'Elon Musk should stay out of politics...': US Treasury chief warns after 'America Party' announcement
In a dramatic escalation of tensions between two of the most prominent figures in American business and politics,
Elon Musk
has officially announced the formation of a new political organisation called the 'America Party.' The announcement came on Saturday, July 5, 2025, following weeks of growing disagreement between President
Donald Trump
and the administration over the recently passed tax-and-spending bill.
The new legislation, which includes sweeping tax cuts and expanded defence spending, has drawn criticism from Musk and others who warn that it could significantly inflate the US budget deficit. Musk, once a vocal supporter of Trump and a key player in federal advisory roles, now appears poised to take on members of the Republican establishment during the upcoming midterm elections.
According to a report by Reuters, Musk shared the news of the party's formation through his social media platform X, citing the results of a public poll showing strong support for an alternative to the traditional two-party system. The implications of Musk's political move are already reverberating across Wall Street, Washington, and Silicon Valley.
Elon Musk rejects Donald Trump's tax bill, launches 'America Party'
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Elon Musk's political shift marks a stark change from his earlier alignment with President Trump. During Trump's previous term, Musk served in a high-profile advisory position as head of the Department of Government Efficiency (DOGE). He also provided financial support to Trump's 2024 re-election campaign.
However, their relationship began to unravel over the content of Trump's latest tax bill. According to The Daily Beast, Musk strongly opposed the bill's elimination of green energy credits that had benefited Tesla's electric vehicle business. Trump, in turn, has accused Musk of acting out of self-interest and has threatened to revoke billions in federal contracts from both
Tesla
and SpaceX.
Trump's reaction and the White House response
President Trump responded publicly to Musk's announcement during a press interaction on July 6. Calling the move 'ridiculous,' Trump dismissed the formation of a third party as a distraction and warned that it could disrupt the nation's political balance.
The White House has not issued an official statement, but Trump's Council of Economic Advisers Chair Stephen Miran defended the administration's policy on ABC's 'This Week,' claiming that the tax bill would 'turbocharge' economic growth. Miran also downplayed Musk's political influence, saying, 'The principles of DOGE were very popular, but if you looked at the polling, Elon was not.'
Meanwhile,
US Treasury Secretary
Scott Bessent publicly urged Musk to prioritise his responsibilities as CEO of Tesla and SpaceX. In a CNN interview, Bessent remarked, 'I imagine that those boards of directors did not like this announcement yesterday and will be encouraging him to focus on his business activities, not his political activities.'
Impact on business and financial markets
The fallout from Musk's announcement was immediate. According to a Reuters report published on July 6, investment firm Azoria Partners delayed the launch of its Tesla-linked Convexity ETF due to uncertainties over Musk's political ambitions. Azoria CEO James Fishback publicly urged Tesla's board to review whether Musk's political commitments were compatible with his corporate duties.
Tesla's stock price dropped nearly 7% following the news, extending a broader decline of about 35% since late 2024. Analysts cited rising political risk and leadership distraction as key concerns for investors.
Fishback, writing on X, stated: 'I encourage the Board to meet immediately and ask Elon to clarify his political ambitions and evaluate whether they are compatible with his full-time obligations to Tesla as CEO.' He later added, 'Elon left us with no other choice.'
Structure and goals of Elon Musk's 'America Party'
Musk's newly formed America Party is designed to operate outside of traditional Republican and Democratic platforms. According to an overview shared on Musk's X profile and summarized in The New York Post, the party will focus on several core issues:
Reducing the federal deficit
Expanding AI-enabled national defence systems
Promoting deregulation in the science and technology sectors
Offering tax incentives for families and manufacturing
Funding primary challengers to Republican incumbents who voted for the tax bill
Rather than fielding a presidential candidate, Musk stated that the party's immediate focus is to win 'a couple of key congressional seats' in the 2026 midterms and reshape the legislative priorities of the Republican majority.
Elon Musk's justification for the break
Musk has framed his departure from the GOP as a necessary response to what he views as irresponsible fiscal policy. In a series of posts on X, he described Trump's bill as 'insanely expensive' and claimed that it would 'destroy the American balance sheet.'
He emphasised that the America Party is intended to restore what he calls 'pragmatic conservatism,' centred on technological advancement and fiscal restraint. According to Reuters, Musk is also considering launching PACs to support like-minded candidates, although no official filings have been made yet with the Federal Election Commission.
Also read |
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