
From banning X to funding Dems: All the ways Musk and Trump could hurt each other as they go nuclear
An alliance between the two most powerful men in the world seemed destined to blow up into a volatile feud yet somehow held ... until it didn't.
Within a few hours on Thursday, the public spat between Donald Trump and Elon Musk exploded into debates over the president's impeachment, calls to launch primary challengers against Republican allies in Congress, and Musk's accusation that the president is implicated in a sexual abuse scandal.
But how they choose to escalate from here could have far-reaching impacts — and not just for the fate of a massive bill that sparked their breakup.
Trump and Musk command the world's attention, own competing social media platforms, and are each in a position to wield the power of the presidency and spend, and lose, billions of dollars against one another.
How Trump could go after Musk
Kill government contracts
Trump has already suggested yanking government contracts for Musk's companies Tesla and SpaceX, which are due to receive at least $3 billion in contracts from 17 agencies.
'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 on Truth Social.
On his War Room podcast, Trump ally Steve Bannon urged Trump to retaliate against the world's wealthiest man by, among other things, using the Defense Production Act to take control of SpaceX. 'The U.S. government should seize it,' Bannon said Thursday.
Cut off Elon's access to the White House
Musk ended his 130-day 'special government employee' term in the Trump administration last week after serving as an 'adviser' to the president for the so-called Department of Government Efficiency, which Musk unleashed across the federal government to make drastic cuts to spending and the workforce.
But Trump left the door open for Musk to return. That 130-day term can be renewed next year. Trump could sever that arrangement at any time.
Bannon also called on Trump to strip Musk's top-secret clearances, which he is granted in conjunction with his work on SpaceX and NASA.
Make X illegal
With more than 220 million followers on a social media platform under his control, Musk can use that audience and ability to shift media narratives against the president to advance his agenda. Trump, whose entire campaign was built on retribution, possesses executive authority to shut X down, according to experts.
Trump could declare X a national security risk, 'which would permit him to ban the platform outright,' claims Devan Leos with AI platform Undetectable AI.
The president could invoke the International Emergency Economic Powers Act on national security grounds to prevent X from operating, which would likely trigger a high-profile legal battle.
'Musk now faces a difficult choice. He can ban Trump from X in retaliation, but that would almost certainly trigger an executive response from the White House,' according to Leos.
The president, meanwhile, owns more than 100 million shares, or roughly 53 per cent, of Trump Media & Technology Group, the parent company of social media platform Truth Social. His stake in the company is worth billions of dollars.
Investigate Musk's immigration status and drug use
Musk was born in South Africa before he emigrated to Canada and later the United States. Last year, The Washington Post reported that the billionaire worked in the country illegally before gaining citizenship.
Bannon called on the president to deport him. 'Elon Musk is illegal. He's got to go too,' Bannon said on his War Room podcast.
Trump also could wield the power of his office to initiate other investigations under a Department of Justice controlled by his fierce ally Attorney General Pam Bondi, including into allegations of his drug use at the campaign trail and within the administration.
How Musk could go after Trump
Flood opponents with cash
The world's wealthiest person spent tens of millions of dollars supporting Trump's 2024 campaign. On Thursday, he took credit for his victory. But this year, his multimillion-dollar effort to support a conservative Wisconsin Supreme Court candidate blew up in his face, with his DOGE efforts tanking his — and Tesla's — appeal.
Still, Republican candidates fear being his target. Musk and his allies have threatened to fund primary challenges against any GOP member of Congress who supports legislation he doesn't.
'Is it time to create a new political party in America that actually represents the 80 percent in the middle?' Musk asked on Thursday.
Democrats agree with Musk that Trump's 'big, beautiful bill' is a disaster but aren't necessarily welcoming him to the party after the right-wing billionaire torched government agencies and helped but Trump back in office.
'We should ultimately be trying to convince him that the Democratic Party has more of the values that he agrees with,' California Democratic Rep. Ro Khanna, whose district represents Silicon Valley, told Politico. 'A commitment to science funding, a commitment to clean technology, a commitment to seeing international students like him.'
Liam Kerr, co-founder of the centrist WelcomeFest meeting underway in Washington during the Trump-Musk feud, told the outlet that 'of course' Democrats should be open to Musk.
'You don't want anyone wildly distorting your politics, which he has a unique capability to do. But it's a zero-sum game,' Kerr told Politico. 'Anything that he does that moves more toward Democrats hurts Republicans.'
Wield social media against the president
It took just four hours for a feud playing out on two different social media platforms for Musk to drop what he called a 'bomb' against the president.
'Time to drop the really big bomb,' he wrote on X. '[Trump] is in the Epstein files. That is the real reason they have not been made public.'
That loaded accusation — Musk's suggestion that Trump was involving the sex offender's trafficking scheme — appeared to be the tipping point in their feud.
Musk, who just days ago seemed to have no problem associating with a man he is now alleging is implicated in Epstein's crimes, could launch a humiliation campaign against the president for an audience that has been largely disappointed with the Trump administration's approach to the Epstein case.
Far-right influencers have turned on top federal law enforcement officials over the case, accusing Trump of continuing what they believe is a 'deep state' conspiracy theory covering up powerful people. Musk could leverage that hostility.
Use DOGE against Trump
Musk hired a small army of young loyalists and old allies for his government-wide operation to not only eliminate jobs and spending but extract reams of data from millions of Americans.
DOGE's unprecedented access to Americans' data 'is alarming, made worse by the complete absence of meaningful oversight,' according to Ben Zipperer, a senior economist with the Economic Policy Institute. 'That unrestrained access to data will likely worsen the problem of identity theft in the United States, which could cost working families tens of billions of dollars annually.'
A report from Democratic Senator Elizabeth Warren's office also uncovered more than 100 instances that Musk allegedly abused his role as a 'special government employee' overseeing DOGE to benefit his private interests.
Musk violated 'norms at an astonishing pace,' amounting to 'scandalous behavior regardless of whether it subjects him to criminal prosecution.'
The report accuses Musk of using the government to promote his businesses, including turning the White House lawn into a Tesla showroom, and allegedly discovered roughly two dozen instances where the government 'entered or explored new lucrative contracts' with the billionaire while halting enforcement actions against his companies.
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The Independent
21 minutes ago
- The Independent
Republicans call for an end to Trump-Musk feud: ‘I hope it doesn't distract us'
As the Republican Party anticipates potential fallout from Donald Trump's public dispute with Elon Musk, prominent lawmakers and conservative voices are calling for reconciliation, wary of the repercussions of a sustained conflict. The animosity between the two figures could pose challenges for the Republican agenda, particularly concerning tax and border spending legislation championed by Trump but criticised by Musk. Representative Dan Newhouse, a Republican from Washington, expressed hope that the disagreement would not impede progress on critical tasks. Speaking on the matter, Newhouse said: "I hope it doesn't distract us from getting the job done that we need to. I think that it will boil over and they'll mend fences." As of Friday afternoon, Musk had refrained from further engagement, focusing instead on promoting his various companies on social media. Senator Ted Cruz, a Texas Republican, voiced optimism for a resolution, telling Fox News that, "I hope that both of them come back together because when the two of them are working together, we'll get a lot more done for America than when they're at cross purposes". Sen. Mike Lee, a Republican from Utah, sounded almost pained on social media as Trump and Musk volleyed insults at each other, sharing a photo composite of the two men and writing, "But … I really like both of them.' 'Who else really wants @elonmusk and @realDonaldTrump to reconcile?' Lee posted, later adding: 'Repost if you agree that the world is a better place with the Trump-Musk bromance fully intact.' So far, the feud between Trump and Musk is probably best described as a moving target, with plenty of opportunities for escalation or detente. One person familiar with the president's thinking said Musk wants to speak with Trump, but that the president doesn't want to do it – or at least do it on Friday. The person requested anonymity to disclose private matters. In a series of conversations with television anchors Friday morning, Trump showed no interest in burying the hatchet. Asked on ABC News about reports of a potential call between him and Musk, the president responded: 'You mean the man who has lost his mind?' Trump added in the ABC interview that he was 'not particularly' interested in talking to Musk at the moment. Still, others remained hopeful that it all would blow over. 'I grew up playing hockey and there wasn't a single day that we played hockey or basketball or football or baseball, whatever we were playing, where we didn't fight. And then we'd fight, then we'd become friends again,' Hannity said on his show Thursday night. Acknowledging that it 'got personal very quick,' Hannity nonetheless added that the rift was 'just a major policy difference.' House Speaker Mike Johnson projected confidence that the dispute would not affect prospects for the tax and border bill. 'Members are not shaken at all,' the Louisiana Republican said. 'We're going to pass this legislation on our deadline.' He added that he hopes Musk and Trump reconcile, saying 'I believe in redemption' and 'it's good for the party and the country if all that's worked out.' But he also had something of a warning for the billionaire entrepreneur. 'I'll tell you what, do not doubt and do not second-guess and don't ever challenge the president of the United States, Donald Trump,' Johnson said. "He is the leader of the party. He's the most consequential political figure of this generation and probably the modern era.'


The Independent
31 minutes ago
- The Independent
As Putin ramps up his summer offensive in Ukraine, will he succeed?
A peevish spokesman for Vladimir Putin bristled with indignation this week at Donald Trump 's description of Russia 's invasion of Ukraine as 'like kids fighting in the park'. It's not, Dmitry Peskov pouted, the conflict is an 'existential question' for Russia. 'This is a question of our security and the future of ourselves and our children, the future of our country,' continued Putin's spokesman who has grown more accustomed to preening with pleasure at the relentless assaults on Ukraine from the White House this year. He is right. Victory for Russia was once defined as regime change in Kyiv. But it really need only be a messed up Ukraine, unstable, violent and impoverished. Because a democratic Ukraine enjoying cultural renaissance, freedom, and economic growth with lots of Russian speakers shows Russia's population that there's an alternative to the kleptocratic autocracy they currently endure. As the summer fighting season gets underway in the fourth year of Putin's full scale invasion of its neighbour, Russia has clearly shifted its main effort to forever destabilising Ukraine. Kyiv, meanwhile, has demonstrated that it is no longer on the back foot, and that it is far from defeated. Indeed two years after its failed summer counter offensive, Kyiv is growing in strength and confidence. Ukraine doesn't have the capacity to drive Russia out of its lands this year. But it is hanging on and by next year may find it has the upper hand as European aid begins to come through to replace the military support that the US has withdrawn. Donald Trump has provided no new military support this year. About $3.85 billion remains unspent from previous allocations – after that… nothing. Russian forces have renewed their attacks around Pokrovsk and Kostyantynivka on the eastern front. 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Ukrainian officers told The Independent that Russian artillery bombardments have fallen away as drones have easily tracked and destroyed the big guns of the traditional battlefield. And Ukraine's Operation Spiderweb, in which Kyiv claimed to have destroyed or damaged a third of Russia's strategic bombers along with some spy planes in a staggering long range long term operation that hit Russian airfields 5,000km apart, have greatly boosted morale. Along with ongoing long-range assaults with drones on Moscow's airports, its energy infrastructure, and commanders themselves, Ukraine has turned the tactics of hybrid warfare developed by Russia back on Putin. It is unlikely Ukraine will turn Trump back to outright support for the embattled democracy – he has gone too far in his public support for Putin to make that a credible ambition. But there are signs that America won't try to cripple Kyiv's war efforts as it has threatened to do. No wonder Putin's peeved.


Reuters
32 minutes ago
- Reuters
Foreign exposure to US assets may be lower than feared
ORLANDO, Florida, June 3 (Reuters) - It is widely believed that investors around the world have a disproportionately high exposure to U.S. assets, particularly stocks, an imbalance that could roil U.S. markets if corrected. But what if these fears are overblown? Several eye-popping statistics suggest that America's weight in world financial markets is even greater than its outsized economic might. Most strikingly, the U.S. net international investment position (NIIP), or foreign investors' holdings of U.S. assets less U.S. investors' holdings of overseas assets, at the end of 2024 was $26 trillion. That's nearly 24% of global GDP, up from 16% only two years earlier, a surge driven by foreigners' insatiable appetite for U.S. equities, mainly "Big Tech". Demand was so hot that, by some measures, the value of U.S.-listed stocks at the turn of the year represented 74% of total global market cap. That share was 60% six years ago, and less than half in 2011. But the attractiveness of dollar-denominated assets is now being questioned, as the often erratic policies of U.S. President Donald Trump have upset longstanding economic and geopolitical norms, making governments and investors question whether Washington is still a reliable partner on the global stage. The concern is that this eroding confidence triggers a reversal of the massive flows into Wall Street seen in recent years that has damaging spillover effects. Such a correction may not require outright selling. Given the scale of the flows involved, just less buying among foreign investors could be enough to cast a shadow over the world's most important stock market. And the running assumption is foreign investors don't have the capacity or willingness to increase their exposure to U.S. assets, creating a significant long-term downside risk for Wall Street, Treasuries and the dollar. "A structural shift is underway: the slow erosion of US economic dominance," analysts at Deutsche Bank wrote on Monday. But looked at another way, foreign exposure to U.S. assets may not be as high as initially meets the eye. That's the view of analysts at JP Morgan, who measure portfolio investment in U.S. bonds and equities as a share of countries' total household sector financial assets. They use a broad definition for a country's "household" sector, covering investments by institutions like insurance companies and pension funds that are ultimately made on behalf of households. Using a broad range of data, from central banks, U.S. Treasury and OECD household financial asset flows, they measure the ratio of U.S. equity and bond holdings relative to household financial assets in each country. They find that "relative to the total financial assets of households in the rest of the world, the allocations to U.S. assets typically stand at around 10-20%." As a result, they are "skeptical of the idea that foreign investors hold too much of U.S. assets." Given that U.S. equities account for more than 70% of the MSCI global market cap and dollar-denominated bonds represent around 50% of global bond indices, according to JP Morgan estimates, the 10-20% exposure of foreign investors to U.S. assets does appear surprisingly low. And the 10-20% figure would be even lower were it not for the outsized U.S. equity holdings at the Swiss National Bank and Norway's sovereign wealth fund. On the bond side, foreigners' footprint in the U.S. Treasury market is shrinking. Data shows that they owned 31% of the $28.55 trillion outstanding Treasury debt at the end of last year. That share has been declining steadily since the Global Financial Crisis. In 2008, the figure was approaching 60%. Overseas investors' share of the T-bill market has shrunk even more. In December, it was under 20%, near its lowest level on record and sharply down from 50% a decade before. Nikolaos Panigirtzoglou and his team at JP Morgan aren't arguing investors will or should ramp up their purchases of U.S. assets. And in cases where allocations are high - such as the Taiwanese exposure to U.S. bonds or Canadians' holdings of U.S. stocks - diversification would hardly be a surprise. But there is "little indication" of broad-based selling of U.S. assets by foreign investors so far this year, they note. And if that selling does materialize, it may be far lighter than many expect. (The opinions expressed here are those of the author, a columnist for Reuters)