Elon Musk could face significant consequences from his rift with U.S. President Donald Trump, including potential financial losses in government contracts and regulatory complexities. Experts suggest that severing the ties between Musk’s various companies and the U.S. government might not be easy, despite the public fallout between the two individuals.
According to Peter Hays, a space policy and international affairs lecturer at George Washington University, while the president may have more leverage than Musk, both parties hold influence over each other. Dan Grazier, a senior fellow at the Stimson Center, also highlighted the mutual leverage between Musk and Trump.
The clash between Musk and Trump escalated after Musk criticized Trump’s spending bill, prompting Trump to retaliate by suggesting the termination of Musk’s governmental subsidies and contracts. However, the cancellation of SpaceX’s contracts, valued at $15 billion with NASA for Falcon 9 rockets and the Starship rocket system, could pose significant challenges for SpaceX’s operations, as noted by Grazier.
SpaceX plays a crucial role in launching national security satellites for the Pentagon and facilitating crew transportation to the International Space Station. Grazier emphasized that both Musk and the U.S. government depend on SpaceX for reliable space launch capabilities.
Clayton Swope, a senior fellow at the Center for Strategic and International Studies, emphasized the interconnectedness of SpaceX contracts with critical government functions related to space exploration, particularly involving the Pentagon and NASA.
In addition to contractual implications, Trump could potentially target Musk’s companies through regulatory agencies. Cary Coglianese from the University of Pennsylvania highlighted that agencies such as the Federal Communications Commission, National Highway Traffic Safety Administration, and Federal Aviation Administration could be used as leverage points against Musk’s businesses.
Legal battles with the Biden administration and federal agencies have created regulatory challenges for Musk’s enterprises. Trump might exert pressure on regulatory agencies to hinder SpaceX’s launch permits or disrupt Tesla’s autonomous driving program, impacting Musk’s businesses significantly.
While Musk could challenge any punitive regulatory actions in court, administrative roadblocks could still complicate his operations. The recent downturn in Tesla’s shares underscores the potential impact of regulatory hurdles on Musk’s companies, as they navigate various compliance requirements with regulatory bodies.
Despite potential hurdles, lasting regulatory changes against Musk’s enterprises could face legal scrutiny due to the public nature of his feud with Trump. Nober suggested that implementing enduring regulatory actions against Musk’s businesses might be vulnerable to legal challenges, but minor administrative obstacles could still impede Musk’s operations.
As tensions between Musk and Trump persist, the financial markets have reacted to the uncertainty, with Tesla’s shares experiencing a significant decline. The cumulative impact of regulatory challenges could further impact Musk’s companies, as they navigate a complex regulatory landscape.
The ongoing feud between Musk and Trump underscores the intricate relationship between government contracts, regulatory oversight, and the business operations of Musk’s companies.
