Trump’s billionaire ally Musk proposes US-EU free-trade zone amid tariff tensions

Billionaire U.S. presidential adviser Elon Musk proposed on Saturday the creation of a free-trade zone between the United States and Europe in an effort to preserve economic ties amid the Trump tariffs.

His comments came after President Donald Trump announced sweeping new tariffs on Thursday, sparking global market jitters, alarming allies, and raising fears of retaliatory measures, including potentially from the European Union.

The EU, which now faces a 20% tariff, has pledged to respond in a “calm, carefully phased, unified way,” EU trade chief Maroš Sefcovic said.

“I hope that the United States and Europe can establish a very close partnership,” Musk said in a video address to a gathering of Italy’s far-right League party.

“I hope it is agreed that both Europe and the United States should move ideally, in my view, to a zero-tariff situation, effectively creating a free-trade zone between Europe and North America,” he added in the video, posted on Musk’s social media platform X by La Liga’s leader, Deputy Prime Minister Matteo Salvini.

L’intervento di Elon Musk al Congresso della Lega. Un onore e un privilegio averlo come ospite e discutere con lui delle sfide che ci attendono, sempre a difesa della libertà. pic.twitter.com/Jnge9P82Fu

— Matteo Salvini (@matteosalvinimi) April 5, 2025

Musk also voiced support for easing restrictions on labor mobility between the regions. “There should be more freedom of movement for people between Europe and North America for work,” he said. “That has certainly been my advice to the president.”

Tesla sales decline as Chinese rival BYD takes lead

Meanwhile, Musk’s electric vehicle company, Tesla, is facing a steep decline in sales, as Chinese competitor BYD gains market dominance.

In 2024, BYD overtook Tesla in revenue, reporting 777.1 billion yuan ($107.2 billion) compared to Tesla’s $97.7 billion—making BYD the world’s leading electric vehicle manufacturer by revenue.

A key factor contributing to Tesla’s slump is Musk’s political alignment with President Trump. His public support during the recent campaign and increasing role as a close adviser have triggered widespread protests and consumer boycotts, particularly across Europe.

This backlash is reflected in Tesla’s performance: EV registrations in the Eurozone and UK dropped by over 40% in February year-over-year, according to the European Automobile Manufacturers’ Association (ACEA). By contrast, overall electric vehicle registrations in the region rose more than 26% during the same period.