Trump threatens to end subsidies for Musk companies amid tax bill feud

Published 01/07/2025, 06:26
© Reuters

Investing.com--  U.S. President Donald Trump on Monday evening threatened to cut government subsidies received by Elon Musk’s Tesla (NASDAQ:TSLA) and SpaceX, as the billionaire continued to criticize a major spending bill backed by the president. 

“Elon may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa,” Trump said in a post on Truth.Social.

“No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this?,” the president said.

Musk responded to the post on X by stating “I am literally saying CUT IT ALL. Now.”

The exchange is the latest in a persistent feud between Musk and Trump over the president’s “big beautiful bill” act, which outlines tax and spending cuts.

Musk has vehemently opposed the bill on grounds that it will increase the government deficit and push up debt levels. A recent bipartisan analysis showed a $3.3 trillion increase to government debt over the next decade if the bill proceeds in its current form. 

Musk has also argued that the bill will undermine his work done under the Department of Government Efficiency (DOGE) to cut government spending.

The bill, which is currently being debated in a marathon session in the Senate, extends Trump’s 2017 tax cuts and outlines more spending on defense and border control.

Critics of the bill have argued that Trump’s proposed spending cuts– especially on social security– will be insufficient in offsetting the fiscal burden of his extended tax cuts. The president’s claims that revenue from his trade tariffs will help improve U.S. fiscal health have also been largely questioned. 

Ratings agency Moody’s had cut its U.S. rating in May on fiscal concerns over the bill. 

Trump had in early-June threatened to cut government subsidies and contracts for Musk’s firms, specifically Tesla and SpaceX. 

The proposed tax bill includes cuts to Biden-era electric vehicle subsidies. Beyond Tesla, SpaceX holds several major contracts with the National Aeronautics and Space Administration.

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