Trump escalates feud with Elon Musk over $5 trillion bill, floats deportation talk amid EV subsidy rollback

What specific provisions in Trump’s $5 trillion bill triggered Musk’s opposition and institutional alarm?

President Donald Trump reignited tensions with Elon Musk on July 1, 2025, stating that his administration would “have to take a look” at deporting the billionaire entrepreneur to South Africa. The remark followed Musk’s harsh criticism of Trump’s $5 trillion spending package, which Musk said would explode the national debt and undercut the future of clean transportation.

The legislation, dubbed the “One Big Beautiful Bill,” raises the federal debt ceiling by a record amount while simultaneously eliminating the electric vehicle (EV) mandate and altering tax incentive structures. Musk, who heads Tesla and SpaceX, slammed the bill on his platform X, calling it a “disgusting abomination” and branding the Republican Party the “PORKY PIG PARTY” for what he described as reckless pork-barrel spending.

Institutional concern also mounted. Economists at major U.S. think tanks flagged that the bill’s deficit implications could add $3.3 trillion to cumulative debt by 2034. Federal Reserve Chair Jerome Powell reportedly told lawmakers that Trump’s tariffs and the bill’s inflationary impact had delayed previously expected interest rate cuts. Meanwhile, several state attorneys general initiated legal reviews over cuts to Medicaid and mental health block grants embedded in the legislation.

Why did Trump threaten deportation and what institutional and legal barriers would block such action?

In response to Musk’s criticism, Trump took to Truth Social, accusing Musk of lashing out because the bill eliminated the EV mandate—jeopardizing Tesla’s future U.S. sales. During a press gaggle, when asked whether he would consider deporting Musk, Trump replied, “We’ll have to take a look,” and added, “We might have to put DOGE on Elon,” referring to the Department of Government Efficiency—a Trump-era initiative once informally led by Musk as a special government employee.

Later in the day while visiting Florida, Trump doubled down. “If DOGE looks at Musk, we’re going to save a fortune,” he said, mocking both Musk’s previous role and the subsidies his companies currently enjoy.

However, experts quickly noted that Musk’s naturalization in 2002 makes deportation nearly impossible under current U.S. law. Legal scholars and immigrant rights groups warned that even raising the threat of denaturalization as political retaliation risks undermining the constitutional protections of millions of naturalized citizens. Immigration lawyers stated that such action would face immediate injunctions in federal court and trigger a legal firestorm with broad national implications.

How have markets and federal contractors reacted to the Trump–Musk feud over EV policy and political loyalty?

The fallout extended swiftly to financial markets and investor sentiment. Tesla’s shares fell over 5% following the exchange, deepening losses that began in early June when Musk started publicly criticizing the bill. The potential for scrutiny of Tesla’s and SpaceX’s multi-billion-dollar federal contracts has alarmed institutional investors, with some fund managers reportedly trimming exposure.

Contracting risk is real. SpaceX holds multiple ongoing deals with NASA and the Department of Defense, while Tesla remains eligible for EV tax credits and infrastructure grants. Trump’s team has hinted at reviewing “preferential treatment,” though no formal action has been taken.

Meanwhile, the feud signals growing tension between political power and corporate influence. Musk has pledged to bankroll primary challengers against Republicans who backed the spending package, promising on X: “If it’s the last thing I do on this Earth.” He also floated creating a rival political organization dubbed the “America Party” aimed at breaking what he calls the “uni-party cartel” of traditional Republicans and Democrats.

How is the Musk–Trump conflict shaping political narratives within and beyond the Republican Party?

Institutionally, the feud is being viewed as a fracture line inside the Republican base. Trump remains the party’s dominant figure, but Musk’s increasing support for libertarian-leaning and centrist GOP figures—like Rep. Thomas Massie—signals a potentially disruptive force.

House Minority Leader Hakeem Jeffries referred to the standoff as “the opening act of a GOP civil war.” Meanwhile, independent and Democratic observers framed the deportation threat as an authoritarian overreach meant to intimidate political dissenters.

Musk’s claim that “without me, Trump would have lost the election” further stoked resentment within party ranks. In the 2024 election cycle, Musk contributed over $270 million to pro-Trump PACs and directly funded turnout efforts in key swing states. Some strategists worry that if Musk channels his money into insurgent candidates—or toward a third-party structure—it could jeopardize Republican control of Congress in 2026.

What does this showdown reveal about billionaire influence and the politicization of citizenship in the U.S.?

Beyond the immediate drama, the conflict exposes structural tensions in the American political system. Critics say the weaponization of deportation rhetoric against a prominent naturalized citizen amounts to an attack on democratic norms. Others argue that Musk’s massive financial influence, including platform control through X and extensive lobbying reach, gives him disproportionate power over national debates.

Civil rights groups, including the ACLU, issued statements warning that normalizing denaturalization threats—even rhetorically—could chill political speech and erode protections for immigrant communities. International observers, including commentators in the European Parliament, expressed concern that U.S. domestic politics is increasingly becoming a platform for plutocratic battles with global consequences.

Diplomatically, Musk’s influence stretches well beyond the U.S. He has backed populist parties in Germany, praised right-wing leaders in Spain, and clashed publicly with former Canadian Prime Minister Justin Trudeau. If Trump’s veiled threats expand into regulatory or immigration action, experts believe the fallout could destabilize not just corporate governance—but foreign perceptions of U.S. rule of law.

What future risks might emerge from this clash for Tesla, the GOP, and U.S. policy?

The political rupture between Trump and Musk is unlikely to heal quickly. Musk’s refusal to escalate—stating on X, “So tempting to escalate this. So, so tempting. But I will refrain for now”—may be temporary. If Tesla or SpaceX face formal investigations, subsidy cancellations, or contract suspensions, retaliatory political actions may follow.

On the policy front, the rollback of the EV mandate is seen as a symbolic win for fossil-fuel aligned interests within Trump’s base. But it also fractures the once-tight alliance between the Republican Party and clean-tech innovation. If major donors like Musk redirect their support or challenge Trump-aligned incumbents, the result could reshape the balance of power ahead of the 2026 midterms.

Ultimately, this conflict is no longer about a single bill. It’s about the nature of political loyalty, the legal limits of citizenship, and whether billionaires can—and should—shape federal policy through financial leverage and public platforms. Whether Trump escalates or backs down will determine whether this feud reshapes U.S. tech policy, campaign finance dynamics, or even the ideological center of the Republican Party itself.