Elon Musk’s overwhelming grip on Donald Trump’s executive branch has sparked criticisms that the world’s richest man is serving as a de facto U.S. president. But some of Musk’s purported campaigns to cut government waste, including working to nix federal agencies such as USAID, have caused alarm amongst foreign policy experts, who fear that Musk’s actions are more in service of his personal financial interests—and the Chinese government.
Musk has cofounded seven companies across the span of his career, including Tesla, SpaceX, the Boring Company, xAI, Neuralink, and Starlink. A December analysis of Musk’s $447 billion net worth by Bloomberg found that the bulk of his value stemmed from his Tesla shares, which grew 71 percent in 2024.
But it was Musk’s close positioning to Trump that helped skyrocket his own net worth by 77 percent since Election Day, with investors predicting that key milestones for the billionaire’s products—from loosened AI regulations to streamlined production of self-driving vehicles—would be easier under a second Trump administration.
The billionaire’s cozy relationships with both Trump and Chinese President Xi Jinping, though, might not just benefit Musk’s financial interests. Critics argue that they could dually boost China as it positions itself to replace the U.S. at the forefront of the world stage.
Former U.S. Ambassador to Russia Michael McFaul warned in an essay for The Dispatch that many of the Trump administration’s early actions (most of which have been spearheaded by Musk) are “directly damaging the United States’ ability to compete with its top geopolitical rival.”
“All these actions create tremendous opportunities for the [People’s Republic of China]. Chinese President Xi Jinping is not shutting down his country’s foreign assistance; he is offering aid, trade, and investment instead,” McFaul, now a political science professor at Stanford, wrote.
Despite declining sales around the globe, Tesla has retained a stronghold on the Chinese market. The company’s Shanghai “gigafactory” is one of its biggest, and singularly accounted for more than half of Tesla’s global sales in 2023.
The business has been so successful there that Tesla broke ground on another, $200 million Shanghai “megafactory” in May 2024, just three months before Musk threw his weight behind Trump’s presidential campaign. The new operation, which focuses on the production of utility-scale lithium-ion batteries, took 10 months to complete construction. Production is slated to begin on February 11.
Musk has waxed poetic about the Chinese production of his electric vehicles. During a 2023 trip during which Musk met with a string of Chinese officials, including Shanghai Communist Party Chief Chen Jining, Musk said that the “cars we produce here are not just the most efficient production, but also the highest quality.”
And Tesla has pulled off several major coups in China. Musk has spent the better part of the last year actively lobbying Chinese officials to advance the approval of his car company’s self-driving features—a turn that would transform Tesla into a more AI-centric company.
After Musk paid a visit to the country in early 2024, the China Association of Automobile Manufacturers released a statement that Tesla’s Model 3 and 7 vehicles had passed the nation’s data security requirement test.
In April, Tesla cut a deal with Baidu, the company behind China’s biggest search engine, that would allow their vehicles to leverage their mapping service to advance the self-driving’s navigation features. Tesla currently plans for cars with “full self-driving” features to enter the Chinese market in Quarter 1 of 2025 “pending regulatory approval.” China has yet to approve this product.
But compare that to the climate for electric vehicles in the U.S., where Tesla’s full self-driving feature has faced heightened scrutiny from federal regulators since the company reported four crashes—one of which killed a pedestrian in Arizona—due to sun glare, fog, and dust.
In October, the National Highway Traffic Safety Administration (NHTSA) opened a probe into 2.4 million Teslas and the full self-driving feature.
Musk originally billed self-driving as an autonomous feature that would allow car owners to take the road unsupervised, but the company changed its tune after the accidents, instead revising its pitch to insist that drivers pay full attention to the road regardless of their car’s full self-driving abilities.
Tesla has also faced heat from the NHTSA over the car’s less advanced Autopilot system, after the agency found 467 crashes involving the effective cruise control feature. Those crashes resulted in 54 injuries and 14 deaths, according to PBS.
In December, it came to light that Trump’s presidential transition team had recommended that the incoming president quash the NHTSA’s crash reporting requirement for self-driving vehicles. In an internal document obtained by Reuters, the team described the safety reporting condition as a mandate for “excessive” data collection, advising that the president abolish the requirement entirely.
The current data collection policy has revealed that Tesla reported more than 1,500 vehicle crashes to federal safety regulators in 2024. And a Reuters analysis of data from the NHTSA found that Tesla’s crash data accounted for 40 out of 45 of the fatal crashes reported through October 15.
But Musk’s affection for China seems to go beyond just Tesla’s success. He has spent the last several years seemingly deferring to Beijing’s stance on Taiwan.
Russian President Vladimir Putin, with whom Musk has reportedly had regular contact since 2022, allegedly asked the tech billionaire to avoid activating his Starlink satellite internet service over Taiwan “as a favor to Chinese leader Xi Jinping,” according to The Wall Street Journal.
That earned Musk backlash from stateside Republican lawmakers, including House China subcommittee Chair Mike Gallagher, who suggested in a letter to the company that the offlined service could be “in breach of SpaceX’s contractual obligations with the U.S. government.” SpaceX had a one-year arrangement to provide internet service to U.S. military stationed on the island.
In 2023, Musk earned a sharp rebuke from Taiwan after he suggested that Taiwan was an integral part to mainland China, separated from the country “arbitrarily” due to U.S. involvement in its defense operations, and “analogous to Hawaii or something like that.” Taiwanese officials told the billionaire that the island was “not for sale.”
Musk sparked more anger in Taiwan after SpaceX asked its Taiwanese suppliers to move their operations off island in late 2024, citing “geopolitical” concerns.
And all of Musk’s goodwill towards China has provided him with an unusually cushy relationship with the foreign country. In mid-January, Bloomberg and The Wall Street Journal reported that Chinese officials were reportedly open to selling TikTok to Musk, despite reports from China’s commerce ministry that the country would “firmly oppose” the sale of the massively popular video sharing app.
So Musk’s clear dependence on the Chinese market, as well as his willingness to acquiesce to the country’s geopolitical stances, has sounded the alarms amongst American critics—on both sides of the aisle.
In a letter to newly confirmed Treasury Secretary Scott Bessent, Senate Finance Committee Ranking Member Ron Wyden warned that Musk’s business operations in China were a fundamental conflict of interest that should prohibit the billionaire from accessing sensitive data and government secrets.
“I am concerned Musk’s enormous business operations in China—a country whose intelligence agencies have stolen vast amounts of sensitive data about Americans, including U.S. government employee data by hacking U.S. government systems—endangers U.S. cybersecurity and creates conflicts of interest that make his access to these systems a national security risk,” Wyden wrote.
Wyden also accused Tesla of receiving “several unusual concessions” from the Chinese government, including privileges “no other car company” had within the Eastern market. Further, Musk’s advantageous tax and loan rates set by Chinese state-owned banks made the carmaker a liability in the White House, Wyden argued, because those perks could “change quickly if Musk were to anger the Chinese government.”
“In light of China’s recent hack of the Treasury Department’s systems, it seems unusual to be granting access to sensitive systems to an individual with such significant business interests in China,” Wyden said.
And Musk’s former Department of Government Efficiency co-chair Vivek Ramaswamy warned in 2023 that he believed “Tesla is increasingly beholden to China.” “I have no reason to think Elon won’t jump like a circus monkey when Xi Jinping calls in the hour of need,” Ramaswamy said at the time, while discussing Musk’s decision to build a battery plant in Shanghai.
Ramaswamy also honed in on Musk’s comments about Taiwan as evidence of Musk’s suspicious alignment with Chinese interests. In 2022, the carmaker drew praise from Chinese officials for claiming that the former Chinese colony should become a “special administrative zone.”
That, according to Ramaswamy, was little more than a successful political ploy for Musk to obtain regulatory approvals and tax breaks from the Chinese Communist Party for his Shanghai factory.
In a lengthy May 2023 post on X in which Ramaswamy openly targeted Musk, the biotech billionaire wrote that “the U.S. needs leaders who aren’t in China’s pocket.”
(Just months later, during his unsuccessful run for president, Ramaswamy said the U.S. should let China invade Taiwan after securing its own source of semiconductors.)
With Musk’s new role as Trump’s right-hand man, Beijing hopes that he can serve as a “conduit” between the U.S. and China, according to The Wall Street Journal.
“Given his investment in China and also given his relations with Chinese leaders, people do hope that he can play a constructive role in the second Trump administration,” Wu Xinbo, director of the Center for American Studies at Fudan University, told the Journal in November.
But some of Musk’s recent machinations at the federal level seem primed to aid the foreign superpower beyond just the policy level. Foreign policy experts have argued that the decimation of USAID and its goodwill foreign policy strategy, for instance, will weaken the U.S.’s global positioning and provide China the leverage to take center on the world stage, with some unexpected complications to boot.
“As China expands its diplomatic and economic influence around the world, American support for systems of oversight, accountability, and sustainable economic and environmental decisions helps prevent China from entrapping countries in debt and diplomatic subservience and from monopolizing critical minerals or strategic access points, about which the Trump administration is so concerned,” wrote Brookings Institute foreign policy fellow Vanda Felbab-Brown, citing the Panama Canal as an example.
In a string of recent tweets, Musk has slammed USAID—which distributes some $86 billion in congressionally appropriated foreign aid—as a “criminal organization” that employs an “arm of the radical-left globalists.”
Andrew Natsios, the former head of USAID under President George W. Bush and a lifelong conservative, told Politico that Musk’s snubs against the agency were a “bold-faced lie” and that the administration’s idea to fold USAID’s priorities into the State Department was the “worst idea [he] could possibly imagine.”
USAID’s mission is, per Natsios, in the “national interest.” Data aggregated from aid missions around the world inform U.S. policy, on issues ranging from public health to diplomacy. News on Monday that there was an Ebola outbreak in Kampala, Uganda, was reported via a USAID mission, for example. Choosing to nix the agency would force the U.S. into an information dark age that could see the country caught off guard in future health crises.
In fact, permanent closure of America’s international aid program, which provides humanitarian assistance and funding for infrastructure and developmental tech in developing nations, would prove a “major global calamity,” according to Chris Barrett, a professor of public policy and economics at Cornell University.
“The U.S. government and U.S. businesses, charities and citizens will be seriously handicapped in our interactions with the rest of the world without USAID data, expertise, and funding,” wrote Barrett in a statement. “The only winners from closing USAID will be China and Russia as they seek to secure access to vital resources abroad and build alliances that are not in U.S. national interests.”
Just days into the budget freeze on USAID, the South China Morning Post reported that developing countries that have been historically reliant on USAID “may turn to China for support or other concessional investments in infrastructure projects—unless China offers first.”
That could be through China’s Belt and Road Initiative, in which the country has invested upwards of $1 trillion since 2013 to advance the nation’s soft power and global dominance.
The New Republic reached out to Musk via Tesla for comment but did not receive a response by time of publication.
Ultimately, China views the next four years under Trump to be a remarkably unstable period for the U.S.—and one that they’re more than ready to seize on for long term, international gains.
“Chinese leaders remain convinced of the country’s historic destiny to rise and displace the United States as the world’s preeminent power,” Yun Sun, the director of the China program at the Stimson Center, argued in a Foreign Affairs op-ed Thursday. “They think that Trump’s policies will undermine U.S. power and reduce U.S. global standing in the long run. And when that happens, China wants to be ready to take advantage.”
The “Make America Great Again” catchall has promised to regress the country back into a bygone golden age. But just two weeks into his second term, the Trump administration’s approach to dealing with China’s growing influence appears discordant with his first term’s “tough on China” approach.
Gutting critical federal agencies, seeding mass distrust in America’s democratic elections and systems, and prioritizing isolationist policies have only opened up more opportunities for China to step into the spotlight. And as the foreign nation’s economy grows—so will Musk’s.
