Elon Musk Predicts Recession Amid Escalating Feud with President Trump Over Tariffs and Contracts
Washington, D.C. – June 7: Billionaire entrepreneur Elon Musk issued a stark economic warning on Friday, claiming that former President Donald Trump’s aggressive new trade tariffs could drive the U.S. into a recession by the second half of 2025. The statement comes amid an intensifying public feud between the Tesla and SpaceX CEO and the President.
“The Trump tariffs will cause a recession in the second half of this year,” Musk wrote on his X platform, formerly Twitter.
“If America goes broke, nothing else matters,” he added, sounding the alarm on what he sees as dangerous economic policy. The economic impact was immediate. Tesla’s stock plummeted more than 14% on Thursday, wiping out nearly $150 billion in market value in a single day—a collapse attributed largely to investor fears over Musk’s clash with the White House.
Clash Over Contracts and Loyalty
The dispute escalated further when Trump publicly suggested that the federal government could save money by terminating contracts and subsidies benefiting Musk and his companies.
In a swift and provocative response, Musk posted:
“In light of the President’s statement about cancellation of my government contracts, SpaceX will begin decommissioning its Dragon spacecraft immediately.” Musk, who had previously served as a key adviser during Trump’s first term, also accused the President of “ingratitude”, revealing that he had donated over $250 million to support Trump’s reelection campaign.
“Trump has 3.5 years left as President, but I will be around for 40 years,” Musk quipped on X, suggesting his long-term influence outweighs short-term political power.
A Once Strategic Alliance Turns Sour
What once appeared to be a pragmatic alliance between business tycoon and populist leader has now unraveled in full public view. The White House, facing growing questions about the deteriorating relationship, declined to comment further on Musk’s contract claims.
President Trump, meanwhile, expressed his displeasure in characteristic fashion, saying he was “very disappointed” in Musk’s criticism of his administration’s policies, particularly regarding tax and spending measures. The President’s aides were reportedly blindsided by Musk’s explosive comments and their rapid market repercussions. Musk responded with a succinct “Whatever” on X, underscoring the breakdown in diplomatic norms that once characterized their interactions.
Symbolic Farewell and Unfinished Business
In a muted and symbolic farewell last week, Musk appeared in the Oval Office for a press briefing, sporting a black eye—one he attributed to a playful mishap with his young son. Observers, however, have pointed to the incident as a metaphor for his bruising experience in public service.
As the world watches this high-stakes rift unfold, the economic and political consequences are already reverberating across sectors—from markets to manufacturing to national defense contracts.
