The tech billionaire’s relations with President Trump could influence the administration’s China policy more than any other donor or patron.

    Toward the end of 2024, the SEC filed a lawsuit against Elon Musk, alleging the billionaire committed securities fraud in 2022 by failing to disclose he had amassed a stake in Twitter. This indiscretion allowed him to buy shares at low prices. This comes weeks after federal investigators were looking into Musk’s engagement with foreign leaders, particularly adversaries of America. Over Christmas, the SpaceX and Tesla founder was caught in a tiff with fringes of the MAGA movement over work visas. More recently, Musk defended an employee of DOGE who was fired over distasteful remarks such as “normalize Indian hatred.”

    The world’s richest man does not mind getting his hands dirty, whether in business or on X. However, Musk’s legal troubles and his forays into international affairs, such as hosting the leader of a controversial German opposition party or commenting on the grooming gang scandal in Britain, may undercut administration officials and, someday, Trump himself.

    President Trump has appointed a cast of China hawks, from Michael Waltz to Marco Rubio, giving the impression that his administration may be tough on China. But those nominations could be deceiving.

    While the president has unleashed tariffs on Chinese goods, he also invited Chinese President Xi Jinping to his inauguration, met with the CEO of TikTok at Mar-a-Lago, and even suggested that the United States and China could solve global issues together. Needless to say, this is a significant departure from his first-term positions. What changed?

    Unlike his first term in office, Trump has avoided establishment conservative types like Mike Pompeo or Nikki Haley to guide his policy thinking. But more importantly, he has kept close the likes of Elon Musk and Jeff Yass, who have extensive commercial interests in China: Musk through Tesla and Yass through investments in ByteDance, the parent company TikTok.

    Musk’s relations with Trump could influence the administration’s China policy more than any other donor or patron. After all, Musk not only supported Trump through campaign donations but also by unleashing X as a challenge to the mainstream media. The platform’s limited restrictions on hate speech, conspiracy theories, and often openly pro-Trump bias make it too vital for Trump not to heed the media mogul’s counsel. This bond could extend to foreign policy and national security issues.

    While the president has doubled down on his anti-China rhetoric with tariffs, he appears to be accommodating Chinese businesses in other ways. In 2023, there was speculation that a prominent Trump donor, Yass, with investments in Bytedance, could influence Trump’s position on the digital application.

    As I had outlined in a piece for The Hill in 2022, Musk’s business interests in China and his close connections with high-ranking officials in the country make him unfit to be an America-first candidate to implement government-supported projects, including SpaceX.

    Musk has explicitly stated his love for China time and again. He even went on to praise the leadership of the Chinese Communist Party as more responsible for its people’s well-being than the democratic United States.

    A New York Times report unveiled that Musk and SpaceX have repeatedly failed to comply with federal reporting protocols on state secrets by not providing extensive details of his meetings with foreign leaders. Musk has met with high-ranking CCP officials and even had phone conversations with Russian president Vladimir Putin.

    He has taken over $500 million in loans from Chinese state-owned banks to build Tesla’s Shanghai Gigafactory. In 2023, Tesla sold nearly as many cars in China as they did in the United States.

    Like Japan, which has lost a decade to slow growth in the electric vehicle (EV) space, the United States, over multiple administrations, has failed to increase national EV adoption. While the Biden administration tried vigorously through industrial policy, President Trump has moved swiftly to revoke EV mandates. Surprisingly, Musk has not attempted to lobby the Trump administration in a way that would apparently benefit his interests.

    On the contrary, he has called for an end to EV tax credits. This once again raises doubts about Musk’s motives. The transition to EVs is not simply about addressing climate change but increasingly ensuring the U.S. position in a critical economic sector. China has come to dominate key green technology sectors over the last decade, leaving the United States and the Western world trailing behind. A significant policy departure could give China and its state-owned enterprises even more advantages in dominating the global market.

    From effectively advocating for less EV adoption in the United States while championing it in China to dismissing calls for decoupling and showering praise on the CCP, Musk could be Trump’s weakest link in competing with Beijing.

    With these complex geo-economic and national security considerations, it is vital for Trump to reexamine his ties with Musk, who may be talking America first but walking China first.

    Akhil Ramesh is the Director of the India Program and Economic Statecraft Initiative at the Pacific Forum.