From the outset, the alliance between Donald Trump and Elon Musk was viewed with skepticism by Washington insiders, who doubted the durability of a partnership between the President of the United States and the world’s richest man. Undeniably, this skepticism is not unfounded, as during Trump's first term, Musk and Trump were in sharp conflict, with Musk once being one of Trump's most prominent critics.

This week, those doubts were proven correct as the two engaged in a public and escalating feud, marked by social media attacks and threats with significant financial and political implications. The unraveling of their once-powerful bond, forged during the 2024 presidential campaign, centers on a contentious Republican tax and spending bill—referred to as the “Big Beautiful Bill”—and has exposed deep tensions that could reshape both the U.S. government and Musk’s corporate empire.

The dispute reached its peak on Thursday when Trump threatened to terminate the government subsidies and contracts that support tesla Inc. and Space Exploration Technologies Corp. (SpaceX), two linchpins of Musk’s $200 billion fortune. Musk retaliated by accusing Trump of ingratitude and dishonesty, claiming the president’s electoral success hinged on his support. This article explores the financial stakes, political ramifications, and broader consequences of the Trump-Musk fallout.

The Breakup: A Public Spectacle

The disintegration of the Trump-Musk alliance unfolded publicly and dramatically. On Thursday, Trump used his social media platform to attack Musk, posting, “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!” Earlier that day, Trump had expressed his disappointment in Musk to reporters, citing the billionaire’s sharp criticism of the Republican tax and spending bill.

Musk responded on X, with a mix of defiance and accusation. “Such ingratitude,” he wrote, asserting that Trump’s second term would not have been possible without his financial and political backing. He also dismissed Trump’s claim that he had asked Musk to leave the government as “an obvious lie” and escalated the personal attacks by alleging Trump’s name appeared in files linked to Jeffrey Epstein—a claim the White House declined to address.

The feud intensified as Trump threatened to cut off Tesla and SpaceX from government support. When a journalist pointed out that severing ties with SpaceX would jeopardize the International Space Station, Musk taunted, “Go ahead, make my day...” The exchange highlighted the personal animosity between the two, with little apparent concern for the broader fallout.

Background: A Partnership Forged in Politics and Profit

The Trump-Musk relationship blossomed during the 2024 presidential campaign, when Musk emerged as a key supporter, reportedly spending hundreds of millions to secure Trump’s victory over Kamala Harris.

In return, Trump elevated Musk to a prominent role in his administration, appointing him to lead the Department of Government Efficiency (DOGE). Tasked with slashing federal bureaucracy, Musk’s position aligned with his libertarian ideals and the commercial interests of his companies, which had long navigated government regulations.

Initially, the partnership thrived. Musk praised Trump’s agenda, while Trump relied on Musk’s financial clout and public endorsements. However, cracks soon appeared. Steve Bannon, Trump’s former strategist, had warned during the transition that Musk’s unpredictability and narcissism could destabilize the alliance. “I cautioned people—this guy would turn on anybody, including the president, when it suited him,” Bannon said on his “War Room” podcast.

The Flashpoint: The ‘Big Beautiful Bill’

The breaking point came with Trump’s “Big Beautiful Bill,” a tax and spending package central to his domestic agenda. The bill, which promises economic growth through tax cuts and deregulation, has been criticized for its fiscal impact. The Congressional Budget Office estimates it would increase the U.S. budget deficit by $2.4 trillion over the next decade, with $3.67 trillion in revenue cuts offset by just $1.25 trillion in spending reductions.

For Musk, who had championed deficit reduction through DOGE, the bill’s fiscal irresponsibility was unacceptable. More critically, it threatened to eliminate electric vehicle (EV) tax credits, a vital subsidy for Tesla. Musk reportedly lobbied House Speaker Mike Johnson to preserve the credits, but his pleas were rebuffed. On X, he denounced the bill as “pork-filled” and a “disgusting abomination,” warning of “debt slavery” for future generations.

Trump accused Musk of prioritizing Tesla’s interests over the administration’s goals. “He’s trying to tank the bill because it hurts Tesla,” Trump said in the Oval Office. The clash laid bare the competing priorities that had simmered beneath their alliance.

Financial Implications for Musk’s Empire

The financial stakes for Musk are immense. Tesla relies on billions in EV subsidies and tax credits, while SpaceX depends on NASA and Pentagon contracts for its launch and satellite operations. Trump’s threat to sever these lifelines could destabilize both companies. Tesla’s stock, already volatile, has contributed to a $64.1 billion drop in Musk’s net worth this year, per the Bloomberg Billionaires Index. Losing EV credits could exacerbate this decline.

SpaceX, a cornerstone of U.S. space and defense programs, presents a more complex challenge. Its dominance in the launch market makes it indispensable, and cutting it off could disrupt national security operations. Yet Musk’s defiance suggests he is willing to call Trump’s bluff, betting on SpaceX’s strategic importance.

Trump, however, faces risks as well. Alienating SpaceX could undermine his administration’s space ambitions, while the financial markets may react negatively to the uncertainty surrounding Tesla, a major U.S. company.

Political Fallout and the Midterm Elections

The Trump-Musk rift carries significant political consequences. Musk’s exit from DOGE and his criticism of the tax bill could weaken Trump’s legislative push, particularly as fiscal conservatives already question its deficit impact. The bill’s passage in the Senate may now hinge on party unity, which Musk’s dissent could fracture.

Musk’s role as a Republican financier is also in doubt. Having spent nearly $300 million in 2024, his hinted withdrawal from political giving—coupled with musings about a new centrist party—could leave the GOP vulnerable in the 2026 midterms. “Should I create a new political party in America that actually represents the 80% in the middle?” Musk asked his X followers, signaling a potential shift in his political strategy.

Within the administration, Musk’s influence has waned. The withdrawal of Jared Isaacman, a Musk ally nominated to lead NASA, reflects pushback from figures like Sergio Gor, with whom Musk clashed at DOGE. “Musk’s power came from being an extension of Trump,” said Stephen Myrow of Beacon Policy Advisers. “Now, he’s in the waning phase of his orbit.”

Conclusion: A High-Stakes Gamble

The Trump-Musk alliance, always a fragile union of convenience, has collapsed under the weight of clashing egos and interests. For Musk, the fallout jeopardizes the government support that has fueled Tesla and SpaceX, testing his ability to weather financial and reputational challenges. For Trump, losing Musk risks complicating his legislative and electoral prospects, though his willingness to confront a key ally underscores his demand for loyalty.

As both men navigate the aftermath, the financial and political landscapes stand to shift. Musk may pivot to new ventures or political experiments, while Trump presses forward with his agenda, undeterred by the loss of his “Chief Buddy.” The stakes are high, and the world is watching.