Business

‘Dumb’: Canada, Mexico blast historic Trump tariffs, threaten retaliation

Kena Betancur/VIEWpress

(WASHINGTON) — America’s closest neighbors, Canada and Mexico, excoriated President Donald Trump for slapping historic tariffs on goods from their countries.

Trump’s broad tariffs went into effect on Tuesday, along with increased duties on goods from China, a move that prompted a swift retaliation from Beijing.

“President Trump continues to demonstrate his commitment to ensuring U.S. trade policy serves the national interest,” the White House said in a statement.

Goods entering the U.S. from Mexico and Canada will carry a 25% tariff, while those from China will be subject to a 10% increase on existing tariffs, according to the White House.

U.S. tariffs are at their highest level since 1943, Yale’s Budget Lab said.

On Feb. 27, Trump alleged that illicit drugs such as fentanyl had continued to enter the U.S. through Mexico and Canada despite agreements reached last month to address the issue.

Since September, nearly all fentanyl seized by the U.S. came through the Southern border with Mexico, according to the U.S. Customs and Border Patrol, or CBP, a federal agency. Less than 1% of fentanyl was seized at the Northern border with Canada, CBP found.

Canadian Prime Minister Justin Trudeau sharply criticized the tariffs, calling them a “dumb” policy that does not “make sense.”

The reason for the tariffs is based on a false allegation about Canada as a major source of drugs entering the U.S., Trudeau added.

“It’s an example of [Trump] not really being able to see what it is that he wants, because even the excuse that he’s giving for these tariffs today of fentanyl is completely bogus, completely unjustified [and] completely false,” Trudeau said.

In response, Canada slapped a 25% retaliatory tariff on $30 billion worth of goods. Tariffs on an additional $125 billion worth of products will take effect in 21 says, Trudeau said.

“We will not back down from a fight,” Trudeau added.

Meanwhile, Mexican President Claudia Sheinbaum announced plans to impose retaliatory tariffs on U.S. goods.

“There is no motive or reason, nor justification that supports this decision that will affect our people and our nations,” Sheinbaum said. “We have said it in different ways: cooperation and coordination, yes; subordination and interventionism, no.”

Sheinbaum said she will speak over the phone with Trump on Thursday, and if no deal can be reached, she’ll announce the tariff and non-tariff measures at a rally on Sunday.

China’s response

Within minutes of the new U.S. tariffs taking effect, China unveiled on Tuesday its initial response by placing additional 10% to 15% tariffs on imported U.S. goods, like chicken, wheat, soybeans and beef.

Those duties will be on top of similar tariffs imposed back during the first Trump administration’s trade war in 2018. Some of those tariffs are already at 25%, though Beijing issued some waivers as a result of the 2020 “phase one” trade deal.

The new Chinese tariffs are set to come into effect for goods shipped out next Monday, March 10.

Stock prices plummet

Stock futures for the three major U.S. indexes were close to flat early Tuesday following the selloff on Monday as Trump announced his proposed tariffs would go into effect at 12:01 a.m.

Stock prices plummet

Stock futures for the three major U.S. indexes were close to flat early Tuesday following the selloff on Monday as Trump announced his proposed tariffs would go into effect at 12:01 a.m.

Asian markets were mixed on Tuesday. The Shanghai Stock Exchange climbed less than a percentage point, while the Nikkei in Japan slipped about 1.2% and the Hang Seng in Hong Kong closed down about 0.3%.

European markets mostly traded off on Tuesday, with the DAX in Germany down about 1.6% and the FTSE 100 slipping about 0.3% midday.

The U.S. tariffs arrived about a month after Trump granted Mexico and Canada a reprieve, having reached agreements with the two countries regarding border security and drug trafficking.

ABC News’ Zunaira Zaki and Anne Laurent contributed to this report.

Copyright © 2025, ABC Audio. All rights reserved.

Business

Stocks fall in early trading Tuesday as tariffs take effect

lvcandy/Getty Images

(NEW YORK) — The stock market fell in early trading on Tuesday, just hours after the Trump administration’s long-promised tariffs took effect.

The Dow Jones Industrial Average dropped nearly 800 points, or 1.8%; while the S&P 500 also fell 1.8%. The tech-heavy Nasdaq tumbled 1.6%.

The policy taxes imports from Mexico, Canada and China — the three largest trading partners of the United States — meaning that it could raise prices for everything from gasoline to avocados to iPhones.

Shares of retail giant Target fell 4.5% in early trading on Tuesday, following an earnings release from the company that cited “tariff uncertainty” as a potential impediment for the business. Walmart’s stock price dipped 1% on Tuesday, while Amazon shares fell 2%.

Shares of Best Buy plummeted more than 13% on Tuesday morning. The sharp drop came hours after Best Buy CEO told analysts that price increases are “highly likely” as a result of the tariffs.

Higher costs for car production could also pose a challenge for U.S. automakers, many of which depend on a supply chain closely intertwined with Mexico and Canada.

Shares of Ford tumbled 3% on Tuesday, while General Motors dropped more than 4%. Stellantis — the parent company of Jeep and Chrysler — saw shares plummet more than 7%.

Tesla, the electric carmaker led by Elon Musk, saw its stock price drop nearly 7%.

The far-reaching losses extend a market slide that began on Monday afternoon when Trump affirmed plans to impose a fresh round of tariffs.

Trump stuck to a March 4 start date for 25% tariffs on imports from Mexico and Canada, as well as 10% tariff on Chinese goods — which, as of Tuesday, rises to 20%, per an amended executive order.

Tariffs of this magnitude would likely increase prices paid by U.S. shoppers, since importers typically pass along a share of the cost of those higher taxes to consumers, experts said. The duties also raise input costs for manufacturers that import raw materials.

In addition to Tesla and Amazon, the tariffs appeared to impact some of the other so-called “Magnificent Seven,” a group of large tech firms that helped drive stock market gains in recent years.

Chipmaker Nvidia, which relies on semiconductors from Taiwan but also imports some materials from Mexico, saw shares drop more than 2%.

Meta, the parent company of Facebook and Instagram, suffered a 4% drop in its stock price. Microsoft’s stock fell 1%.

Shares of Alphabet and Google defied the trend, however, remaining essentially unchanged in early trading on Tuesday.

This is a developing story. Please check back for updates.

Copyright © 2025, ABC Audio. All rights reserved.

Business

Stocks tumble as Trump tariffs create ‘uncertainty’ in markets

lvcandy/Getty Images

(NEW YORK) — The stock market fell in early trading on Tuesday, just hours after the Trump administration’s long-promised tariffs took effect.

The Dow Jones Industrial Average dropped nearly 800 points, or 1.8%; while the S&P 500 also fell 1.8%. The tech-heavy Nasdaq tumbled 1.6%.

The policy taxes imports from Mexico, Canada and China — the three largest trading partners of the United States — meaning that it could raise prices for everything from gasoline to avocados to iPhones.

Shares of retail giant Target fell 4.5% in early trading on Tuesday, following an earnings release from the company that cited “tariff uncertainty” as a potential impediment for the business. Walmart’s stock price dipped 1% on Tuesday, while Amazon shares fell 2%.

Shares of Best Buy plummeted more than 13% on Tuesday morning. The sharp drop came hours after Best Buy CEO told analysts that price increases are “highly likely” as a result of the tariffs.

Higher costs for car production could also pose a challenge for U.S. automakers, many of which depend on a supply chain closely intertwined with Mexico and Canada.

Shares of Ford tumbled 3% on Tuesday, while General Motors dropped more than 4%. Stellantis — the parent company of Jeep and Chrysler — saw shares plummet more than 7%.

Tesla, the electric carmaker led by Elon Musk, saw its stock price drop nearly 7%.

The far-reaching losses extend a market slide that began on Monday afternoon when Trump affirmed plans to impose a fresh round of tariffs.

Trump stuck to a March 4 start date for 25% tariffs on imports from Mexico and Canada, as well as 10% tariff on Chinese goods — which, as of Tuesday, rises to 20%, per an amended executive order.

Tariffs of this magnitude would likely increase prices paid by U.S. shoppers, since importers typically pass along a share of the cost of those higher taxes to consumers, experts said. The duties also raise input costs for manufacturers that import raw materials.

In addition to Tesla and Amazon, the tariffs appeared to impact some of the other so-called “Magnificent Seven,” a group of large tech firms that helped drive stock market gains in recent years.

Chipmaker Nvidia, which relies on semiconductors from Taiwan but also imports some materials from Mexico, saw shares drop more than 2%.

Meta, the parent company of Facebook and Instagram, suffered a 4% drop in its stock price. Microsoft’s stock fell 1%.

Shares of Alphabet and Google defied the trend, however, remaining essentially unchanged in early trading on Tuesday.

This is a developing story. Please check back for updates.

Copyright © 2025, ABC Audio. All rights reserved.

Business

Trump tariffs go into effect against Canada, Mexico; China retaliates

Kena Betancur/VIEWpress

(WASHINGTON) — President Donald Trump’s broad tariffs on imported goods from Mexico and Canada went into effect on Tuesday, along with increased duties on goods from China, a move that prompted a swift retaliation from Beijing.

“President Trump continues to demonstrate his commitment to ensuring U.S. trade policy serves the national interest,” the White House said in a statement.

Goods entering the U.S. from Mexico and Canada will carry a 25% tariff, while those from China will be subject to a 10% increase on existing tariffs, according to the White House.

Within minutes of the new U.S. tariffs taking effect, China unveiled on Tuesday its initial response by placing additional 10% to 15% tariffs on imported U.S. goods, like chicken, wheat, soybeans and beef.

Those duties will be on top of similar tariffs imposed back during the first Trump administration’s trade war in 2018. Some of those tariffs are already at 25%, though Beijing issued some waivers as a result of the 2020 “phase one” trade deal.

The new Chinese tariffs are set to come into effect for goods shipped out next Monday, March 10.

Canadian Prime Minister Justin Trudeau also promised to impose tariffs on American goods if Trump’s tariffs on Canadian goods went into effect.

He said in a statement on Monday that Ottawa would start with “tariffs on $30 billion worth of goods immediately and tariffs on the remaining $125 billion on American products in 21 days’ time.”

“Our tariffs will remain in place until the U.S. trade action is withdrawn, and should U.S. tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures,” Trudeau said in the statement.

Stock futures for the three major U.S. indexes were close to flat early Tuesday following the selloff on Monday as Trump announced his proposed tariffs would go into effect at 12:01 a.m.

The announcement sent major stock indexes plummeting, with the S&P suffered its biggest loss since December, closing at 5,849.72 — down 104.78 points or 1.76%. The Dow Jones Industrial Average closed at 43,191.24 down 649.67 points — or 1.48% — while the tech-heavy Nasdaq fell 2.64%.

Asian markets were mixed on Tuesday. The Shanghai Stock Exchange climbed less than a percentage point, while the Nikkei in Japan slipped about 1.2% and the Hang Seng in Hong Kong closed down about 0.3%.

European markets mostly traded off on Tuesday, with the DAX in Germany down about 1.6% and the FTSE 100 slipping about 0.3% midday.

The U.S. tariffs arrived about a month after Trump granted Mexico and Canada a reprieve, having reached agreements with the two countries regarding border security and drug trafficking.

ABC News’ Max Zahn contributed to this report.

Copyright © 2025, ABC Audio. All rights reserved.

Business

Automakers head north to test new cars. This year is proving more difficult

Volvo

When Swedish automaker Volvo opened its proving ground in Kiruna, Sweden, 30 years ago, the mission was clear: “Making sure that our products are truly fit for the harshest of winter conditions.”

The remote location was ideal. Kiruna, situated about 90 miles north of the Arctic Circle, historically has long, cold winters and snow cover until mid-May. This year, Volvo engineers have been forced to postpone their annual testing or rely on subarctic cold boxes to replicate the region’s harsh conditions.

“Normally we’re used to a long season of winter testing,” John Lundegren, an engineering manager at Volvo, told ABC News. “The season is getting more unpredictable. You can have warm weather in the middle of the winter. What happens is the snow melts and you have icy conditions. We’ve seen the weather start to change in the last five years.”

The unpredictable weather can delay a vehicle’s rollout and production schedule and interfere with critical testing of new vehicles: braking, battery heating, thermal management, performance and drivability and even cabin heating and defrosting.

“We have people coming to do brake testing, but we don’t have any snow on the tracks,” Lundegren explained. “So we have to wait for snowy conditions, and I don’t think we have that in the pipeline for 10 days. It impacts how efficient we can be.”

He went on, “We’re trying to develop cars faster and faster, so having this short period of time where we can do the very important winter testing affects our whole development process.”

Sven Albiecht, a chassis and drivetrain development engineer at Volkswagen, said the above-normal temperatures in Sweden and northern Scandinavia have been “difficult” for the German automaker.

“We need freezing conditions,” he told ABC News. “We’re testing later and ending earlier. … The work is a little more compressed.”

Like Volvo, Volkswagen parks vehicles overnight in fridgelike chambers to study how the cold affects a vehicle’s responsiveness. The chambers are often more reliable than Mother Nature.

“We have to make sure the doors open at minus 40 degrees,” Albiecht said.

Ice and slippery surfaces are also essential for tuning a vehicle’s anti-lock braking system and electronic stability program, he added.

The volatile weather has not yet convinced Volkswagen to find new testing sites. But Albiecht said he’s well aware that “something is happening. That is a fact.”

According to Erik Kjellström, a professor in climatology at the Swedish Meteorological and Hydrological Institute (SMHI), the snow cover in large parts of Sweden is much less this year when compared to previous years.

“There is usually much more snow right now. It’s been rainy and slushy in northern parts of the country and the coast,” he told ABC News. “The winter season keeps getting shorter and starting later. People are disturbed.”

He pointed out that the average temperature in Sweden has “gone up quite a lot” in the last few decades. SMHI predicts the average annual temperature in the country will be 2 to 6 degrees Celsius higher by the end of the century, “depending on how much greenhouse gas emissions continue.”

What’s more, northern Sweden will likely see the greatest change in temperature and “winters that are both significantly warmer and colder than the average climate,” according to SMHI. And in southern Sweden, the number of days with snow cover has decreased. “Many winter industries are dependent on snow and are kept back if the snow cover is too thin and sporadic,” according to SMHI.

“We are living through these changes, and it’s quite frightening,” Kjellström said. “There’s been a strong impact on wildlife and nature.”

Polestar, the Swedish electric performance car brand, runs tests on its vehicles in Jokkmokk, a small town located in the Arctic Circle. The erratic weather there is raising alarms for the company’s engineers.

“The winter testing in Jokkmokk allows our engineers to fine-tune the steering, balance the chassis and push the brake predictability to the max in the most extreme conditions,” a spokesperson told ABC News. “But cold weather isn’t something we can take for granted anymore, not even in Swedish Lapland. Climate change is real, and our mission is to accelerate the shift to sustainable mobility.”

Companies that perform annual winter vehicle tests in the United States are seeing similar climate-related dilemmas. Jake Fisher, who oversees Consumer Reports’ auto testing program, said he and his team have traveled from Colchester, Connecticut, to the Canadian border to get their work done.

“It costs quite a bit of money to travel north to get these snow conditions,” Fisher told ABC News. “The warmer temperatures are affecting our testing, too. The development [of vehicles] will get more expensive. Automakers will have to follow the weather and go farther north.”

The lack of snow and mild weather cannot impede these necessary tests, he argued.

“Automakers are making sure all of the vehicle’s components operate at extremely cold temperatures,” Fisher said. “The heating system, the powertrain cooling, making sure windows defrost and stay defrosted — engineers do a lot of work. If automakers can’t get this weather, they can’t validate the car.”

Bridgestone, the tire and rubber company, sends its engineers around the globe to test how the company’s tires perform in varying terrains and harsh environments. Tire testing can take weeks or even months in locales such as Colorado, Michigan, Finland and Sweden, with drivers observing understeer, oversteer and tire recovery. Last year, a series of tests scheduled to take place in Michigan had to be canceled because of unexpectedly warm weather.

“The conditions were fantastic until the week before we were slated to go,” Matthew Thomas, manager of consumer marketing intelligence at Bridgestone, told ABC News. “Then the temperature rose and there was a lot of rain — it degraded the testing surfaces in a way we didn’t feel confident in the testing. We scraped the testing.”

He added, “The weather is very unpredictable week over week.”

An abnormal winter season does not mean motorists can forgo winter tires, he said.

“There will always be a need for winter-capable tires,” he said. “When one region has a mild winter, another region may have a very severe winter. Snow and ice continue to be a major cause of collision for drivers.”

Subzero temperatures are even more consequential for battery electric vehicle (BEV) testing. Volvo’s Lundegren said he and his fellow engineers are still understanding how to make these batteries more efficient in bone-chilling temperatures.

“In the past, we had an issue with just starting the vehicle,” he said. “That’s why we have so many cold boxes this year. BEVs are still new for us in certain aspects. How do you optimize the battery for heat, for the propulsion? Finding the sweet spot on how to use as little energy as possible is really important when it comes to BEV tuning.”

Fisher pointed out that cold weather is an electric vehicle’s worst enemy.

“EVs do have range issues in the cold — there’s no question,” he said. “The efficiency of EVs plummet in cold temperatures. The range can be cut by up to half. It takes so much electricity to warm the vehicle.”

Albiecht, however, argued that gasoline and diesel engines may not always work perfectly in winter either.

“Diesel has to burn, and burning in very low temps is more difficult — it’s like starting a fire in the cold,” he said. “There are a lot of mechanical parts in an internal combustion engine. Electric cars have no oil, no fluids and fewer parts. They are more simple. An electric motor never has problems starting.”

Benny Leuchter, a Volkswagen factory race and test driver, has traveled the world to test-drive vehicles. The weeks and months analyzing vehicles in extreme temperatures is “tough on the engineers,” he conceded. What’s learned in the Arctic, though, has real-world consequences for consumers.

“We’re developing our all-wheel drive and electric systems. … Driving dynamics should work on dry, wet and snowy roads,” he told ABC News. “It’s worth it to develop and test these cars under these very hard conditions so the cars work every time.”

Copyright © 2025, ABC Audio. All rights reserved.

Business

Economists say Trump tariff threats, DOGE job cuts are ‘chilling’ the economy

Andrew Harnik/Getty Images

(WASHINGTON) — Economists say the uncertainty from President Donald Trump’s tariff threats and mass layoffs of government workers are starting to have a “chilling” effect on the U.S. economy.

“It’s a very difficult business environment, because they can’t plan for what their cost structure is going to be,” said Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security. “It’s adding to investment uncertainty, and some people are holding back on investments.”

Trump has so far imposed 10% tariffs on Chinese imports and says he’ll impose additional 10%, plus 25% tariffs on Canada and Mexico on March 4. Trump also says he will impose “reciprocal tariffs” that match the duties other countries levy on the U.S. That comes on top of tariff plans on cars, semiconductors, steel and aluminum. Even if Trump doesn’t ultimately move forward with all his tariff threats, the mere uncertainty has a chilling effect.

“If one of the inputs of your factory goes up by 25%, you might cut your production and say maybe we’ll have to fire some people,” Ziemba added.

Meanwhile, the Department of Government Efficiency’s slashing of the federal workforce across the country “also impacts consumption, because people are losing their jobs or are afraid of losing their jobs, so that might cause them to save more money,“ Ziemba said.

This week, The Conference Board’s consumer sentiment survey found that it registered the largest monthly decline since August 2021.

“Views of current labor market conditions weakened. Consumers became pessimistic about future business conditions and less optimistic about future income. Pessimism about future employment prospects worsened and reached a 10-month high,” said Stephanie Guichard, senior economist for global indicators at The Conference Board.

“Average 12-month inflation expectations surged from 5.2% to 6% in February. This increase likely reflected a mix of factors, including sticky inflation but also the recent jump in prices of key household staples like eggs and the expected impact of tariffs,” Guichard said.

The Canada and Mexico tariffs would have a sweeping effect, since those are America’s two biggest trading partners. It could raise prices at the grocery store and the gas pump. Ziemba also noted that the cost of cars could increase by several thousand dollars.

“Every time a car part crosses the border, 25% tariffs could be very onerous,” Ziemba said. “We could see the cost of building a house go up quite substantially.”

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Business

Consumer confidence falters, signaling worry about economy under Trump

Bonnie Cash/UPI/Bloomberg via Getty Images

(NEW YORK) — Consumer confidence plummeted in February, indicating worry about the direction of the U.S. economy under President Donald Trump.

A gauge of consumer confidence registered its largest monthly drop since August 2021, the nonpartisan Conference Board said on Tuesday.

Meanwhile, the share of consumers who expect a recession within the next year surged to a nine-month high, the data showed. A growing portion of consumers believe the job market will worsen, the stock market will fall and interest rates will rise, the report added.

Trump has issued a flurry of economy-related directives since he took office last month, including tariff proposals, spending cuts and an assault on diversity, equity and inclusion initiatives.

Earlier this month, Trump announced 25% tariffs on goods from Mexico and Canada as well as 10% tariffs on products from China.

Trump paused the tariffs on Mexico and Canada for one month after striking a deal with each of the two countries on drug trafficking and border security. On Monday, Trump said he plans to go forward with the tariffs when that pause lifts next week.

Seven of every 10 American adults believe tariffs will raise prices, an Ipsos survey found last week.

Concern about rising prices coincides with a bout of resurgent inflation that stretches back to the final months of the Biden administration. Consumer prices rose 3% in January compared to a year ago, registering a percentage point higher than the Federal Reserve’s target of 2%.

Egg prices, a closely watched symbol of rising costs, soared 53% in January compared to a year ago. An avian flu has decimated the egg supply, lifting prices higher.

“Consumers who fear the impact of higher tariffs, spending cuts, and deportations are getting worried and are likely to be more cautious,” Bill Adams, chief economist at Comerica Bank in Dallas, told ABC News.

Meanwhile, U.S. hiring slowed at the outset of the year. The nation added 143,000 jobs in January, far fewer than the 265,000 jobs gained a month prior, government data showed.

Still, some measures of consumer sentiment improved this month. Consumers’ assessment of current business conditions moved higher, while an uptick in purchasing plans for a home extended a monthslong recovery.

The fresh data follows a report last month from the University of Michigan showing that its gauge of consumer sentiment had declined for the first time in six months.

The results showed a sharp disparity between Democrats and Republicans, however. Attitudes among Democrats worsened while sentiment among Republicans improved.

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Business

Americans’ credit card debt reaches new record high: New York Federal Reserve

Adam Gault/Getty Images

(NEW YORK) — Americans’ household debt — including credit cards, mortgages, auto loans and student loans — is at a new all-time high $18.04 trillion, according to a report released Thursday by the Federal Reserve Bank of New York.

Overall debt grew by $93 billion in the last three months of 2024 — and about half of that increase was new credit card debt.

Americans’ total credit card balances now stand at a record-high $1.21 trillion.

On a call with reporters Thursday, New York Federal Reserve researchers said credit card debt typically goes up at the end of the year when consumers do their holiday shopping. Researchers said they expect balances will decline at the start of this year as shoppers start to pay down that debt.

High interest rates are another factor behind elevated credit card debt levels, the researchers said. They added that income levels have been going up as debt is increasing, a positive sign for the health of the economy.

Delinquencies — reflecting missed payments on credit card bills — also ticked up in the fourth quarter.

The report highlighted higher delinquency rates for auto loans, too. Americans hold nearly $1.7 trillion in auto loan debt.

New York Federal Reserve researchers said higher new and used car prices in the wake of the pandemic are a key reason why some Americans are behind on their auto payments.

“While mortgage delinquency rates are similar to pre-pandemic levels, auto loan delinquency transition rates remain elevated,” said Wilbert van der Klaauw, economic research adviser at the New York Federal Reserve. “High auto loan delinquency rates are broad-based across credit scores and income levels.”

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Business

Tesla shares have plunged while Musk takes on Washington. Is that the reason?

Christian Marquardt/Getty Images

(NEW YORK) — While Elon Musk has vaulted into a powerful role overhauling government agencies and upending Washington, the world’s richest person has suffered a $106 billion drop in wealth due to steep decline in shares of his Tesla electric car company.

Tesla’s stock price has plummeted 30% from its all-time high in December, including a 21% selloff since Inauguration Day. The losses have sent Musk’s net worth tumbling from a peak of $486 billion on Dec. 17 to its current level of about $380 billion, according to Bloomberg.

The stock woes have divided current and former Tesla shareholders. Critics of Musk fault his new role and polarizing reputation, blaming recent reports showing lackluster sales in some regions on his foray into politics. They say Musk must step away from the Trump administration for the company to thrive.
Supporters, on the other hand, say Musk’s role in the White House has little to do with the selloff, noting that Tesla shares remain higher than where they stood on Election Day. Instead, some say, the company is suffering growing pains as it weathers stiff competition in electric vehicles and pursues new ventures like self-driving taxis.

“I don’t have a problem if Elon wants to save a bunch of money for America. I say, ‘Where’s the good part in this for Tesla'” Ross Gerber, a prominent Tesla investor, told ABC News, referring to cost-cutting efforts undertaken by Musk’s Department of Government Efficiency.
Tesla representatives did not respond to ABC News’ request for comment.

Despite disagreement over the effect of Musk’s government role, both current and former Tesla shareholders who spoke to ABC News broadly acknowledged the company’s recent business hiccups.

Tesla sold fewer cars in 2024 than it did the year prior, marking the company’s first year-over-year sales decline in more than a decade, earnings released in January showed.
As rivals have challenged Tesla’s dominance over the electric vehicle market, the company has promised a future revenue stream from autonomous taxis, also known as robotaxis.

Musk announced in late January that the company would roll out its robotaxi test program in Austin, Texas, in June. But within days, China-based competitor BYD unveiled advances in self-driving technology, which the company said was set to be included in models costing as little as $9,600.
Gary Black, managing partner of The Future Fund, which manages $100 million in assets, including Tesla shares, said the recent selloff of Tesla is primarily the result of investor jitters about whether the company can dominate self-driving technology the way it did electric vehicles.

“Over time, you will see Teslas and other cars self-drive. But Tesla is not going to be the only one,” Black told ABC News’ Elizabeth Schulze.

The stock also faced downward pressure this week when a Musk-led group of investors offered to buy OpenAI for $97.4 billion, making possible a scenario in which Musk would sell some of his Tesla shares to finance the deal, Black said.
Black said that, in his opinion, the downturn has nothing to do with Musk’s government role.

“It’s always good to know the president of the United States — to be able to pick up your phone and say, you know, ‘I need this favor, that favor,'” Black said.

A jump in Tesla shares after Trump’s victory suggests many investors viewed the relationship that way. The stock price soared about 85% over a six-week period following Election Day.

But some investors lay the blame for the downturn squarely at Musk’s feet.

Nell Minow, Vice Chair of ValueEdge Advisors and a longtime critic of Musk, said Musk has been “absent” from the company.

“I think that he is a huge drag on the stock right now,” Minow told Schulze. “No question, he’s a problem.”

“Elon Musk is to the Tesla brand what the Green Giant is to corn,” Minow said. “He has made himself the brand and that is always very risky.”
Minow, who said she donated nearly all of her Tesla shares to charity last year, also criticized the Tesla board for what she said was a failure to hold Musk to account, or update shareholders and the public about a leadership plan while Musk runs DOGE.

“We don’t know what the board is thinking. They have not spoken out in any way,” Minow said. “They have not made a filing with the SEC about what the impact of this side hustle is, and the employees and the shareholders need some kind of certainty.”

New York City Comptroller Brad Lander echoed concerns about the board’s ability to rein in Musk. Lander, who oversees $1.25 billion in Tesla stock through the city’s five pension systems, said the lack of oversight was a “long-standing problem.”

“Independent governance is designed to provide a voice for shareholders at the table,” Lander, who is running for New York City mayor and has publicly sparred with Musk, said in a statement to ABC News. “When companies are controlled by a set of directors with either family or aligned interests, they lose this.”

For his part, Musk has looked to hype up Tesla’s prospects, saying on an earnings call last month that he believes there is an opportunity for it to be “the most valuable company in the world.”

During the call, AllianceBernstein Research analyst Daniel Roska questioned Musk on how Tesla plans to meet its ambitious projections given its high valuation.

Musk emphasized Tesla’s focus on real-world AI, claiming the company is making significant strides.

“We’re working on perfecting real-world AI and making rapid progress week over week, if not month over month,” Musk said. “I go where the problem is, essentially … I focus where the challenges are the greatest.”

Some Tesla shareholders remain bullish on the company despite its short-term drop. Angel investor Larry Goldberg, known as “Tesla Larry,” posted on X that he supports Musk’s political efforts, even if they impact the company’s stock price.

“If the Trump administration (and DOGE) does not fix the deficit, my Tesla shares — and everyone’s US stocks and bonds will be worthless,” Goldberg wrote.

Musk reposted Goldberg’s comment, adding, “Exactly.”

ABC News’ Will Steakin contributed to this report.

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Business

Tesla shares have plunged while Musk takes on Washington. Is that the reason?

(Anton Petrus/Getty Images)

(NEW YORK) — While Elon Musk has vaulted into a powerful role overhauling government agencies and upending Washington, the world’s richest person has suffered a $106 billion drop in wealth due to steep decline in shares of his Tesla electric car company.

Tesla’s stock price has plummeted 30% from its all-time high in December, including a 21% selloff since Inauguration Day. The losses have sent Musk’s net worth tumbling from a peak of $486 billion on Dec. 17 to its current level of about $380 billion, according to Bloomberg.

The stock woes have divided current and former Tesla shareholders. Critics of Musk fault his new role and polarizing reputation, blaming recent reports showing lackluster sales in some regions on his foray into politics. They say Musk must step away from the Trump administration for the company to thrive.

Supporters, on the other hand, say Musk’s role in the White House has little to do with the selloff, noting that Tesla shares remain higher than where they stood on Election Day. Instead, some say, the company is suffering growing pains as it weathers stiff competition in electric vehicles and pursues new ventures like self-driving taxis.

“I don’t have a problem if Elon wants to save a bunch of money for America. I say, ‘Where’s the good part in this for Tesla'” Ross Gerber, a prominent Tesla investor, told ABC News, referring to cost-cutting efforts undertaken by Musk’s Department of Government Efficiency.

Tesla representatives did not respond to ABC News’ request for comment.

Despite disagreement over the effect of Musk’s government role, both current and former Tesla shareholders who spoke to ABC News broadly acknowledged the company’s recent business hiccups.

Tesla sold fewer cars in 2024 than it did the year prior, marking the company’s first year-over-year sales decline in more than a decade, earnings released in January showed.

As rivals have challenged Tesla’s dominance over the electric vehicle market, the company has promised a future revenue stream from autonomous taxis, also known as robotaxis.

Musk announced in late January that the company would roll out its robotaxi test program in Austin, Texas, in June. But within days, China-based competitor BYD unveiled advances in self-driving technology, which the company said was set to be included in models costing as little as $9,600.

Gary Black, managing partner of The Future Fund, which manages $100 million in assets, including Tesla shares, said the recent selloff of Tesla is primarily the result of investor jitters about whether the company can dominate self-driving technology the way it did electric vehicles.

“Over time, you will see Teslas and other cars self-drive. But Tesla is not going to be the only one,” Black told ABC News’ Elizabeth Schulze.

The stock also faced downward pressure this week when a Musk-led group of investors offered to buy OpenAI for $97.4 billion, making possible a scenario in which Musk would sell some of his Tesla shares to finance the deal, Black said.

Black said that, in his opinion, the downturn has nothing to do with Musk’s government role.

“It’s always good to know the president of the United States — to be able to pick up your phone and say, you know, ‘I need this favor, that favor,'” Black said.

A jump in Tesla shares after Trump’s victory suggests many investors viewed the relationship that way. The stock price soared about 85% over a six-week period following Election Day.

But some investors lay the blame for the downturn squarely at Musk’s feet.

Nell Minow, Vice Chair of ValueEdge Advisors and a longtime critic of Musk, said Musk has been “absent” from the company.

“I think that he is a huge drag on the stock right now,” Minow told Schulze. “No question, he’s a problem.”

“Elon Musk is to the Tesla brand what the Green Giant is to corn,” Minow said. “He has made himself the brand and that is always very risky.”

Minow, who said she donated nearly all of her Tesla shares to charity last year, also criticized the Tesla board for what she said was a failure to hold Musk to account, or update shareholders and the public about a leadership plan while Musk runs DOGE.

“We don’t know what the board is thinking. They have not spoken out in any way,” Minow said. “They have not made a filing with the SEC about what the impact of this side hustle is, and the employees and the shareholders need some kind of certainty.”

New York City Comptroller Brad Lander echoed concerns about the board’s ability to reign in Musk. Lander, who oversees $1.25 billion in Tesla stock through the city’s five pension systems, said the lack of oversight was a “long-standing problem.”

“Independent governance is designed to provide a voice for shareholders at the table,” Lander, who is running for New York City mayor and has publicly sparred with Musk, said in a statement to ABC News. “When companies are controlled by a set of directors with either family or aligned interests, they lose this.”

For his part, Musk has looked to hype up Tesla’s prospects, saying on an earnings call last month that he believes there is an opportunity for it to be “the most valuable company in the world.”

During the call, AllianceBernstein Research analyst Daniel Roska questioned Musk on how Tesla plans to meet its ambitious projections given its high valuation.

Musk emphasized Tesla’s focus on real-world AI, claiming the company is making significant strides.

“We’re working on perfecting real-world AI and making rapid progress week over week, if not month over month,” Musk said. “I go where the problem is, essentially … I focus where the challenges are the greatest.”

Some Tesla shareholders remain bullish on the company despite its short-term drop. Angel investor Larry Goldberg, known as “Tesla Larry,” posted on X that he supports Musk’s political efforts, even if they impact the company’s stock price.

“If the Trump administration (and DOGE) does not fix the deficit, my Tesla shares — and everyone’s US stocks and bonds will be worthless,” Goldberg wrote.

Musk reposted Goldberg’s comment, adding, “Exactly.”

ABC News’ Will Steakin contributed to this report.

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