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

U.S. rejects bid by Tesla for tariff exemption for Model 3 'brain'
FILE PHOTO: A Tesla logo is seen in Los Angeles, California U.S. January 12, 2018. REUTERS/Lucy Nicholson -
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Lucy Nicholson(Reuters)
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By David Shepardson and David Lawder

WASHINGTON (Reuters) - 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" of its Model 3 electric vehicle, 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 (USTR) 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 "Made in China 2025" programme.

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 had benefited from the theft and forced transfer of U.S. intellectual property.

Made in China 2025, a programme 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.

(Reporting by David Shepardson; Editing by Meredith Mazzilli)

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