Trump threatens Musk's government deals as feud explodes over tax-cut bill

WASHINGTON, June 5 (Reuters) - President Donald Trump threatened on Thursday to cut off government contracts with companies owned by billionaire Elon Musk, as the alliance between the world's most powerful man and its richest erupted into a rancorous public fight.

The feud, which exploded in spectacular fashion over the course of a few hours, pushed shares of electric vehicle maker Tesla down dramatically. The company, where Musk serves as CEO, closed down 14.3% for the day and lost about $150 billion in value after Trump and Musk began their war of words.

Trump lashed out at Musk in comments in the Oval Office. For two days, the billionaire who had been Trump's close adviser campaigned to torpedo the sweeping tax-cut and spending bill, the Republican president's top legislative priority, saying it would add too much to the nation's $36.2 trillion in debt. Even as Trump spoke, Musk responded with posts on his social media platform X.

Continuing the battle, Trump wrote later on his social media site Truth Social: "The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon's Governmental Subsidies and Contracts." Trump had appointed Musk this year to slash the federal bureaucracy.

Trump told reporters in the Oval Office he was "very disappointed" in Musk. The president had held his tongue this week as Musk criticized his bill, an opinion also voiced by some Republicans in the closely divided U.S. Senate.

"Look, Elon and I had a great relationship. I don't know if we will anymore," Trump told reporters, making his first direct response to Musk's criticism.

Musk quickly unleashed a series of biting responses on X.

"Without me, Trump would have lost the election," Musk posted. "Such ingratitude."

Besides electric vehicle maker Tesla, Musk's companies include rocket company and government contractor SpaceX and its satellite unit Starlink. The billionaire spent nearly $300 million in the 2024 election in support of Trump and other Republican candidates.

Trump could have a hard time carrying out his threats against Musk's space business, which plays a critical role in the U.S. government's space program. SpaceX's cheap, reusable Falcon 9 rockets have made it the world's most active launch provider. Its vast Starlink network has disrupted the global satellite communications market.

EVER-PRESENT ALLY

After serving as the biggest Republican donor in the 2024 campaign season, Musk became one of Trump's most visible advisers as the head of the Department of Government Efficiency, which mounted a sweeping effort to downsize the federal workforce and slash spending.
Musk was frequently present at the White House and made multiple appearances on Capitol Hill, sometimes carrying his young son.

A prolonged feud between Trump and Musk could make it more difficult for Republicans to keep control of Congress in next year's midterm elections. In addition to his campaign spending, Musk has a huge online following and helped connect Trump to parts of Silicon Valley and wealthy donors.

Musk had already said he planned to curtail his political spending in the future.

Soon after Trump's Oval Office comments, Musk polled his 220 million followers on X: "Is it time to create a new political party in America that actually represents the 80% in the middle?"

'KILL THE BILL'

Starting on Tuesday, the tech executive unleashed a series of blistering attacks against what Trump calls his "big, beautiful bill." Musk called it a "disgusting abomination" that would deepen the federal deficit, amplifying a rift within the Republican Party that could threaten the bill's prospects in the Senate.

Nonpartisan analysts say Trump's bill could add $2.4 trillion to $5 trillion to the nation's $36.2 trillion in debt.
Trump asserted that Musk's complaints were motivated by the proposed elimination of consumer tax credits for electric vehicles.

Trump also suggested that Musk was upset because he missed working for Trump. Last week, Trump and Musk showered praise on one another at an Oval Office event to mark the end of Musk's service, and both said Musk would remain a trusted adviser.

"He's not the first," Trump said on Thursday. "People leave my administration ... then at some point they miss it so badly, and some of them embrace it and some of them actually become hostile."

Musk wrote on X, "Slim Beautiful Bill for the win," adding "KILL the BILL." He followed that up by saying he was fine with Trump's planned cuts to electric vehicle credits as long as Republicans rid the bill of "mountain of disgusting pork" or wasteful spending.

He also pulled up past quotes from Trump decrying the level of federal spending, adding, "Where is this guy today?"

Trump, meanwhile, posted on Truth Social that Musk "went crazy."
Musk came into government with brash plans to cut $2 trillion from the federal budget. He left last week having cut only about half of 1% of total spending.

DOGE eliminated thousands of federal jobs and cut billions of dollars in foreign aid and other programs, causing disruption across federal agencies and fueling a wave of legal challenges.
Musk's increasing focus on politics provoked widespread protests at Tesla sites in the U.S. and Europe, driving down sales while investors fretted that Musk's attention was too divided.

Following Trump's remarks, a White House official, speaking on background, underscored the shift in the once-close dynamic between Musk and Trump.

"The president is making it clear: this White House is not beholden to Elon Musk on policy," the official said. "By attacking the bill the way he did, Musk has clearly picked a side."