Introduction

As tensions between President Donald Trump and Elon Musk escalated through June 2025, Trump’s top aides launched a behind-the-scenes effort to review — and potentially cancel — Musk’s lucrative government contracts. The effort ultimately faltered after agency assessments concluded that most of SpaceX’s deals were technically irreplaceable.

The Public Flashpoint

On June 5, 2025, Trump erupted publicly on Truth Social, bluntly accusing Musk of being overly reliant on federal government payouts and stating:

“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts” .

This post followed Musk’s vocal criticism of Trump’s signature tax-and-spending legislation, framing the tension as both political and personal.

 Aides Mobilize a Contract Review

Just days after Trump’s comments, GSA Commissioner Josh Gruenbaum directed the Pentagon, NASA, and several other agencies to compile detailed “scorecards” of SpaceX contracts — their values, mission-critical status, and viable alternative providers . These internal evaluations were clearly driven by aides seeking ways to act on Trump’s threat.

 The Findings: Too Much at Stake

After reviewing the data, officials determined that most of SpaceX’s contracts were essential to U.S. missions in space and defense. Attempts to replace Musk’s firm were considered infeasible due to lack of comparable technical capacity from other providers

According to the Wall Street Journal, aides had discussed canceling some contracts, but the overall conclusion was that SpaceX’s dominance in launches, satellite services, and astronaut transport made wholesale termination impossible

What Trump’s Team Explored — and Rejected

The administration reviewed over $38 billion in support over years, including NASA contracts and subsidies for Tesla and SpaceX  In theory, they had authority to cancel contracts “for convenience”—but in practice, few deals were dispensable without jeopardizing national security and logistics

Fallout in Defense Planning

Despite the political tension, SpaceX remained a key player in the launch of the $175 billion Golden Dome missile defense project, with firms like Lockheed Martin and Amazon’s Project Kuiper named as alternative vendors

The administration’s shift reflects a pragmatic acceptance that, regardless of internal feuds, SpaceX’s technology remains vital to U.S. interests in space and defense

 Musk’s Reaction and Public Retort

Following Trump’s threats, Musk reacted publicly with defiance. He announced SpaceX might “decommission its Dragon spacecraft immediately”, the only U.S. vehicle capable of sending astronauts to the ISS, only to backtrack hours later, saying “Ok, we won’t”

Musk later accused Trump of ingratitude and defended his companies’ strategic value—including Starlink’s role in connectivity and national infrastructure .

 Internal Division: Aides vs. Strategists

Some Trump allies, including Steve Bannon, pushed for aggressive action—calling for audits of Musk’s immigration, drug history, and other investigatory moves with the goal of pulling contracts or launching investigations

Others in the administration warned that cutting ties entirely would jeopardize critical operations and destabilize ongoing collaborations — illustrating a split between political hard-liners and security-focused moderates.

 DOGE, Conflicts, and the Irony

Musk’s tenure leading the Department of Government Efficiency (DOGE)—Trump’s ambitious cost-cutting initiative—made headlines. DOGE canceled hundreds of contracts, yet Musk’s own firms remained some of the most substantial recipients of federal spending throughout that period .

Critics pointed to potential conflicts of interest: DOGE accessed sensitive government data while Musk remained CEO of companies benefiting from agency contracts—a rare crossover of public and private interests

 Why Contracts Were Too Valuable

SpaceX accounts for over 90% of U.S. satellite launch capacity and remains unmatched in efficiency and cost

Crew Dragon spacecraft remains the only U.S.-built craft capable of ferrying astronauts to and from the ISS .

Agencies such as NASA and Pentagon deemed alternative vendors unready to fill major roles in satellite-based internet or rocket launch systems

Conclusion

The attempt by bitter Trump aides to cancel Elon Musk’s government contracts ultimately failed—not due to legal protections, but because SpaceX has become mission-critical to U.S. space and defense operations. Despite political posturing and internal pressure, the administration concluded the deals were too strategically valuable to sacrifice.

This episode underscores the hazards of politicizing vital infrastructure. At stake was not just a feud between two powerful individuals—but the continuity of national security, space exploration, and technological dominance.