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Thursday, November 7, 2024

How Is China’s Relationship With USA (& Tesla) Going To Change On Cleantech?


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Let’s simply begin this off by saying that Donald Trump doesn’t have numerous deep longstanding beliefs on subjects that don’t straight concern him. And he’s one of the crucial transactional politicians I’ve ever seen, in a world in fact the place politicians are exceptionally transactional. We assume many issues on Trump based mostly on the previous, however a few issues can change and he can flip in one other course. If he assume he can get one thing from you, he can change his “beliefs” 100% and even 200% and go in one other course.

After which we’ve obtained Elon Musk, who is outwardly not all that a lot completely different. Nicely, that is clearly the place to start out. Whereas Donald Trump has talked very critically and combatively about China for a number of years, Elon Musk has been very optimistic about China and has now based mostly half of Tesla’s international manufacturing capability there. Tesla was the primary automaker of any sort given permission to construct its personal manufacturing unit there and not using a three way partnership with a Chinese language firm. Clearly, he has been granted particular consideration and favors in China.

So, what occurs now if Musk, who’s a key a part of Trump’s crew now, is standing by Trump whereas he’s trashing China? What occurs if Trump does go ahead with greater tariffs on Chinese language-produced merchandise? Is Tesla’s place in China threatened if Trump doesn’t play good on China? Frankly, with the flick of a swap or one cellphone name, Tesla’s manufacturing and gross sales in China could possibly be demolished. Maybe President Xi Jinping wouldn’t go that route. Or maybe he would.

However let’s assume one thing else. Let’s assume Musk will get Trump to melt his rhetoric and method on China. Let’s say Musk by some means transfers who deferential and respectful he’s to Xi Jinping on to Trump and Trump begins treating Xi Jinping extra how he treats Vladimir Putin. Then what? How does China’s relationship with the US change? (And let’s not low cost the truth that Trump was not too long ago having his marketing campaign fundraiser Bibles made in China.)

This text was triggered by information I noticed this morning that Xi Jinping has referred to as to congratulate Trump. “Xi urges China, U.S. to handle variations correctly,” Reuters studies. “Xi requires mutual respect, strengthened dialogue.” Evidently Xi wish to have a greater relationship with the US once more, and, frankly, are any of Trump’s fanatical cult followers going to care if Trump turns 180 levels on China? Do any of them care if he’s pro-tariff or anti-tariff with China? Trump campaigned partly on placing large tariffs on Chinese language items, and stubbornly mentioned this wouldn’t elevate costs for Individuals, however some segments of the inventory market are already reacting negatively to that, and we all know Trump doesn’t wish to be unpopular, particularly on Wall Road. Additionally, Reuters notes, “China faces main progress dangers from threatened tariffs of 60%.” Xi Jinping could also be additional eager to “discover a resolution” with Trump and play no matter silly flattery recreation Trump needs to keep away from a rising commerce battle. Might Musk persuade Trump to go this route? What anti-China persons are on Trump’s crew who’ve an even bigger voice with him?

In fact, as somebody I talked to right now who was desirous about these identical issues famous, Trump needs to be the focus and get the reward for all the things. He and Musk aligned to realize a typical objective, however will Trump get bored with him, bored of him (he has reportedly referred to as Musk boring and peculiar in personal), and irritated by him taking his highlight and interfering along with his plans for China? Will Musk quickly discover what numerous others have discovered, that all the things Trump touches dies and rots? Or is that this an alliance and bromance that can rising in the course of the subsequent 4 years?

Assuming Trump adjustments course on China, what might that imply extra broadly? Will tariffs on EVs and photo voltaic panels come down? Will Chinese language EVs lastly come to America and destroy complacent and distracted American automakers? Musk has predicted that might occur and definitely wouldn’t care; he might even invite it. Trump presumably hasn’t gotten the reward and assist from GM and Ford that he’d like, and definitely not from the United Auto Employees union, an arch nemesis of Elon Musk. Maybe he’d change course and fortunately let Chinese language automakers are available in and threaten the US auto business.

All of these EV battery crops, photo voltaic panel factories, EV battery mineral mines and refineries that have been anticipated to assist rebuild working class, blue collar management within the US — are they going to be useless within the water if Trump lets the Chinese language in with 0% tariffs?

I don’t assume anybody actually is aware of the place all of this goes. A number of it might merely come down to non-public dynamics between Elon Musk and Donald Trump. They appear rosy in the meanwhile. However they haven’t at all times been.

In 2022, Musk mentioned that it was “time for Trump to hold up his hat & sail into the sundown.” And Trump responded on Reality Social:

“When Elon Musk got here to the White Home asking me for assistance on all of his many sponsored initiatives, whether or not it’s electrical automobiles that don’t drive lengthy sufficient, driverless automobiles that crash, or rocketships to nowhere, with out which subsidies he’d be nugatory, and telling me how he was an enormous Trump fan and Republican, I might have mentioned, ‘drop to your knees and beg,’ and he would have completed it.”

Who gained that debate?

“Now Elon ought to give attention to getting himself out of the Twitter mess as a result of he might owe $44 billion for one thing that’s maybe nugatory,” Trump added. Nicely, you must say Trump was extra proper than fallacious on that as effectively — from a monetary perspective. Nevertheless, from a political perspective, Twitter/X has in all probability proved fairly helpful to Musk. Let’s see the place issues go from right here, although.

Coming again to the China–US subject, China Every day, a state-run newspaper, added: “new starting in China-US relations, if the possibility that has been supplied shouldn’t be wasted.”


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