Trump Threatens Musk’s Government Contracts as Political Alliance Collapses — Just Days After Michael Cohen Predicted the Move
President’s Warning to Elon Musk Escalates Feud as Cohen Says “Trump Always Goes for the Money”
WASHINGTON — The Trump–Musk alliance, once a symbol of billionaire power and political synergy, is now in ruins — and, as of Thursday, threatening to turn into a financial war. In a stunning escalation, President Donald Trump publicly threatened to strip Elon Musk’s companies of billions of dollars in federal contracts, accusing the tech mogul of betrayal and lashing out over criticism of his administration’s marquee tax-and-spending plan.
Speaking from the Oval Office during a meeting with German Chancellor Friedrich Merz, Trump veered off script to declare, “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts.” The comments were later amplified on Trump’s Truth Social platform, where he added, “I was always surprised that Biden didn’t do it!”
Within minutes, Musk fired back on X, the social media platform he owns: “This just gets better and better. Go ahead, make my day.”
The verbal slugfest comes just days after longtime Trump fixer and former attorney Michael Cohen warned on national television that Musk’s fortune would be the next target. “He always goes for the money — Trump doesn’t forgive disloyalty, and Elon knows that,” Cohen said in a CNN interview earlier this week. “He’ll punish him where it hurts: the wallet.”
A Public Breakup with Real Financial Consequences
Trump’s threat wasn’t idle. Musk’s companies, including SpaceX and Starlink, currently hold billions in federal contracts with the Pentagon, NASA, and the Department of Commerce. Tesla has also benefited from various energy and climate-related incentives — many of which are now being clawed back under Trump’s controversial “One, Big, Beautiful Bill.”
The feud began after Musk publicly criticized the bill, calling it a “disgusting abomination” and accusing Trump of betraying fiscal conservatives by pushing legislation projected to balloon the national deficit by over $2.4 trillion across the next decade.
Musk’s opposition triggered an immediate and tangible backlash. On Thursday alone, Tesla stock fell more than 9% — a massive single-day loss — as investors feared political retribution from the federal government.
Musk: “Such Ingratitude”
In a rapid-fire exchange on X, Musk claimed that without his support, Trump wouldn’t have won re-election in 2024. “Without me, Trump would have lost the election,” he posted. “Such ingratitude.”
The remarks stunned political observers, who just weeks ago saw Musk standing alongside Trump at Mar-a-Lago, donning a MAGA hat and serving as an influential voice within the short-lived Department of Government Efficiency. Musk had also funded a $1 million-a-day voter sweepstakes in key battleground states, including Pennsylvania, and personally advised Trump on energy, AI, and space policy.
But by this week, the relationship had soured. “I’m very disappointed in Elon,” Trump said Thursday. “I’ve helped Elon a lot.”
Cohen’s Warning Proves Prophetic
Michael Cohen, Trump’s former fixer and author of Disloyal, made waves earlier this week when he predicted this exact turn of events. Speaking to MSNBC’s Nicolle Wallace, Cohen said: “It doesn’t matter how close you were. The moment you turn on him, Trump not only turns back — he tries to destroy you.”
Cohen added, “Look at what happened with Michael Flynn, with Sessions, with Barr. Elon’s next. And it’s going to be financial.”
The latest developments appear to prove him right.
EV Tax Credits and NASA Fuel the Fire
While Musk has taken a moralistic tone against “pork-barrel spending,” Trump dismissed the billionaire’s concerns as self-serving. “He only developed a problem with the bill because it rolls back tax credits for electric vehicles,” Trump said Thursday.
Musk countered immediately: “False. This bill was never shown to me even once and was passed in the dead of night so fast that almost no one in Congress could even read it!”
Another source of tension: the abrupt withdrawal of Jared Isaacman’s nomination to lead NASA. Isaacman, a Musk ally and private astronaut, was described by Trump as “totally a Democrat” during Thursday’s rant. The nomination was pulled last weekend, days after Musk resigned from his government advisory role.
From Allies to Adversaries in Record Time
It’s a dramatic shift for a relationship that was once unusually close, even by Trump standards. Musk stood behind Trump during his second inauguration, reportedly slept in the Lincoln Bedroom, and appeared in photos leaping behind the president at campaign rallies. He was considered one of the most powerful unelected figures in the administration — until he wasn’t.
Now, the rift is playing out like a live-action version of a failed alliance. “It’s sort of Trump derangement syndrome, I guess they call it,” Trump joked to reporters. “People leave, and they miss the Oval Office so badly they become hostile.”
The president even mocked Musk’s recent black eye, which Musk claimed was caused by one of his children. “I said, ‘Do you want a little makeup? We’ll get you a little makeup,’” Trump said with a grin.
The Political Fallout
The collapse of the Trump–Musk alliance could have wide-ranging implications heading into the 2026 midterms. Musk’s massive financial influence and digital following once made him a top power broker in Republican politics. Now, that cash may no longer flow to Trump-aligned candidates — or could even fund a centrist rebellion.
Earlier this week, Musk floated the idea of a new political party “that actually represents the 80% in the middle.” On Thursday night, he re-upped the idea with a poll on X asking if it was “time to move on from both major parties.” Over 2 million votes poured in, with more than 60% saying “yes.”
Bottom Line
Trump may have started the day focused on foreign policy with Germany’s chancellor, but he ended it launching economic warfare against the world’s richest man. The president’s scorched-earth style, long predicted by former insiders like Michael Cohen, is once again playing out in real time — this time aimed squarely at the one billionaire who dared to walk away.
And if history is any guide, Trump isn’t done yet.
