In a dramatic collision of political influence and business power, Elon Musk — the billionaire CEO of Tesla, SpaceX, and Starlink — has lashed out at former U.S. President Donald Trump following what Musk called a “sneaky and corrupt” threat to sabotage his companies’ government contracts. What began as policy disagreement has rapidly escalated into a high-stakes standoff, with billions of dollars, national security operations, and political reputations hanging in the balance.

The feud, unfolding in the public eye throughout June and July 2025, offers a rare view into the dangerous intersection of political vendettas and the vulnerability of private enterprise — even one as vast and influential as Musk’s empire.

A Partnership Turned Hostile

In earlier years, Elon Musk and Donald Trump maintained a publicly cautious, occasionally cooperative relationship. Musk served on Trump’s advisory councils during the 2016–2020 term, and both shared interests in deregulation and domestic manufacturing. Even during Trump’s second campaign in 2024, Musk hinted at supporting the former president’s economic plans, especially those related to space and infrastructure.

But by mid-2025, the alliance had crumbled. Tensions came to a head after Musk criticized Trump’s “Big American Revival Act” — a sweeping economic bill passed in April 2025. The legislation slashed electric vehicle (EV) subsidies and altered federal procurement rules in ways that directly harmed Tesla’s bottom line.

“Trump’s bill is a disaster for innovation and national security,” Musk tweeted on June 2. “It rewards legacy energy lobbies while punishing clean tech and aerospace innovation.”

The tweet went viral. Trump responded just hours later on Truth Social, writing:

“Elon should be more grateful. Without U.S. government contracts, he’s NOTHING. Maybe it’s time to end his sweetheart deals. Billions wasted!”

That post, seemingly impulsive, triggered a public relations and market meltdown.

The Threat: Cancel Federal Contracts

Over the next several days, sources inside the White House (where Trump holds considerable influence despite being out of office) claimed that Trump-aligned lawmakers were drafting legislation to review and potentially cancel major contracts with SpaceX and Starlink. Conservative PACs began circulating messages accusing Musk of “betraying America’s values” and “pushing globalist EV agendas.”

The threats weren’t empty. SpaceX currently holds contracts worth more than $35 billion with NASA and the U.S. Department of Defense. These include:

Launch services for national security satellites

Transport missions to the International Space Station (ISS)

Starlink’s critical military internet infrastructure in global conflict zones

Tesla, too, benefits from government EV incentives and federal fleet contracts — all of which were now under scrutiny.

Musk Strikes Back — Publicly and Personally

On June 8, Musk held an impromptu press conference at SpaceX headquarters in Hawthorne, California. He didn’t mince words:

“This is political blackmail, plain and simple. Donald Trump is threatening national security to settle a personal grudge. If he thinks I’ll cave, he doesn’t know me.”

Then, in an X post (formerly Twitter), Musk wrote the now-infamous line:

“Go ahead and cancel our contracts. You’ll be begging us to relaunch Dragon after Boeing misses another deadline. MAKE MY DAY.”

The statement stunned observers. NASA’s Artemis and ISS programs rely heavily on SpaceX’s Dragon and Falcon 9 platforms, with no immediate replacement.

Fallout on Wall Street and in Washington

Within hours of Musk’s outburst, Tesla stock fell by over 14%, wiping out $140 billion in market capitalization. Investors panicked, fearing Musk’s outspokenness could cost the company lucrative government partnerships.

Financial analysts issued warnings:

“This feud is existential. If Trump’s allies succeed in gutting Musk’s federal revenue streams, SpaceX’s growth halts, Tesla loses EV credits, and Starlink’s military edge fades.” — Morgan Finch, Sovereign Capital

Meanwhile, on Capitol Hill, lawmakers scrambled to assess the legality of Trump’s push. A bipartisan Senate Space Committee hearing was convened on July 1 to examine whether federal aerospace contracts could be canceled for political reasons.

Democratic Senator Linda Carson called Trump’s actions “a dangerous abuse of influence,” while Republican Senator Tom Hauser said, “Musk brought this on himself. Government loyalty should be earned.”

Behind Closed Doors: Pressure Mounts

Multiple leaks to media outlets revealed that the Pentagon and NASA both privately warned Trump’s inner circle that canceling SpaceX contracts could:

Ground U.S. crewed spaceflight for up to 2 years

Delay satellite launches crucial for defense readiness

Endanger broadband infrastructure in military theaters (especially in Ukraine and Taiwan)

 

Insiders also reported that the Department of Justice quietly opened a legal review into whether politically motivated contract cancellation violates procurement law.

Musk, meanwhile, threatened to relocate Starlink’s headquarters overseas and hinted at spinning off parts of SpaceX as independent entities to shield them from government interference.

“Too Big to Cancel”

As the pressure built, Musk appeared to gain the upper hand. On July 15, an internal White House memo, leaked to The Intercept, stated that “SpaceX and Starlink remain too strategically important to disrupt at this time.”

Though Trump continued to taunt Musk on social media — calling him “ungrateful,” “unstable,” and “overrated” — no federal action has been taken to cancel existing contracts.

However, some Tesla federal contracts have been quietly paused or renegotiated at lower value, including Department of Energy fleet upgrades.

Political Backlash and Culture War Crossfire

The feud has bled into America’s broader political culture war. Right-wing media figures like Steve Bannon and Candace Owens have accused Musk of “turning liberal,” while progressive leaders accuse Musk of leveraging national infrastructure as a private bargaining chip.

Musk has found himself isolated politically — no longer fully embraced by the right, nor trusted by the left.

Yet, his fanbase remains powerful. His 160 million X followers continue to rally behind him, and a recent Axios poll found 48% of independent voters view Musk as “a better economic visionary than Trump.”

What’s at Stake

This feud has profound implications far beyond two personalities:

Government Contracts & Business Security: Can a president or powerful political figure threaten a private company’s survival for political gain? This case could test legal limits.

National Security Risk: Musk’s firms — especially Starlink — are deeply embedded in U.S. military strategy. Retaliation could leave intelligence and defense systems vulnerable.

 

 

Business Independence vs. Government Reliance: Musk’s companies have thrived in part due to federal support. This battle exposes how dependent even tech titans are on political goodwill.

Precedent for Political Retaliation: If Trump (or any future leader) can punish a business for political dissent, it may chill corporate speech or innovation.

Conclusion: Billionaire vs. President

 

 

As of late July 2025, Elon Musk remains defiant. Contracts with NASA and the Pentagon are still in effect, but some EV-related subsidies for Tesla remain at risk. Trump, unrepentant, continues to campaign on “ending corporate welfare,” with veiled shots at Musk embedded in nearly every rally speech.

What began as policy disagreement now risks reshaping the boundaries between government and private enterprise. And while the battle may fade from headlines, the scars it leaves — legal, political, economic — could be felt for decades.

One thing is certain: Elon Musk has made it clear that when threatened, he doesn’t just fight back — he escalates.