Elon Musk’s role in Trump’s trade war 2.0

What happened China added 28 US entities to its export control list on January 2, with the commerce ministry stating it was banning dual-use items from certain companies to “safeguard national security and interests.” The news came as global markets are bracing for disruption as Donald Trump prepares to assume the US presidency on January 20, following his pledge to significantly increase tariffs. Promising charges of up to 10% on global imports, 60% on Chinese goods, and a 25% surcharge on Canadian and Mexican products, these proposed measures are expected to reshape trade patterns, inflate costs, and provoke retaliatory actions, according to trade experts. During Trump’s first term as president (2017-2021), the US imposed extensive tariffs on Chinese imports worth hundreds of billions of dollars. This move pushed American businesses to reconsider their dependence on supply chains rooted in China. The Trump trade war comeback is again set to see China as a primary target. The soon-to-be-president has pointed to China’s alleged insufficient efforts to prevent the flow of illicit drugs into the US via Mexico as one justification for tariff hikes. Despite the 2023 US-China agreement whereby Beijing pledged to curb the export of materials linked to fentanyl production — a leading cause of overdoses in the US — Trump continues to criticize China’s role. China, however, has defended its actions, highlighting measures taken since the agreement and dismissing claims that it knowingly allows fentanyl precursors to enter the US as baseless. Trump has also previously claimed that his proposed tariffs on Chinese imports would strengthen the US and boost its wealth. However, the news has sparked growing fears of a potential global trade war. The Jing Take Potential Trump tariffs have triggered anxiety across global supply chains and supply logistics, which are still in recovery post Covid-19. But could the threat of tariffs spur a negotiated settlement between the US and China; a conversation that could potentially be facilitated by Trump’s vocal friend Elon Musk. The entrepreneur behind Tesla, SpaceX, and other innovative ventures is a prominent figure deeply integrated into both nations’ economic ecosystems. His engagement with China through Tesla’s Gigafactory in Shanghai, for instance, showcases a collaborative model for US companies operating in China. The factory, wholly owned by Tesla, represents a rare feat amid the typical joint-venture mandates enforced on foreign firms, and manufactures more than half of Tesla's electric vehicles. Musk’s dual narrative as a pioneer of sustainable energy and space exploration resonates with global stakeholders, offering an alternative to the zero-sum rhetoric that dominates trade wars. His ability to navigate regulatory and political landscapes — both in the US and China — positions him as a potential bridge, fostering dialogue and innovation-driven economic integration. Moreover, Musk’s ventures in artificial intelligence and autonomous vehicles align with key industrial priorities in both nations. By emphasizing shared technological goals, he could ease trade frictions and encourage mutual investment. If Musk leverages his visibility and own reliance on exporting from China, he might serve as an informal ambassador of cooperation, demonstrating that innovation can thrive amid geopolitical challenges. Ultimately, while Musk is unlikely to directly mediate trade disputes, his presence as a transformative industrialist underscores the possibility of collaboration over confrontation. Trump has, in the past, famously favored his friends after all. And due to surging economic uncertainty, China might need Musk more. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

Elon Musk’s role in Trump’s trade war 2.0

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Published January 08, 2025

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Elon Musk’s role in Trump’s trade war 2.0