In Musk, Xi will have ‘a friend with influence’ in Trump administration

President-elect Donald Trump grabbed China’s attention after he announced that billionaire Elon Musk would help lead what he called the Department of Government Efficiency, along with biotech entrepreneur Vivek Ramaswamy. While the new body will attempt to do what the opposition called “dismantling government bureaucracy,” Musk’s influence on the Trump administration goes beyond just one department.

The Tesla CEO was part of nearly every meeting Trump held after he won the 2024 US Presidential Election. This included the President-elect’s talks with Ukrainian President Volodymyr Zelenskyy, who had to let Musk jump in the call despite the fact that several reports suggested that the billionaire is in touch with Russian President Vladimir Putin.

Musk’s involvement in the Trump administration is considered good news for China, given the billionaire’s investment in the country’s Electric Vehicle (EV) market. In the past, the world’s richest man enjoyed perks that were rarely offered to other foreign investors, such as when Tesla got an unprecedented concession to wholly control its local subsidiary.

Not only this, but Musk’s view on some of the most sensitive issues of contention between the US and China aligns with the outlook of Chinese President Xi Jinping. However, things are not as smooth as they look. While Musk opens doors for China to come back into the US markets, several Trump loyalists, who are now part of his administration, intend to close them swiftly.

Musk’s investment in China’s EV market

In April this year, when Tesla’s revenue was on a sharp decline, Musk made an unannounced trip to China. The billionaire visited Beijing to seek approval to launch its driver-assistance software in the world’s biggest auto market. During his visit, he met Premier Li Qiang, who as the Chinese Communist Party secretary for Shanghai helped the company set up what is now its top plant globally.

Since then, Musk’s presence in the Chinese market has increased to such an extent that today half of Tesla electric vehicles are made in China. The billionaire’s dip in the Chinese pond fared well for him. Earlier this month, it was reported that Chinese stocks associated with Tesla rose after the US Elections.

According to the South China Morning Post, shares of Chinese manufacturers that are believed to be suppliers to Tesla surged by about 20 per cent in morning trading on November 8. The surge happened because investors bet the world’s largest maker of electric vehicles (EVs) will prosper under Donald Trump’s second presidency.

In May, a month after he visited China, Musk opposed US tariffs on Chinese electric vehicles (EVs). Musk’s opposition came just days after President Joe Biden quadrupled levies on EVs imported from China. “Neither Tesla nor I asked for these tariffs”, the multi-billionaire told a technology conference in Paris via video link.

Musk’s remarks came at odds with the warning he made in January that Chinese car makers would “demolish” competitors from other countries if there were no trade barriers. “In fact, I was surprised when they were announced. Things that inhibit freedom of exchange or distort the market are not good. Tesla competes quite well in the market in China with no tariffs and no preferential support. I’m in favor of no tariffs,” he added at that time.

Hence, the Chinese EV market, which struggled in the US after President Joe Biden announced a 100% increase in tariffs on EVs from China, was a response to unfair policies and intended to protect US jobs, might get some relief under the Trump administration with Musk’s help.

Musk’s stance on Taiwan might be good news for Xi

The SpaceX CEO is known for weighing in on several geopolitical issues frequently, including the tensions between China and Taiwan. In 2022, Musk said a recommendation for Taiwan was to “figure out a special administrative zone,” aligning with Xi’s vision for unifying the self-ruled island with a similar framework to that of Hong Kong and Macau.

Last year, Musk reiterated that Beijing views Taiwan as an “integral part of China” similar to Hawaii for the US, drawing criticism online. Under the Biden administration, the US has forged strong ties with Taiwan, making China anxious.

It is pertinent to note that Trump has already expressed skepticism over US defense commitments to Taiwan, raising fears that he could abandon the island as it faces growing tensions with Beijing. Musk’s talks with Taiwan over the deployment of Starlink came to an abrupt end after the SpaceX CEO insisted on 100% of the company, which is currently not allowed under the island’s laws. However, many experts believe that Trump is less likely to seek advice from Musk over the Taiwan situation.

It’s not that ‘hunky dory’: The presence of anti-China Trump loyalists

It is pertinent to note that Musk’s view on China represents a stark contrast to other Trump loyalists. Earlier, Robert O’Brien, Trump’s former national security adviser, wrote in Foreign Affairs magazine that the US should sever all its economic ties with China. Meanwhile, Michael Pompeo, a former secretary of state, has called on the US to recognise Taiwan as a nation. However, Trump has already made it clear that Pompeo will not be part of his new government.

Despite a snub to Pompeo, Trump’s new cabinet is filled with China hawks. Senator Marco Rubio — who has taken an aggressive stance on China’s emergence as an economic power — will be Trump’s Secretary of State. Interestingly, Rubio will be the first sitting US secretary of state to have been sanctioned by Beijing.

Meanwhile, Elise Stefanik, Trump’s nomination as US ambassador to the United Nations, has also been an ardent critic of Beijing. In the past, Stefanik cited countering national security and economic threats posed by the “Chinese Communist government” as one of her priorities when serving as congresswoman for New York. Hence, it will be interesting to see whose influence will shape Trump’s outlook towards China.

With inputs from agencies.