Tesla bid for tariff exemption on Model 3 'brain' rejected by U.S.

WASHINGTON -- U.S. trade officials rejected Tesla Inc.'s bid for relief from President Donald Trump's 25 percent tariffs on the Chinese-made computer "brain" in the Model 3, one of more than 1,000 product denials linked to China's industrial development plans.

According to documents filed by U.S. Trade Representative's office and reviewed by Reuters, Tesla's and other tariff exclusion requests for Chinese-made products from aircraft parts to biotechnology instruments were all denied because they were deemed "strategically important" to the country's "Made in China 2025" program.

Tesla did not return requests for comment. Tesla has a separate pending tariff exclusion request for duties on the Chinese-made Model 3 Center Screen.

The company in a securities filing on Monday said that "our costs for producing our vehicles in the U.S. have also been affected by import duties on certain components sourced from China."

The denials illustrate a systematic approach by the Trump administration to thwart China's efforts to develop high-technology industries that it alleges have benefited from the theft and forced transfer of U.S. intellectual property.

Made in China 2025, a program aimed at growing China's prowess in 10 strategic industries now dominated by the United States, is at the heart of trade negotiations and U.S. demands for sweeping changes to China's trade, industrial and intellectual property policies.

Those industries include new energy and autonomous vehicles, aerospace, semiconductors, biopharmaceuticals, robotics and artificial intelligence.