Tesla has quietly suspended new orders for its high priced Model S and Model X vehicles on its Chinese website, indicating increasing pressure from intensifying U.S.-China trade tensions. The suspension reported earlier by Reuters and MKTNews also includes Tesla’s WeChat mini program where the two imported models are no longer listed. Both cars are produced in the U.S. and exported to China and hence are particularly sensitive to increasing tariffs and geopolitical risk.
This action comes at a time of heightened volatility in international markets mainly due to assertive trade policies. Wall Street fell sharply on Thursday after investors responded to the increasing trade tensions. The S&P 500 lost nearly 3.5%, the Dow fell 2.5% and Nasdaq advanced 4.3%.
White House Press Secretary Karoline Leavit declared that the U.S. will no longer permit China to dump cheap foreign goods. Donald Trump conceded the market volatility, blaming it on ‘transition problems’ but still expressed optimism over a future trade agreement with China.
While the U.S. has suspended a 26% tariff on Indian products until July, steep tariffs on imports from China, Mexico and Canada continue. These trade pressures contribute to deteriorating market confidence and anxiety over inflation. As Federal Reserve officials stated, this level of uncertainty can restrain both business investment and consumer spending.
Tesla’s shutdown in China depicts how even tech corporations have not been impervious to effects of tensions on the global economy.
