Why Trump and Musk were stronger together

Australia Broadcast Center

2 days ago

Sam Hawley: Breaking up can be hard and fascinating to watch from afar. So where is the disintegration of the relationship between Donald Trump and Elon Musk up to now? Today, Geoff Kabaservice from the centre-right think tank, the Niskanen Center, on the real-world consequences of the split and whether there's any chance of reconciliation between the President and the billionaire. I'm Sam Hawley on Gadigal land in Sydney. This is ABC News Daily.
Donald Trump, US President: I'm very disappointed in Elon. I've helped Elon a lot. People leave my administration, some of them embrace it and some of them actually become hostile. I don't know what it is, it's sort of Trump derangement syndrome, I guess they call it.
News report: Within hours of his Oval Office comments, their once-close relationship had disintegrated. The world's richest man firing back in a barrage of hostile posts on X.
News report: Mr Musk, until recently a major ally of the President, continues to publicly criticise a government spending bill, even agreeing that Mr Trump should be impeached and replaced by Vice President J.D Vance.
News report: Donald Trump also fired off on his truth social platform. He posted, I asked him to leave, I took away his EV mandate and he just went crazy.
News report: Elon Musk then claimed that Trump is in the files about child sex trafficker Jeffrey Epstein tweeting, that is the real reason they have not been made public.
Sam Hawley: Geoff, talk about a clash of the titans, if we could put it that way. How would you describe the last few days?
Geoff Kabaservice: Well it's good to be with you Sam and of course this feud between Donald Trump and Elon Musk is causing plenty of amusement for anyone who pays attention to US politics. The memes practically write themselves. Is this alien versus predator? Is this the gayest thing to have happened during the whole of Pride Month so far? You know, it's amusing but it's also quite consequential in the sense that Elon Musk is not just the richest man in the world but somebody whose businesses directly impacts US national security and the fate of global affairs. And of course Donald Trump is the most powerful man possibly in the world. So it's entertaining but it's also disturbing.
Sam Hawley: So there is deeper implications to all of this. One of them of course for Donald Trump is that the richest man in the world could switch his allegiances to the other side of politics. If he really wants to annoy Donald Trump he could back the Democrats, right?
Geoff Kabaservice: You know, Elon Musk is unlike anyone who Trump has ever had in his circle because he's not a creature of Trump. He is independent. He has his own base in the world of business and of course his vast fortunes and the companies that he controls. So it's entirely possible that Musk could say I am flipping over to the Democrats or as he has already tweeted during the course of his epic meltdown that he is going to support a third party. Anything's possible. But of course there are also some people wondering if maybe this is a big put on of some kind, if maybe this was staged, if there's going to be an immediate kiss and make up session - to be determined.
Sam Hawley: Well during an interview on NBC, Donald Trump did warn Elon Musk against that move. He said there'd be serious consequences although he didn't mention what those consequences would be. And even though he kept saying that he doesn't spend any time thinking about Elon Musk, he was happy to keep answering questions about Elon Musk.
Reporter: What's your view on Elon Musk as of today? I mean, have you heard from him at all?
Donald Trump, US President: I've been so busy working on China, working on Russia, working on Iran, working on so many, I'm not thinking about Elon.
Geoff Kabaservice: This is a breakdown that I've been predicting for a while. I can at least say that I was correct in foreseeing that egos this Titanic could not comfortably coexist for long on the same team. But you know, Elon Musk has considerable cards, shall we say, because he is, as we've said, the world's richest man. He actually has a number of businesses that are critical to how government and the world works. Just as an example, SpaceX has under its umbrella Starlink, which does I think 80% of satellite communications launches in this country. It had a material impact on the outcome of the Ukraine war and the conduct of that war. And, you know, Elon Musk also controls a very important social media platform. It is as though he were the head of, let's say, the Washington Post 50 years ago. This is a person with a lot of formidable weapons, should he choose to go to all out war with Donald Trump, as opposed to just flinging insults at each other and calling each other paedophiles.
Sam Hawley: Yes, because of course, Elon, without evidence, accused the US president of being named in the Epstein sex trafficking files, a post which he later deleted. So let's just delve a bit further, though, into what Elon Musk could actually do to harm President Trump. As we said, he also has, of course, this very large social media platform with millions of followers. Could he use that against the president, do you think? Will he want to?
Geoff Kabaservice: Well, Elon Musk has a lot of say over what messages get broadcast on his platform, X, which is his new name for Twitter, of course. And it's entirely possible that he could actually go up against some of Trump's biggest supporters on that platform and simply suppress their messages, as well as putting out his own using one of the world's biggest microphones. But that's an entirely foreseeable outcome.
Sam Hawley: And of course, as we mentioned, he could also set up a new political party, support the Democrats.
Geoff Kabaservice: Well, you know, Elon Musk doesn't really have a lot of followers among Democrats. And in fact, a lot of people on the left have fled his platform for Blue Sky and others. But Elon Musk does have considerable amount of influence over the so-called tech right. Elon Musk is one of the biggest beasts in Silicon Valley, and a lot of people do look up to him and have followed his lead in being willing to support Donald Trump, even despite the fact that Silicon Valley's institutional political perspective, if that makes sense, is really quite different from Trump's populism. So there's a lot of points of stress in politics that if Elon Musk chooses to exacerbate them could widen the divides within the Trumpian coalition such as it is. And that might or might not benefit the Democrats. It's hard to say, but at least would weaken Trump.
Sam Hawley: Mm hmm. All right. Well, there's also, of course, a number of ways that Trump could also make life very difficult for Elon Musk. You mentioned SpaceX. Donald Trump, he's threatened to tear up all of the contracts that Musk companies have with the federal government. And that includes, of course, SpaceX. Can Trump actually do that, do you think?
Geoff Kabaservice: Well, Trump has certainly threatened other institutions with the withdrawal of federal funds, most notably Harvard University, which stands to lose close to $3 billion if Trump's actions are upheld by the courts. So it's certainly not an idle threat to take action against Elon Musk's companies. Certainly, SpaceX would be the most vulnerable to that kind of Trumpian threat because they get something on the order of $20 billion a month from the federal government. And in many ways, Trump's threat, it would really matter, would not just be to withhold funds from SpaceX, but actually to nationalise it. And Steve Bannon, who is in so many ways Elon Musk's antagonist, has actually called for Trump to do just that. And there's a real argument that somebody who does so much of the United States rocketry business, who has such an incredible sway over its Starlink and satellite apparatus, who in many ways is almost a sovereign entity at this point, you could make a real argument that nationalisation of SpaceX should happen. And I'm sure you would actually find a lot of Democrats supporting that motion as well.
Sam Hawley: Trump could also suspend his security clearances, right? Which would make life somewhat difficult.
Geoff Kabaservice: You know, Trump in extremis could even deport Elon Musk, who after all is from another place, shall we say.
Sam Hawley: Yeah. And Steve Bannon, a former advisor to Trump, he's actually raised that, hasn't he?
Geoff Kabaservice: He has indeed.
Sam Hawley: That Donald Trump should investigate the immigration status of Elon Musk, even though, of course, he is an American citizen.
Geoff Kabaservice: Right.
Sam Hawley: Well, of course, the stoush also did send Tesla stocks plummeting, Geoff. So that's another way, I suppose. This could harm Elon's business operations. And also Trump could tighten regulations, couldn't he, to make it harder for Elon to do business?
Geoff Kabaservice: Sure. You know, it's been interesting to see the way the narrative has shifted over the last several months since Elon Musk came aboard. When Elon invested something on the order of $250 million in the 2024 political campaigns, which included not just Trump's election, but also a number of other Republican candidacies in Congress and elsewhere, this seemed like actually a remarkably astute payoff because Elon Musk's personal net worth soared in the first few months. But, you know, there's been incredible pushback, even from some Republicans, against the Doge project of cutting the government that Elon Musk has engaged in. And Elon never quite seemed sure as to what his purpose was in helming that Doge effort. Was it to just help Trump extract political payback against woke enemies and the so-called deep state? Or was it actually to try to genuinely cut the deficit or make government work more efficiently? You know, the blow up between Musk and Trump got its start when Elon started criticising the Republican budget bill, which truly is a fiscally incontinent budget buster, which will add something on the order of over $3 trillion to debt.
News report: Tech billionaire Elon Musk has issued a blistering criticism of US President Donald Trump's spending bill.
News report: He has said that I'm sorry, but I just can't stand it anymore. This massive, outrageous, pork-filled congressional spending bill is a disgusting abomination. Shame on those who voted for it.
Geoff Kabaservice: So, you know, there's a lot of things that are going wrong in the Trump-Musk relationship in the ways that they're not seeing each other eye to eye. And Elon is not very political. So in that sense, Trump could actually have the upper hand on him and could make his life difficult in many ways. And, you know, since you mentioned Tesla, you know, Tesla's stock has really cratered in recent months. People on the left really don't want to be associated with Elon Musk, but the right has never gone in for electric vehicles in the first place. And even Donald Trump's shilling for Teslas on the White House lawn hasn't really done much to encourage people on the right to buy Teslas. And one would imagine that they will be even less willing to do that now.
Sam Hawley: Yeah. And Donald Trump, of course, says he's going to sell his Tesla. I wonder if this might be better for Tesla, then Elon might have somewhat of a recovery when it comes to Tesla if he's not so closely associated with Donald Trump.
Geoff Kabaservice: It's kind of amusing. Like I said, this is this sandbox, quarrel of these two extremely powerful men flinging poo at each other. But, you know, let's not forget that the United States is no longer the world's unquestioned superpower. It no longer, in some sense, has the luxury to actually engage in this kind of infantile behavior.We are facing a serious technological threat from China, which undoubtedly will translate into global mastery of some kind. And frankly, Elon Musk's Tesla is also losing shares not just because of politics, but because it's actually lost the technological edge to some of these other Chinese companies. And the same is true of a number of critical technology areas where the United States is almost visibly falling behind China. And certainly our manufacturing capability, we've now been dwarfed by China, which is why Tesla does so much of its manufacturing in China. So one hopes that cooler heads are going to prevail. And I strongly suspect that both Trump and Musk are looking for ways to back down from this feud. But that doesn't mean that the political alliance that existed between them can be resurrected.
Sam Hawley: Yeah. I was going to say, is there a way back from the brink? And if there isn't, who do you think will be the ultimate winner of this stoush, the billionaire or the president?
Geoff Kabaservice: Oh, that's awfully hard to say because it's not clear what winning would look like here. I mean, at the end of the day, Elon will still have more money than any human being has had in history, as well as however many children he wants to have, however many consorts he wants to have. One suspects Elon will be fine. And at the end of the day, Donald Trump will still be president as well. And it's unlikely that the Republican Party is going to get out from under his brand of populism anytime soon, whether or not he chooses to run for a third term in 2028, despite the constitutional prohibition on that happening. So it's hard to say who is actually going to come out winners, you know, but I think there's a fair case to be made that they were stronger together than they will be apart, and that they will never quite wield the same power and influence or even be able to affect the cultural vibes in quite the same way.
Sam Hawley: Geoff Kabaservice is from the Niskanen Center, a centre right think tank based in Washington DC.This episode was produced by Sydney Pead. Audio production by Adair Sheppard. Our supervising producer is David Coady. I'm Sam Hawley, thanks for listening.