Elon Musk warned that US President Donald Trump’s aggressive new tariffs could plunge the country into a recession by the second half of this year, as tensions between the two former allies erupt into a full-blown political and personal feud. “The Trump tariffs will cause a recession,” Musk posted on X, signalling a dramatic break from the president he once helped elect and advised.
The fallout sent shockwaves through financial markets, with Tesla’s stock plunging over 14% on Thursday, wiping out nearly \$150 billion in market value. The drop came just hours after Trump publicly attacked Musk, accusing him of turning against the administration over changes to a key tax and spending bill. “I’m very disappointed in Elon,” Trump told reporters, claiming the Tesla CEO had praised the bill before it was passed.
Musk shot back, accusing Trump of “ingratitude” and denying he had ever seen the bill. “False. This bill was never shown to me even once and was passed in the dead of night,” Musk posted. He later added, “Without me, Trump would have lost the election… Such ingratitude.”
In an escalation that stunned Washington, Musk alleged without evidence that Trump’s name appeared in unreleased Jeffrey Epstein files. “Time to drop the really big bomb: @realDonaldTrump is in the Epstein files. That is the real reason they have not been made public,” he wrote.
The row intensified after Trump threatened to terminate government contracts with Musk’s companies. In response, Musk announced that SpaceX would begin decommissioning its Dragon spacecraft—one that had recently rescued two stranded NASA astronauts. “In light of the President’s statement… SpaceX will begin decommissioning its Dragon spacecraft immediately,” he posted.
Republicans are now scrambling to contain the fallout. House Rep. Ryan Zinke warned the clash could jeopardise Trump’s sweeping tax and immigration bill, calling the standoff “the fight of the egos”. Speaker Mike Johnson attempted to calm tensions, texting Musk and urging that “policy differences shouldn’t be personal”.
The public breakdown between the world’s richest man and the most powerful political figure in the US has stunned observers, particularly given Musk’s major financial support for Trump’s 2024 campaign and his role in the administration.
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