Elon Musk's historically amicable approach towards China, including his praises of "China speed" during Tesla's factory establishment, and his marveling at Shanghai's administrative efficiency and infrastructure development, may face new challenges. With Trump set to retake office in January 2025, the potential policy differences regarding China between these two influential figures remain a critical question.
Tesla's electric vehicle (EV) price war in late 2023 highlights the Chinese market's importance to Musk. Despite Model Y being offered at the lowest global price, Tesla continues to boost sales by engaging in price competition with local brands.
A noteworthy personnel change has emerged. Tesla's Gigafactory Shanghai manager, Gang Song, has left the company. As a representative in the Shanghai Municipal People's Congress, Song held significant influence within Tesla's China operations, second only to senior vice president Tom Zhu, and likely played a crucial role in government relations.
This development raises questions about subtle changes in Tesla's relationship with the Chinese government.
The selection of Shanghai for Tesla's first Gigafactory marked it as China's first fully foreign-owned automotive plant approved by the government. The party secretary for Shanghai at the time was Qiang Li, the current premier of China. This achievement solidified Musk's connections within the Chinese political landscape.
According to a recent report from MarketWatch, new restrictions on investments in China were excluded from last week's US government budget proposal, particularly concerning advanced technology sectors like AI, semiconductors, and quantum computing. Rosa DeLauro, chair of the House Appropriations Committee, has accused Musk of conspiring to remove related provisions to protect his investments in China.
DeLauro also questioned Musk's extensive investments in key industries in China and his personal relationships with Chinese officials, suggesting these factors influenced his opposition to certain policies.
These developments have raised concerns among US insiders regarding Musk and Tesla's investments in China potentially undermining Trump's hardline stance on China.
Divergent interests shape contrasting approaches
During his campaign, Trump has exhibited a clear and aggressive anti-China position. However, at their core, Musk and Trump differ significantly in their attitudes and policies toward China due to their distinct roles, interests, and objectives.
Musk, as a businessman and entrepreneur, primarily focuses on economic benefits and global markets. His companies, Tesla and SpaceX, need to maintain good relations with various countries, including China. He typically approaches business decisions from a commercial perspective, striving for success in the world's largest EV market.
In contrast, Trump, as a politician, prioritized "America First" during his presidency (2017-2021), emphasizing national security, trade balance, and economic independence. His hawkish stance against China included sanctions, tariffs, and technological blockades, and he viewed China as a primary competitor.
Musk receiving criticism for being "friendly to China" or "overly accommodating" could provoke dissatisfaction among Trump's supporters.
However, Musk may choose to handle his relationship with China discreetly. Although Trump publicly adopts a tough stance on China, he respects successful American entrepreneurs and might refrain from openly attacking Musk. Yet, it is challenging to avoid further scrutiny from hawkish members within his camp.
While the possibility of tension arising between Musk and Trump due to differing views on China exists, it is not insurmountable. The pragmatic nature of Musk's business dealings and Trump's political motivations may allow both parties to maintain superficial harmony on some issues. However, should US-China relations deteriorate further, or if Musk's business activities in China are seen as threatening US national interests, their divergences could deepen.
