Elon Musk holds an outsized affect 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 energy in slashing and refashioning the federal authorities as he sees match. And it has shortly grow to be clear that he has the president’s ear on points past that transient.
However on one subject, Musk stands considerably aside from others within the coterie of aides and advisers round Trump: China. In distinction to the numerous hawks within the new Trump cupboard who name for a hard-line method on China, Musk is a putting outlier.
As an professional 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 language sentiment shocking, on condition that he has sought all through to get a enterprise maintain within the nation.
However these entanglements are value scrutiny, given Musk’s function within the Trump administration at a time when certainly one of America’s largest international coverage challenges is the right way to handle its relationship with Beijing.
Musk’s journey to the East
For years, Musk has had important enterprise pursuits in China, with Tesla’s Shanghai manufacturing unit, Tesla Giga Shanghai, taking part in 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 dimension and productiveness, now accounting for greater than half of the corporate’s world deliveries and a majority of its income. Furthermore, practically 40% of Tesla’s battery provide chain depends on Chinese language corporations, and these partnerships proceed to broaden.
Elon Musk walks with Shanghai Mayor Ying Yong throughout the groundbreaking ceremony for a Tesla manufacturing unit in Shanghai on Jan. 7, 2019.
STR/AFP through Getty Photos
Notably, Tesla was the primary international automaker permitted to ascertain operations in China with out a native associate, following a change in possession laws. The Shanghai manufacturing unit was constructed with the help 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 lowered company tax fee of 15% – 10 share factors decrease than the usual fee.
The fee benefits of producing in Shanghai, which embrace decrease manufacturing and labor bills, have additional cemented Tesla’s reliance on the Chinese language market.
Provided that Musk’s wealth is basically tied to Tesla inventory, 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 manufacturing unit in Shanghai — a $200 million plant that’s set to supply 10,000 megapack batteries yearly. It’s the corporate’s first megapack battery manufacturing unit outdoors 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 ten% tariff on Chinese language 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 path he needs the administration to maneuver.
Throughout his go to to Beijing in April 2024, Musk praised the nation, 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 staff as lazy and has confronted U.S. labor regulation disputes, whereas concurrently praising Chinese language staff for “burning the 3 a.m. oil” underneath 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 area program, applauded its management in world inexperienced power initiatives and urged his followers to go to the nation.
Musk has additionally opposed U.S. efforts to decouple from China, describing the nations’ economies as “conjoined twins,” regardless of a large a part of the international coverage institution within the West viewing decreased dependency on China as crucial for safety pursuits amid rising geopolitical tensions.
On the difficulty of Taiwan, essentially the most harmful flashpoint in U.S.-China relations, Musk has in contrast Taiwan to Hawaii, arguing that it’s an integral a part of China and noting that the U.S. Pacific Fleet has prevented mainland China from attaining reunification by power.
Musk additional steered that the Taiwan dispute may very well be resolved by permitting China to ascertain Taiwan as a particular administrative zone, much like Hong Kong.
His remarks have been shared and welcomed by China’s then-ambassador to the U.S., who, in a submit on X, emphasised China’s so-called peaceable unification technique and advocated for the “one country, two systems” 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 sturdy faction of anti-China hawks in Trumpworld.
Given Musk’s method to China, it’s laborious to see him not attempting to make use of his affect with the president to push for considerably hotter relations with Beijing.
If such counsel have been heeded, it’s straightforward to check Musk leveraging his deep ties to China, notably his shut private relationship with China’s present second-ranking official, Premier Li Qiang, who was the Shanghai get together chief when Tesla’s manufacturing unit was constructed. Within the state of affairs, Donald Trump might faucet Musk as a again channel for diplomacy to ease U.S.-China tensions and facilitate bilateral cooperation when wanted.
So far, 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 occasion.
However 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 commerce battle and tech blockade towards 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 battle towards China throughout the president’s first time period — recommend that Trump’s dedication to additional decoupling from China stays sturdy.
Moreover, Musk’s enterprise pursuits and private wealth tied to China might go away him weak to Chinese language affect. By leaning on Musk’s shut ties with Trump, China might 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 corporations reliant on its market into making compromises on issues regarding its nationwide pursuits. As an example, Apple eliminated digital non-public community apps from its app retailer in China on the authorities’s request. Equally, Tesla might 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 entry to delicate knowledge from a number of businesses, Musk might discover himself caught between U.S. safety scrutiny and China’s strategic concentrating 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 depend upon the president and his different advisers, a lot of whom are looking for an aggressive entrance towards Beijing and are prone to view Musk as an obstacle fairly than ally in that battle to come back.
