Trump Cuts Ties with Elon Musk—What’s Next for U.S. Politics and Business?

Trump Cuts Ties with Elon Musk—What’s Next for U.S. Politics and Business?







In a week of political news and otherwise boring career endeavors, the heightened battle between Elon Musk and Donald Trump is the most intriguing and the most telling. A comprehensive breakdown of where we stand so far brings news beyond the Beltway that this battle could shake things up.

What We Know So Far

Trump Says It's Over

On an NBC interview today, Trump claimed his relationship with Musk is over; he has “no intention of speaking” to Musk ever again in the future. In addition, Trump warned Musk that if he proceeds to support Democratic challengers to Republican Senators supporting Trump's $2.4 trillion tax-and-spending bill—there will be “serious consequences"

This comes just a few days after Musk referred to the tax bill as an “abomination,” communicating that it would “squash innovation” and negatively impact taxpayers. While it seems like an empty threat, Trump does have the power to retaliate—via SpaceX government contracts and anticipated Tesla orders—and if this battle continues, Musk's companies may be in jeopardy.

Sources: Business Insider, Reuters




Musk Backtracks—And Teases His Own Party

Before Trump's threats ensued, Musk deleted some of his more controversial posts—even one referencing Epstein and calling for impeachment. In addition, he polled his 220 million followers on X (formerly Twitter) whether they'd like to see a new “America Party.” Over 80% said yes. Musk followed up with “The people have spoken.”

When billionaires start tossing around party structures for no reason, it should raise eyebrows. If he breaks away from the existing norm come 2024, it can be detrimental to a strong Republican party as he's obviously powerful—both monetarily and follower-wise. But it also shows that if push comes to shove, Musk can use his billions for a center-right or centrist agenda.

Source: Time




GOP and White House Get Defensive

As rhetoric continues to fly, Trump doubled down on his sentiments and JD Vance, VP, called Musk’s rhetoric a “huge mistake.” Meanwhile, multiple GOP leaders sent messages privately to calm both sides down, fearing the Senate support for Trump's tax bill may go awry since it's so razor-thin. For now, however, neither side seems locked down in any compromise.

Sources: Business Insider, Reuters




Market Reaction

From a market perspective, increased drama is never good news. Share prices dropped 14% last Thursday once rumors spread about a potential governmental crackdown on Tesla and SpaceX contracts associated with the new tax bill. While share prices have positively risen since then, they're still down 9% this week. Additionally, Dogecoin—one of Musk's go-to crypto investments—is down 6%. Even Wall Street doesn't want to deal with the drama. If governmental operations suspend contracts or even minutely shifts legislation out of increasing fear/crossed blows, they'll lose the chance to make money with Musk's endeavors.

Source: Reuters




It Gets Personal

But it gets personal, too. Trump called Musk “the man who has lost his mind.” Musk deleted some of his extreme commentary but recognized peaceful overtures (although did not apologize), which means this is still on thin ice. In addition, even Musk's father spoke about it to ABC, that he was encouraging his son to let this blow over.However, insiders feel differently. They feel that both parties know what's at stake—and with investor pressure and operational funding from angel investors—it would make sense that someone aligned with both sides would broker peace for now until later needed.

Source: ABC News


Quick Thoughts

What Trump has over Musk: He can order suspended reviews of any commercial launch contracts with SpaceX or hold up Tesla electric vehicle tax credits. He controls government dialogue—which could severely hurt Musk's companies.


What Musk has over Trump: Billionaire status and millions of loyal followers. Let's not forget that in the 2024 presidential run, Musk was Trump's biggest fan.

What Can Happen:

Peaceful co-existence: Neither want to push now that blood has been settled after MCCAIN'S DEATH—or GREECE ON FIRE (I assume no one wants to push it further)!


Musk runs as a third-party candidate: He funds challengers; pushes for an America Party that eventually favors centrists in the long run; creates some GOP civil war.


War over contracts: Trump crosses the line in some public forum—resulting in chaos in market value fluctuations.

For now, all eyes are on the Senate. If this tax bill is changed to suit Musk, then all this drama can go away. If not? Buckle your seatbelts!


Final Thoughts

This isn't just two powerful men fighting like multimillionaire CEOs—they're two men cornering Washington discourse arenas—and seeing who can have more power over those supporting them in the real world at present. Stay tune