Trump Backs Musk Amid Tensions Over Subsidies and Tax Policy
In a surprising turn following weeks of political tension, Trump backs Musk, declaring on Thursday that he has no plans to cut off federal subsidies to Elon Musk’s companies.The former president stressed his support for American innovation by saying that he wants Musk and all U.S.-based businesses to “thrive.”
This statement comes just after a very public fight between Trump and Musk. In July, Musk, who just started a new political party, criticized Trump’s tax policy, saying it could lead to the country’s bankruptcy. People started to wonder if Trump would respond by cutting off government funding for Tesla and SpaceX after the billionaire entrepreneur’s comments.
Trump Denies Targeting Elon Musk’s Companies
Addressing the speculation on social media, Trump wrote:
“Everyone is stating that I will destroy Elon’s companies by taking away some, if not all, of the large-scale subsidies he receives from the U.S. Government. This is not so!”
He added: “I want Elon, and all businesses within our Country, to THRIVE.
Musk Responds: “Subsidies Don’t Exist”
Musk quickly responded on X (formerly Twitter), saying that the so-called subsidies that Trump talked about don’t exist in the way that critics say they do.
“SpaceX got contracts from NASA by doing a better job for less money.” Musk wrote that taking those contracts away would leave astronauts stranded and cost taxpayers twice as much.
Despite often criticizing subsidies, Tesla has historically benefited from billions in tax credits and clean energy incentives. These include the $7,500 federal tax credit for new EVs and a $4,000 credit for used ones—both set to expire on September 30 under legislation signed by Trump.
Behind the Rift: Politics, Contracts, and Power
Musk used to back Trump, giving his campaign more than $250 million and briefly running the now-defunct Department of Government Efficiency. However, things got worse after Musk publicly spoke out against Trump’s harsh tax and spending plan.
After that fight, there were reports that the White House had told NASA and the Pentagon to look over Musk’s federal contracts, which made the possibility of retaliation more likely.
Trump Backs Musk but Expands Defense Search
Even though Trump publicly supports Musk, sources say the administration is now looking for other contractors for the $175 billion Golden Dome missile defense project, which SpaceX was once set to win.
The future of Musk’s partnerships with the government—and the larger relationship between politics and innovation—remains unclear as tensions continue.
