What a war with President Trump could cost Elon Musk’s business empire

The once-close alliance between Elon Musk, the billionaire entrepreneur behind Tesla and SpaceX, and President Donald Trump has unraveled into a public feud that could have major repercussions for Musk’s business empire.

As of June 2025, the fallout between the two powerful figures has escalated with threats and insults traded on social media platforms, raising questions about the potential financial and operational damage to Musk’s companies.

Elon Musk and Donald Trump’s relationship began to solidify during Trump’s campaign for the 2024 presidential election.

Musk, known for his influential presence on social media and his ownership of X (formerly Twitter), played a pivotal role in mobilizing support for Trump.

During the initial months of Trump’s presidency, Musk’s companies, particularly SpaceX, enjoyed favorable conditions.

SpaceX, a key player in the American space program with its Dragon spacecraft, continued to secure lucrative government contracts.

Tesla, Musk’s electric vehicle giant, also navigated the administration’s policies with relative ease, despite occasional tariff concerns Musk himself raised on social media in March 2025.

This period of mutual benefit painted Musk as a significant ally in Trump’s inner circle, amplifying his influence in political and economic spheres.

The Musk and Trump feud

The partnership took a sharp downturn in early June 2025, when disagreements over a major legislative proposal—referred to by Musk as the ‘Big Ugly Bill’—sparked a public spat.

The conflict centers on a spending bill that Musk criticized for massively increasing the federal budget deficit to $2.5 trillion and imposing unsustainable debt on American citizens.

Musk’s vocal opposition to the bill, expressed through posts on X, reportedly angered Trump, who retaliated by threatening to cut government contracts tied to Musk’s companies, particularly SpaceX.

In response, Musk fired back, claiming credit for Trump’s electoral success and asserting that without his support, Democrats would have controlled key branches of government.

This exchange of barbs has not only turned personal, touching on unrelated issues like the Epstein files, but also raised the stakes for Musk’s business interests.

The threat to sever federal contracts is particularly alarming for SpaceX, which relies heavily on government partnerships for its operations, including missions critical to NASA and national security.

Potential damage to Musk’s companies

The fallout could inflict substantial damage on Musk’s business empire, starting with SpaceX.

Given that SpaceX’s contracts with NASA and the Department of Defense are worth billions annually, any reduction or cancellation of these agreements could severely impact the company’s revenue and long-term projects, such as the Starship program aimed at Mars colonization.

Analysts suggest that such a loss could also dent investor confidence in SpaceX, which remains a private entity heavily tied to government funding.

Tesla, while less directly tied to government contracts, is not immune to the ripple effects.

Musk has previously highlighted the impact of tariffs on Tesla, and Trump’s proposed economic policies, including aggressive tariffs as warned by Musk on X in June 2025, could exacerbate costs for the automaker.

A potential recession, which Musk predicted could occur in the second half of 2025 due to these tariffs, would further challenge Tesla’s growth in an already competitive electric vehicle market.

Additionally, the public nature of the feud could harm Musk’s personal brand, which is closely intertwined with Tesla’s image, potentially affecting consumer trust and stock performance.

Beyond SpaceX and Tesla, other Musk ventures like Neuralink and The Boring Company could face indirect consequences.

Regulatory scrutiny, which had been eased under Trump’s earlier support, might intensify if the administration turns hostile.

This could delay innovation timelines and increase operational costs, further straining Musk’s ambitious goals across multiple industries.

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