Trump Targets Musk Subsidies Amid Feud Over “Beautiful Bill”
As tensions rise between former allies, President Donald Trump has publicly called for a federal review of Elon Musk’s government subsidies, escalating a bitter feud over the administration’s massive tax-and-spending bill.
In an early morning post on Truth Social, Trump suggested that the Department of Government Efficiency (DOGE) take a “good, hard look” at the billions in federal support received by Musk’s companies.
“Elon may get more subsidy than any human being in history, by far,” Trump wrote. “Without subsidies, Elon would probably have to close up shop and head back home to South Africa. No more Rocket launches, Satellites, or Electric Car Production — and our Country would save a FORTUNE.”
Musk vs. Trump: Tax Bill Sparks Clash
Trump’s remarks come as Musk has ramped up criticism of the president’s so-called “Beautiful Bill,” a sweeping tax-cut and spending package that passed the Senate by a razor-thin 50-50 margin, with Vice President JD Vance casting the tie-breaking vote.
Musk blasted the bill as “utterly insane and destructive,” accusing lawmakers of betraying their promises to reduce federal spending. On Monday, he vowed political retribution:
“They will lose their primary next year if it’s the last thing I do on this Earth.”
Despite having donated nearly $300 million to Trump’s re-election campaign and helping to lead DOGE, Musk now finds himself in the administration’s crosshairs.
DOGE Under Scrutiny, Again
Musk’s leadership of DOGE — once hailed as a cost-cutting innovation hub — has faced growing scrutiny. Watchdogs have accused him of slashing budgets at agencies investigating his businesses, such as the National Highway Traffic Safety Administration, which has probed Tesla, and the FDA, which is reviewing Musk’s Neuralink brain chip.
A Public Citizen report claimed Musk aimed to gut budgets at 70% of government agencies reviewed in May, including the Department of Defense, which holds over $22 billion in contracts with SpaceX.
Market Reacts: Tesla Tumbles
Trump’s renewed threats to cut federal support for Musk’s companies spooked investors. Tesla stock dropped 6% by mid-morning Tuesday and has fallen 13% over the past five days.
The administration's bill includes elimination of the EV tax credit, which Musk previously downplayed but now admits could cost Tesla over $1.2 billion annually, according to JP Morgan.
“This BFF situation has now turned into a soap opera,” said Dan Ives, a senior analyst at Wedbush Securities. “Investors fear the Trump administration will turn hawkish on Musk-related spending and regulatory approvals — especially with Tesla’s autonomous vehicle future at stake.”
Bigger Market Impacts
The broader markets also responded. The Nasdaq fell 1%, the S&P 500 dipped 0.3%, while the Dow Jones Industrial Average bucked the trend, up 0.6%.
Meanwhile, Trump’s suggestion of reviewing Musk’s citizenship status — reportedly joking about “taking a look” at deportation — only added fuel to the fire.
As Musk hints at launching a new political movement and Trump doubles down on his legislative agenda, what began as a policy disagreement is rapidly morphing into a full-blown political war — with billion-dollar implications for Tesla, SpaceX, and beyond.
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