Headline: “Elon Musk – The Power Player in Trump’s Administration and His Unique Stand on China”

Elon Musk, the world’s wealthiest person, wields substantial influence within the Trump administration. As the leader of the newly formed Department of Government Efficiency (DOGE), Musk has unprecedented political authority, allowing him to reshape the federal government to his preference. Moreover, it’s evident that he has President Trump’s attention on various matters beyond his official role.

However, Musk’s stance on one particular issue – China, sets him apart from the majority of Trump’s inner circle. Unlike the numerous hardliners in Trump’s cabinet advocating for a strict approach towards China, Musk stands out as a notable exception.

Having tracked Musk’s perspective on China-US relations, his historical leanings towards China are understandable, considering his endeavors to establish a business foothold in the Asian nation. However, these connections merit close examination, especially given Musk’s influential role in the Trump administration during a period when managing the relationship with Beijing presents a major foreign policy challenge for the US.

Musk’s Eastern Journey

Over the years, Musk has significant commercial interests in China, with Tesla’s Shanghai factory, Tesla Giga Shanghai, playing a pivotal role in the company’s international operations.

Since its inauguration in 2019, the Shanghai plant has outperformed Tesla’s Fremont, California, facility in terms of both size and output, contributing to over half of the company’s global deliveries and a majority of its profits. A significant portion of Tesla’s battery supply chain involves Chinese companies and these collaborations continue to grow.

Remarkably, Tesla was the first foreign carmaker allowed to set up operations in China without a local partner, following a change in ownership rules. The Shanghai factory was built with the assistance of $1.4 billion in loans from Chinese state-owned banks, offered at favorable interest rates.

From 2019 to 2023, Tesla also benefited from a reduced corporate tax rate of 15 percent – 10 percentage points below the standard rate, courtesy of the Shanghai government.

The financial benefits of manufacturing in Shanghai, including lower production and labor costs, have further solidified Tesla’s dependence on the Chinese market.

As Musk’s wealth is primarily linked to Tesla’s stock, his financial status is increasingly tied to the company’s success in China, making any potential disengagement challenging economically and strategically.

Musk’s Affinity for China

The extent to which Musk’s financial interests in China will translate into real influence over the Trump administration’s policy towards Beijing remains uncertain. However, Musk’s history of pro-China statements provides an indication of the direction he’d prefer the administration to take.

During a visit to Beijing in 2024, Musk expressed his admiration for the country, commenting, “I also have a lot of fans in China – well, the feeling is mutual.”

His admiration seems partly based on how he perceives business and labor practices in China. Musk has criticized American workers as lazy while praising Chinese workers for their hard work and dedication.

On the social media platform X, formerly known as Twitter, Musk has also commended China’s infrastructure, space program, and leadership in global green energy initiatives. He has encouraged his followers to visit the country and explore.

Musk has expressed opposition to US efforts to disengage from China, describing the countries’ economies as “conjoined twins,” despite a sizable part of the foreign policy establishment in the West viewing decreased dependency on China as necessary for security interests amid rising geopolitical tensions.

Whether Musk’s influence over Trump will result in a shift towards warmer China-US relations remains a question. However, given his unique vantage point and close ties with China’s leadership, it’s conceivable that Trump might leverage Musk as a diplomatic conduit to ease tensions between the two nations.

Nonetheless, it’s worth noting that Trump has not indicated a desire for such a diplomatic role for Musk. In his first term, Trump initiated an unprecedented trade war against China, fundamentally transforming China-US relations and promoting a bipartisan consensus to counter Beijing.

Musk’s business interests and personal wealth tied to China could leave him vulnerable to Chinese influence. China could potentially use his dependency on the Chinese market as leverage to pressure Trump into making concessions on significant strategic issues.

As long as Musk retains his influence with Trump, it’s plausible that his pro-China sentiments will translate into attempts to influence government policy. However, the success of these efforts will ultimately depend on the President and his other advisers, many of whom are seeking a more aggressive stance against Beijing and may view Musk as a hindrance rather than an ally in that fight.

This article was originally published on The Conversation. Read the original article.

(Disclaimer: The article is intended to provide information and does not constitute investment advice.)