Tensions Rise: Trump and Musk’s Public Feud Over Tax Policy and Government Contracts
A public spat between tech mogul Elon Musk and former U.S. President Donald Trump has intensified, leading to financial repercussions for Musk's electric vehicle company, Tesla. In a striking conflict, Trump criticized Musk's tax policy following Musk's comments about the significance of Trump's presidency for his own success. Trump's response included threats to eliminate federal subsidies and government contracts now relied upon by Musk's companies, including SpaceX and Starlink.
Following these developments, Tesla's stock faced a steep decline on Thursday. The company's shares began the day at a price of $322.49 but dropped to $284.70, reflecting a staggering decline of $47 per share and a 14.26% loss in market value as rumors of Trump's retaliation spread. This plunge came at an especially difficult time, as Tesla reported a staggering 71% drop in net profits for the first quarter of 2025, alongside a 20% revenue decrease in its automotive sector.
In an effort to stabilize the precarious situation, Musk announced his intention to scale back his involvement with the U.S. government starting in May to focus primarily on his business ventures. However, tensions flared further when Trump publicly expressed his frustration over Musk's comments about economic policies, which Musk implied contributed significantly to his electoral victory.
'Without me, he would have lost the election,' Musk reportedly stated, further inflaming the ongoing dispute. Trump didn't hold back in his rebuttal, taking to social media to voice his displeasure with Musk's criticism of tax policies that, according to Trump, exacerbate the national deficit and debt. He remarked, 'The easiest way to save money in our budget is to end Elon’s subsidies and government contracts.'
Trump accused Musk of lacking foresight regarding recent changes that impacted the electric vehicle market, stating, 'I was surprised that Biden did not do this.' In a public appearance with German Chancellor Friedrich Merz, Trump elaborated on the situation, explaining how the removal of protections for electric vehicles had financial implications that Musk had been aware of for some time. 'Electric vehicles are struggling, and they want us to pay billions of dollars in subsidies,' Trump asserted.
Musk, however, contested Trump's claims. 'False! I was not shown this bill even once, and it was passed overnight so quickly that almost no one in Congress could even read it,' he countered on social media.
The unfolding drama not only illustrates the fraught relationship between business and politics but has also raised concerns about the economic ripple effects of this public feud. With Tesla's financial stability now uncertain amid the ongoing clash, the outcome of these power dynamics could set a precedent for future interactions between powerful business figures and political leaders.
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