Supply Management (ISM) manufacturing purchasing managers’ index (PMI) shows raw material costs rose sharply at the start of this year, in the first signs of supplier difficulties and discussions about who will pay for tariffs. The rise in input costs could dent US manufacturing output, and is likely to be passed on to consumers in the form of higher prices for finished goods.Consumer spendingUS consumer spending unexpectedly dropped in January for the first time in almost two years, with a fall of 0.2%, the biggest decrease in nearly four years. Cold temperatures in some parts of the country, as well as wildfires in California, were likely to have hit spending. However, some analysts warn consumer sentiment has taken a knock amid mounting concern over the strength of the economy. More

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      Notable Tesla investor says he hopes Musk’s government role is ‘short-lived’

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      A devoted investor in Elon Musk’s Tesla – and once a close childhood friend of the US president’s eldest son and namesake – says he hopes the world’s richest man’s role in cutting federal spending for Donald Trump’s administration is “short-lived” and that he returns to managing his businesses.Investment manager Christopher Tsai, whose firm has tens of millions of dollars tied up in Tesla, said the stock market had demonstrated clear signs of displeasure with Musk’s activities at the so-called department of government efficiency. And, in an interview with the Guardian, Tsai said: “I hope his involvement with [Doge] is short-lived so he can spend even more time on his businesses.”The chief investment officer and president of Tsai Capital, which reportedly manages a portfolio of about $137m, made it a point to say that his stated hope does not constitute a loss of faith in Musk or his company’s earning potential, despite opinion polls establishing the Tesla boss’s unpopularity with the American public and his net worth evidently tumbling about $23bn in recent days.Tsai said the stock markets also reacted negatively when Musk bought Twitter, the social media platform now known as X, in 2022 for $44bn. Yet he said Tsai Capital – which holds about 75,000 shares in Tesla as of its most recent quarterly filings – had made more than six times its money since first investing in the company in February 2020, even with the downturn in performance of late.Tsai recently told his investors in a letter that his firm considers Tesla to be more of a creator of advanced electronics and software that it attaches to cars rather than a traditional automotive manufacturer and he insisted that the EV maker remained “on a path to become one of the most valuable companies on the planet”.Nonetheless, he said “the market … reacting unfavorably to Elon Musk’s recent involvement in politics” was real. And though he said he thought Musk’s self-professed belief that government reforms are needed is genuine, Tsai expressed a hope that the Tesla boss’s role in Doge ultimately proved to be like other temporary commitments he had previously taken on.Tsai’s comments on what is his firm’s largest holding come at a time when Musk – who prominently supported Trump’s successful run for a second presidency – has advised the White House on the widespread firings of government employees and the dismantling of various services. Those services include US humanitarian aid and development work, with experts warning that their elimination could have life-threatening consequences.If a CNN poll conducted by the research firm SSRS is any indication, such measures have not gone over well with the public. The survey showed 53% of Americans disapproved of Musk, and 35% approved – leaving him about 18 points underwater.Those results were released on Wednesday, two days after Tesla’s stock fell more than 15% amid public protests against the company and vandalism reported at some of the brand’s dealerships.Tsai’s descent from a lineage of legendary investors sets his voice apart from some of the others who have weighed in on Musk, Doge and Tesla at the two-month mark of the second Trump presidency.His paternal grandmother was Ruth Tsai, who became the first woman to trade on the floor of the stock exchange in Shanghai, China, in 1939 during the second world war. Her earnings helped her send her son – Tsai’s late father, Gerald – to college in the US, where he ultimately settled and made a name for himself as a financier and fund manager.Gerald Tsai Jr also eventually became the chief executive officer of the financial services giant Primerica, which – along with its subsidiary Commercial Credit Group – helped build Citigroup, as the New York Times has reported.A notable aspect of Tsai’s trajectory was his father’s acquaintance with Trump when the latter was primarily a real estate mogul in Manhattan. The families were close enough that, in his youth, Tsai considered Donald Trump Jr his best friend, vacationing with him and once going to a baseball game with his siblings, their mother and their father.Tsai said the younger Trump was one of the first people to whom he came out as a gay man, doing so before he did to Gerald. “That’s cool,” Tsai recalled Trump Jr telling him, while he said Gerald took a longer time to accept it.A registered Democrat, Tsai said he had not had “a meaningful conversation with any member of” the president’s family since a lunch with Donald Jr in January 2014 – more than two years before Trump Sr clinched the Republican White House nomination and won his first presidency. Tsai said they just “went in different directions” as the Trumps moved into politics, and their family patriarch aligned himself closely with Musk as he clinched the White House a second time in November’s election.Meanwhile, the elder Tsai, who married and divorced four times and once survived crashing in a helicopter into New York’s Hudson River before his death in 2008, did not pass on much of his larger-than-life personality to Christopher.The younger Tsai for instance has been married to his spouse – with whom he is raising teenaged twins – since 2005.But, as Christopher put it, Gerald Tsai Jr did teach him to learn about – and love – trading stocks in his childhood. He began investing at 12 and started his capital firm in 1997 at age 22.Tsai said some of the principles to which he adheres – whether as a philanthropic donor to artistic as well as environmental causes – were inherited from the first Chinese American to be CEO of a Dow Jones Industrial company.“My father would say you have to do deep work in order to figure out where value is and to uncover great situations,” Tsai said. “Our job as investors is to figure out what’s real, what’s not real, what that’s worth, what’s priced into the stock and where the company’s valuation is going.” More

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      Tesla tells US government Trump trade war could ‘harm’ EV companies

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      Elon Musk’s Tesla has warned that Donald Trump’s trade war could expose the electric carmaker to retaliatory tariffs that would also impact other automotive manufacturers in the US.In an unsigned letter to Jamieson Greer, the US trade representative, Tesla said that it “supports fair trade” but that the US administration should ensure that it did not “inadvertently harm US companies”.Tesla said in the letter: “As a US manufacturer and exporter, Tesla encourages the Office of the United States Trade Representative (USTR) to consider the downstream impacts of certain proposed actions taken to address unfair trade practices.”The company, led by Musk, a close ally of Trump who is leading efforts to downsize the federal government, said it wanted to avoid a similar impact to previous trade disputes which resulted in increased tariffs on electric vehicles imported into countries targeted by the US.Tesla said: “US exporters are inherently exposed to disproportionate impacts when other countries respond to US trade actions. The assessment undertaken by USTR of potential actions to rectify unfair trade should also take into account exports from the United States.“For example, past trade actions by the United States have resulted in immediate reactions by the targeted countries, including increased tariffs on electric vehicles imported into those countries.”Trump has imposed significant tariffs that will affect vehicles and parts made around the world.The EU and Canada have announced large-scale retaliations for tariffs on steel and aluminium imports into the US, while the UK has so far held off on announcing any countermeasures.Tesla’s share price has fallen by more than a third over the last month over concerns about a potential buyer backlash against Musk, who has shown support for Germany’s far-right Alternative für Deutschland party, theatrically brandished a chainsaw at a conservative conference, and accused Keir Starmer and other senior politicians of covering up a scandal over grooming gangs.skip past newsletter promotionafter newsletter promotionThis week Trump said said he was buying a “brand new Tesla” and blamed “radical left lunatics” for “illegally” boycotting the EV company – a day after Tesla’s worst share price fall in nearly five years.Tesla said: “As USTR continues to evaluate possible trade actions to rectify unfair trade practices, consideration should also be given to the timeline of implementation. US companies will benefit from a phased approach that enables them to prepare accordingly and ensure appropriate supply chain and compliance measures are taken.” More

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      Donald Trump threatens 200% tariff on EU wine and champagne

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      Donald Trump has threatened a 200% tariff on wine and champagne from European Union countries, in the latest threat of escalation in the global trade war started by the US president against the country’s biggest trading partners.Trump said in a post on Thursday on his Truth Social platform that the tariffs on all alcoholic products from the bloc would be retaliation for a “nasty” 50% levy on American bourbon whiskey announced by the EU.The EU’s action against bourbon whiskey – due to come into force on 1 April – was itself part of a €26bn ($28bn) response to Trump’s 25% tariffs on steel and aluminium imports, which came into effect on Wednesday.Trump claims the US’s trading partners have taken advantage of the US and that tariffs will help him to bring back jobs – a theory that is roundly rejected by most mainstream economists.The tariffs on the EU, Canada, Mexico and China – and those imposed in retaliation – threaten to tip the US economy into recession, and Trump has admitted there may be a “period of transition” while businesses start producing more in the US.The White House has so far shrugged off the concerns of investors, after his tariff announcements were greeted with heavy stock market sell-offs that have wiped out all of the share price gains since his election in November.Despite starting the trade war, Trump appeared to be infuriated by the EU’s retaliatory measures.He wrote: “If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES.“This will be great for the Wine and Champagne businesses in the U.S.,” he added.The US already circumvents the protected geographical origin rules on European products – American supermarkets are full of US-made imitations of champagne and other delicacies such as parmesan and gorgonzola.Senior figures in Europe vowed to hold firm. “We will not give in to threats,” the French foreign trade minister, Laurent Saint-Martin, wrote on X. “Donald Trump is escalating the trade war he chose to unleash.”France was “determined to retaliate” and would “always protect our sectors”, he added.Trump wrote on Thursday: “The U.S. doesn’t have Free Trade. We have “Stupid Trade.” The Entire World is RIPPING US OFF!!!” Channeling the former US president Franklin D Roosevelt, he added: “The only thing you have to fear, is fear itself!”In France, independent winemakers represent 60% of the country’s wine production. They are watching closely to see how the dispute plays out. “We’re very prudent at this stage,” said Jean-Marie Fabre, who makes wine in Fitou in the south of France.French winemakers were concerned they could be swept into the broader tariff row, and had feared tit-for-tat measures when the EU announced retaliatory tariffs on some American products, including US whiskey.skip past newsletter promotionafter newsletter promotion“The entire wine sector has been through a succession of crises of different kinds which have already really tested us, including the Covid crisis, inflation, the war in Ukraine and the climate issues,” said Fabre, who is also head of the Independent Winemakers of France. “Winemakers, whatever their size, but particularly small winemakers, have found themselves in a fragile position.”European shares fell on Thursday, amid concerns over the impact of a trade war. France’s Cac 40 index gave up morning gains to fall by 0.3%, while Germany’s Dax index fell by 0.6%.Leading European drinks giants came under pressure. Shares in Pernod Ricard fell almost 4% and Rémy Cointreau declined 3.5%. LVMH, owner of Moët & Chandon, slipped 1.4%.In New York, the benchmark S&P 500 dipped 0.7% after Wall Street opened for trading. Trump’s officials have attempted to brush off days of stock market declines, claiming they are not worried about it.“We’re focused on the real economy,” the treasury secretary, Scott Bessent, said during his latest interview on CNBC news network, a fixture on Wall Street. “I’m not concerned about a little bit of volatility over three weeks.”Trump also repeated a longstanding criticism of the EU, that the trading bloc “was formed for the sole purpose of taking advantage of the United States”, calling it “one of the most hostile and abusive taxing and tariffing authorities in the world”.Ursula von der Leyen, the president of the European Commission, the EU’s executive, said on Wednesday that trade between Europe and the US “brought prosperity and security to millions of people, and trade has created millions of jobs on both sides of the Atlantic”. More

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      EU retaliates against Trump tariffs with €26bn ‘countermeasures’

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      The EU has announced it will impose trade “countermeasures” on €26bn (£22bn) worth of US goods in retaliation after Donald Trump’s tariffs on steel and aluminium imports, escalating a global trade war.The president of the European Commission, Ursula von der Leyen, called the 25% US levies on global imports of the metals “unjustified trade restrictions”, after they came into force at 4am GMT on Wednesday.“We deeply regret this measure,” von der Leyen said in a statement, as Brussels announced it would be “launching a series of countermeasures” on 1 April. “The European Union must act to protect consumers and business,” she added.The commission said it would be targeting industrial products in response, including steel and aluminium, as well as household tools, plastics and wooden goods.In addition, the EU measures will affect some US agricultural products, such as poultry, beef, some seafood, nuts, eggs, dairy, sugar and vegetables, provided they are approved by member states.The retaliatory measures will also entail Brussels reimposing the tariffs on US goods including bourbon whiskey, jeans and Harley-Davidson motorbikes that it introduced during the first Trump term.“We will always remain open to negotiation. We firmly believe that in a world fraught with geopolitical and economic uncertainties, it is not in our common interest to burden our economies with tariffs,” von der Leyen said.France’s European affairs minister, Benjamin Haddad, said on Wednesday that the EU could “go further” in its response to the US tariffs. The measures “are proportionate”, Haddad told TF1 television. “If it came to a situation where we had to go further, digital services or intellectual property could be included,” he said.Britain would not issue its own immediate measures in response to the US tariffs but was going to “reserve our right to retaliate”, a UK minister said.The exchequer secretary to the Treasury, James Murray, told Times Radio the levies were disappointing but “we want to take a pragmatic approach, and we’re already negotiating rapidly toward an economic agreement with the US, with the potential to eliminate additional tariffs”.Asked by Sky News whether Britain’s response to the levies could be called weak in comparison with Brussels, Murray said the UK was in a “very different position than the EU” and does not want to be “pushed off course” as it pursues a trade deal with Washington.“We think the right response is to continue pragmatically, cool-headedly, without a knee-jerk response, but toward our economic agreement that we’re negotiating with the US to secure, because that’s in the best interests of the UK,” he said.skip past newsletter promotionafter newsletter promotionHis comments came after the prime minister, Keir Starmer, said on Tuesday that Britain would not respond with its own counter-tariffs, after last-ditch efforts to persuade Trump to spare British industry from his global tariffs appeared to have failed.The UK steel industry warned that Trump’s tariffs “couldn’t come at a worse time”, and said the move would have “hugely damaging consequences for UK suppliers and their customers in the US”.Gareth Stace, the director general of the trade association UK Steel, called the Trump administration’s move “hugely disappointing”. He said: “President Trump must surely recognise that the UK is an ally, not a foe. Our steel sector is not a threat to the US but a partner to key customers, sharing the same values and objectives in addressing global overcapacity and tackling unfair trade.“These tariffs couldn’t come at a worse time for the UK steel industry, as we battle with high energy costs and subdued demand at home, against an oversupplied and increasingly protectionist global landscape.”The introduction of EU measures came after a day of drama on Tuesday, when Trump threatened to double tariffs on Canadian steel and aluminium in response to Canadian threats to increase electricity prices for US customers.The US president backed off from those plans after the Ontario premier, Doug Ford, agreed to suspend his province’s decision to impose a 25% surcharge on electricity exports to the states of Minnesota, Michigan and New York. More

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      Trump threatens to raise Canadian steel and aluminum tariffs to 50%

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      The looming trade war between the US and Canada escalated on Tuesday as Donald Trump threatened to double tariffs on Canadian steel and aluminum after Canadian threats to increase electricity prices for US customers.On Tuesday morning Trump announced plans to double tariffs on Canadian steel and aluminum from 25% to 50% and once again threatened to annex Canada as retaliation for the province of Ontario’s imposition of a 25% surcharge on electricity exports to several US states, in a dramatic escalation of the trade war between the two ostensibly allied countries.The news set off another stock market sell-off on Wall Street that was tempered when Ontario’s premier, Doug Ford, said he made a deal with the US commerce secretary, Howard Lutnick, to suspend Canada’s 25% tariff on exports of electricity to Michigan, New York and Minnesota after Lutnick agreed to discuss renewing existing trade relations.Incorrectly calling Canada “one of the highest tariffing nations anywhere in the world”, Trump said he had instructed his secretary of commerce to increase levies on the metals due to start Wednesday morning. He also threatened more tariffs on 2 April on the car industry that would “essentially, permanently shut down the automobile manufacturing business in Canada”.Asking rhetorically why the US received electricity from another country, he accused Canada of using energy, “that so affects the life of innocent people, as a bargaining chip and threat” and said “they will pay a financial price for this so big that it will be read about in History Books for many years to come”.After the news that Ontario was suspending its electricity hikes, Trump said he would “probably” reconsider imposing the higher tariffs on Canada.Mark Carney, Canada’s incoming prime minister, called Trump’s latest move “an attack on Canadian workers, families and businesses” and promised to “keep our tariffs on until the Americans show us respect and make credible, reliable commitments to free and fair trade”.The Trump administration was also reportedly preparing on Tuesday to institute a new rule that would require some Canadians staying in the US for more than 30 days to register personal information and agree to fingerprinting, according to Bloomberg. Currently there is largely frictionless travel for citizens between the two countries.The fractious economic battle between the US and Canada has developed even graver undertones as Trump makes increasingly aggressive threats for the US to absorb its northern neighbour. Although at first claiming that he wanted Canada to crack down on fentanyl, Trump has now accused the US ally of underpaying for military protection and incorrectly described the trade imbalance with Canada as a $200bn subsidy from the US.Trump coupled his tariff declaration with openly aggressive language about making Canada “our cherished Fifty First State”, repeating a constant refrain over the last few months. He claimed American statehood for Canada would make “all tariffs, and everything else, totally disappear”, called the border “an artificial line of separation drawn many years ago” and suggested the Canadian national anthem, O Canada, would become a state anthem.The rhetoric has inspired a rare unity among Canadian politicians, with Carney campaigning for Liberal leader on standing up to Trump, and saying to a standing ovation in his acceptance speech on Sunday that “Canada never, ever will be part of America”.Trump’s moves are just the latest in the chaos around the president’s trade policy, amid tumbling stock markets and fears it could trigger a possible US recession.The White House’s strategy so far has been to play down the anxiety on Wall Street, even as stocks waver. After Trump refused to rule out the possibility of a recession in an interview with Fox News over the weekend, the Nasdaq had its worst day on Monday since September 2022, dropping 4%.Shares in US automakers also fell after the announcement, as traders bet that high metal tariffs would drive up costs for the American industrial sector, eating into their profits. Ford Motor dropped nearly 4%, while General Motors dipped by 1.3%. Shares in the carmaker Stellantis – which has several manufacturing facilities in Canada – fell by more than 5%.Price premiums for aluminum on US physical market soared to a record high above $990 a metric ton, Reuters reported.The Ontario premier Ford has said that Trump must take the blame if there is a recession in the US, telling MSNBC on Tuesday: “If we go into a recession, it will be called the Trump recession.”Ford has said in the past that he would be willing to cut off US energy supply from Canada completely in response to Trump’s tariffs.“We will be relentless,” Ford said, adding he would not “hesitate” to shut off electricity exports to the US if Trump continues the trade war.“That’s the last thing I want to do. I want to send more electricity down to the US, to our closest allies or our best neighbors in the world. I want to send more electricity.” But, he said, “Is it a tool in our toolkit? One hundred per cent, and as he continues to hurt Canadian families, Ontario families, I won’t hesitate to do that.”Ford also encouraged American CEOs, who have been largely silent on the trade war and threats to Canadian sovereignty, to speak up. On Tuesday Trump is set to meet with the Business Roundtable, an influential group of business leaders that includes the CEOs of Google, Amazon and JPMorgan.Ford said: “We need those CEOs to actually get a backbone and stand in front of him and tell him, ‘This is going to be a disaster. It’s mass chaos right now.’”The group said in a statement last week that while it supported trade policies that “open markets to US exports, revitalize the domestic manufacturing base and de-risk supply chains”, it called on the White House to “preserve the benefits” of the US-Mexico-Canada Agreement (USMCA), which Trump himself signed in 2020 but has since apparently violated by suddenly imposing steep tariffs on both countries.Tariffs of 25% on steel and aluminum imports were already slated to apply to all countries globally on Wednesday, after Trump announced them last month.Both consumer and business confidence has dropped in the US since Trump entered office.A survey published on Monday in Chief Executive magazine found that CEOs’ rating of the current business climate fell 20% in January, from 6.3 out of 10 – with 1 being “poor” and 10 being “excellent” – to 5, the lowest since spring 2020.
      Meanwhile, consumer confidence measured by the Conference Board found that confidence dropped over 6% in February, its biggest month-to-month drop since August 2021.Trump had not yet spoken with Carney, said the White House press secretary Karoline Leavitt on Tuesday, arguing that the tariffs on Canadian metals “was a retaliatory statement due to the escalation of rhetoric that we’ve seen out of Ontario, Canada”.“I think Canada is a neighbor. They are a partner. They have always been an ally,” she said, adding: “Perhaps they are becoming a competitor now.” More

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      Trump calls Tesla boycott ‘illegal’ and says he’s buying one to support Musk

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      Donald Trump said he intends to buy a “brand new Tesla” and blamed “Radical Left Lunatics” for “illegally” boycotting Elon Musk’s electric vehicle company a day after Tesla suffered its worst share price fall in nearly five years.On Tuesday, several Tesla vehicles were parked in the driveway of the White House for Trump to pick which vehicle to buy, accompanied by Musk and his young son. In August 2024, a podcaster gifted Trump a Cybertruck.“Elon Musk is ‘putting it on the line’ in order to help our Nation, and he is doing a FANTASTIC JOB! But the Radical Left Lunatics, as they often do, are trying to illegally and collusively boycott Tesla, one of the World’s great automakers, and Elon’s ‘baby,’ in order to attack and do harm to Elon, and everything he stands for,” Trump posted on Truth Social on Tuesday morning.Tesla’s shares fell hard on Monday as markets reacted to the threat of a recession and Trump’s tariff plans. Tesla’s slide came amid widespread protests over the billionaire Musk’s influence in the federal government at Tesla dealerships, a boycott campaign, car owners selling their Tesla vehicles, and activists pushing members of the public to sell Tesla shares.“In any event, I’m going to buy a brand new Tesla tomorrow morning as a show of confidence and support for Elon Musk, a truly great American. Why should he be punished for putting his tremendous skills to work in order to help MAKE AMERICA GREAT AGAIN???”Trump’s claim the boycott is “illegal” is false. The supreme court ruled in 1972 that the first amendment of the US constitution protects Americans’ right to protest against private businesses.View image in fullscreenMusk’s net worth decreased by $29bn yesterday alone, and has fallen by $132bn over the past 12 months, as Tesla shares’ gains have been wiped out. Tesla shares have declined every week since Trump took office, declining 15% on Monday alone. He remains the richest man in the world with a fortune of more than $320bn, according to Forbes.Tesla’s board members, including Musk’s brother Kimbal Musk, have offloaded millions of dollars worth of shares in recent months. Tesla vehicle sales abroad have also dropped significantly, including by 76.3% in Germany in February 2025 compared with February 2024.The boycott has emerged as Musk’s so-called “department of government efficiency” (Doge) has wreaked havoc throughout the federal government in a proclaimed effort to reduce federal spending. The access and actions by Musk and his team have incited concerns over the lack of transparency, false claims about cancelled contracts and grants and the amount of savings made.Polls have shown public support for Doge is mixed to unfavorable, with the vast majority of Democratic voters polling that Musk has too much power. More

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      ‘Major brand worries’: Just how toxic is Elon Musk for Tesla?

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      Globally renowned brands would not, ordinarily, want to be associated with Germany’s far-right opposition. But Tesla, one of the world’s biggest corporate names, does not have a conventional chief executive.After Elon Musk backed Alternative für Deutschland (AfD) – calling the party Germany’s “only hope” – voters are considering an alternative to Tesla. Data released on Thursday showed that registrations of the company’s electric cars in Germany fell 76% to 1,429 last month. Overall, electric vehicle registrations rose by 31%.Tesla’s biggest shareholder, who has voiced support for rightwing leaders around the world, is now a de facto US cabinet member under Donald Trump’s administration.Tesla’s valuation has become inextricably tied to Musk’s politics. After he spent $288m backing Trump’s 2024 election victory, Tesla’s valuation passed $1tn. Yet Musk’s political involvements – unprecedented for the head of a company that size – could also be having a negative effect.On Friday, a group of Extinction Rebellion activists occupied a Tesla store in central Milan. Activists chained themselves to the cars’ tyres, and others glued themselves to the windows along with the slogans “Make millionaires pay again” and “Ecology for all, no ecofascism”.Analysts are openly wondering if Musk is causing lasting damage to a brand he has made synonymous with electric cars and, by extension, liberal aspirations to tackle climate change.Tesla was approached for comment.Tesla was the world’s biggest producer of battery electric cars in 2024, but sales dropped to 1.79m, the first time the company has endured a sales decline since 2011 after years of rapid growth that made it the world’s most valuable carmaker.The manufacturer said in January that global sales would grow during 2025, and Wall Street analysts expect Tesla to sell more than 2m cars this year. But even those forecasts would hardly represent a blazing return to form. As recently as October, Musk said he expected 20% to 30% annual sales growth, implying as many as 2.3m cars sold.“Customer retention will be key in 2025 as customers may begin to look for an ‘Alternative for Tesla’,” said Matthias Schmidt, a Berlin-based electric car analyst.View image in fullscreenOther analysts are more optimistic. Dan Ives, of Wedbush Securities, a US financial firm, is a longstanding Tesla supporter. Ives believes the company’s share price could rise from its current level of about $280 to hit $550. However, he acknowledged the negative perception created by Musk’s partnership with Trump and his work on the so-called department of government efficiency (Doge) – an issue he described as the “elephant in the room” for the brand.Calling them “major brand worries for Tesla”, he added in a note to investors that the direct impact on sales should be relatively small. “We estimate less than 5% of Tesla sales globally are at risk from these issues despite the global draconian narrative for Musk.”Ives said that Tesla was on the verge of making a new, cheaper vehicle – costing less than $35,000 – and would “own” the autonomous vehicle market, factors that would help push Tesla to a valuation of more than $2tn.Nonetheless there are clear signs in the US, Tesla’s biggest market, that would-be buyers are wavering, according to Strategic Vision, a market research company. Its new vehicle experience study tracks the buying preferences of up to 250,000 car buyers in the US, and it shows a sharp decline in regard for Tesla since Musk bought Twitter (now X) in 2022.Shortly before the multibillionaire bought the social media platform, 22% of new vehicle buyers would have “definitely” considered buying a Tesla. By the end of 2024 it was just under 8%. The proportion who would not consider buying a Tesla has risen from 39% over the same period to 63%.According to Strategic Vision, approximately half of non-Tesla EV buyers identify as Democrat or liberal, compared with about 20% identifying as Republican or conservative. Among Tesla owners, the Democrat owner group has fallen from 40% during the Biden administration to 29% now, with the Republican group averaging about 30% since 2021.“Democrats, the majority party of EV owners, are now actively rejecting Tesla and choosing other options,” said Alexander Edwards, president of Strategic Vision.Meanwhile, global protests against Musk and Tesla are intensifying. In America, there have been demonstrations outside dozens of Tesla showrooms, while in the UK a guerrilla poster campaign – “0 to 1939 in 3 seconds” – has emphasised Musk’s fascist-style salute at an inauguration rally. In Germany, he was recently caricatured on a carnival float as “Napo-Elon”.Ross Gerber, chief executive of the US investment management firm Gerber Kawasaki, which holds shares in Tesla, said Musk had given people an outlet to express their disdain for his politics.skip past newsletter promotionafter newsletter promotionHe said: “He has left himself open to a direct way for people to attack him if they don’t like his politics. It’s ironic because the vehicles were made for liberals who care about the environment and it has become a symbol of the conservative movement.”Tesla is valued at about $847bn – still more than the next 10 carmakers combined. Few investment banks have included any effect from Musk in their work trying to accurately value Tesla. Still, there are further reports of falling sales. In Australia, February sales were down about 72% compared with the same month in 2024, according to data released this week.View image in fullscreenSeveral analysts have raised concerns that the current valuation is much too high. JP Morgan is among the most pessimistic of the investment banks, suggesting that Tesla’s share price could fall as low as $135 – or a valuation closer to $400bn. Musk is the largest shareholder in Tesla, a key contributor to his status as the world’s wealthiest person.“Tesla shares continue to strike us as having become completely divorced from the fundamentals,” wrote JP Morgan in January, pointing out that 2025 profit expectations were down 70% since 2022. The share price has more than doubled since then – something that would not usually happen when investors expect lower profits.Analysts at UBS, a Swiss investment bank, concur, saying that Tesla’s valuation “continues to confound us”, with big risks in its efforts to make money from self-driving cars or humanoid robots.While sales declined steeply in January in several markets, several analysts have warned against relying on numbers for a single month. Schmidt said: “Some consumers are likely holding back purchase decisions and waiting for the updated Model Y which arrives this month. The big question though is, are these just the die-hard Tesla enthusiasts which remain in line while other potential consumers jump ship?”There have also been positive signs elsewhere. UK Tesla sales fell in January, but bounced back by a fifth in February to leave sales up year-on-year for 2025 so far. In the US there were also signs of a recovery after a fall in January, with preliminary data for February indicating rebound sales of about 42,000 cars, up 14% year-on-year, according to Wards Intelligence.But the UK sales figures also highlight another concern for investors: that Tesla’s lead on rivals could be narrowing as a flood of new models arrive. Tesla’s electric market share for the first two months of 2025 was 11%, down from 14% in 2024, according to New Automotive, a research group.Ben Nelmes, New Automotive’s chief executive, said: “The impact of Elon Musk’s political views on Tesla’s sales may have been overstated, but Tesla is gradually losing its position as the dominant EV seller in the UK as other carmakers bring more up-to-date and cheaper models to market.”In China Tesla is under big pressure from a slew of cheaper competitors, most notably BYD. In Tesla’s second-biggest market, sales of its China-made EVs dropped 49% year-on-year in February, to the lowest level since August 2022.Edward Niedermeyer, author of Ludicrous – a 2019 book about Tesla which focuses on Musk’s habit of making bold claims about the business that don’t stack up – argues that the prospect for new business like robotaxis and robots are distant. “The unique moment that we’re in now is the business has peaked,” he said.The worry for Tesla investors is whether Musk has turned that peak into a cliff-edge.Additional reporting Lorenzo Tondo More