U.S. turns down Tesla bid for tariff exemption for Autopilot ‘brain’

U.S. trade officials turned down Tesla Inc’s bid for relief from President Donald Trump’s 25-percent tariffs on the Chinese-made Autopilot “brain” of its Model 3 among other electric automobiles, one of over 1,000 product denials associated with China’s industrial development plans.

According to documents submitted by the U.S. Trade Representative’s office (USTR) and seen by Reuters, exclusion requests from Tesla and others for Chinese-made products from aircraft parts to biotechnology instruments were rejected because they were deemed “strategically important” to the “Made in China 2025” program.

Tesla refused to comment.

The company has other pending tariff exclusion requests for duties on the Chinese-made Model 3 Center Screen and for the Model 3 Car Computer before USTR.

Tesla stated in a securities filing on Monday: “Our expenses for producing our vehicles in the U.S. have also been impacted by import duties on certain components sourced from China.”

The denials show a systematic approach by the Trump administration to thwart China’s attempts to develop high-technology industries that Washington alleges advanced from theft and forced transfer of U.S. intellectual property.

Made in China 2025, a program intended at increasing China’s prowess in 10 strategic industries dominated by the United States, is at the heart of trade negotiations and U.S. demands for sweeping modifications to China’s policies.

Those industries consists of new energy and autonomous vehicles, aerospace, semiconductors, biopharmaceuticals, robotics and artificial intelligence.