Elon Musk’s biggest conflict is with Donald Trump
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Jonathan Guilford
NEW YORK, Nov 6 (Reuters Breakingviews) -Elon Musk has arrived. Shares of his electric car-maker Tesla TSLA.O added roughly $100 billion in value when markets opened Wednesday following Donald Trump’s presidential election victory. Musk backed the Republican to the hilt, and his vast web of business interests overlap – worryingly – with his new political role. The converse risk is that this puts him in the firing line of not only the trade war, but unpredictable leaders’ whims.
Musk’s sprawling empire empowered him with two pieces of ammunition that have rapidly put him as a key person in Trump’s corner. With a net worth of more than $280 billion, according to Forbes, he enriched Trump’s campaign with donations. He also has a pulpit: After the acquisition of $44 billion social network Twitter, now X, in 2022, he reinstated Trump's account, rolled back moderation policies that shifted the site's political mood, and broadcast unceasing support to his own followers. In return, Trump – who once boasted that he could have forced the tech entrepreneur to “drop to (his) knees and beg” – said that he may appoint Musk to oversee a committee on government efficiency.
The Tesla boss is already deeply intertwined with the state. SpaceX, the $210 billion satellite company he controls, is building an espionage network for U.S. intelligence, Reuters reported. Governments on both sides of the Atlantic depend on it for reaching orbit, and its Starlink system is crucial in Ukraine. Tesla, meanwhile, benefits from government subsidies while also facing a bevy of investigations into safety and labor practices. Add in that the company is trying to roll out fully automated self-driving features that are subject to deep regulatory scrutiny, and Musk’s cozy relationship to the next U.S. leader smacks of concerning conflicts of interest.
There is, however, a converse risk. The north star of Trump’s political program is economic nationalism. He has promised across-the-board 10% tariff hikes on imports, rising to 60% on Chinese goods. Turbo-charging the trade war cuts against Tesla’s enduring advantage: a uniquely free rein to operate in the People’s Republic, home to 40% of its manufacturing capacity. Over a fifth of 2023 revenue came from the country.
Musk has enjoyed a relatively close relationship with Chinese officials, making a surprise visit to Premier Li Qiang in April. Regulators have ways to pressure or help him, like with restrictions on self-driving features. The benefit of potentially becoming a proxy for the White House is that Musk is now a conduit between China’s leaders and those in the United States, earning him the continued ear of both. But perhaps the greater risk is that he becomes a bargaining chip between the two. After all, the governments on which he relies are in direct and growing conflict. And those who depended on Trump have been disappointed before, judging by the near-endless list of former confidants booted from his prior administration. Ultimately, Musk’s vulnerability to the whims of either side is rising. Given enough time, that will haunt him.
Follow @JMAGuilford on X
CONTEXT NEWS
Shares of Tesla opened up over 13% at the beginning of trading on Nov. 6, increasing the electric-car maker’s market capitalization by over $100 billion. The move comes after Republican Donald Trump was declared the victor of the U.S. presidential election, held the day prior.
Tesla Chief Executive Elon Musk endorsed Trump, contributing millions to a political action committee and organizing get-out-the-vote operations. Trump has said that he would set up a commission on government efficiency to be headed by Musk.
Musk's empire is deeply exposed to government whims https://reut.rs/4hypKQ3
Editing by Lauren Silva Laughlin and Pranav Kiran
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
