Billionaire Battle: Trump vs. Musk Turns Ugly in Public Meltdown
Trump, Musk, and the Federal Subsidy Showdown: Markets Rattle as Tensions Rise
July 1, 2025 | Washington, D.C. — In a move sending shockwaves through Silicon Valley and Wall Street alike, former President Donald Trump has signaled a major policy shift targeting federal support for Elon Musk’s companies—Tesla, SpaceX, and Starlink front and center. The catalyst? Trump’s latest legislative initiative, the “Big Beautiful Bill,” which aims to axe electric vehicle tax credits and slash what he deems “massive waste” in government contracts.
Trump took to Truth Social, calling out Musk as potentially “the most subsidized human being in history.” He warned that, if Congress passes the bill, Musk “would probably have to close up shop and head back home to South Africa.” Trump also floated the idea of reviving the Department of Government Efficiency (DOGE)—a short-lived project Musk briefly led—to comb through existing subsidies and contracts. “BIG MONEY TO BE SAVED!” Trump posted, clearly signaling a new cost-cutting crusade.
Musk responded just as forcefully, posting on X: “I am literally saying CUT IT ALL. Now.” He doubled down, claiming he’s long advocated for ending all federal subsidies, going so far as to call the bill “utterly insane” and accusing Republican leaders of fiscal irresponsibility.
This public spat marks a sharp departure from their former alliance. Musk once advised Trump and even led the DOGE initiative before stepping down early this year. During the 2024 campaign, Musk was a prominent Trump supporter, but their partnership fractured after Musk openly criticized Trump’s spending plans and hinted at supporting independent political efforts.
Beneath the rhetoric is a very real financial issue. Tesla has long benefited from generous EV tax breaks, while SpaceX and Starlink hold multibillion-dollar government contracts. Trump’s bill would slash these incentives—ostensibly to reduce the federal deficit. Yet, analysts point out that independent projections show the bill could actually increase the national debt by nearly $3 trillion over the next decade.
The market reaction was immediate and severe. Tesla shares dropped more than 6% intraday, briefly falling below $300. The company has now lost over $380 billion in market value since January, with Monday’s selloff marking its steepest single-day loss on record. Investor concerns are mounting over Musk’s increasingly aggressive political stance and the risk of evaporating federal support.
Looking ahead to the 2026 midterms, the Musk-Trump feud is shaping up into a significant political and financial battle. Musk has vowed to back primary challengers against any Republican supporting Trump’s bill, stating, “It’s time to end this debt-driven circus.” The implication is clear: the business community should expect heightened volatility as this conflict escalates.
In short, Trump and Musk’s split is more than a personal rivalry—it’s a high-stakes fight with major implications for federal policy, the future of clean energy, and the relationship between Washington and America’s most influential tech leaders. For investors and executives, it’s a situation demanding close attention, strategic flexibility, and perhaps a stronger risk management posture than ever.
