Continue Reading Below
The electric car maker asked the U.S. Trade Representative’s office to approve exemptions for Model 3 car computers and center console screens, Reuters reported. Administration officials denied the requests in two letters dated May 29.
Tesla argued that the tariffs would cause “economic harm to Tesla, through the increase of costs and impact to profitability.”
Tesla representatives did not immediately respond to a request for comment on the report. Tesla shares briefly fell on the report but rallied more than 1 percent as of midday Thursday.
The Trump administration raised tariffs to 25 percent from 10 percent on $200 million worth of Chinese-made goods in May after trade talks stalled between the two nations. President Trump has threatened further duties if negotiations do not progress.
Tesla has struggled to sustain profitability in recent quarters as it makes heavy investments into Model 3 production. While Wall Street analysts have warned of sagging demand for Tesla vehicles, CEO Elon Musk dismissed those concerns earlier this week at the company’s shareholder meeting.
“I want to be clear, there is not a demand problem, okay?” Musk said, adding that Tesla has “got a shot at a record quarter” in the current period.
Tesla shares have fallen more than 30 percent this year on concerns related to cash burn and vehicle demand.