Tesla's CFO warns that tariffs could affect the company's profitability

President Donald Trump campaigned on the prospect of imposing tariffs on several of his main trading partners' goods. Elon Musk's electric vehicle startup could suffer some of the pain.

During Tesla's earnings call on Wednesday, Chief Financial Officer Vaibhav Taneja indicated the company's profitability could suffer if the new administration imposes tariffs. 

"Over the years, we've tried to localize our supply chain in every market, but we are still reliant on parts from across the world for all our businesses," Taneja told me. He said the "imposition of tariffs" wouldn't "impact our business and profitability." 

President Trump, who returned to the White House last week, is considering tariffs on China, Mexico, and Canada to safeguard American corporate interests.

Tariffs were a popular strategy during the first Trump administration, and they were applied to products such as solar panels, steel, and aluminum. It remained a key discussion subject during the campaign. The president has touted a 60% tax on China and, over the weekend, threatened Colombia with a 25% duty on goods entering the United States.

Musk was Trump's most significant supporter, investing $277 million in his campaign and other Republican candidates. Musk currently runs the Department of Government Efficiency (DOGE), and many observers believe his close ties with the president will benefit his firms.

Tesla shares have risen by 55% since Trump's electoral victory in early November. Even though Tesla posted lower-than-expected earnings and revenue for the quarter, the stock climbed 4% in extended trading Wednesday.