Tesla is denied relief from tariffs on Chinese parts used in Model 3 cars

The Trump administration has refused to spare Tesla Inc. from tariffs of 25% levied on the China-made computer “brain” and large center screen used in Tesla’s Model 3 electric car.

The denials were made in two May 29 letters from the U.S. trade representative’s general counsel responding to requests for relief by the California automaker and its touchscreen supplier. Model 3 drivers use the screen to control navigation, media and other vehicle systems.

In its request to the trade representative, Tesla called the computer the “brains” of the Model 3 and said increased tariffs on the component would cause the company economic harm through higher costs and “impact to profitability.”

The exemption requests were denied because the Model 3 components in question were “strategically important or related to ‘Made in China 2025’ or other Chinese industrial programs,” the trade representative’s letters said.

When contacted Thursday, Tesla had no immediate comment.

Tesla shares rose 2.2% on Thursday. They are still down more than 35% so far this year.