Tesla delivered 36.7% of its cars to customers in China last year, making it the company's second-largest market worldwide based on sales. As Elon Musk, CEO of Tesla, continues to expand his business interests in China, U.S. lawmakers express concerns over Beijing's potential leverage over him. Meanwhile, President Donald Trump has announced additional 10% tariffs on Chinese goods and seeks greater restrictions on Chinese investments in the U.S., escalating tensions between the two countries.
The U.S. House of Representatives' select committee on China warns that the Chinese Communist Party might attempt to use Musk to influence U.S. policies favorable to its interests, especially given Musk's longstanding contacts with senior Chinese officials, including President Xi Jinping. The committee's Republican chair, John Moolenaar, and Democratic ranking member, Raja Krishnamoorthi, believe that Beijing views Musk as a strategic asset in negotiations, potentially bypassing key figures on Trump's national security team, such as Secretary of State Marco Rubio and national security adviser Mike Waltz.
"They absolutely see him as an asset to them in any kind of negotiations, a way to bypass Rubio, a way to bypass Waltz, a way to bypass those whom they see to be less friendly to them on their issues." – Raja Krishnamoorthi
Apart from Tesla, some of Musk's other ventures, including SpaceX and X, are viewed by Beijing as security risks. However, Beijing might offer Musk incentives like market access or regulatory approvals for Tesla's self-driving features. These potential incentives raise concerns among U.S. lawmakers about the extent of influence Beijing might exert over Musk.
"To the question of Elon Musk, I do believe that the CCP will try and leverage any opportunity." – John Moolenaar
Despite these concerns, the White House has clarified that Musk holds no decision-making authority within the Trump administration. Nevertheless, Trump's expressed admiration for Xi and Russian President Vladimir Putin has fueled worries that he might pursue a grand bargain with Beijing that sidelines Taiwan—a critical issue for China's geopolitical strategy.
China's priorities include asserting its claim over Taiwan and expanding its influence in the South China Sea. With Musk's significant presence in China through Tesla and other ventures, Beijing might see him as a potential channel to achieve these objectives without direct confrontation with Trump's hawkish national security team.
"My hope is that the president is going to be listening to everybody very carefully." – Raja Krishnamoorthi
The select committee emphasizes the need for Washington to counter any efforts by Beijing to manipulate U.S. business leaders like Musk for advancing its goals. The committee believes that the Chinese Communist Party may attempt to use Musk to negotiate with the White House and achieve its broader ambitions.
"We are happy to see foreign-funded enterprises invest and start businesses in China, deepen their presence in the Chinese market and share development opportunities." – Liu Pengyu, China's Washington embassy spokesperson
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