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Journalism of Courage
US President-elect Donald Trump has picked Elon Musk, the world’s richest man and a key backer, to lead a newly created Department of Government Efficiency (Doge) for his incoming administration. The acronym, incidentally, refers to Musk’s favourite cryptocurrency Dogecoin.
Trump announced that Vivek Ramaswamy, an investor who ran against him in the Republican Party primaries, will work with the SpaceX and Tesla founder on the project to “dismantle” bureaucracy and that the two will provide “external advice” to the White House on executing “large scale structural reform”. He likened the initiative, which was an idea mooted by Musk himself, to the “Manhattan Project”, stating “this will send shockwaves through the system, and anyone involved in Government waste, which is a lot of people!”
While Musk was the single largest contributor and most vocal proponent of Trump’s reelection campaign and is now a key figure in advising the president-elect in picking his initial team, it remains to be seen how the two reconcile the multiple contradictions in this developing symbiotic relationship.
President-elect Trump is increasingly filling his incoming administration with personalities known for their hawkish views on China, potentially signalling a hard line on Beijing on issues ranging from trade to national security.
Musk, on the other hand, seems to have developed an uncharacteristically cordial working relationship with high-ranking officials in China, where he established Tesla as the country’s first fully foreign-owned automaker in 2018. Chinese state media has at multiple times cited Tesla as an example of successful trade cooperation between Beijing and Washington.
For Tesla, China’s importance cannot be understated. The country is Tesla’s second-largest market only after the US and the Tesla Gigafactory in Shanghai, which started production in 2020, is the carmaker’s largest production centre in the world. Tesla sold some 600,000 EVs in China last year. Musk could be one of the casualties if the business engagements between the world’s two biggest economies were to run into rough weather.
Musk may have been unflinching in his hardsell of Trump’s candidature, but the billionaire has previously expressed doubts over the basic tenets of the former US President’s economic plans, especially over the question of whether those measures would indeed supercharge the American economy. Trump has called for mass deportations of undocumented immigrants, a fresh dose of his 2017 tax cuts and a range of other tax tweaks, alongside higher tariffs on practically all imports.
Musk has raised doubts. In one of his multiple responses to a pseudonymous X account on October 29 that alluded to an “initial severe overreaction in the economy” and the “market tumbling” if Trump were to be elected and then gets to roll out his plan, Musk had a three word response: “Sounds about right”.
On the issue of tax cuts, Musk has acknowledged earlier at a ‘telephone town hall’ that cutting government spending, given the tax cut promises, could be painful.
On the other issue of illegal immigration, the Washington Post released a story on October 26 quoting documents stating how “long before he became one of Donald Trump’s biggest donors and campaign surrogates, Elon Musk worked illegally in the United States as he launched his entrepreneurial career.”
South African-born Musk held no legal right to work while building the company that became Zip2, which sold for about $300 million in 1999 and backrolled most of his other ventures. The Post noted that Musk is “arguably America’s most successful immigrant.”
The President-elect has spent years ridiculing electric vehicles, saying they suffer from range-related issues, are too expensive, and are made in China.
In keeping with his climate change denialism, Trump has vociferously supported internal combustion engine car makers, batted for the Detroit Big Three (GM, Ford and Chrysler) and has repeatedly promised to end federal support for EVs. For Musk, all of that does present a challenge. His personal wealth is tied largely in Tesla stock and his EV hardsell is fundamentally rooted in the environmentally-friendly pitch of battery electric cars that his company makes. The Detroit three are among Tesla’s competitors. And any paring down of federal subsidy could be a serious headwind for Tesla going forward, especially at a time when EV sales are seeing a temporary slowdown.
Musk’s Starlink satellite internet service has provided a clear frontline advantage to Ukraine’s smaller military since the 2022 Russian invasion, permitting the Ukrainian forces to share real-time drone feeds between battlefield units, and continue communications in areas where cell phone services have been disrupted by the fighting.
Trump, meanwhile, has a perceived soft corner for Russian president Vladimir Putin. Recent months have seen some recalibrations by Musk’s company.
When it comes to SpaceX, which operates the Starlink satellite system, there is clearly a lot of business that rides on the US government contracts. The company won a $1.8 billion contract with US military and intelligence agencies in 2021 and is now the major rocket launcher for NASA and the Pentagon. For that, Musk has to straddle a diplomatic tightrope with regard to the commercial obligations of his ventures, including Starlink’s Ukraine operations.
Also, for Starlink and for SpaceX, Musk needs access to terrestrial relay stations across the whole world, including Russia and China and other large swathes of territories. Russia also has the capacity to destroy satellites in space and Musk would be keen to avoid that event at any cost. There is a possibility that Musk’s bet on Trump is a deliberate hedge on the potential risks that span from owning a business as large in scope and scale as SpaceX.
Trump has championed the cause of the American workers, labouring for support from prominent union leaders while ostensibly campaigning against mass lay-offs at American companies. He has drummed up support among steel worker groups and projected himself as a protector of American labour jobs in the election campaign.
Musk, on the other hand, is synonymous with firings across all of his companies. The impulsive firings by the billionaire run counter to the pro-employee image that Trump has been desperately cultivating.
In January this year, SpaceX was accused by a US labour agency of illegally firing eight employees for circulating a letter calling Musk a “distraction and embarrassment.” A regional official with the Washington-based National Labor Relations Board (NLRB) had issued a complaint claiming SpaceX violated the workers’ rights under federal labour law to band together and advocate for better working conditions.
Then in April, Musk fired practically all of Tesla’s electric-vehicle charging division as part of much wider layoffs. Earlier, there was a massive purging at Twitter when Musk took over.
Another way of looking at it is that his penchant for purgings somewhat qualifies Musk to lead Trump’s ‘Manhattan Project’.
