Without those subsidies, he'd have to shut down and go back home.
What was once a celebrated alliance between two of the most powerful figures in American public life has curdled into an open confrontation, as Donald Trump and Elon Musk trade threats over a budget bill that touches the deepest interests of both men. Trump, wielding the instruments of the state, has raised the specter of deportation and subsidy investigations against the South African-born billionaire, while Musk has countered with the threat of a rival political party. The dispute illuminates a timeless tension: when power is shared between those who hold office and those who hold capital, the partnership rarely survives the first serious collision of interests.
- Trump publicly floated deporting Elon Musk and turning the DOGE agency — which Musk himself helped create — against the billionaire's government-subsidized business empire.
- Musk threatened to launch a rival political party called America First the very next day if Trump's budget bill passed, and vowed to fund primary challenges against Republicans who voted for it.
- The fracture reopened a wound that had barely closed: the two men had traded insults in early June before a fragile ceasefire, which collapsed as the Senate moved toward a budget vote.
- At the heart of the clash are Tesla's electric vehicle tax credits and the broader question of whether Musk's companies — SpaceX included — could survive without the government money Trump is now threatening to cut.
- Musk acknowledged the pull toward escalation on X, writing that restraint was difficult, signaling the conflict is being held just below its boiling point — for now.
A budget dispute has shattered the alliance between Donald Trump and Elon Musk, with the president openly raising the possibility of deporting the billionaire and using the DOGE agency to investigate the government subsidies flowing to his companies. The tension crystallized around Trump's domestic spending bill, which Musk has attacked as fiscally reckless, and a proposed elimination of electric vehicle tax credits that have been central to Tesla's competitive position.
The two men had clashed in early June before pulling back — Musk even deleted posts on X linking Trump to Jeffrey Epstein. But the truce collapsed Monday night as the Senate moved on the budget measure. Musk returned to X with a stark ultimatum: if the bill passed, he would launch a new political party called America First the following day and fund primary challenges against any Republican who voted yes.
Trump responded on Truth Social, suggesting DOGE — the very agency Musk had helped build before stepping back in May — could audit and cut subsidies to his enterprises. Without that government support, Trump wrote, Musk would have to "shut down shop and go back home to South Africa." The irony was pointed: an instrument Musk designed to slash government waste was now being aimed at him.
Musk's reply on X was uncharacteristically measured. "It's so tempting to escalate this," he wrote. "But I'm going to hold back for now." The restraint may reflect an awareness of how much he stands to lose. What began as an enthusiastic political partnership — Musk's vocal support for Trump's 2024 campaign — has become a collision between two men unaccustomed to yielding, with billions of dollars and the shape of American political life hanging in the balance.
The relationship between Donald Trump and Elon Musk has fractured over a budget dispute, with the president now openly discussing the possibility of deporting the billionaire entrepreneur. On Tuesday, when asked by journalists about the escalating conflict, Trump said he would need to "take a look" at whether deportation was feasible. The tension centers on Trump's domestic spending bill—which Musk has repeatedly attacked as fiscally reckless—and the proposed elimination of electric vehicle tax credits that directly benefit Tesla, the company Musk leads.
The two men had exchanged insults in early June before stepping back from public confrontation. Musk had even deleted some posts on X, his social media platform, that connected Trump to Jeffrey Epstein. But the ceasefire proved temporary. On Monday night, as the Senate worked through a procedural voting process on the budget measure, Musk returned to X with a stark warning: if the spending bill passed, he would launch a new political party called America First the very next day. He also threatened to challenge Republican candidates in primary elections if they voted for the proposal.
Trump's response came swiftly on Truth Social, his own social platform. He suggested that the Department of Government Efficiency—the DOGE agency that Musk had briefly led before stepping back in May—could investigate and potentially cut subsidies flowing to Musk's enterprises. Without those government supports, Trump wrote, Musk would likely have to "shut down shop and go back home to South Africa." Trump elaborated further, noting that Musk had known before endorsing him for president that he opposed the electric vehicle mandate. He claimed Musk receives more government subsidies than any person in history and that eliminating them would save the country a fortune. "Maybe we should have DOGE look into this thoroughly?" Trump asked.
The core grievance for Musk appears twofold: the budget bill itself, which he believes will worsen the federal deficit, and the loss of tax credits that have been crucial to Tesla's market position. Trump, meanwhile, has long campaigned against what he calls the EV mandate, arguing that while electric cars are fine, nobody should be forced to buy them. The subsidy question cuts deeper—Trump is suggesting that Musk's entire business empire, including SpaceX's rocket launches and satellite operations alongside Tesla's vehicle production, depends on government money.
When Trump floated the idea of using DOGE to investigate Musk's subsidies, he was invoking an agency ostensibly designed to cut government waste. The irony is sharp: Musk created DOGE specifically to help Trump identify spending cuts, but now Trump is threatening to turn it against him. Musk's response on X was notably restrained. "It's so tempting to escalate this," he wrote. "So, so tempting. But I'm going to hold back for now." The restraint suggests he recognizes how quickly this could spiral, yet the underlying conflict remains unresolved.
As the budget process continues, the relationship appears poised to deteriorate further. Trump has made clear he is willing to weaponize government agencies and subsidy programs against Musk if the billionaire continues to oppose his legislative agenda. Musk, for his part, has demonstrated he is prepared to challenge Trump politically, even if it means creating a rival party. What began as a partnership—Musk's enthusiastic support for Trump's 2024 campaign—has become a high-stakes power struggle between two men accustomed to getting their way.
Notable Quotes
If this insane spending bill passes, the America First Party will be created the next day.— Elon Musk on X
Without subsidies, Elon would probably have to shut down shop and go back home to South Africa.— Donald Trump on Truth Social
The Hearth Conversation Another angle on the story
Why would Trump actually threaten deportation? Musk is a South African citizen who became a U.S. citizen. Is that even a realistic threat?
It's not realistic in a legal sense, but that's not really the point. Trump is signaling that he has leverage—he can investigate Musk's subsidies, he can use government agencies against him. The deportation comment is theater, but the threat underneath it is real.
So this is about the subsidies more than the budget bill itself?
Both matter, but yes, the subsidies are the actual weapon. Musk says he opposes the bill because of the deficit, but Tesla loses the EV tax credit if it passes. Trump is saying: you need my government money to survive. That's the real conversation.
Why did Musk back off from escalating? He said it was tempting but he held back.
Because he understands what Trump just demonstrated—that the president can hurt him in ways that matter. SpaceX contracts, Tesla subsidies, regulatory approval. Musk has leverage too, but it's slower and messier. Creating a political party takes time. Losing government support happens overnight.
Is this about ideology or just power?
It's power dressed up as ideology. Trump has always opposed the EV mandate. Musk has always wanted subsidies. They agreed to disagree when Musk was useful to Trump. Now Musk is in the way, so Trump is reminding him who controls what.
What happens next?
Either Musk backs down and the subsidies stay, or Trump follows through and Musk's companies face real pressure. The budget bill will probably pass either way. The question is whether Musk creates that rival party or whether he decides it's not worth the fight.