Trump escalates feud with Musk, threatens Tesla, SpaceX support
The feud reignited on Monday when Musk, who spent hundreds of millions on Trump's re-election, renewed his criticism of Trump's tax-cut and spending bill, which would eliminate subsidies for electric vehicle purchases that have benefited Tesla, the leading US EV maker.
That bill passed the Senate by a narrow margin midday Tuesday.
"He's upset that he's losing his EV mandate and … he's very upset about things but he can lose a lot more than that," Trump told reporters at the White House on Tuesday.
Musk's businesses, especially Tesla and SpaceX, are highly dependent on an array of federal contracts, policies, subsidies and credits that have provided the companies tens of billions of dollars in revenue over the years.
Some of these benefits for Tesla, including consumer tax credits for EV purchases, were already on the chopping block in Trump's tax bill.
The Tesla CEO renewed threats to start a new political party and spend money to unseat lawmakers who support the tax bill, despite campaigning on limiting government spending.
Republicans have expressed concern that Musk's on-again, off-again feud with Trump could hurt their chances to protect their majority in the 2026 midterm congressional elections.
Treasury Secretary Scott Bessent pushed back on Musk's criticism that the bill would balloon the deficit, saying, "I'll take care of" the country's finances.
Musk spearheaded the Department of Government Efficiency (DOGE), aimed at cutting government spending, before he pulled back his involvement in late May.
Trump on Truth Social on Tuesday suggested Musk might receive more subsidies "than any human being in history, by far," adding: "No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE."
Trump later doubled down, telling reporters with a smile, "DOGE is the monster that might have to go back and eat Elon."
In response to Trump's threats, Musk said on his own social media platform X, "I am literally saying CUT IT ALL. Now." He later added that he could escalate the exchange with Trump but said, "I will refrain for now."
The feud could create new challenges for Musk's business empire, particularly as the electric automaker — his primary source of wealth — bets heavily on the success of its robotaxi programme currently being tested in Austin, Texas.
The speed of Tesla's robotaxi expansion depends heavily on state and federal regulation of self-driving vehicles.
"The substance of Tesla's valuation right now is based on progress towards autonomy. I don't think anything is going to happen on that front, but that is the risk," said Gene Munster, managing partner at Tesla investor Deepwater Asset Management.
Analysts expect another rough quarter when the EV maker reports second-quarter delivery figures on Wednesday. Sales in major European markets were mixed, data showed Tuesday, as Musk's embrace of hard-right politics has alienated potential buyers in several markets worldwide.
Gary Black, a longtime Tesla investor who manages money for the Future Fund LLC, sold his shares recently as car sales declined. He told Reuters he is considering when to reinvest and that eliminating electric vehicle credits would harm Tesla. In a separate post on X, Black said: 'Not sure why @elonmusk didn't see this coming as a result of him speaking out against passage of President Trump's big beautiful bill.'
The US Transportation Department regulates vehicle design and will play a key role in deciding if Tesla can mass-produce robotaxis without pedals and steering wheels, while Musk's rocket firm SpaceX has about $22 billion in federal contracts.
Tesla also gets regulatory credits for selling electric vehicles; the company reported $2.8 billion in those credits in the 2024 fiscal year.
Trump had in early June threatened to cut Musk's government contracts when their relationship erupted into an all-out social media brawl over the tax-cut bill, which non-partisan analysts estimate would add about $3 trillion to the US debt.
The subsequent selloff in Tesla shares erased $150 billion in market value, though the stock recovered after Musk walked back some of his comments.
The truce was short-lived, with Musk on Saturday calling the tax bill "utterly insane and destructive" in a post on X. He said lawmakers who voted for the bill after campaigning on cutting spending bill "will lose their primary next year if it is the last thing I do on this Earth."
Asked if he was going to deport Musk, a naturalized US citizen, Trump told reporters as he left the White House on Tuesday: "I don't know. We'll have to take a look."
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Al Etihad
17 minutes ago
- Al Etihad
Trump announces US trade deal with Vietnam
2 July 2025 19:22 WASHINGTON / HANOI (Reuters) US President Donald Trump said on Wednesday that the United States has struck a trade deal with Vietnam, after months of negotiations, that imposes a 20% tariff rate on many imports from the Southeast Asian rate is lower than the initial 46% levy Trump announced in April on goods from Vietnam, largely as a result of its big trade surplus with Washington."It is my Great honour to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam after speaking with To Lam, the Highly Respected General Secretary of the Communist Party of Vietnam," Trump said on Truth said that goods from Vietnam would face a 20% tariff and that any trans-shipments from third countries would face a 40% would also provide the United States with more market access, with US exports to the country facing no tariffs, he said."It is my opinion that the SUV or, as it is sometimes referred to, Large Engine Vehicle, which does so well in the United States, will be a wonderful addition to the various product lines within Vietnam," Trump said. The White House and the Vietnamese trade ministry did not immediately respond to a request for comment.
Middle East Eye
18 minutes ago
- Middle East Eye
Hamas says it is studying Trump's ceasefire proposal
Hamas said it was studying what US President Donald Trump called a "final" ceasefire proposal for Gaza. The group said it was "conducting national consultations" to discuss proposals it had received from Egyptian and Qatari mediators. Hamas said it aimed "to reach an agreement that guarantees ending the aggression, achieving the withdrawal [of Israeli forces from Gaza] and urgently aiding our people in the Gaza Strip". Trump said Israel had agreed to a 60-day truce, during which he would work with all parties "to end the War". He also threatened Hamas if they did not accept the deal, stating: "it will not get better - IT WILL ONLY GET WORSE". Israeli Prime Minister Benjamin Netanyahu called for the elimination of Hamas in his first public remarks since Trump's announcement. "There will not be a Hamas. There will not be a Hamastan. We're not going back to that. It's over," he said.
Arabian Post
19 minutes ago
- Arabian Post
US–Vietnam Trade Accord Sets Stage for New Era
President Trump has confirmed that the United States and Vietnam have reached a trade agreement, with a detailed framework now in place while formal terms await finalisation. The accord suspends the 46 per cent reciprocal tariff on Vietnamese imports, originally imposed in April, and paves the way for expanded market access and tighter controls on rerouted Chinese goods. Negotiations were fast-tracked to meet the looming July 9 deadline, when the temporary pause on tariffs would otherwise lapse. As part of the layout, Vietnam has committed to reducing non-tariff trade barriers and allowing greater access for US livestock, aerospace equipment and energy exports—though precise sectors and volumes remain unspecified. At the centre of the deal stands a tiered tariff system based on foreign value‑content of exports. Products most heavily reliant on Chinese components may face duties of 20 per cent or more, while Vietnamese-made goods enjoy a lower baseline of 10 per cent. US officials have asserted that this structure addresses circumvention of Chinese duties while protecting legitimate Vietnamese manufacturing. ADVERTISEMENT Vietnamese Prime Minister Pham Minh Chinh, speaking at the World Economic Forum in Tianjin prior to the deal's announcement, stated that Hanoi expected to finalise negotiations before the July deadline and hoped for outcomes 'earlier than two weeks.' The country's trade surplus with the US, which reached US $13.8 billion in May—up 42 per cent year‑on‑year—remains a key negotiating point. Negotiators also addressed concerns about illegal trans‑shipment: goods routed through Vietnam after being manufactured in China to bypass Chinese tariffs. US trade adviser Peter Navarro has described this practice as a serious evasion tactic; Vietnamese officials have promised to strengthen border controls and customs scrutiny. Efforts are now moving beyond tariffs, with signs that Vietnamese companies will sign memorandums of understanding to purchase US agricultural products. One such agreement involves $800 million worth of corn, wheat, soybean meal and dried distillers grains from Iowa over three years—part of a wider $2 billion agricultural import initiative. The Office of the US Trade Representative has been steering bilateral talks under the authority granted in April, rolling back country‑specific tariffs to a baseline 10 per cent while seeking comprehensive trade frameworks. Vietnam is among eighteen nations engaged in similar negotiations, alongside the UK and China. However, as negotiations progress, only those with finalized agreements can expect to retain suspended tariffs beyond July 9. Vietnamese Trade Minister Do Duc Duy led a delegation to Washington in early June, focusing on high‑tech, aviation and energy sectors. This build‑up culminated in Vietnamese officials approving a broad framework, though detailed tariff schedules and purchase commitments remain pending. ADVERTISEMENT US Treasury officials, including Deputy Finance Minister Cao Anh Tuan, have registered concern over Vietnam's ballooning trade surplus and advocated for mechanisms to facilitate greater US exports of high‑technology products. The trade deal aims to address structural imbalances and discourage asymmetry. By halting the 46 per cent tariff, both governments aim to provide breathing room for companies navigating supply‑chain adjustments. Vietnamese exporters, particularly in textiles, electronics, and furniture, had faced rising costs and uncertainty. US importers, in turn, gained steadier input pricing while Vietnam's manufacturing sector gains clearer visibility on duty obligations. The bilateral agreement falls within the Trump‑era pivot towards isolating China as a growing trade adversary. After earlier deals with the UK and China, it signals an effort to construct a network of selective, strategic partnerships centred on reciprocal trade and industrial transparency. Despite uncertainty over the finer details, the accord demonstrates mutual interest in cooperative economic alignment. Vietnam has positioned itself as a major manufacturing hub in Southeast Asia, and its compliance against illicit trans‑shipment could bolster legitimacy in global supply chains. US firms—particularly in agriculture and high-tech—stand to benefit if Vietnamese commitments materialise. Further negotiations will refine tariff bands, enforcement mechanisms, and market access mandates. Both sides aim to formalise agreements ahead of the July 9 expiration. Meanwhile, US companies tied to Vietnamese supply chains—covering electronics, textiles and agri‑inputs—are anticipating disclosures that could guide sourcing decisions. Observers on both continents consider the deal as a modest but strategic realignment. For Washington, it reduces reliance on adversarial supply routes; for Hanoi, it secures tariff relief and access to high‑value US markets. As the technical teams proceed to swap drafts and conduct consultations, stakeholders await clarity on what the detailed deal will deliver in terms of quotas, standards and timelines.
