In a sharp escalation of political and economic tensions, U.S. President Donald Trump suggested on Tuesday that federal subsidies granted to Elon Musk’s companies should be reviewed for possible cuts, reigniting a heated feud between two of the most influential figures in America today.

The comments were made in a Truth Social post where Trump urged the Department of Government Efficiency (DOGE) to examine the financial benefits received by Musk’s companies—Tesla and SpaceX—in an effort to save taxpayer money.

Trump’s remarks follow growing criticism from Musk over a sweeping tax-cut and spending bill, which the billionaire has described as fiscally reckless. Despite once being a major donor and ally—Musk reportedly spent nearly $300 million on Trump’s re-election campaign—the two now appear to be at odds over the future direction of U.S. economic policy.

Musk’s Fiery Response

In response to Trump’s call for a subsidy review, Musk posted on his platform X: “I am literally saying CUT IT ALL. Now.”

Musk has increasingly positioned himself as a critic of both major political parties, going so far as to propose the formation of a new political movement.

On Monday, Musk lashed out at lawmakers who supported the bill, accusing them of hypocrisy and threatening political retaliation.

The Tesla and SpaceX CEO has argued that the new legislation, expected to add about $3 trillion to the national debt, undermines the very savings he claims to have secured through the government efficiency initiative DOGE.

Fallout in the Markets

Tesla shares dropped more than 6% in premarket trading on Tuesday, as investors grew uneasy over the public rift and its potential consequences for the electric vehicle maker’s future. The company is currently testing autonomous robotaxis in Texas—vehicles that the U.S. Transportation Department must approve before mass production. Meanwhile, SpaceX holds roughly $22 billion in federal contracts that could be jeopardized if tensions continue to rise.

trump elon subsidies

Greenpeace activists protest against the U.S. President Donald Trump and Tesla CEO Elon Musk as a part of a campaign “Time to Resist”, which, according to them, is responding to the way billionaires are attacking the environment and society, in front of the Tesla dealership in Prague, Czech Republic, June 11, 2025. REUTERS/David W Cerny

The feud is already having tangible effects. Earlier public clashes between the two led to a $150 billion drop in Tesla’s market value before a partial recovery, when Musk softened his rhetoric. But with the current standoff intensifying, analysts warn that renewed volatility could hurt both Tesla’s valuation and the broader Republican political agenda.

International and Political Ramifications

Tesla’s sales figures in Sweden and Denmark declined for a sixth consecutive month in June, and U.S. delivery numbers—expected on Wednesday—are also anticipated to show weakness. With both domestic and international pressure mounting, Musk’s business empire could face new hurdles if federal support is withdrawn.

The once-promising alliance between Trump and Musk has seemingly devolved into a power struggle, with far-reaching implications for technology, politics, and economic policy. As the 2026 midterm elections approach, Republicans are reportedly concerned that this high-profile feud could weaken their electoral standing and fracture their support base.