Elon Musk Pushes for Zero Tariffs as U.S.-EU-China Trade War Heats Up

Elon Musk Urges Free Trade Zone Between Europe and America

In a surprising video message delivered at the Federal Congress of Italy’s League party in Florence, Tesla and SpaceX CEO Elon Musk called for the removal of all tariffs between the United States and Europe. Musk proposed a zero-tariff agreement that could effectively create a free trade zone between the two major economies.

He emphasized that high tariffs hurt both sides and that eliminating them could benefit businesses and consumers across North America and Europe. “At the end of the day,” Musk said, “it would be in everyone’s best interest to agree on a zero-tariff policy and build a strong transatlantic economic alliance.”

Trump’s New 20% Tariff on European Goods

Musk’s comments come just days after U.S. President Donald Trump announced a 20% tariff on goods from the European Union. This move is part of a larger strategy targeting multiple trading partners under the umbrella of “America First” trade policy.

The Trump administration says the goal is to reduce trade deficits and protect American industries. However, these new tariffs are seen by many—including Musk—as a step backward for global cooperation and free trade.

EU Prepares Countermeasures

The European Union has responded cautiously but firmly. EU officials have stated that they prefer negotiation over confrontation. However, they also warned that if talks fail, they are prepared to retaliate. Possible EU countermeasures include:

Imposing new tariffs on American products

Increasing digital service taxes

Targeting U.S. tech companies operating in Europe

The EU’s strategy mirrors past trade conflicts, aiming to apply pressure without escalating into a full-blown trade war.

Elon Musk’s Role in U.S. Politics May Be Shifting

Interestingly, Elon Musk has been a key advisor to President Trump since January and also a major financial supporter of his campaign. But insiders now suggest that Musk is reconsidering his position due to growing disagreements over trade policy.

Sources close to Musk say he may step back from his political advisory role to focus more on managing his companies like Tesla, SpaceX, and X (formerly Twitter).

Matteo Salvini and Musk’s Growing Ties

Italy’s League party leader, Matteo Salvini, has been actively building ties with Elon Musk. Some speculate that Musk may be looking for broader international partnerships outside the current U.S. administration. Salvini praised Musk’s stance on free trade and openness, adding that Italy welcomes innovation and global cooperation.

China Responds with Strong Trade Sanctions

While the U.S. and Europe navigate their tariff disputes, China has entered the trade conflict with serious consequences for American businesses. On April 10, 2025, China will implement several aggressive trade policies aimed directly at the United States.

China to Impose 34% Tariffs on All U.S. Imports

China’s government has announced a 34% tariff on all U.S. goods, a move that will significantly impact American exports, including in:

Agriculture

Electronics

Industrial manufacturing

These higher tariffs will make U.S. products more expensive in Chinese markets, leading to decreased demand and potential losses for American producers.

U.S. Companies Face Blacklisting and Export Bans

In addition to higher tariffs, China’s Commerce Ministry has revoked export licenses for 16 major American companies. These businesses will no longer be allowed to import products from China or operate freely within the country.

Furthermore, 11 more U.S. firms have been added to China’s “Unreliable Entity List,” a designation that blocks them from doing business with Chinese suppliers and partners. This list is typically reserved for companies accused of harming China’s interests or breaking international trade rules.

Global Trade War Impact: What Lies Ahead?

With rising tensions between the U.S., Europe, and China, the global economy is entering a period of uncertainty. Tariffs, export bans, and political disputes are likely to:

Disrupt global supply chains

Increase product costs for consumers

Hurt small and large businesses worldwide

Delay international tech and industrial projects

Economic analysts warn that if trade tensions continue to escalate, we may witness a full-scale global trade war, similar to what happened during past economic downturns.

Final Thoughts: A Call for Balance

As world leaders push their national agendas, business leaders like Elon Musk are urging a return to open markets, fair competition, and zero tariffs. Whether the U.S., EU, and China can find common ground remains to be seen, but one thing is clear—international cooperation is more important now than ever.

Update, April 7, 2025

European Union says it is ready to talk with the US about a “zero-zero” deal, where both sides remove all tariffs on each other’s goods.

Now, CNBC reports that no one at the White House is aware of any 90-day pause.