Win for Musk? New U.S. Spending Bill Softens Restrictions on Chinese Investment

(the article has been updated to make it concise and cohesive)

In a last-minute move to avoid a government shutdown, the U.S. House of Representatives passed the updated spending bill, which was sent to the Senate for approval. The bill, which was significantly slimmed down from its original 1,547 pages to just 118, reflects compromises from both parties, particularly from Republicans.

One of the key changes in the new version of the bill is the removal of provisions that would have restricted outbound investment to China. This means that restrictions on Chinese technology, including potential barriers to Chinese investments in U.S. tech, were taken off the table. The bill also eliminates previous national security concerns, such as expanded reviews of Chinese real estate purchases near sensitive sites in the U.S. and studies of risks from Chinese-made consumer modems and routers.

These changes were seen as a significant victory for Elon Musk, who had been vocal about the bill’s potential impact on his business interests in China.

Musk's Influence on the Bill?

Democratic leaders, particularly Rep. Rosa Delauro (D-Connecticut), accused Musk of influencing the spending bill to protect his interests. Delauro claimed that Musk’s intervention derailed a bipartisan agreement that could have prevented a government shutdown, all in favor of safeguarding his business dealings in China. According to reports from The Hill, Delauro said that Musk acted “to protect his wallet and the Chinese Communist Party at the expense of American workers, innovators, and businesses.”

Musk made his opposition known through a tweet on his social media platform X at around 4:30 a.m., warning that “this bill should not pass.” This caused an immediate impasse, with Trump also expressing opposition shortly afterward, creating further delays.

Despite the controversies, the third version of the bill passed, with House Speaker Mike Johnson confirming that he had been in constant communication with Trump, who was ultimately pleased with the final version.

Some observers believe that the changes in the bill signal a potential softening of the U.S.’s stance on China, particularly amid Trump’s threats of imposing higher tariffs—up to 60%—on Chinese imports.