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By Micah McCartney
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The U.S. must be "on alert" about President Donald Trump ally Elon Musk's conflict of interests with China, a former U.S. naval official says.
Newsweek reached out to Tesla and the Chinese embassy in the U.S. by email with a request for comment.
Why It Matters
Musk, whose special government worker status allows him to continue his work as CEO of Tesla, X (formerly Twitter) and SpaceX, does significant business in China, Tesla's second-largest market, with annual vehicle sales rising by 8.8 percent in China in 2024. Recently, Musk has argued China should allow X on its heavily censored internet given that TikTok, owned by China's ByteDance remained accessible to Americans.
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Observers—including former Trump adviser Steve Bannon—have pointed to a conflict of interest for the world's richest man and head of the newly minted Department of Government Efficiency (DOGE), pointing to remarks by Musk that have aligned with Chinese Communist Party (CCP) propaganda.
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What To Know
Mike Studeman, retired rear admiral and Office of Naval Intelligence commander during the Biden administration, recently said Musk was "compromised and co-opted by the Chinese" and "a Chinese sympathizer of high order."
"I think he pursues his business with a fulsomeness that's very impressive," Studeman said Wednesday on the Why Should We Care: Indo-Pacific Podcast, hosted by Ray Powell, director of Stanford-affiliated ship tracking and analysis group Sealight. "At the same time, when you're in bed with the CCP, you're going to be influenced if you're beholden to the CCP on a number of different issues."
He added that the "question that we should all be asking" is whether these conflicts of interest will influence Musk's work at DOGE.
"You know, when he goes into DOGE and decides to make recommendations to the president about how to alter the U.S. government. We have to be alert for these issues," Studeman said.
He pointed to Musk's past statement echoing CCP claims that self-ruled Taiwan is "part of China."
"So that's a demonstrable piece of evidence in fact that Elon is an extension of the CCP's voice—and he has a pretty big one with X now," Studeman said.
"If (SpaceX-owned satellite internet constellation) Starlink, for example, has a null zone around Taiwan because Elon Musk wants to make the CCP happy, then that's a problem if we're trying to support Taiwan and allow it to defend itself against increased aggression from the PRC that aims to assimilate Taiwan."
Chinese President Xi Jinping has vowed unification with Taiwan, which has its own democratic government, stating that it is "inevitable" and has stepped up aggressive actions around the island. Secretary of State Marco Rubio has warned Beijing could move on Taiwan within the next five years.
Last month Musk voiced opposition to provisions in a bipartisan stop-gap spending bill introduced to avoid a government shutdown.
The original bill would have prohibited or required notification of overseas transactions involving China in sectors like semiconductors, quantum technology and artificial intelligence. It also would have included an expanded review of Chinese real estate purchases near national security-sensitive sites and a requirement to study national security risks posed by Chinese-made consumer modems and routers.
The final version of the bill removed all China-related provisions.
Musk has recently been garnering lavish praise from CCP officials, observers note, including from Zhang Heqing, who is among the dozens of CCP diplomats to have opened X accounts to parrot Beijing's propaganda.
Zhang praised the "visionary tech titan" and "global icon" in over 30 posts between December 10 and January 15 alone, observed Tuvia Gering, Israeli researcher and non-resident fellow of the Atlantic Council think tank's Global China Hub, on his blog Wednesday.
What People Are Saying:
Tuvia Gering, non-resident fellow of the Atlantic Council think tank's Global China Hub: "Drawing on a century of CCP United Front tactics, Chinese propagandists seek to divide their 'enemies' from within. Recognizing the impact of Musk's controversial statements, they possibly see his rhetoric as a means to deepen fractures in American society and diminish the U.S.'s global influence."
Liu Pengyu, a spokesperson for the Chinese embassy in the U.S., told Newsweek: "China has always welcomed businesspeople from all countries, including Mr. Musk, to visit China to better understand China and promote mutually beneficial cooperation. China is also determined to promote high-level opening up to the outside world and is committed to creating a market-oriented, rule-of-law, and internationalized business environment [...] The personnel issues of the U.S. government are internal affairs of the United States, and we will not comment on them."
What Happens Next?
Trump has signaled his administration will continue the hard approach toward China that began during his first term, warning he could further raise tariffs on Chinese goods as early as February 1.
Rubio has spent his first week as secretary of state touting U.S. alliances, including reiterating support for the Philippines amid its territorial dispute with China.
He also met with his counterparts from fellow Quad (Quadrilateral Security Dialogue) countries India, Japan and Australia. In a thinly veiled swipe at Beijing, the joint statement that followed warned against "unilateral actions that seek to change the status quo by force or coercion."
Update 1/27/25, 11:20 a.m. ET: This article has been updated with a comment from the Chinese embassy.
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