Trump Threatens to Cut Government Contracts with Musk

The relationship between U.S. President Donald Trump and billionaire entrepreneur Elon Musk has rapidly deteriorated, transforming from a strategic alliance to a bitter public feud in a matter of hours.

The escalation began on June 6, 2025, following Musk's harsh criticism of Trump’s proposed economic bill, which included cuts to electric vehicle tax incentives. What started as a policy disagreement quickly spiraled into personal attacks, with both men taking to social media to exchange barbs and accuse each other of betrayal.

The tension between Musk and Trump has now extended beyond economic policies and into personal territory, creating a spectacle that has grabbed the attention of political observers and investors alike.

The war of words, which began over tax policies, has now evolved into a full-scale battle over political credit and personal grievances. Musk has claimed that without his support, Trump would have lost the 2020 election, and he has accused the president of being ungrateful for the help Musk provided during the campaign.

Musk’s comments on social media further deepened the divide, stating that if it weren’t for him, “Trump would have lost the election, the Democrats would have controlled the House, and the Republicans would only hold a 51-49 majority in the Senate.”

This sharp statement underscores the breakdown of what was once a close relationship between the two influential figures. The dispute began over Trump’s economic bill, which proposed to eliminate tax breaks for electric vehicles—something Musk saw as a direct threat to Tesla’s core business.

As the leader of Tesla, Musk has long championed policies that support the electric vehicle industry, and the elimination of such tax incentives was viewed as a major setback for Tesla and the wider EV market.

Musk’s attempts to lobby against the bill, reportedly spending at least $240,000 on lobbying efforts, failed to prevent the cuts. Frustrated by the lack of support from Trump’s administration, Musk took to social media to express his discontent, labeling the proposed bill as a “disgusting abomination.”

This marked the beginning of Musk’s public disapproval of Trump, once a close ally, and triggered a series of events that would dramatically alter their relationship. What followed was a cascade of personal and political attacks that shifted the feud into the realm of personal egos.

Trump’s disappointment with Musk’s criticism was publicly expressed during a meeting with German Chancellor Friedrich Merz at the White House on June 5, 2025. Trump, who had once praised Musk as “one of the greatest creators and entrepreneurs in the world,” now voiced his discontent, stating, “I am very disappointed in Elon.

I have helped him a lot. We had a great relationship, but now, I’m not sure anymore.” This public rebuke was quickly met with Musk’s retaliation. On social media, Musk fired back, accusing Trump of ingratitude and emphasizing his role in Trump’s electoral victory.

Musk’s tweet, directed at his followers, underscored his belief that his support was critical in Trump’s 2020 win. He further commented that without his intervention, Trump would have faced a Democratic-controlled House of Representatives and a much narrower Senate margin.

As the feud intensified, the personal attacks escalated even further. Musk criticized Trump for his failure to support certain initiatives, including a proposal Musk had made regarding the use of Starlink satellites to improve air traffic control in the U.S.

This proposal was rejected by Trump, with concerns raised over potential conflicts of interest. Musk’s frustration was compounded by Trump’s sudden withdrawal of support for Musk’s nominated candidate for NASA Administrator, Jared Isaacman.

The withdrawal of Isaacman’s nomination was described by insiders as a major blow to Musk, with sources close to him revealing that Musk felt personally insulted by the decision. For Musk, this was seen as the final straw, signaling the unraveling of a relationship that had once been seen as mutually beneficial.

In response to the ongoing public feud, Trump’s allies began to rally behind the president, with some calling for a complete severing of ties with Musk. A former strategist for Trump, who had been a vocal critic of Musk, called for Trump to cancel all government contracts with Musk’s companies and initiate investigations into the billionaire’s dealings.

This call for action has added fuel to the fire, further dividing the political landscape and creating a rift between the tech world and the political establishment. The fallout between Trump and Musk has not been limited to personal and political disputes.

The financial impact has been significant, particularly for Tesla. The company’s market capitalization has taken a hit, losing a staggering $152 billion since the public confrontation between Musk and Trump began.

This loss highlights the influence that political and personal relationships can have on the stock market. Investors are increasingly concerned about the long-term stability of Tesla, given the ongoing turmoil surrounding its CEO and the potential for further political entanglements.

Tesla’s stock has been volatile in recent months, and the clash between Musk and Trump has only exacerbated investor concerns. Musk’s public criticism of the economic policies proposed by Trump, combined with the uncertainty surrounding his political future, has led to a decline in investor confidence.

As the CEO of Tesla, Musk’s actions and public statements play a crucial role in shaping the company’s image and stock performance. The current political climate, marked by Musk’s open disagreements with Trump and other influential political figures, has created a sense of instability for Tesla and its investors.

The tension between Musk and Trump also reflects a deeper divide between the worlds of technology and politics. Musk, a self-made billionaire and founder of multiple groundbreaking companies, has long been a champion of free-market principles and innovation.

However, his increasing involvement in political matters has made him a polarizing figure, with some viewing his political activities as a threat to the integrity of the tech industry.

The feud with Trump is a stark reminder of the challenges faced by tech leaders who attempt to influence public policy while also managing the expectations of investors and consumers.

Looking ahead, the future of the relationship between Trump and Musk remains uncertain. While Musk has made it clear that he no longer considers Trump an ally, the possibility of reconciliation remains open.

Despite the current public fallout, both men share common interests in space exploration, deregulation, and economic growth, which could provide a foundation for future collaboration.

However, the damage done to their personal and professional relationship may be irreparable, and the public feud between the two could have lasting consequences for both Musk and Trump.

In conclusion, the public rift between Elon Musk and Donald Trump has evolved into a full-blown political and personal feud with significant financial and reputational consequences.

What began as a disagreement over economic policies has quickly escalated into a battle of egos, with both men launching personal attacks and accusing each other of betrayal. The fallout from this confrontation has led to a sharp decline in Tesla’s market capitalization, highlighting the influence that political disputes can have on business outcomes.

As the situation continues to unfold, the future of both men’s influence in their respective fields remains uncertain, with the potential for further conflict and financial repercussions.

This dramatic clash between two of the most powerful figures in business and politics serves as a reminder of the unpredictable intersection between personal relationships and public affairs.