What does Musk’s joining of Trump administration mean for US-China ties?

US President-elect Donald Trump announced on Tuesday the creation of a new advisory group, the Department of Government Efficiency (DOGE), appointing tech billionaire Elon Musk and biotech entrepreneur and former Republican presidential candidate Vivek Ramaswamy as co-leaders.

While this move aims to improve efficiency within the US government, it has stirred questions in China, where Musk's deep business ties and Ramaswamy's staunch anti-China stance could influence US-China relations.

Musk, CEO of Tesla and SpaceX, has long been seen as a friend to China, with Tesla’s Shanghai operations central to his business strategy. His ability to navigate the political landscapes in both the US and China has allowed him to maintain successful ventures in one of the world’s most competitive markets.

His new ‘DOGE’ role in the incoming Trump administration has raised concerns in some quarters about Musk’s ability to manage the growing tensions between Washington and Beijing.

However, Mike Liu, Vice President of the Center for China and Globalization (CCG), a Beijing-based think tank, downplays this possibility, citing Musk’s strong connections in China and his skill at balancing US and Chinese interests.

“Elon is well-connected with many senior people in China... I don’t think the Chinese side will have any problem with that,” he tells TRT World.

Still, Liu acknowledges that tensions could arise on the US side, where Musk’s new role could be seen as a conflict of interest given his business dealings in China.

In recent years, the US has blacklisted multiple Chinese entities and individuals as "foreign agents" or "national security threats," citing their alleged ties to the Chinese government. Beijing has condemned these actions, accusing the US of "overstretching” national security to disrupt normal trade and economic ties.

A matter of interests

Tesla’s Shanghai Gigafactory is vital to its global operations, and Musk has frequently lauded China’s efficiency in growing the electric vehicle (EV) sector.

At the same time, the US continues to target Chinese tech firms like Huawei and ByteDance.

Josef Gregory Mahoney, a professor of politics and international relations at Shanghai-based East China Normal University, tells TRT World that China may not take Elon’s new “official” role seriously.

"Simply participating in this type of government initiative doesn’t really mean that he’s a government official… say on par with the national security advisor or the secretary of state," he reasoned.

“Given that Musk once backed the failed cryptocurrency ‘dogecoin,’ I’m not sure how seriously we can take a task force named DOGE.”

The term ‘DOGE’ echoes its historical namesake, originating from the Italian word "doge," which, as defined by the Cambridge Dictionary, refers to the highest government official in Roman city-states like Venice and Genoa during the Renaissance.

A bridge or a backchannel?

Despite Musk’s business connections to China, Chinese analysts believe his role in the Trump administration will not significantly alter US-China relations.

According to Liu, Musk’s main task will be to streamline US government operations, not mediate between the two superpowers.

"Elon’s role in the administration is to clean up the mess in the bureaucratic systems and reduce costs," he says. "I don’t think he will be the bridge between China and the US."

Mahoney concurs, noting that Musk’s influence will be limited when it comes to foreign policy. “Musk might be a backchannel for dialogue, but his sway over US policy will likely be limited.”

Reports indicate that Trump is populating his administration with figures known for their hardline views on China, signalling a firm stance on issues ranging from national security to trade.

Liu notes that while the “hawkish” elements like Marco Rubio, Trump’s pick for US Secretary of State, will continue to have more say in steering the US’ China policy, Musk “can help when both sides run into a deadlocked situation.”

"I would not expect the US to go easy on China when it comes to trade negotiations and sanctions," he says.

Mahoney believes that China will nevertheless keep a close eye on Musk, whose track record has often been unpredictable. He points to Musk’s abrupt departure from White House advisory groups in 2017 over disagreements with Trump on climate policy and immigration, only to later reconcile with him before the 2024 elections.

“It's difficult to know precisely how Musk might act,” he says.

Elon, Vivek, and the EV factor

The rapidly evolving Chinese EV market could shift the dynamics of Musk’s relationship with China, says Mahoney.

He notes that with domestic players like BYD and NIO offering high-quality, low-cost electric vehicles, Musk may find his influence in China diminishing, especially if US-China tensions continue.

“Tesla is failing to compete effectively with Chinese EVs... Chinese EVs are not only better but have better quality and lower prices,” Mahoney explains.

The US has recently introduced policies targeting China's burgeoning EV sector, citing "overcapacity" as a primary concern. These policies include sharp tariff increases of 100 percent on the import of Chinese EVs and essential components like lithium-ion batteries and permanent magnets.

As China reduces its reliance on foreign companies for advanced technology, Musk’s business interests may align less with Beijing’s objectives.

Musk’s DOGE co-leader Ramaswamy, who has taken a hardline stance against China, could further complicate the Tesla CEO’s position.

Liu, however, argues that while the two may have different views on China, their main focus will likely be domestic policy.

“With Elon and Vivek in place, they might have some influence on US regulatory policies in EV and emerging tech areas,” Liu says. “It might shed a slim light to promote multilateral cooperation in tech innovation.”

Mahoney, however, believes Musk’s role in the administration won’t shift the broader trajectory of US policy toward China. “Trump has a record of trying to accumulate leverage... he may be setting the stage to do that again (with Musk’s appointment in DOGE).”