Tesla opens new battery factory in China amid China-US trade war
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Tesla is attempting to solidify its presence in the Chinese market by opening the first Megapack Gigafactory outside of the United States.
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A Tesla Model X sports-utility vehicle sits outside a Tesla store in Littleton, Colorado, on June 18, 2023. (AP)
Tesla opened a $200 million battery factory in Shanghai, China in its latest expansion in the country in the midst of rising tensions between China and the US over Trump's tariffs, which could escalate to a trade war between the two countries.
The Megapack [battery] facility is located close to Tesla's Car Gigafactory in the Lingang Free Trade Zone. It is Tesla's first battery Gigafactory outside the United States and was opened in an attempt to strengthen its energy storage business in critical markets.
The facility is 200,000 sqm and is designed to produce up to 10,000 megapack battery units annually, showing the Electic Vehicle manufacturer's growing investments in China which constitutes the world's largest energy storage and EV market.
China and the US exchange economic blows
Trump introduced an additional 10% tariff on top of other taxes, tariffs, and duties on Chinese imports which came into effect on February 4, justifying it by claiming that China is responsible for the fentanyl epidemic that is taking over the United States.
China responded in a flurry of countermeasures: China's Finance Ministry introduced 15% tariffs on US coal and Liquified Natural Gas (LNG) and 10% tariffs on crude oil, agriculture machinery, and certain cars, effective February 10.
China also filed a lawsuit with the World Trade Organization to formally challenge the new tariffs, as the WTO has the authority to allow retaliatory measures against trade restrictions, and both countries have to comply with the WTO's ruling since they're both members of the organization.
Beijing's Ministry of Commerce condemned Washington's actions, saying that the tariffs do not help the US in solving its problems and undermine the trade relations between the two countries, adding that the US should "objectively and rationally view and deal with its own problems threatening other countries with tariffs."
Trump stated that he would keep imposing more tariffs until China stops the flow of fentanyl, a very potent opioid, into the United States, however, China maintains that fentanyl is an American problem.
Trump started a two-year trade war with China during his first term, due to concerns over its trade surplus with the US, and imposed tariffs on goods worth hundreds of billions of dollars, disrupting global supply chains and the global economy.
