Tesla sues US govt over tariffs on Chinese imports

Tesla Inc. has sued to stop the United States government from collecting tariffs on parts it imports from China for the manufacturing of its electric cars.

Bloomberg reported that Tesla on Monday filed the suit concerning tariffs imposed by the Office of the U.S. Trade Representative (USTR) on imports from China in the U.S. Court of International Trade in New York.

The carmaker in its filing called tariffs "arbitrary, capricious, and an abuse of discretion." It wants the court to declare the duties unlawful and order a refund, with interest, amounts already paid.

The USTR last year denied Tesla's bid to avoid tariffs of 25 percent on the Chinese-made computer and display screens it uses in its Model 3 electric car.

At the time, the company argued that the increased cost imposed by the tariffs would cause economic harm through the increase of costs and impact to profitability.

In 2018, the company estimated that additional tariffs on parts sourced from China would decrease gross profit by US$50 million in the fourth quarter of the year.

Tesla shares on Wednesday tumbled 10 percent to US$380.36 after its annual "Battery Day" event, in which its CEO Elon Musk said the company will cut costs to build a cheap electric car with a price tag of US$25,000 in three years.

Other automakers, including General Motors, Volvo, Ford and Mercedes-Benz have also joined the battle to sue the U.S. government because of the increasing costs caused by additional tariffs on auto parts from China, AFP reported.

Mercedes-Benz argued that U.S. law "did not confer authority on defendants to litigate a vast trade war for however long, and by whatever means, they choose," AFP reported.

(Source: CGTN)