94Ha Viewpoint
After the conflict between US President Trump and American entrepreneur and former head of the “Government Efficiency Department” Musk was made public, it quickly escalated into a war of words on the 5th.
Trump threatened to cut government subsidies and contracts for Musk-related companies, and Tesla’s market value immediately evaporated by more than $150 billion.
From Musk’s public support for Trump in July 2024 to the breakdown of their relationship, in less than a year, the two people went completely against each other because of a bill named “Big and Beautiful”.
Trump and Musk broke up and started a war of words
△On June 5, Elon Musk responded to Trump: “That’s totally wrong. I never saw this bill once, and it was passed quickly in the middle of the night!”
Trump: “Very disappointed” with Musk
On June 5, US President Trump talked about Musk and said he didn’t know if he could still maintain a good relationship with him. Trump said on the same day that he was “very disappointed” with Musk.
Trump said Musk was very unhappy about the Trump administration’s revocation of the electric vehicle “mandate”.
Trump also said on the same day that Elon Musk understood the inner workings of the “big and beautiful” bill and had no objection to it, until he found out that the electric vehicle “mandate” was to be revoked and realized the problem.
Musk: Big mistake, I was not shown the bill
After Trump made his comments about Musk, Musk quickly responded and refuted on social media, saying, “Big mistake, I was not shown the bill once, and it was passed quickly in the middle of the night!”
Trump: Musk is crazy
Seemingly in response to Musk’s criticism, US President Trump then posted on his social media platform “Real Social” that Elon Musk has begun to “lose patience.” Trump said he asked Musk to leave and revoked Musk’s “mandatory order” for electric vehicles, but “Musk went crazy.”
Trump claimed that Musk knew that Trump would revoke the electric vehicle “mandate” several months ago. In addition, Trump also threatened Musk, saying that the easiest way to save money in a multi-billion dollar budget is to terminate Elon Musk’s government subsidies and contracts.
And what Trump said in his post, “revoke Musk’s electric vehicle ‘mandate'”, is one of the items in the tax reform bill. The beginning of the verbal war between Musk and Trump originated from the tax reform bill passed by the U.S. House of Representatives on May 22.
The so-called “big and beautiful” tax reform bill
is “robbing the poor to help the rich” + pushing up debt
On May 22, the U.S. House of Representatives, where Republicans hold a majority, passed a large-scale tax and spending bill proposed by the Trump administration by a narrow margin. The Trump administration described the bill as “big and beautiful”. The content of the bill can be generally summarized into two aspects:
First, cut taxes, Medicaid, food aid, education and clean energy spending, and use the funds saved in this way for military and border security;
Second, raise the debt ceiling and allow the federal government to continue borrowing to finance debt.
As a result, many American media outlets predict that the bill will lead to huge consequences, which are generally two-fold:
First, the federal government deficit will increase significantly;
Second, the number of people without livelihood security will increase sharply.
“Rob the poor to help the rich”
Based on these two consequences, some American politicians who oppose the bill say that the bill is “robbing the poor to help the rich.”
US Democratic Senator Chris Murphy believes that this bill is “giving another trillion-dollar tax cut to the richest 1%” at the expense of tens of millions of Americans’ health insurance. Even some Republican lawmakers have expressed opposition to the bill because they question whether it is “writing checks that cannot be cashed.”
Widening the fiscal gap
Another major reason for opposing the bill is that the US federal government’s fiscal deficit will inevitably expand.
According to estimates released by the US Congressional Budget Office on June 4, the bill will increase the US debt of $36.2 trillion by about $2.4 trillion.
The forecast data released by the nonpartisan American organization “Committee for a Responsible Federal Budget” on June 3 is even more shocking. If interest expenses are taken into account, the debt incurred by the bill may rise to 3 trillion US dollars in ten years. If the temporary tax cut policy is made permanent, the debt cost will rise to 5 trillion US dollars.
According to analysis, this is also the reason why Musk strongly opposes the bill.
Musk left the scene in disgrace after saving money failed
The tax reform bill broke Musk’s defense again
May 30th was Musk’s last day as the head of the “Government Efficiency Department”. In the past three months, Musk has achieved a reduction of less than 200 billion US dollars in US government fiscal spending, which is far from his original goal of reducing fiscal spending by 1 trillion US dollars.
The current tax reform bill will add a large amount of fiscal deficit, which poses a huge challenge to the sustainability of US finances. Musk said bluntly in a media program on May 27 that the tax reform bill weakened the work of the “Government Efficiency Department”, and thus began his continuous criticism of the bill.
May 27 “Disappointed” doubts whether “big and beautiful” can be combined
On May 27, a few days before Musk left the “Government Efficiency Department”, Musk made his first comment on the tax reform bill in a program broadcast by CBS in the United States. At that time, Musk’s evaluation was only “disappointed”.
At that time, in response to Trump’s statement that the bill was “big and beautiful”, Musk’s evaluation was relatively restrained, saying only: “I think a bill can be ‘big’ or ‘beautiful’, but I don’t know if it can be both.”
June 1 “Don’t want to be a scapegoat”
In the interview content released by CBS on June 1, Musk further expressed his dissatisfaction with the US government.
Musk said in the interview that he did not want to publicly oppose the US government, but he also did not want to take responsibility for everything the government did. Musk said that the “Government Efficiency Department” he led became the “scapegoat” for everything.
June 3 The bill is “absurd” and “disgusting”
Musk posted a message on the social media platform that day, saying that this massive bill is “ridiculous” and “disgusting”. Musk said that the bill will significantly increase the budget deficit to 2.5 trillion US dollars, and put American citizens under an unbearable debt burden.
June 4th Call on the American people to “kill” the bill
Elon Musk stepped up his offensive against Trump’s tax cut bill that day, calling on the American people to contact their legislators to “kill” the bill. Musk said on social media that “it is wrong to let the United States go bankrupt.”
Not only the tax reform bill, Trump also wants to “borrow and open up sources of income” without limit
However, the Trump administration does not seem to want to stop at this tax reform bill. On June 4th local time, US President Trump said on his social media platform “Real Social” that the debt ceiling should be completely abolished to prevent economic disasters. Trump said that the debt ceiling is “too destructive” and should not be controlled by politicians who want to use it.
This is also the focus of Musk and Trump’s continued war of words this time-the tax reform bill includes a provision to increase the debt ceiling by 4 trillion US dollars. Trump’s statement on the 4th expressed his intention to directly cancel the debt ceiling and borrow unlimited debt to “open up new sources of income.”
As of June 5, the current total debt of the United States has exceeded 36 trillion US dollars. US Treasury Secretary Bensont warned last month that the US Treasury Department may run out of funds by the end of August, causing the United States to hit the debt ceiling. If the debt ceiling cannot be raised or canceled by then, the United States will default on its government.
If Trump’s tax reform bill is implemented and the debt ceiling cannot be canceled or raised again, the US government’s debt default will inevitably occur, which will trigger a new round of financial crisis.
But compared with the future US government debt default, the current public feud between Trump and Musk has already produced a victim – Tesla.
The first victim of Trump and Musk’s feud – Tesla
On June 5, shortly after Musk and Trump turned against each other, the market value of Tesla, an electric car company with Musk as CEO, quickly evaporated by about 100 billion US dollars, and Tesla’s stock price plummeted by 16% on the same day. As of the close of the day, Tesla’s stock price fell 14.26% from the opening, and its market value evaporated by more than $150 billion.
On April 30, Tesla’s board of directors was previously exposed to be looking for Musk’s successor as the new CEO, although its chairman immediately denied the rumor and expressed full confidence in Musk’s ability to continue to implement the exciting growth plan as Tesla’s CEO.
However, at a time when Musk’s conflict with Trump has become public, Musk, who has been “unemployed” from the “Government Efficiency Department”, is expected to continue to be under pressure in the future as Tesla’s CEO.
