Trump Walks Back Threats to Musk, Says He Wants His Companies to Thrive in US

By Staff, Agencies

US President Donald Trump has attempted to ease tensions with Elon Musk, saying he does not intend to destroy the billionaire entrepreneur’s companies by cutting federal subsidies and instead wants them to “thrive.”

The remarks followed a heated fallout between the two former allies after Musk launched a new political party earlier this month, warning that Trump’s “big, beautiful” tax bill would bankrupt the US.

“Everyone is stating I will destroy Elon’s companies by taking away some, if not all, the large-scale subsidies he receives from the US government. This is not so,” Trump said in a social media post on Thursday. “I want Elon, and all businesses within our country, to thrive.”

Musk responded on X [formerly Twitter], denying that any such subsidies exist. “SpaceX won NASA contracts by doing a better job for less money,” he said. “Moving the contracts to other aerospace companies would leave astronauts stranded and taxpayers on the hook for twice as much.”

Trump’s statement came shortly after Musk warned Tesla investors that a reduction in government support for electric vehicle [EV] makers could lead to “a few rough quarters.” While Musk has publicly argued against subsidies, Tesla has benefited significantly from government tax credits and incentives tied to clean transportation and renewable energy.

Legislation signed into law by Trump earlier this year will end a $7,500 tax credit for purchasing or leasing new EVs and a $4,000 credit for used EVs starting September 30, a move that could impact Tesla’s market appeal.

Tensions between the two deepened in June when Musk denounced Trump’s tax and spending bill, prompting the president to reportedly threaten cancellation of federal contracts with Musk’s companies. Musk had earlier left the administration in May to focus on his private ventures, having played a central role in a chaotic push to slash budgets and downsize the federal workforce.

Following their public clash, Reuters reported that the White House directed the Defense Department and NASA to assess SpaceX’s multibillion-dollar contracts in preparation for potential retaliation. Musk’s company had been viewed as a top contender to build Trump’s proposed $175 billion “Golden Dome” missile defense shield.

However, sources now say the administration is actively expanding its search for alternative partners amid growing friction with Musk, raising questions about SpaceX’s continued dominance in the program.