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Trump explored ways to cut contracts with Elon Musk's SpaceX after fallout but failed: Report
US President Donald Trump talks to the media, next to Tesla CEO Elon Musk with his son X Æ A-12, at the White House in Washington, DC, US, March 11, 2025. (Photo: Reuters)
After the public break-up of Elon Musk and US President Donald Trump, the administration explored ways to cut contracts to Musk-owned SpaceX, but concluded that it was not possible, according to a report.
After Musk mounted personal attacks on Trump over the 'One Big Beautiful Bill', Trump had suggested he could cut subsidies to Musk's companies like SpaceX and Tesla. Over the years, the US government has given several billions in contracts, subsidies, and tax credits to Musk's companies — most notably SpaceX.
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Days after Trump's statement, a senior administration initiated a review of government contracts to SpaceX to see if and how they could be cancelled, as per the Wall Street Journal.
However, the review concluded that the Department of Defense and Nasa are so deeply dependent on SpaceX for a host of purposes, ranging from military connectivity to satellite launches, that contracts to SpaceX could not be cancelled, the newspaper reported.
As per the latest information available publicly, ongoing US government contracts to SpaceX total around $18 billion. This does not include the money that SpaceX or other companies owned by Musk have got in subsidies or tax credits in ongoing or past contracts. Public estimates say that around 30-40 per cent of SpaceX's annual revenue comes from the US government — mostly from services to Nasa, military, and intelligence services.
Trump administration realises US depends too much on Musk
The Journal reported that the review of Musk's contracts, which was led by Josh Gruenbaum of the General Services Administration's (GSA), asked the Defense Department, Nasa, and around half a dozen other federal agencies to fill out a spreadsheet with all of their current SpaceX contracts and other transaction agreements, as per the newspaper.
The spreadsheet also asked whether a competitor could do the job that had been contracted to the SpaceX, the report said.
After receiving the information, the Trump administration realised it could no cut contracts to SpaceX for two reasons.
Firstly, SpaceX was doing some of the most critical work for the US military, Nasa, and spy agencies like the National Reconnaissance Office (NRO). Such work cannot be disrupted or stopped.
Secondly, even if the Trump administration would have gone for short-term disruption for long-term solution or punishment to Trump, they would have found few alternatives. In most of the cases, the technology and launch capacity of SpaceX is simply unmatched. There are few to no companies that can do the work that SpaceX does — particularly at the scale of SpaceX.
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