Musk’s Close Ties With Trump Give Xi a Friend With Influence
(Bloomberg) -- The emergence of Elon Musk as one of Donald Trump’s top campaign donors bodes well for Xi Jinping if the former US president wins back the White House.
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The billionaire chief executive officer of Tesla Inc. and SpaceX, who has donated more than $100 million to support Trump, has extensive business interests in China. He enjoyed perks that were rarely offered to other foreign investors, such as when Tesla got an unprecedented concession to wholly control its local subsidiary. Today, half of all Tesla electric vehicles are made in China.
Musk’s views on some of the most sensitive US-China issues also closely align with those of Xi. The businessman has said Taiwan should effectively be under Beijing’s control, and expressed opposition to US duties on Chinese electric vehicles — a stance that differs from Trump’s threat to impose tariffs of as much as 60% on all goods made in China.
In April, with Tesla’s revenue declining, Musk made an unannounced trip to China to seek approval to launch its driver-assistance software in the world’s biggest auto market. He met with Premier Li Qiang, who as the Chinese Communist Party secretary for Shanghai helped the company set up what is now its top plant globally. Shortly afterward, Tesla’s locally-made cars cleared a key data security and privacy requirement in China.
“We have a pattern with Musk that he flatters the Chinese and they give him special treatment, and they will use that absolutely to try to influence the Trump administration,” Derek Scissors, senior fellow at the American Enterprise Institute who previously worked at the Pentagon. “He is extremely pro-China.”
Musk’s views on China represent a stark contrast to others within Trump’s orbit when it comes to policy toward the world’s second-biggest economy. Robert O’Brien, Trump’s former national security adviser, wrote in Foreign Affairs magazine this year that the US should sever all economic ties with China, while Michael Pompeo, a former secretary of state, has called on the US to recognize Taiwan as a nation.
Both the Trump campaign and Musk didn’t respond to emailed requests for comment.
During Musk’s trips to China, he is routinely received by senior Chinese leaders, including Li and his various ministers. Even his mother, Maye Musk, enjoys some star status in the country.
Besides becoming the first international carmaker in China to operate without a joint venture with a local manufacturer — an exception not granted to the likes of Volkswagen AG or General Motors Co. — Tesla is positioning itself to get other perks.
Just last month, the official China Daily newspaper said Tesla is likely to be one of the first firms to join a pilot program that allows foreign companies to operate their own telecommunications infrastructure, which could help the company move closer toward deploying its driver-assistance system.
“The Tesla-China relationship is one of ‘co-dependence,’ where Tesla needs China for its manufacturing scale and supply chain sophistication, while China welcomes Tesla for its technology leadership,” said Kevin Xu, a tech investor and founder of Interconnected Capital based in the US.
“I can see Musk becoming a key interlocutor between the US and China on many technology and trade matters in a second Trump administration,” Xu said. “Musk will likely push Trump to be more friendly towards EV adoption in the US, which Trump has not been so far.”
On the campaign trail, Trump has indicated an openness for Chinese automakers to build cars in the US even while threatening across-the-board tariffs on China that would effectively decimate trade between the world’s biggest economies. At the same time, the former US leader has shown a willingness to cut deals and expressed admiration for Xi.
“He controls 1.4 billion people with an iron fist,” Trump said of Xi on a recent podcast with comedian Joe Rogan. “I mean, he’s a brilliant guy, whether you like it or not.”
Musk’s comments on the Communist Party have generally won praise in Beijing. In 2021, after he said the Chinese government is “possibly more responsible” to people’s happiness than the US, then Foreign Ministry spokeswoman Hua Chunying hailed his “objective statement.”
A year later, Musk published a column in the official magazine of the Cyberspace Administration of China, where he laid out a vision for how technology can ensure humanity’s future that largely echoes the goals of Xi’s government. After his $44 billion takeover of Twitter, since renamed X, Musk decided to drop all “state-affiliated” labels from the site, including for China’s propaganda outlets such as Xinhua News Agency.
Musk on Taiwan
Musk also weighs in frequently on geopolitical issues. In 2022, he said his recommendation for Taiwan was to “figure out a special administrative zone,” aligning with Xi’s vision for unifying the self-ruled island under the same framework that Beijing has to govern Hong Kong and Macau.
Last year, he said Beijing views Taiwan an “integral part of China” similar to Hawaii for the US, drawing criticism online. The US’s “One China” policy recognizes the People’s Republic as the “sole legal government of China,” without clarifying its position on Taiwan’s sovereignty.
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. Bloomberg reported last year that talks between Taiwan and SpaceX over the deployment of Starlink — a satellite network that can maintain communications in the event of a war — have broken down over Musk’s insistence on owning 100% of the company, which is currently not allowed under the island’s laws.
“I don’t think either Trump or Musk gives a hoot about national security or define it the same way the current administration does,” said Kendra Schaefer, a partner at consultancy Trivium China. “During the first Trump term, I’d argue that national security was defined by whoever was whispering in Trump’s ear last.”
Despite Tesla’s success in China, Beijing has remained suspicious of Musk’s SpaceX and his ties with the Pentagon. The PLA Daily, the official mouthpiece of China’s military, once warned about the “barbaric expansion” of the Starlink satellite network, saying it could be used by the US government “obsessed with seeking hegemony.”
It’s unlikely that either Trump or Vice President Kamala Harris would take advice from Musk when it comes to Taiwan, according to Stephen Orlins, president of the National Committee on US-China Relations, who was a member of the State Department legal team that helped establish diplomatic relations with China.
“Governments are smart enough to know what the interests of the business people are,” said Orlins, adding that multinationals with big stakes in China could play a constructive role as long as they disclose their interests.
“I don’t mind having people with interests in both countries,” he said. “It could lead to a more peaceful future.”
--With assistance from Chunying Zhang, Stephanie Lai and Jenni Marsh.
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