Donald Trump has won the US presidential election… and so has Elon Musk. The famous, media-friendly and private founder and CEO of Tesla, the flagship electric car company in the US, has been a clear protagonist of the electoral campaign with his continuous and effusive displays of support for Trump. In a kind of courtship that began by offering the Republican candidate to return to from generous donations to unusual leaps of enthusiasm at a rally to Trump’s own astonishment. The return of all this waste now remains to be seen, but Musk may become the man who ‘whispers’ Trump in the Oval Office.
Although Musk has repeatedly boasted of having an independent vision and of having even supported Democrats in the past, his approach to Trump has occurred with great intensity and great speed, one could say. As a contribution to ‘romance’, Musk has contributed more than 130 million of dollars, according to Bloombergto Trump’s cause through a super PAC (political action committee). He has also made available the dominant narrative in X, a movement led by himself with infinite messages of support.
Especially revealing has been one of the messages published with the result already quite firm. It’s a post with a photo of a rocket taking off (Space is another pillar for this ‘corporate Da Vinci’) accompanied by the phrase: “The future is going to be fantastic”. Beyond the enthusiasm with the victory, this future message reveals that an always restless Musk has big plans and the question is how far Trump will let him go or how much he will pay attention to him. For now, in an election as momentous as that of appointing vice president in the electoral ‘ticket’, Musk would have influenced Trump to appoint JD Vance.
But after the victory at the polls, the ball is in the court of the former president and new president. Amid the excitement of an election campaign, Musk and Trump publicly discussed the possibility of the billionaire CEO joining a potential Trump Administration as ‘czar’ of government efficiency and deregulation (“cost reduction secretary” they have come to verbalize). Although with Trump’s return to the White House a promise of this type may be quite dissipated, there is consensus among analysts that, with the Republican candidate in the Oval Office, there are some policy areas in which Musk will try to influence Trump to benefit his own business interestsallowing these pressures to have a national and global echo.
The proof of this hypothesis has been clearly seen in the Tesla shares, which have soared more than 14% in the negotiation prior to the opening of Wall Street in anticipation that the brand will benefit from this closeness of Musk to the new Administration. “The most positive thing about a Trump victory will be for Tesla and Musk,” writes Daniel Ives, an analyst at Wedbush Securities, in a report on what a Republican victory will mean for technology companies. Tesla would have a competitive advantage over other manufacturers if the US reduced tax incentives for electric vehicles, he predicts.
China, tariffs and subsidies
The first point to which all these gazes are directed is, necessarily, China. In a note to clients, the Capital Economics team led by its chief North American economist, Paul Ashworth, notes that since Tesla’s Shanghai Gigafactory represents approximately 40% of its global vehicle production capacity, Musk has interest in avoiding a total break in relations between the US and China.
“It is true that Tesla does not import any of its electric vehicles manufactured in China into the US. But Musk would rightly fear a violent reaction from the Chinese government if Trump followed through on his threat to impose tariffs of up to 60% on Chinese imports,” these explain. analysts. The CEO of Tesla assured this past Monday in a podcast that he is not in favor of applying large tariffs all at once, but prefers “measured and specific” levies.
Musk would also have a direct interest in preventing the new Trump Administration from suppressing the subsidies for electric vehicles provided for in the Inflation Reduction Act signed by Joe Biden. And, in more general terms, Capital Economics emphasizes, given its business interests also in the solar energy and batteriesMusk would try to prevent Trump from adopting an energy policy that is strongly anti-environmental.
Conflict of interest
In the hypothetical case of Trump finally agreeing to have Musk join the Administration to spearhead a government efficiency campaign, and as long as Musk is willing to dedicate his time to it (there’s Tesla, there’s SpaceX, there’s X, there’s Neuralink) – Trump has insisted that Musk “He’s dying to do it”-, the consequences seem more diffuse.
If he becomes part of the next Republican government, Musk would have the power to recalibrate federal laws to put them in favor of the activities of its companies with several current contracts with the US administration, such as Tesla and SpaceX. Furthermore, their presence in the Administration would raise suspicions regarding the 20 investigations opened for possible illegalities in the operations of these two firms, according to information from The New York Times.
Likewise, as stated in information from the magazine Rolling Stone collected by Europa PressMusk could benefit from a tax exemption “worth tens of billions of dollars” over the next four years depending on the outcome of the income and billionaire tax cuts announced by Trump in recent months.
Specifically, the exemption would be given by the current regulations promulgated by the United States Office of Government Ethics that prohibits a Government employee – possibly Musk if he enters the federal Administration – from participating “personally and substantially” in private matters regarding those who have “a financial interest” and have the ability to force him to “divest the corporate interests.” Consequently, and by applying a provision of the tax code inserted 35 years ago, officials can indefinitely save all capital gains taxes on such divestment, a potential profit for Musk of “billions of tens of millions of dollars,” adds the information collected by EP.
‘Purge’ of officials
Those derived from this entry into the Administration would also have a political scope. “A Musk-led government efficiency push could merge with a renewed attempt by Trump to politicize more civil servant positions. In October 2020, Trump issued an executive order creating a new employment category (the List F), stripping protections from up to 50,000 federal workers, who became able to be fired if they were perceived as disloyal. Upon taking office, Biden reversed that decision, but Trump has promised to restore the order from day one, as part of his plan to end what he calls the Deep State,” Ashworth and his team warn. Deep State It would be what is known in Spain as ‘State sewers’.
Although the macroeconomic repercussions of a government efficiency campaign like this could end up being quite limited, the analysis house points out that a sharp reduction in personnel, combined with a politicization of even low-level public jobs, could call into question the quality of public statistics prepared by the Bureau of Economic Analysis (BEA), the Bureau of Labor Statistics (BLS), the Census Bureau and other agencies. In an extreme case, they warn, markets could divert their attention from official government reports, focusing more on alternative measures produced by the private sector, which would represent a major shift on Wall Street.
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