Elon Musk’s close relationship with President Donald Trump was supposed to be a good thing for the electric vehicle maker, but it could be used as leverage in the trade war between the U.S. and China.

China's stocks and currency came under pressure as markets returning from a week-long break were greeted by a new trade dispute with the United States and ructions in the global artificial intelligence sector.

In a trade war with China, tariffs are charged to importers and passed on to consumers. Companies with tight margins and inelastic demand will suffer.