What Happened Between D. Trump and E. Musk and Its Consequences

Discussion Process

On June 3, in response to Elon Musk’s tweet calling the One Big Beautiful Bill “a big and ugly law”, Trump’s response of “I’m disappointed” when asked about Musk’s statement at the press conference in the oval office on June 5 caused fluctuations in the markets within minutes. So what was this One Big Beautiful Bill, let’s talk about it first. This bill was passed by the Senate in May as a law regulating US tax regulations, spending and deductions in general terms. The reason for the debate between Trump and Musk is that the bill includes cutting support for clean energy investments and removing tax advantages for electric vehicle purchases. Before this law, there was a tax deduction of 7,500 dollars for every electric vehicle sold in the US within the scope of clean energy. This meant an extra burden for the budget. However, it will be so, based on the assumption that the removal of this discount could slow Tesla’s sales, the allegations that Musk opposed this bill for this reason kept a very tight place on the agenda. Trump argued that this was why Musk opposed it. However, Musk responded by publishing a segment from his X account, emphasizing that he did not need this support in a television program he attended in 2021, and that the important thing was the US economy.

Source: BBC

In response to Elon Musk’s outbursts, Trump reportedly told his inner circle that Musk’s “government-funded contracts should be re-evaluated”. After this statement, Musk,

“In light of the President’s statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately.”

in a direct retaliatory post. The move caused panic in many organizations, including NASA. Musk also claimed that Trump’s name was mentioned in the Epstein documents (in the case of billionaire Jeffrey Epstein, who died in prison while on trial on charges of sexual abuse of girls and creating a prostitution network) and that this was the real reason why the files were not made public, stating that “the truth will come out soon”. In addition, Musk launched a survey on forming a new political party on the X platform.

Reflection on Markets

In the ensuing period of mutual statements and discussions, the markets followed a volatile course. US technology and space industry companies, especially the cryptocurrency market, were directly negatively affected. Bitcoin (BTC), while testing the $ 105,000 level before the developments, lost about 5% to $ 100,000, Ethereum (ETH) fell from $ 2,600 to $ 2,300, down about 9%. The daily liquidation was over $ 800 million. US stock markets ended the day with the S&P 500 down -0.53%, Dow Jones down -0.25% and Nasdaq down -0.80%.

Tesla, which was at the center of the events, faced a hard sell after Trump stated that government subsidies to Musk should be cut. “Following the President’s announcement about canceling my government contracts, we will immediately begin decommissioning the Dragon spacecraft,” Musk said in response. -The Dragon spacecraft is very important as it is the only vehicle that provides logistics to the International space station.

Tesla shares fell by about 20% during the day from 330 dollars to 270 dollars, down from 330 dollars, and lost about 150 billion dollars. It closed the day with a loss of -14.26%.

Current Situation After the Discussion

The high-tension process between Musk and Trump continued for a while with direct statements and public confrontations between the parties. However, on June 11, Musk’s backpedaling post on X caused the atmosphere to soften to some extent. Musk showed an attitude to reduce the tension by using the expressions “maybe I have gone too far in”.

“I may have gone too far in my frustration. I still believe in American innovation and am hopeful cooler heads will prevail.”

This statement was followed by backdoor messages from the White House saying “we do not intend to escalate tensions”. Although the Trump front did not give a direct response, according to the information leaked to the press, it is stated that some advisors have suggested that cooperation with Musk should not be completely severed, especially within the scope of defense and space projects.