TIL CreativesElon Musk has issued a stark warning that US President Donald Trump’s aggressive tariffs could push the country into a recession by the second half of 2025. The Tesla CEO’s statement on social media has deepened a bitter political and personal clash between the two, ending a once close alliance. Musk wrote plainly on X, “The Trump tariffs will cause a recession,” signalling a sharp break with the president he once backed.
The fallout was swift. Tesla’s share price plunged more than 14% in a single day, wiping out nearly $150 billion in market value. This market shock came after Trump publicly criticised Musk, accusing him of turning against the administration over a recent tax and spending bill. “I’m very disappointed in Elon,” Trump told reporters, claiming Musk had previously praised the legislation.
Musk denied seeing the bill at any point. “False. This bill was never shown to me even once and was passed in the dead of night,” he posted. He added, “Without me, Trump would have lost the election… Such ingratitude.” The feud escalated when Musk alleged without evidence that Trump’s name appeared in unreleased Jeffrey Epstein files, writing: “Time to drop the really big bomb: @realDonaldTrump is in the Epstein files. That is the real reason they have not been made public.”
Trump responded by threatening to end government contracts with Musk’s companies, including SpaceX. In turn, Musk announced that SpaceX would begin decommissioning its Dragon spacecraft, a vehicle recently used to rescue two stranded NASA astronauts. “In light of the President’s statement… SpaceX will begin decommissioning its Dragon spacecraft immediately,” Musk said.
Musk described the Republican tax-and-spending bill as a “disgusting abomination,” criticising its size and wastefulness. “I’m sorry, but I just can’t stand it anymore,” Musk wrote. He urged Senate Republicans to reject the legislation, which Trump helped shepherd through the House last month.
Trump dismissed Musk’s criticisms and accused him of “Trump Derangement Syndrome,” a term used to describe irrational hostility towards the president. Trump also suggested Musk’s companies could lose lucrative federal contracts. House Representative Ryan Zinke described the standoff as “the fight of the egos,” warning it could jeopardise key legislation.
Yet, some economists see silver linings. Damian McIntyre, vice president at investment firm Federated Hermes, noted that recent drops in imports might help GDP and ease recession fears in the short term.
Still, the feud highlights how economic policy and personal animosity are entwining in Washington. Musk has even hinted at supporting third-party campaigns to challenge Republicans backing the tax bill. He also affirmed support for impeaching Trump in a cryptic reply on social media.
Musk’s time in the Trump administration was marked by turmoil. His DOGE panel faced lawsuits and resignations amid concerns over privacy and aggressive deregulation. Meanwhile, his personal life has come under scrutiny, with a New York Times report revealing a serious drug habit.
Despite these issues, Musk remains a formidable figure in US politics and business. Tesla’s global supply chain partly shields it from tariffs, but rising costs threaten its growth. Trump has linked Musk’s criticisms to proposed cuts in electric vehicle tax credits, which would hit Tesla’s bottom line.
The fight between Musk and Trump is no longer just political; it’s personal, public, and has serious consequences for markets and policy alike.
The fallout was swift. Tesla’s share price plunged more than 14% in a single day, wiping out nearly $150 billion in market value. This market shock came after Trump publicly criticised Musk, accusing him of turning against the administration over a recent tax and spending bill. “I’m very disappointed in Elon,” Trump told reporters, claiming Musk had previously praised the legislation.
Musk denied seeing the bill at any point. “False. This bill was never shown to me even once and was passed in the dead of night,” he posted. He added, “Without me, Trump would have lost the election… Such ingratitude.” The feud escalated when Musk alleged without evidence that Trump’s name appeared in unreleased Jeffrey Epstein files, writing: “Time to drop the really big bomb: @realDonaldTrump is in the Epstein files. That is the real reason they have not been made public.”
Trump responded by threatening to end government contracts with Musk’s companies, including SpaceX. In turn, Musk announced that SpaceX would begin decommissioning its Dragon spacecraft, a vehicle recently used to rescue two stranded NASA astronauts. “In light of the President’s statement… SpaceX will begin decommissioning its Dragon spacecraft immediately,” Musk said.
A breakdown of a fractured alliance
Once firm allies, Musk and Trump now openly clash. Musk had played a key role in Trump’s 2024 campaign and served as head of the Department of Government Efficiency (DOGE), a government cost-cutting panel. His recent resignation from DOGE came amid controversy and resistance to his aggressive reforms.Musk described the Republican tax-and-spending bill as a “disgusting abomination,” criticising its size and wastefulness. “I’m sorry, but I just can’t stand it anymore,” Musk wrote. He urged Senate Republicans to reject the legislation, which Trump helped shepherd through the House last month.
Trump dismissed Musk’s criticisms and accused him of “Trump Derangement Syndrome,” a term used to describe irrational hostility towards the president. Trump also suggested Musk’s companies could lose lucrative federal contracts. House Representative Ryan Zinke described the standoff as “the fight of the egos,” warning it could jeopardise key legislation.
Economic fears and political fallout
Musk’s warning taps into broader economic concerns. Trump’s tariffs, including high levies on China, have driven up costs for manufacturers like Tesla. The overall US tariff rate remains elevated between 10 and 15 percent, contributing to higher prices and inflationary pressures. The Congressional Budget Office has accounted for a 0.4 percentage point rise in inflation due to tariffs in its latest budget projections.Yet, some economists see silver linings. Damian McIntyre, vice president at investment firm Federated Hermes, noted that recent drops in imports might help GDP and ease recession fears in the short term.
Still, the feud highlights how economic policy and personal animosity are entwining in Washington. Musk has even hinted at supporting third-party campaigns to challenge Republicans backing the tax bill. He also affirmed support for impeaching Trump in a cryptic reply on social media.
Musk’s time in the Trump administration was marked by turmoil. His DOGE panel faced lawsuits and resignations amid concerns over privacy and aggressive deregulation. Meanwhile, his personal life has come under scrutiny, with a New York Times report revealing a serious drug habit.
Despite these issues, Musk remains a formidable figure in US politics and business. Tesla’s global supply chain partly shields it from tariffs, but rising costs threaten its growth. Trump has linked Musk’s criticisms to proposed cuts in electric vehicle tax credits, which would hit Tesla’s bottom line.
The fight between Musk and Trump is no longer just political; it’s personal, public, and has serious consequences for markets and policy alike.
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