Tesla Shares Rise Amid Trade Talks and Tariff Changes

Shares of Tesla (NASDAQ: TSLA) increased today, closing up 4.7%. Earlier in the session, the stock had climbed as much as 7.8%. This gain comes as the S&P 500 (SNPINDEX: ^GSPC) fell 0.1%, while the Nasdaq Composite (NASDAQINDEX: ^IXIC) remained relatively flat.

In related news, President Trump expressed intentions to ease trade tensions between the U.S. and China ahead of crucial negotiations between the two countries.

Trump Proposes Potential Tariff Cuts

In a recent statement, President Donald Trump suggested lowering tariffs on Chinese goods as key discussions approach. He indicated that an “80% Tariff on China seems right.” Although still high, this figure marks a significant drop from the current 145% tariffs that were imposed in April.

The upcoming trade discussions will involve U.S. Treasury Secretary Scott Bessent and China’s Vice Premier He Lifeng, set to take place in Switzerland. These discussions are expected to influence global markets significantly. China’s Vice Foreign Minister Hua Chunying echoed Trump’s optimistic sentiment, stating that Beijing has “full confidence” in handling trade matters with the U.S.

Image source: Getty Images.

Tesla’s Business Challenges

Tesla’s business model allows it some insulation from the direct impacts of tariffs compared to its competitors. The company maintains manufacturing operations in both the U.S. and China, which helps it circumvent certain tariffs. However, Tesla’s broader supply chain remains vulnerable, with tariffs affecting overall costs significantly.

Currently, Tesla faces rising competition from other EV manufacturers while its global sales are on a downward trend. Analysts remain critical, with some believing that the company’s stock is currently overvalued.

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.