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Cancelling contracts, making big disclosures: Who loses what in Musk-Trump breakup?
Donald Trump and Elon Musk have called time on their friendship in the most shocking of ways — social media posts were fired off, threats were made, and big bombshells were dropped. In the aftermath of it, Tesla stocks tanked, and the world's richest man's personal net worth declined. Yes, this breakup could be costly for both. Here's how read more
The aftermath of Donald Trump and Elon Musk's breakup raises the question: Who has the most to lose? File image/Reuters
No one believed that the Donald Trump-Elon Musk friendship would be one that would last forever. But the fact that it ended in the most spectacular of ways and that too so quickly was not anticipated.
On Thursday (June 5), America's two most powerful men — one is the US president and the other is the world's richest man — spent time on social media trying to destroy each other's reputations with threats and secrets.
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Their spectacular breakup also means the end to perhaps the most powerful of alliances in the US with many pondering who emerges as the bigger loser in this spat. Does Trump have more to lose or will Musk be the one to suffer?
A bromance turns nasty
It was last July when Elon Musk endorsed Trump for president and became an integral part of his campaign machinery — who can forget Musk manically jumping around at Trump rallies, funding a massive super-PAC on his behalf. Later, when Trump became US president, he returned the favour by appointing Musk to take charge at Department of Government Efficiency (Doge).
When Elon Musk attached himself to Trump many began speculating when these two massive egos would, eventually, clash and that their strategic partnership would flame out spectacularly. And crash and burn the relationship did.
Since late May, Musk has been vocally critical of Trump's so-called big, beautiful spending bill. 'I was, like, disappointed to see the massive spending bill, frankly, which increases the budget deficit, not decrease it, and undermines the work that the DOGE team is doing,' Musk told the TV programme CBS Sunday Morning.
But Trump kept his cool and bid adieu to Musk as he called time on his service to the White House. Once out of government, though, the Tesla chief took his criticism against the bill even further. He called the bill a 'd isgusting abomination ,' threatened to politically retaliate against its supporters, and argued it would increase the debt.
Social media posts by US President Donald Trump and Elon Musk are displayed on smartphones. Trump has threatened to revoke government contracts from Tesla and SpaceX CEO Elon Musk as a public feud escalates over Musk's criticism of the Trump administration's policies. AFP
The US president then shot back on Thursday, while he had a sit down in the Oval Office with German Chancellor Friedrich Merz. ' I'm very disappointed because Elon knew the inner workings of this bill better than almost anybody sitting here,' Trump said. 'He had no problem with it. All of a sudden, he had a problem.'
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He further stated, ' I'll be honest, I think he misses the place. It's sort of Trump derangement syndrome. We have it with others, too. They leave, and they wake up in the morning, and the glamour's gone. The whole world is different, and they become hostile.'
Trump then took the fight online, writing in one social media post, 'Elon was 'wearing thin,' I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!'
And this led Musk to hit back. Musk argued, 'Without me, Trump would have lost the election' and accused Trump of 'such ingratitude.' And that wasn't the end, the feud kept going with Musk levelling a serious allegation, '@realDonaldTrump is in the Epstein files. That is the real reason they have not been made public. Have a nice day, DJT!'
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Consequences of the big, nasty breakup
But who shall suffer from this breakup? After all, it was a mutual relationship benefiting both individuals.
Many analysts and Trump watchers believe Musk shall be the big loser from this breakup. In fact, as the two bickered on social media, Tesla shares slumped — dropping 14 per cent, wiping out roughly $150 billion in market value in one of the worst days in months. Analysts and pundits believed that the losses were an indication of what might be at stake for Musk.
Musk's personal net worth also took a tumble on Thursday — it fell by nearly $34 billion, making him the biggest daily loser on Bloomberg's list of the world's 500 richest people.
Trump could even take the fight further with cancelling government contracts with Musk's various companies, including SpaceX and Tesla. In fact, the US president even suggested this while feuding with Musk online. 'The easiest way to save money in our budget, billions and billions of dollars, is to terminate Elon's Governmental Subsidies and Contracts,' Trump wrote.
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SpaceX headquarters is shown in Hawthorne, California. If the Trump administration pauses government contracts, SpaceX will lose billions of dollars. Reuters
According to data available, last year, Musk's companies were promised $3 billion in nearly 100 contracts with 17 government agencies. Additionally, Reuters reported that if Trump did go ahead with this move, about $22 billion of SpaceX's government contracts would be at risk.
In addition to hitting his businesses, this feud could also threaten Musk's stay in the US. Musk is not a natural-born American — he was born in Pretoria, South Africa and thanks to his mother, Maye Musk, obtained Canadian citizenship in 1989 when he was 17 years old. This helped him move to North America for his studies and eventually to the United States. It was only in 2002 that he became a naturalised US citizen.
Moreover, Musk has already lost his fan base on the liberal side and now with the fight with Trump, he will also lose his Conservative supporters. This will be bad for Musk — personally and from a business standpoint.
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On June 5, Elon Musk and Donald Trump ended their friendship in the most spectacular way. File image/Reuters
But many also note that the Trump-Musk feud also has the potential to hurt the US president. How?
When Trump was campaigning, Musk emerged as one of his major donors. The SpaceX chief spent more than $250 million to get Trump elected. Now imagine if he used that same financial clout against the US president. Musk could fund campaigns against Republicans, hurting Trump in the long run. Moreover, he could also align with fiscally conservative lawmakers to block Trump's signature tax bill in the Senate.
Besides this, Musk could also use the time he has spent with Trump against him. After spending a lot of time closely with the US president, he could use information that the two shared to hurt Trump. He could make big revelations, which have the ability to hurt the US president. For instance, on Thursday, amid the online battle Musk claimed that the US president was part of the Epstein Files
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Musk could also use X against Trump — the X owner has more than 220 million followers compared to the US president's 105.6 million followers. As some note, Musk could use the platform to keep airing his grievances against Trump. In fact, on Thursday, he called for the impeachment of the US president and even asked his followers 'is it time to create a new political party in America that actually represents the 80 per cent in the middle?'
It's left to be seen if Trump or Musk will win this battle, but for now, we can buckle up and wait for their next steps.
With inputs from agencies
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