‘Biggest crisis ever': What happens if Trump cancels billions of dollars of SpaceX contracts with NASA
An expert said the feud between US President Donald Trump and Tesla CEO Elon Musk could potentially plunge US space programmes into the "biggest crisis ever." The statement came after Trump threatened to terminate government contracts with Musk's companies after the duo's unlikely political marriage exploded in a fiery public divorce on June 5, 2025.
Trump and Musk's public relationship turned sour after Musk launched a barrage of criticism on Trump's "Big Beautiful Bill."
Taking the threat seriously, Musk posted on X, saying: "In light of the President's statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately."
However, Musk appeared to reverse course hours later. Responding to a follower on X who urged him and Trump to "cool off and take a step back for a couple of days," Musk wrote: "Good advice. Ok, we won't decommission Dragon."
Trump's warning has put around $22 billion of SpaceX's government contracts at risk, Reuters reported. Moreover, multiple US space programs could face dramatic changes in the fallout from Elon Musk and Trump's explosive feud over the "big, beautiful" spending bill.
In the wake of Trump's threats, Casey Dreier, chief of space policy for the Pasadena-based Planetary Society, told BBC News that the potential cuts represent "the biggest crisis ever to face the US space programme".
If the president prioritised political retaliation and canceled billions of dollars of SpaceX contracts with NASA and the Pentagon, it could slow US space progress, Reuters reported.
Elon Musk's SpaceX and Dragon spacecraft have been part of the key American mission to the International Space Station (ISS). NASA uses SpaceX's Dragon for its Commercial Crew Program — taking astronauts to and from the ISS.
This means that the cancellation of SpaceX's government contracts and the decommissioning of Dragon would impact the US's ability to launch astronauts to space from American soil.
Under a roughly $5 billion contract, the Dragon capsule has been NASA's only US vessel capable of carrying astronauts to and from the ISS, making Musk's company a critical element of the US space program.
NASA uses Russia's Soyuz spacecraft as a secondary ride for its astronauts to the ISS. Boeing's Starliner is an option, but the spacecraft has not been certified yet to fly operational astronaut missions and is still several months away from launching again.
Some of SpaceX's more important government contracts include NASA's Commercial Crew Program and cargo resupply services for the ISS and the space station's deorbit vehicle.
Currently, there's one Crew Dragon docked at the ISS. It's in the middle of SpaceX's Crew-10 astronaut mission for NASA. Axiom Space is just days away from launching its fourth private astronaut mission to the ISS aboard a Dragon spacecraft.
Founded in 2002, SpaceX has won $15 billion of contracts from NASA for the company's Falcon 9 rockets and development of SpaceX's Starship, a multipurpose rocket system tapped to land NASA astronauts on the moon this decade.
According to Space.com, NASA has picked SpaceX's next-gen Starship spacecraft to be the first crewed lunar lander for its Artemis moon program. If all goes as planned, Starship will put NASA astronauts on the moon for the first time in 2027, on the Artemis 3 mission.
"The cessation of these contracts — alongside the nearly 25% cut to NASA's overall budget and roughly 50% cut to its science programs that the White House has proposed for 2026 — could mark the end of NASA as we currently know it," the report added.
Notably, under Trump in recent months, the US space industry and NASA's workforce of 18,000 have been whipsawed by looming layoffs and proposed budget cuts that would cancel dozens of science programs.
Besides, Musk's quest to send humans to Mars has been a critical element of Trump's space agenda. The effort has threatened to take resources away from NASA's flagship effort to send humans back to the moon.
However, it's unclear what a Dragon decommissioning would mean for SpaceX's other private spaceflight endeavors.
NASA press secretary Bethany Stevens told Space.com in an emailed response, "NASA will continue to execute upon the President's vision for the future of space. We will continue to work with our industry partners to ensure the President's objectives in space are met."
Meanwhile, former NASA Deputy Administrator Lori Garver was quoted by Reuters as saying canceling SpaceX's contracts would probably not be legal.' But she also added, 'A rogue CEO threatening to decommission spacecraft, putting astronauts' lives at risk, is untenable.'
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