United States President Donald Trump on Tuesday threatened to cut off the billions of dollars in subsidies that Elon Musk's companies receive from the federal government, in an escalation of the war of words between the president and the world's richest man, one-time allies who have since fallen out.
"He's upset that he's losing his EV mandate and … he's very upset about things but he can lose a lot more than that," Trump told reporters at the White House on Tuesday.
This comes after Musk threatened to form a new ‘America Party’ if Donald Trump’s massive spending bill, nicknamed “Big Beautiful Bill”, becomes law. Musk has denounced the proposed bill in a series of strongly worded social media posts.
As tensions between United States President Donald Trump and the world’s richest person, Elon Musk continue to escalate, the latter has proposed to form “America Party,” a new political outfit. Musk claims that the new party will give ordinary citizens a genuine voice, in contrast to what he refers to as the existing “uniparty” structure of Democrats and Republicans.
“If this insane spending bill passes, the America Party will be formed the next day. Our country needs an alternative to the Democrat-Republican uniparty so that the people actually have a VOICE,” Musk wrote on his social media platform X.
Musk campaigned for Trump during the 2024 US presidential election and was the largest donor for Trump's campaign. After Trump’s victory in the election, Musk was also welcomed into the administration with custom-made positions for him, Senior Advisor to the United States President and de facto head of the Department of Government Efficiency (DOGE). Tensions between these eminent figures started to rise, particularly over policy and fiscal matters.
Musk’s first major break with Donald Trump over the President's signature spending bill led to the idea of launching a new political party. Musk, who previously advised the administration through DOGE, has been vocal in his disdain for the bill, which he believes reverses efforts made by DOGE to curtail public spending.
“Every member of Congress who campaigned on reducing government spending and then immediately voted for the biggest debt increase in history should hang their head in shame! And they will lose their primary next year if it is the last thing I do on this Earth,” said Musk.
He had previously touted DOGE’s success in saving $190 billion for the federal government through sharp cutbacks in various sectors. However, critics, including the non-partisan Partnership for Public Service, argue these actions may have cost taxpayers an estimated $135 billion.
DOGE was central to Trump and Musk’s shared mission to reduce social welfare programmes, foreign aid and environmental protections. Yet Musk now argues that the new bill undercuts those efforts. Beyond the broader fiscal impact, he had been particularly upset by cuts to clean energy and electric vehicle subsidies — areas central to his Tesla.
According to Musk, the legislation supports “industries of the past while severely damaging industries of the future.” He further labeled the spending initiative a “disgusting abomination.”
Trump and Musk’s differences became evident publicly in early June when Musk posted that Trump had failed to acknowledge his role in the 2024 election victory, stating, “Without me, [Donald] Trump would have lost the election.”
The US president responded on his platform, Truth Social, suggesting the government could slash expenses by eliminating federal subsidies and contracts granted to Musk’s ventures: “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts.”
Musk had in the last month conducted a poll on X asking users if it was time to form a new party that represents the “80% in the middle”. Over 80 per cent of respondents agreed, Musk framed this as proof of widespread displeasure with the two-party system. “The people have spoken. A new political party is needed in America to represent the 80% in the middle! And exactly 80% of people agree. This is fate,” he said on X.
Musk has directly voiced support for US Representative Thomas Massie of Kentucky, who has stood firmly against the bill. Massie is one of the few Republicans to openly challenge the legislation. He is known for his libertarian-leaning positions.
Historical precedent shows the difficulty of breaking through America’s entrenched two-party system. Ballot access requirements, lack of political infrastructure and limited institutional support have stalled or sunk similar efforts in the past. Public opinion appears to show limited enthusiasm for Musk himself as a political alternative to Trump.
A YouGov poll conducted in June found that while 28 per cent of respondents would choose Trump in a head-to-head contest, only 8 per cent favoured Musk. While a majority — 52 per cent — stated they would support neither candidate. Pollings conducted before the public fallout between Musk and Trump revealed similar data in ratings among the American public.
