Trump ending Musk contracts fraught with difficulties
The article discusses the renewed feud between President Donald Trump and billionaire entrepreneur Elon Musk, focusing on Trump’s threats to possibly end government contracts with Musk’s companies, particularly SpaceX and NASA. While the exact severity of Trump’s threats remains uncertain,the legal and national security complexities involved in severing ties-given the government’s reliance on Musk’s companies for vital operations-are meaningful. Musk’s firms have received substantial government support, approximating $38 billion in contracts, and they play critical roles in military and civilian space launches. Their dispute is partly fueled by disagreements over a recent bill, with Musk criticizing its potential financial impact.
The rivalry has escalated with both parties exchanging personal insults. Musk has indicated plans to support political challengers to politicians backing the controversial legislation. Trump has suggested that Musk benefits excessively from government subsidies and implied severe consequences if these contracts were canceled. Amid these tensions, other figures, including former Trump advisor Steve Bannon, have voiced extreme suggestions, such as the government taking control of SpaceX. The situation represents a complex intersection of politics, business interests, and national security.
Trump ending Elon Musk’s federal contracts faces legal and national security problems
President Donald Trump and billionaire entrepreneur Elon Musk have reignited their feud that they had supposedly worked past, with the president now threatening Musk’s companies’ government contracts.
It’s unclear how serious the president is about possibly canceling government contracts with Musk’s companies, but the legal complexities involved in a complete disentanglement would presumably be extensive due to how dependent the government is on his companies, including from a national security perspective.
Specifically, the Department of Defense and NASA heavily rely on Musk’s SpaceX for rocket launches and space-based communications. Musk’s businesses have received at least $38 billion in various contracts and benefits, according to the Washington Post.
SpaceX was responsible for 236 of 254 military, civil, and commercial space launches in 2023 and 2024, Breaking Defense reported, citing Jonathan McDowell, an astrophysicist with the Harvard Smithsonian Center for Astrophysics who maintains a robust open-source database on space launches.
The company is also working to build a network of hundreds of spy satellites under a classified contract with an intelligence agency, Reuters reported earlier this year.
NASA also uses SpaceX’s Dragon spacecraft to service the International Space Station. During their initial feud, Musk threatened to ground the program earlier this month, but ultimately changed his mind. The Space Force also uses the company’s Falcon series rockets to put payloads into orbit.
“We have $22 billion in government contracts,” said Gwynne Shotwell, SpaceX’s president and COO, in a live-streamed public panel last year. “We earned that. We bid it, we were the lowest price, best bidder, we won and we execute.”
The Trump-Musk dispute is over how much the president’s One Big Beautiful Bill Act adds to the national debt, which the Senate passed on Tuesday. Musk has argued that the bill would balloon if signed into law.
The fight follows Musk spending roughly $250 million to help elect Trump in his 2025 campaign. Subsequently, Musk became the public face of the Department of Government Efficiency, which oversaw the administration’s efforts to cut fraud, waste, and abuse from the federal government.
Trump told reporters on Tuesday, “We might have to put DOGE on Elon. You know what DOGE is? DOGE is the monster that might have to go back and eat Elon.”
Musk, for his part, said he would fund primary challengers to lawmakers who vote in favor of the legislation and claimed he would create a new political party.
“Elon may get more subsidies than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa,” Trump said on Truth Social early Tuesday morning. “No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE.”
SpaceX was believed to be in the running to develop part of Trump’s proposed Golden Dome, a multi-layered air defense system that would defend the United States, though it’s unclear where that stands now, according to Reuters. The president said the administration believes the project will cost roughly $175 billion, while the Congressional Budget Office has estimated it could cost between $161 billion and $542 billion over the next twenty years.
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Trump and Musk were a close duo during the tail end of the campaign and during the president’s first couple of months in office, but this bill has been the catalyst for their dispute. The two fired off personal insults toward one another in early June, though they had seemingly moved past it until they restarted their fight in recent days.
Amid that dispute, NASA press secretary Bethany Stevens said the agency “will continue to work with our industry partners to ensure the President’s objectives in space are met,” but did not specifically mention SpaceX.
Around that time, Steve Bannon, a former Trump adviser and vocal critic of Musk, said Trump should utilize the Korean War-era Defense Production Act to take governmental control of SpaceX. Bannon also urged Trump to deport Musk. On Tuesday, Musk also criticized Bannon, claiming, “Bannon is going back to prison. This time for a long time.” It’s unclear what he was referring to. Bannon was released from prison in October 2024, after serving a four-month sentence for contempt of Congress.
Trump initially nominated billionaire commercial astronaut Jared Isaacman, an ally of Musk’s, to serve as the head of NASA but withdrew the nomination during their fight in early June. Isaacman had a history of donating to Democratic politicians.
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