Elon Musk Gets A Whole New York Times Article For Making Faces At A Chinese Luncheon

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Ah, it’s the important stuff.

Titans of industry are in China this week with Donald Trump to meet with the most powerful man in the world, Xi Jinping. Something is afoot. Maybe. I’ll get to that in a moment. But first, what gets attention from one of the biggest newspapers in the world? Elon Musk making faces as a Chinese tech entrepreneur takes a selfie with him.

The Gray Lady spent a whole article on this. “The Gray Lady” is a nickname for the New York Times in part because of the color of newsprint and in part because of “the Times’ opposition to yellow journalism,” as Wikipedia summarizes. Yellow journalism is “the use of eye-catching headlines and sensationalized exaggerations for increased sales, while the yellow press are American newspapers which do so.” Interesting….

To be fair to the New York Times, this is what people are interested in. We were having dinner at some friends’ house yesterday, and this was one of the first things my friend, the grandma, brought up to me. It went viral on social media. And the New York Times also has to pay its bills.

But, yes, let’s try to find out what’s going on in China with Elon Musk, Donald Trump, Xi Jinping, NVIDIA CEO Jensen Huang, Apple CEO Tim Cook, and others.

Oh, that tech entrepreneur who took an awkward selfie with Musk was Lei Jun, the CEO of Xiaomi. Xiaomi started out in cheap smartphones and household goods, but it quickly became the hottest new EV producer in the world last year when it boomed onto the market faster than anyone else before it. In fact, last month, the Xiaomi SU7 beat the Tesla Model Y to become the second best selling car in China!

The Xiaomi SU7 is also the car Ford CEO Jim Farley drove for 6 months and didn’t want to give up, raving about how nice it was. Of course, Xiaomi can’t sell its EVs in the US, or would have to double their prices thanks to 100% tariffs on Chinese EVs. There’s also a 50% tariff on chips and 25% on batteries. Presumably, all of the tech titans mentioned above want to get rid of these tariffs. They all want cheaper components or products made in China, and Chinese businessmen want to be able to sell their goods in the US, especially as their domestic market gets saturated or highly competitive.

Another article connected to this topic caught my attention. An article on CNBC highlights that “Chinese parts are already in US cars.” It notes that there are more than 60 automotive supplies in the US that are owned by Chinese companies. Nonetheless, “Lawmakers in both parties are warning President Donald Trump not to give Chinese automakers a path into the US market during talks with his Chinese counterpart Xi Jinping.” They don’t want Trump using the auto industry as a bargaining chip.

“The warning stems in part from Trump’s January suggestion that he could welcome Chinese automakers if they built vehicles in the US with American workers — remarks that were later walked back but still rattled auto-state lawmakers, unions and industry groups. Trump in January in an appearance at the Detroit Economic Club said he would happily welcome Chinese automakers to manufacture in the US.”

I wrote the other day about Chinese EV makers being on a path the take over the world. However, I basically excluded the US from that thesis since it is completely blocking these companies out. But maybe that stance won’t last? Maybe the 100% tariffs will go away, or there will be exceptions for cars built in the USA? I think that’s still highly unlikely, due to facts expressed by Stephen Ezell, a vice president at the Washington think tank the Information Technology and Innovation Foundation: “If your state is in the Rust Belt, letting Chinese automakers into the U.S. market would be detrimental and politically bad for many people…. You’re talking about risks to industry, jobs, factories and whole communities.” Indeed. And these are key states for anyone running for president of the United States, or to remain president of the United States.

Funny enough, Ezell is for allowing Chinese EV makers into the country. “The reality is we are behind Chinese autos in America, but we hope automakers can respond through innovation,” Ezell told CNBC. “Ultimately we need to compete through innovation if the industry is going to thrive domestically.” Domestically? Meh, maybe. Or the US could just block them forever. However, as far as winning outside of the US, as far as having any significant presence abroad, US automakers need to innovate and get more competitive. The more they are shielded from this competition, the less likely they are to do well outside of the United States. But, hey, maybe that’s fine. Chinese EV makers will happily service markets from South America to Africa to Europe to Asia.

Of course, politicians in vulnerable states do have strong warnings on the matter. Debbie Dingell, a Democratic member of the US House of Representatives from Michigan, says: “China has a pattern of coming in, subsidizing the cost to keep the price lower, destroy an industry and then jack up the price…. This is about America’s future. This is about the American workers’ future.”

We’ll see what happens. Jim Farley wasn’t with Donald Trump and Xi Jinping, Elon Musk was. Musk probably doesn’t want Tesla to have to compete with Xiaomi, BYD, XPENG, and others in the US, but he does want cheap Chinese made supplies for his vast data centers, for Tesla cars, for SpaceX rockets and satellites, for Tesla Semi trucks and computers. We still don’t really know what Musk was there for and what he was trying to get, but given what he’s said in the past, I’d assume he wants tariffs removed and that was his main focus of discussion whether he was talking with Trump or Xi Jinping. That said, he also gets distracted easily by various social matters, cultural matters, and “freedom of speech.” But he seems to have a way of behaving himself around Xi Jinping and the Chinese government….