Trump threatens to sever contracts with Musk-owned firms; Tesla shares plunge amid escalating online feud.

WASHINGTON, June 6 — A dramatic feud erupted yesterday between President Donald Trump and tech billionaire Elon Musk, as Trump threatened to sever government contracts with Musk’s companies while Musk called for Trump’s impeachment, marking a sharp end to their once close alliance.

The clash began when Trump criticised Musk during an Oval Office briefing, and quickly escalated across social media platforms — Trump on Truth Social, Musk on X — with both figures trading personal attacks in full public view.

“The easiest way to save billions in our budget is to cancel Elon’s government contracts and subsidies,” Trump wrote. In response, Tesla shares nosedived, closing down 14.3% and wiping out nearly US$150 billion in market value — the steepest single-day loss in the company’s history.

Just after the markets closed, Musk responded affirmatively to a post suggesting Trump should be impeached — a symbolic gesture given Republican control of Congress makes impeachment unlikely.

Tensions between the two had been building for days, sparked by Musk’s vocal opposition to Trump’s massive tax-cut and spending bill, which he criticised for worsening the national debt. Trump, initially silent, broke his silence Thursday, expressing disappointment with Musk.

"Elon and I had a great relationship,” Trump said. “I don’t know if we will anymore.”

Musk quickly fired back on X: “Without me, Trump would’ve lost the election,” referencing the nearly US$300 million he spent supporting Trump and Republican candidates in 2024. In another post, Musk warned that Trump’s tariffs could tip the U.S. into a recession.

Musk, who leads Tesla, SpaceX, and Starlink, also threatened to begin decommissioning the Dragon spacecraft — a critical NASA asset for ferrying astronauts — in response to Trump's contract threats.

A Collision of Egos

The fallout, while dramatic, was not entirely unexpected. Both Trump and Musk are known for their combative personalities and use of social media to air grievances. Musk’s role as head of the Department of Government Efficiency had already placed him at odds with several Cabinet officials due to aggressive budget cuts.

Trump, who had a history of high-profile staff shake-ups during his first term, now faces his first major internal rift in his second term. Despite once praising Musk's contributions to the administration, Thursday's confrontation suggests a complete breakdown in relations.

Only a week earlier, the two appeared together in the Oval Office, promising continued cooperation. But Musk’s growing disillusionment with Trump’s policies — and the bill Musk derided as a "disgusting abomination" — deepened the divide.

Trump claimed Musk’s opposition stemmed from the bill’s removal of EV tax credits, and suggested Musk was simply upset about no longer being part of the administration. Musk rejected that, calling instead for the bill’s defeat and proposing the formation of a new political party to represent centrist Americans.

Political and Financial Fallout

Musk’s political entanglements have already drawn backlash. Tesla faced protests at several sites over Musk’s political focus, which some investors fear is hurting sales and distracting him from core business operations.

Having entered public service with bold promises to slash federal spending by US$2 trillion, Musk exited with only a fraction achieved — and now stands locked in a highly public, high-stakes battle with the President he once backed. — Reuters