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5 reasons why Trump, Musk are at loggerheads

Once allies, Elon Musk and Donald Trump are now locked in a bitter feud over a $2.5 trillion spending bill, trading accusations and threats. Founder-Editor Bhupendra Chaubey explains why.

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The Squirrels Bureau
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The feud between US President Donald Trump and world’s richest man Elon Musk likely stems from policy disagreements, business interests and personal grievances, with recent public accusations intensifying the conflict. The rift began when Elon Musk, who served as head of the Department of Government Efficiency (DOGE) until recently, criticised President Donald Trump’s “big, beautiful” spending bill. Musk labelled it a “disgusting abomination” on X, arguing it would increase the federal deficit by $2.5 trillion over 10 years, according to Congressional Budget Office (CBO) analysis.

This criticism came after Musk had been advocating fiscal discipline, a stance he took during his 129-day tenure at DOGE, which involved initiating mass sackings and claiming to save $180 billion (a claim disputed by critics). His call to action on X, with over 200 million followers, was to “KILL the BILL,” reflecting his strong opposition.

Their relationship had previously been strong, with Musk endorsing Trump in July 2024 after an assassination attempt and reportedly funnelling $290 million into his campaign, making him a key financial backer. This backdrop makes their current feud particularly notable, as it marks a significant break from their earlier alliance.

5 key reasons for fallout

In the video above, The Squirrels’ Founder-Editor Bhupendra Chaubey posits that the conflict can be broken down into five primary reasons, each contributing to the growing divide.

1. Fiscal concerns

Musk’s primary objection is the bill’s fiscal impact, with the CBO estimating a $2.4 trillion increase in national debt over 10 years, potentially leaving nearly 11 million without government-backed health insurance.

The White House disputes this, claiming the figures don’t account for revenues from increased tariffs, but Musk’s stance as a fiscal hawk, especially after his DOGE role, drives his opposition.

2. Business interests

The bill eliminates tax credits for electric vehicle (EV) buyers, a move that could directly impact Tesla, Musk’s flagship company. House Speaker Mike Johnson suggested Musk’s criticism might stem from this, as EV mandates are “very important” to him.

Musk denied this was his sole concern, stating on X, “Keep the EV/solar incentive cuts in the bill, even though no oil & gas subsidies are touched (very unfair!!), but ditch the MOUNTAIN of DISGUSTING PORK in the bill,” but the potential business hit remains a factor.

3. Policy differences

Musk, a proponent of free trade, has clashed with Trump’s protectionist policies, including tariff hikes. During a Tesla earnings call, Musk pushed for lower tariffs, arguing they benefit global businesses like Tesla, which relies on parts from North America, China and Europe.

This policy divergence has been a long-standing tension, as reported from time to time by The Squirrels, exacerbated by the bill.

4. Personal betrayal

Musk felt betrayed by Trump’s private meeting with OpenAI CEO Sam Altman, Musk’s rival in the AI race and the withdrawal of a NASA leadership nomination for one of Musk’s allies. Additionally, Musk halted the final $100 million of a $300 million pledge to Trump’s campaign, signalling a personal rift.

These actions, combined with perceived slights, have fuelled Musk’s frustration.

5. Reputation management

Musk’s time at DOGE was marked by controversy, including thousands of layoffs, agency cuts and lawsuits, damaging his public image. Critics argue his attacks on Trump’s bill may be an attempt to reclaim his narrative as a fiscal conservative, especially after failing to meet his $2 trillion cost-cutting goal and facing backlash for his DOGE tenure.

In the past 24 hours, the feud has escalated dramatically, with both figures trading personal attacks on X, turning a policy dispute into a public spectacle.

Among the key developments, Musk accused Trump of ingratitude, claiming, “Without me, Trump would have lost the election,” and took credit for the Republican victory, stating, “Dems would control the House and the Republicans would be 51-49 in the Senate” without his help.

The SpaceX, Tesla and X owner escalated the situation further by suggesting Trump is listed in the Jeffrey Epstein files, an unverified and controversial claim condemned by White House press secretary Karoline Leavitt as “unfortunate” and a false White House statement.

Musk further called for Trump’s impeachment and suggested replacing him with VP JD Vance, quoting an X post with “Yes”.

Trump retaliates — only to find Musk hitting back

Trump expressed disappointment, suggesting their “great relationship” was over and implying Musk was upset over the EV subsidy removal. He retaliated by threatening to cut government contracts with Musk’s companies, including Tesla, SpaceX and Starlink, which benefit from subsidies and tax breaks worth billions. Trump claimed this would save “billions and billions of dollars” and called Musk “just went CRAZY,” defending the bill as the “Greatest Bills ever presented to Congress,” a $1.6 trillion cut in expenses and the “Biggest Tax Cut ever given”.

In response, Musk threatened to decommission SpaceX’s Dragon spacecraft immediately, a move with significant implications for space exploration and national security. He also vowed to spend money to oust Republican lawmakers supporting the bill in the 2025 midterms, stating on X, “I will spend my own money to get rid of RINOs who vote for this disgusting bill,” targeting those he sees as disloyal.

The feud has had immediate business consequences, with Tesla’s stock dropping 14% within hours of the row, reflecting investor concerns about the impact on Musk’s companies, especially given their reliance on government contracts.

Implications

The feud has considerable political and business implications, dividing Republicans and drawing reactions from lawmakers. The conflict has split the GOP, with some lawmakers backing Musk’s fiscal concerns and others supporting Trump. Rep Tom Massie, R-Ky, defended Musk, stating, “I choose math,” highlighting the mathematical absurdity of the bill’s spending.

In contrast, Rep Troy Nehls, R-Texas, criticised Musk, saying, “You’ve lost your damn mind”. This division could affect future legislation and party unity, especially with Musk’s threat to target RINOs (Republicans In Name Only) in midterms.

Democrats have seized on the feud, with Rep. Jamie Raskin, D-Md., likening it to “two gentlemen with gargantuan egos,” and Rep Melanie Stansbury, D-N.M., comparing it to “Real Housewives,” even quoting Musk’s X posts into the Congressional Record.

The feud threatens Musk’s companies, with potential contract cuts impacting SpaceX’s role in NASA missions and Tesla’s market position. Politically, it could weaken Trump’s control over the GOP, especially if Musk’s financial influence sways primaries, and it raises questions about the stability of both leaders, given the personal nature of their attacks.

Patch-up possible?

Despite the escalation, there are signs of a possible cooling-off period. Musk responded positively to suggestions for peace, agreeing not to decommission the Dragon spacecraft after initially threatening to do so and replying “Good advice” to an X user with 200 followers suggesting a cooling off. Billionaire investor Bill Ackman suggested Musk and Trump make peace, to which Musk responded, “You’re not wrong”. House Speaker Mike Johnson also commented, “… policy differences shouldn’t be personal,” and called Musk a friend, indicating a desire to maintain some level of alliance. However, given the intensity of recent exchanges, whether this leads to reconciliation or further conflict remains uncertain.

The recent accusations and responses have been rapid and intense, with both parties using X to air their grievances. Musk’s claim about Trump’s Epstein connection has drawn significant backlash, with the White House condemning it as false, adding to the controversy. Trump’s threat to cut contracts has raised concerns about the financial stability of Musk’s companies, especially given Tesla’s stock drop. The political implications are clear, with the GOP facing internal divisions and Democrats cashing in on the spectacle.

The Musk-Trump feud, rooted in policy disagreements and personal grievances, has escalated into a public spectacle with real stakes for American politics and business. While recent developments show signs of potential de-escalation, the intensity of their traded accusations, ranging from Epstein allegations to contract threats, underscores the complexity and volatility of their relationship. As of now, the world watches closely, with the future of their alliance and its broader impact yet to be determined.

Donald Trump Elon Musk