Trump Threatens to Cancel Billions in Government Contracts With Elon Musk Amid Escalating Feud

A feud between Donald Trump and Elon Musk has erupted, with Trump threatening to axe billion-dollar federal contracts tied to Musk’s companies.

The clash began after Musk criticized Trump’s new tax bill, prompting the president to accuse him of betrayal and signal a potential financial crackdown.

A political feud between U.S. President Donald Trump and billionaire tech mogul Elon Musk has taken a dramatic turn, with the President threatening to cut off federal contracts worth billions of dollars that Musk’s companies currently hold. The clash stems from Musk’s criticism of Trump’s new tax bill, which has triggered a series of fiery exchanges between the two influential figures.

On Thursday, President Trump took to his social media platform, Truth Social, to issue a stern warning. “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts,” Trump wrote. His post signaled a possible withdrawal of federal support from Musk’s ventures, a move that could significantly affect companies like SpaceX and others involved in government work.

Elon Musk’s SpaceX is one of the most heavily contracted private companies working with the U.S. government. The space exploration firm has secured numerous lucrative deals with NASA and the Department of Defense, particularly for rocket launches, satellite deployments, and secure military communications through the Starlink network. Aside from space technology, Musk’s influence also stretches across electric vehicles, infrastructure, and national digital communications, making him a key player in several federally backed initiatives.

This latest dispute escalated when Trump expressed disappointment in Musk during a high-level meeting at the White House with German Chancellor Friedrich Merz. The president, while addressing the press, noted he felt “very surprised” and “very disappointed” in Musk’s public criticism of the tax reform bill.

“I’ve always liked Elon,” Trump said. “So I was very surprised. You saw the words he had for me. He hasn’t said anything bad about me before. I’d rather have him criticize me than the bill. Because the bill is incredible.”

Musk, who played a brief but high-profile role in Trump’s administration as head of the Department of Government Efficiency, a position focused on reducing federal expenditure did not take the comments lightly. Just days after stepping down from the role, Musk fired back online, asserting that his influence had been pivotal to Trump’s re-election in 2024.

“Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate,” Musk posted on social media in response to a video of Trump’s statement. He ended the post with a scathing remark: “Such ingratitude.”

Musk’s departure from his government role last Friday came amid growing tension over federal spending priorities, particularly the tax plan recently passed by the Trump administration. Critics argue that the bill disproportionately favors the wealthy, while proponents claim it stimulates growth and simplifies the tax code.

As of now, no formal action has been taken to revoke SpaceX’s or other Musk-linked companies’ federal contracts, but Trump’s threat has raised concerns among defense analysts, space industry stakeholders, and political observers. Many warn that abrupt contract cancellations could have ripple effects on national security projects and ongoing space missions.

With both men holding substantial influence over policy and innovation in the U.S., the deepening rift between Trump and Musk signals more political fireworks to come. Whether the President will follow through on his threat remains to be seen but the feud is undoubtedly reshaping the conversation around political loyalty, government partnerships, and the intersection of business and power in Washington.