Trump-Musk Alliance Cracks Open: Elon Warns Of Recession Over Tariffs, Says Trump Would Have Lost Without Him

In a stunning escalation, Elon Musk warned Thursday (5 June) that President Trump’s tariff blitz will cause a recession—a rare, direct rebuke that signals a full-blown rupture in the once-aligned Trump-Musk relationship.

Musk said the US President's tariffs, which has sent global markets into a tizzy, will "cause a recession in the second half of this year", NDTV reported.

Musk also announced the shutdown of SpaceX’s Dragon spacecraft— used by NASA to send supplies and astronauts to International Space Station (ISS).

Hours later, he reversed course with a patriotic “Team America” post. But the message had landed.

The immediate trigger behind the now withdrawn announcement was the President's threat to terminate government contracts with the Tesla CEO, amid a series of spiraling disagreements rooted in the latter's criticism of the administration's tax-cut and spending legislation that erupted last week.

The hostilities between world's most powerful leader Trump and world's richest Musk began when the former criticised the latter in the Oval Office on Thursday.

" I'm very disappointed because Elon knew the inner workings of this bill better than almost anybody sitting here.  He had no problem with it. All of a sudden, he had a problem," the President said, referring to the flagship spending legislation. 

Later, Trump took a swipe at the billionaire and suggested terminating his governmental subsidies and contracts to "billions of dollars". 

"The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon's Governmental Subsidies and Contracts. I was always surprised that (his predecessor Joe) Biden didn't do it," he said in a post on Truth Social. 

Musk’s empire includes SpaceX and Starlink—both heavily entwined with federal programmes, and now positioned at the centre of this dramatic political falling-out.

"In light of the President's statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately," Musk posted on X.

NASA relies on the Dragon spacecraft to ferry astronauts to and from the International Space Station (ISS) under a contract worth roughly $4.9 billion. The capsule is the only US spacecraft capable of flying humans in orbit.

A Dragon shutdown would’ve jeopardized the 20-year international space alliance. Only Russia’s Soyuz remains as backup—exposing how deep the Trump-Musk fallout could cut.

However, after an X user slammed Trump and Musk for their "shameful" fight and asked them to "take a step back for a couple of days", the Tesla CEO said: "Good advice. Ok, we won't decommission Dragon".

He later posted an image of the US flag and Dragon capsule, captioned “Team America”.

The dramatic breakdown came just a week after Trump gave Musk an Oval Office send-off, celebrating his exit from the “Department of Government Efficiency”—a symbolic alliance now in tatters.

South African-born Musk hit back minutes later, saying the President's claims that he had advance sight of the bill were "false".

"Whatever", he added above a video of Trump saying Musk was upset about the loss of subsidies for electric vehicles.

The Tesla CEO then ratcheted up the public spat even further, saying the Trump would have lost the election without his support.

The billionaire had donated nearly $300 million—making him Trump’s top financial backer.

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