Elon Musk holds an outsized influence within the new Trump administration.
As head of his Division of Authorities Effectivity, or DOGE, the world’s wealthiest man has loved practically unfettered political power in slashing and refashioning the federal authorities as he sees match. And it has rapidly turn into clear that he has the president’s ear on issues beyond that brief.
However on one subject, Musk stands considerably other than others within the coterie of aides and advisers round Trump: China. In distinction to the numerous hawks in the new Trump cabinet who call for a hard-line approach on China, Musk is a putting outlier.
As an skilled on China-U.S. relations who has monitored Musk’s views on China, I don’t discover his lengthy historical past of espousing pro-Chinese sentiment shocking, provided that he has sought all through to get a business hold within the nation.
However these entanglements are price scrutiny, given Musk’s function within the Trump administration at a time when one among America’s greatest international coverage challenges is learn how to handle its relationship with Beijing.
Musk’s journey to the East
For years, Musk has had vital enterprise pursuits in China, with Tesla’s Shanghai factory, Tesla Giga Shanghai, enjoying a vital function within the firm’s world operations.
Since its opening in 2019, the Shanghai plant has surpassed Tesla’s Fremont, California, facility in each measurement and productiveness, now accounting for more than half of the corporate’s world deliveries and a majority of its income. Furthermore, practically 40% of Tesla’s battery supply chain depends on Chinese language firms, and these partnerships proceed to increase.
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Notably, Tesla was the primary international automaker permitted to establish operations in China without a local partner, following a change in possession laws. The Shanghai manufacturing facility was constructed with the assist of US$1.4 billion in loans from Chinese language state-owned banks, granted at favorable rates of interest.
Between 2019 and 2023, the Shanghai authorities additionally supplied Tesla with a reduced corporate tax rate of 15% – 10 percentage points lower than the usual price.
The cost advantages of manufacturing in Shanghai, which embrace decrease manufacturing and labor bills, have additional cemented Tesla’s reliance on the Chinese language market.
On condition that Musk’s wealth is largely tied to Tesla stock, his monetary standing is more and more depending on the corporate’s fortunes in China, making any potential disengagement from the nation each economically and strategically difficult.
Tesla’s continued funding in China underscores this dependency. On Feb. 11, 2025, the corporate opened its second factory in Shanghai — a $200 million plant that’s set to provide 10,000 megapack batteries yearly. It’s the corporate’s first megapack battery factory outside the U.S..
This funding deepens Tesla’s presence in China amid a brand new wave of U.S.-China commerce tensions. On Feb. 1, the Trump administration imposed a 10% tariff on Chinese imports, prompting Beijing’s retaliation with tariffs on American coal, liquefied pure fuel, agricultural tools and crude oil.
A Chinese language fan
It stays unclear to what extent Musk’s monetary pursuits in China will translate to actual affect over the Trump administration’s coverage towards Beijing. However Musk’s lengthy historical past of pro-China remarks suggests the route he needs the administration to maneuver.
Throughout his go to to Beijing in April 2024, Musk praised the country, noting additionally: “I also have a lot of fans in China – well, the feeling is mutual.”
His admiration seems to hinge partially on how he views enterprise and labor practices in China. In that vein, Musk has criticized American workers as lazy and has confronted U.S. labor law disputes, whereas concurrently praising Chinese language staff for “burning the 3 a.m. oil” beneath an intensely repressive labor system.
In quite a few posts on the social media platform X, previously Twitter, which he owns, Musk has additionally praised China’s infrastructure and high-speed rail system, lauded its space program, applauded its management in global green energy initiatives and urged his followers to visit the country.
Musk has additionally opposed U.S. efforts to decouple from China, describing the nations’ economies as “conjoined twins,” regardless of a large half of the foreign policy establishment within the West viewing decreased dependency on China as mandatory for safety pursuits amid rising geopolitical tensions.
On the problem of Taiwan, the most dangerous flashpoint in U.S.-China relations, Musk has in contrast Taiwan to Hawaii, arguing that it’s an integral part of China and noting that the U.S. Pacific Fleet has prevented mainland China from achieving reunification by force.
Musk additional advised that the Taiwan dispute could possibly be resolved by permitting China to ascertain Taiwan as a special administrative zone, much like Hong Kong.
His remarks had been shared and welcomed by China’s then-ambassador to the U.S., who, in a put up on X, emphasised China’s so-called peaceable unification technique and advocated for the “one nation, two techniques” mannequin.
Trump’s back-channel envoy?
The large query going ahead is how Musk’s monetary stakes in, and acknowledged admiration for, China will translate into makes an attempt to affect the U.S. administration’s China coverage, notably given Musk’s unconventional advisory function and the robust faction of anti-China hawks in Trumpworld.
Given Musk’s method to China, it’s onerous to see him not making an attempt to make use of his affect with the president to push for considerably hotter relations with Beijing.
If such counsel had been heeded, it’s straightforward to examine Musk leveraging his deep ties to China, notably his close personal relationship with China’s current second-ranking official, Premier Li Qiang, who was the Shanghai social gathering chief when Tesla’s manufacturing facility was constructed. Within the situation, Donald Trump may faucet Musk as a again channel for diplomacy to ease U.S.-China tensions and facilitate bilateral cooperation when wanted.
Up to now, it was, maybe, telling that it was Musk who met with China President Xi Jinping’s envoy to Trump’s inauguration, Vice President Han Zheng, on the eve of the event.
Nevertheless it’s removed from sure that Trump needs that diplomatic function for Musk, or that different voices gained’t win out with regard to Beijing. In his first time period, Trump launched an unprecedented trade war and tech blockade against China, basically reshaping U.S.-China relations and pushing the U.S. towards one thing of a bipartisan consensus to counter Beijing that has existed for a number of years.
Trump’s tariff strikes and second-term picks for prime commerce and commerce roles, like Peter Navarro and Jamieson Greer — who performed key roles within the commerce warfare towards China throughout the president’s first time period — counsel that Trump’s dedication to additional decoupling from China stays robust.
Moreover, Musk’s enterprise pursuits and private wealth tied to China may go away him weak to Chinese language affect. By leaning on Musk’s shut ties with Trump, China may use his dependence on the Chinese language market as a bargaining chip to strain Trump into making concessions on problems with main strategic significance to Beijing.
China has a historical past of coercing international firms reliant on its market into making compromises on issues regarding its nationwide pursuits. As an illustration, Apple eliminated digital non-public community apps from its app retailer in China at the government’s request. Equally, Tesla may face comparable strain sooner or later if Beijing needs to make use of Musk as a cudgel to affect coverage within the Trump administration. Notably, as the top of DOGE, with access to sensitive data from multiple agencies, Musk may discover himself caught between U.S. safety scrutiny and China’s strategic focusing on.
As long as Musk retains the affect with Trump that he holds now, it’s conceivable that his pro-China sentiments will translate into makes an attempt to affect authorities coverage. But even when that is to be the case, whether or not these efforts succeed will rely on the president and his different advisers, a lot of whom are searching for an aggressive entrance towards Beijing and are more likely to view Musk as an obstacle fairly than ally in that struggle to come back.
