Billionaire Elon Musk influenced Mr. Trump to change his stance on China?

(VTC News) - Billionaire Elon Musk, an ardent supporter of Mr. Trump and with many business interests in China, could be a "cool breeze" to ease US-China tensions.

Donald Trump is preparing to return to the White House for a second term. Analysts say Beijing's biggest concern is the US President-elect's tough tariff policies, which could severely impact the Chinese economy. However, billionaire Elon Musk, who was a staunch supporter of Trump's successful campaign but also has many business interests in China, could be a "cool breeze" to ease US-China trade tensions.

Billionaire Elon Musk during a campaign rally with Mr. Trump (Photo: Reuters)

After Trump declared victory on November 6, Chinese Foreign Ministry spokesperson Mao Ning said at a regular press conference that China's policy toward the United States is consistent, affirming that Beijing will continue to view and handle China-US relations according to the principles of mutual respect, peaceful coexistence and win-win cooperation. As for how China might respond to the possibility of increased tariffs, Mao said: "We do not answer hypothetical questions." China policy Trump initiated the US-China trade war in his first term. During the current campaign, he has threatened to impose tariffs of more than 60% on Chinese exports to the United States and revoke China's Most Favored Nation trade status. According to UBS Group, a new 60% tariff on all Chinese exports to the United States would cut China's annual growth rate by more than half. Analysts say Beijing has prepared for the tough tariff policy of the “Trump 2.0” era. Associate Professor Dylan Loh, from the School of Public Policy and Global Affairs at Nanyang Technological University (Singapore), said that Trump’s high tariffs on Chinese goods are Beijing’s biggest concern. Therefore, Mr. Loh said that China “has not shown its cards” and has “prepared thoroughly for such a scenario.”

Export cargo containers at Lianyungang Port in Jiangsu Province, China. (Photo: China Daily)

China's response

The Standing Committee of the National People's Congress concludes its meeting on November 8 and is expected to introduce new measures to address local debt problems. Reuters previously reported that China is considering approving more than 10 trillion yuan ($1.4 trillion) in new debt issuance over the next few years, and Beijing could announce an even more robust fiscal package if Trump returns to the White House. Zhu Feng, director of the Institute of International Studies at Nanjing University, pointed out that China repeatedly stressed the need to deepen reform and comprehensively open up in its report to the 20th National Congress of the Communist Party of China to the third plenary session of the Central Committee held in July this year. This is not only to prepare for economic restructuring, but also to address the strategic pressure from the current Joe Biden administration and the goal of moving towards "America First" under Trump. Zhu predicts that the US-China technology war, the data war and other related issues will not change significantly when Trump returns to the White House. He believes that China needs to strengthen its own reforms, while pushing the US to return to the phase one trade deal signed in January 2020. The Musk Effect Tesla founder Elon Musk - the world's richest man - has turned to strongly support Trump in this election. Trump has promised to establish a government efficiency committee headed by Musk.

Billionaire Musk could be a "cool breeze" to ease US-China trade tensions in Trump's second term. (Photo: Reuters)

On November 12, Mr. Trump officially announced the nomination of billionaire Elon Musk and former Republican presidential candidate Vivek Ramaswamy to head the Department of Government Efficiency. According to Mr. Trump, the Department of Government Efficiency will conduct "a comprehensive financial and performance audit of the entire federal government, as well as make strong reform recommendations." Mr. Trump once praised billionaire Musk as "a star". Billionaire Musk has significant business interests in China, with half of Tesla's electric cars being manufactured in the country of a billion people. Expert Zhu said that if Mr. Musk can emphasize the common interests of US-China trade cooperation, adjust the continuous decoupling and disruption of the supply chain promoted by the Biden administration, and orient US-China relations in a relatively controllable direction, Mr. Musk can blow a cool breeze to cool down the tension. "From this point of view, the 'Musk effect' in the Trump 2.0 era is really something to look forward to," Mr. Zhu said.