Trump distances himself from Musk, hints at reviewing govt contracts

After a public spat over tax policy, Trump may review billions in federal contracts awarded to Tesla and SpaceX, citing fairness and national interest

US President Donald Trump has made it clear he has no intention of reaching out to Elon Musk despite their long-standing association. Their recent public fallout, triggered by disagreements over a sweeping tax package, has now raised questions about the future of Musk’s government ties.

 

“We’ll take a look at everything,” Trump told reporters on Friday, when asked whether he was considering cancelling federal contracts with Musk’s companies, Bloomberg News reported. “It’s a lot of subsidy,” he added, noting that any decision would be made “only if it’s to be fair for him and for the country.”

 

The feud intensified on June 5, when both men took public swipes at each other, shaking investor confidence. Tesla shares tumbled, although they regained some ground on Friday. Other assets linked to Trump and Musk were similarly affected. 

 

Musk had shown a willingness to de-escalate the tensions late Thursday, but received no such reciprocation from the president. “I don’t have any plans,” Trump said when asked if he’d speak to him.

Billions in federal support at stake

The fallout between Elon Musk and Donald Trump could stall Tesla’s self-driving ambitions, reduce SpaceX’s Nasa missions, limit Starlink’s global contracts, and cost X valuable advertisers.

 

Musk’s firms — including Tesla and the privately-held aerospace giant SpaceX — have long benefitted from government funding. According to Bloomberg Government data, SpaceX has secured over $22 billion in unclassified contracts from Nasa and the Department of Defense since 2000. The company is now valued at around $350 billion. 

 

Despite the apparent rift, Trump struck a more measured tone when asked about Musk’s earlier role heading the Department of Government Efficiency, a federal cost-cutting initiative. “He helped us a lot,” the president said, adding he wished Musk well and hoped he “does well with Tesla.”

 

A White House official said on Friday that, beyond Trump’s post on social media raising the issue, no formal steps had been taken to cut off ties with Musk’s companies. The official also added that Trump was moving ahead and focusing on his economic agenda instead of the fight with Musk.

 

Trump also said he hadn’t yet considered whether to keep the Tesla vehicle he received earlier this year during a White House event meant to highlight American innovation.