E-Paper
Donald Trump warns Elon Musk of ‘consequences’. How can he potentially hurt his interests?
It all started with Elon Musk’s public criticism of Donald Trump's Big Beautiful spending bill, which he called a ‘disgusting abomination’.
US President Donald Trump’s explosive row with billionaire Elon Musk, his biggest backer in the 2024 Presidential election, has raised only one question: Will it hurt the Tesla and SpaceX CEOS' businesses?
Trump warned of ‘serious consequences’ for Musk, but that was in the context of the world’s richest man backing candidates against Trump's Republicans in next year's midterms.
“If he does, he’ll have to pay the consequences for that,” Trump told NBC, though he declined to share what those consequences would be.
It all started with Elon Musk’s public criticism of Donald Trump's Big Beautiful spending bill, which he called a ‘disgusting abomination’. That started what became one of the ugliest but also most-watched public spats between two of the most powerful men in the world.
How can spat with Donald Trump hurt Elon Musk’s tech empire?
The spat with Donald Trump could certainly hurt Elon Musk and his businesses, as he may have made an enemy out of the world's most powerful leader.
Musk’s businesses have many lucrative federal contracts that Trump could take back. According to a report by The Hill, SpaceX alone holds federal contracts worth over $22 billion, and the US President has already threatened to take them all back.
“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!” Trump wrote on Truth Social the day it all flared up.
While the Republican leader hasn't walked the talk yet, he certainly has the power to do so, as he pointed out in the NBC interview on Saturday.
“I’d be allowed to do that. I haven’t given it any thought,” he said.
Even if that doesn't happen, making an enemy in the Oval Office is not good for business. Elon Musk would need favourable policies for his businesses, like tax credits for EVs, one of the points that might have brought the situation to where it is now.
The very public spat also could shake investor confidence, as seen by the free fall that Tesla's share prices saw on Thursday. It wiped $153 billion off the company's valuation before rebounding a bit on Friday. But the longer it drags out, the harder Wall Street will react to it. And for a person whose entire net worth is bound by the share prices of his companies, it is not a good sign.
