Elon Musk could act as middleman between China and Trump in possible global trade war

Drive an hour outside China’s commercial capital Shanghai, and you’ll reach Elon Musk’s Tesla gigafactory.

It manufactures almost one million Tesla cars a year and produces more than half of all its cars worldwide.

But with US president-elect Donald Trump preparing to move into the White House, the relationship between his new buddy Elon Musk and the leadership of China‘s Communist Party is in sharp focus.

Shanghai has been the key to Tesla’s success, largely thanks to the city’s former Communist Party secretary, now China’s premier, Li Qiang.

Chief executive of Shanghai-based Auto Mobility Limited, Bill Russo, says: “Qiang is China’s number two person. His position in Shanghai made everything possible for Tesla.”

He added: “In 2017, China adjusted its policy guidelines for the automotive industry to allow foreign companies to own their factories in China.

“Tesla signed its deal in 2018, broke ground in 2019, and started producing the Model 3 in 2020.”

The factory opened at breakneck speak and in record time.

In April, Musk met Qiang in Beijing, later posting on X: “Honoured to meet with Premier Li Qiang. We have known each other now for many years, since early Shanghai days.”

The Musk-China ties go all the way to the top.

When China’s President Xi Jinping visited the US in November 2023 he met Musk, who posted: “May there be prosperity for all” – echoing the language often used by China’s government.

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Musk has previously weighed into the debate over the status of Taiwan. Two years ago, he suggested tensions could be eased by giving China some control over Taiwan.

This comment incensed Taiwan’s leaders.

Chinese commentator Einar Tangen, from the Taihe Institute in Beijing, says: “If Musk had said anything else, he could face action against the Shanghai plants. He’s not going to endanger that. He’s playing both sides for his own advantage.”

What’s in it for China?

Musk needs China, and in the months to come, China may need Musk.

He could act as a well-connected middleman between the Chinese Communist Party and Trump, in the face of a potential global trade war.

“Like it or not, we are living in a world where China is the dominant player in the race to an electric future,” says Russo.

Musk pioneered the EV industry in China, but is now struggling to compete with local car brands like BYD and Nio.

The relationship between Musk and Trump could become volatile, but for now, Musk stands to benefit.

“Donald Trump has never had a problem giving exceptions to friends,” Tangen says.

“It fits his personality, that he can grant pardons and give favours to the people and companies he chooses.”

Musk ‘the pioneer’

Musk is well regarded as a pioneer in China and most people speak of him highly.

Strolling along the Bund waterfront area in Shanghai, Benton Tang says: “Tesla really impacted the entire industry here.

“It pushed people to develop and improve the quality, the design and especially the price.”

Interest in the Musk family has also gripped China’s online community.

His mother, Maye Musk, frequently visits the country, where she has a huge social media following as a senior-age celebrity fashion icon and endorses several Chinese products including a mattress brand.

Her book, A Woman Makes A Plan, has been translated into Chinese and is a bestseller here.

Meanwhile, as the countdown to Trump’s inauguration gains pace, the spotlight on the president-elect’s coterie of advisers intensifies.

In the middle of the glare is Elon Musk.

China waits to see what that will mean for them.