How Trump’s China Tariff Deal Benefits Tesla

Good morning! It’s Wednesday, May 14, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you’ll find the most important stories that are shaping the way Americans drive and get around.

In this morning’s edition, we’re looking at how Trump’s trade deals help Tesla, as well as how they’re hurting Subaru. Plus, new tariffs on semiconductor parts and materials may be inbound, and Ford is cutting hundreds of workers on the software side of the business.

Tesla has a problem. Its CEO bankrolled Donald Trump’s reelection, but Trump’s policies have hurt the automaker. Take the tariffs on China, where Tesla produces parts for its totally definitely-real Cybercab and Semi — two vehicles whose production was halted thanks to those taxes. Now though, with a new lightening of tariffs on China, Tesla can bring those parts in again. From Reuters:

Tesla plans to start shipping components from China to the U.S. for the production of Cybercab and Semi trucks from the end of this month, after the U.S. and China reached a truce over tariffs, said a person with direct knowledge.

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Reuters reported last month that Tesla had suspended plans to ship the components after U.S. President Donald Trump raised tariffs on Chinese goods to 145%, potentially disrupting Tesla’s plan to start mass production of the much-anticipated models.

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The source, however, added that the situation could still change, citing the Trump administration’s unpredictability. They declined to be named as the matter was confidential.

All these plans could be upended by the next shift in Trump’s tariff whims, but for now Tesla can put the parts together to flood our roads with autonomous taxis based on the company’s infallible “full self-driving” and Autopilot software. Surely no harm will come from this. 

In the face of Trump’s tariffs, many automakers are taking a deeply conservative approach: Deprioritizing electrification, and refocusing on the ICE products that serve as their financial bread and butter. Subaru now seems to be among them, in hopes of dodging $2.5 billion in losses. From Automotive News: 

Import-reliant Subaru will rethink its electrification strategy, including the timing of investments, amid new global trade tumult and uncertainty about future emissions regulations.

CEO Atsushi Osaki said the overall direction toward electrified vehicles remains unchanged.

But the pace of Subaru’s rollout and the amount of money it plows into the technology is under review as the company braces for sliding sales and withholds earnings guidance.

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Executives said the Trump administration’s tariffs could cost Subaru Corp. some $2.5 billion in the current fiscal year if the company doesn’t take any actions to mitigate the impact.

Tariffs having the knock-on effect of outsized harm to EVs is the kind of serendipity that the Trump team likely didn’t plan, but is certainly thankful for. Who needs any of that pesky “habitable ecosystem” when there are profits to be made right now? The people making these decisions won’t have to live through the end of the world they’re hastening, but their kids will.

The Trump team recently ordered that semiconductors could flow freely into the United States, unencumbered by tariffs, but it seems that could all come to an end within the next couple of months. The administration is now weighing specific tariffs on semiconductors and the minerals that are used to build them. From Automotive News:

As automotive industry stakeholders parse a tariff ceasefire between China and the U.S., this week marks a public comment deadline for an inquiry by the Trump administration about whether to impose new tariffs on critical minerals and derivative parts such as semiconductor wafers.

The Trump administration is exploring new tariffs on “processed critical minerals as well as their derivative products” using a mechanism meant to protect the U.S. from threats to national security. The deadline for the public comment period for that process is May 16.

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While an executive order in April exempted certain semiconductor products from “reciprocal” tariffs on imports that differed by country, Howard Lutnick, the U.S. secretary of commerce, suggested new electronics tariffs would come in May or June.

Semiconductors are in pretty much everything at this point, and the minerals that form them are absolutely critical. Get ready for a big mining boom in the States, I guess. 

Modern cars are more software-driven than ever — “software-defined vehicle” is a buzzword in automotive circles — and software requires developers to both build it and keep it running. Ford, though, is laying off hundreds of workers in the automotive software sector of the company. From the Detroit Free Press: 

Ford Motor Co. is cutting nearly 350 connected-vehicle software jobs in its effort to improve efficiency, according to a person familiar with the situation. The automaker has also hired a new chief accounting officer.

The 350 people work in the United States and Canada, but the person would not break out how many are located at the company’s Dearborn-based headquarters. The affected employees, who made up about 5% of the connected-software team, were notified on May 13, the person said.

Laying off 5% of a team likely won’t substantially hamper Ford’s software efforts, but it’s a great sense of scale for how much code goes into modern cars — if 350 people are just 5% of the team, that works out to 7,000 people on connected car software alone. Your car is built by a lot more people than the few on the assembly line. 

I would say Sinatra certainly made it here, and did in fact make it anywhere. 

It’s raining here in New York, so why not set the mood with some downtempo Mitski?