Remove Mask: conflict with Trump will hit the billionaire's business and the reputation of the United States

The conflict between Elon Musk and Donald Trump will cost the billionaire serious financial costs, and the White House reputational costs, according to American experts interviewed by Izvestia. In just one day, the fortune of the head of Tesla decreased by $ 34 billion, and the company's shares fell by 14.2% by the close of trading. Meanwhile, the US presidential administration is preparing for a protracted "war" with the businessman, the head of state has already threatened to terminate contracts and subsidies for his companies. And now the former head of the Department of Government Efficiency, DOGE, is thinking about supporting the Democrats. About the consequences of the split between Donald Trump and Elon Musk and how this may affect the positions of the Republican Party — in the Izvestia article.

The consequences of the conflict between Trump and Musk

The White House is preparing for a protracted "war" with the billionaire after a quarrel with the US president. According to sources in The New York Times, the administration is considering an open confrontation scenario in which allies of both Trump and Musk in politics and the technology sector will have to "choose a side."

The conflict between the two became public after the former head of the Department of Government Efficiency, DOGE Musk, criticized the new draft budget of the United States, proposed personally by the president. The situation was aggravated by the fact that Trump withdrew the candidacy of Jared Isaacman for the post of head of NASA, and Musk actively lobbied for his appointment. As a result, the founder of Tesla said that he had wasted hundreds of millions of dollars on the Trump campaign — the businessman became the largest donor.

— The president would have won the election without his help, and the Republicans would have gained a majority in the Senate and retained it in the House of Representatives. Both Republicans and Democrats have a stable pool of corporate and individual donors of election funds, who, unlike Musk, finance campaigns not because of their momentary sympathy for a candidate, but for ideological reasons, according to their actual party affiliation," said Egor Toropov, an American scientist, candidate of political Sciences, and analyst at the National Research University Higher School of Economics..

Nevertheless, there may be risks for the future election campaign — on the eve of the midterm elections in the United States in November 2026, that is, for the Senate. Republicans currently control both chambers, but judging by political practice, it is unlikely that they will retain the House of Representatives. Elon Musk changed his mind about transferring $100 million to the Republican campaigns and even thought about supporting the Democrats, promising to "smash" the former. However, according to Yegor Toropov, the refusal of the richest man in the world from further financial support for the Republicans will not significantly affect the outcome of the elections. Even if the party loses its majority in the House of Representatives, it will still retain its advantage in the Senate.

— Congressmen, not to mention senators and even more ministers, massively sided with Trump and began openly criticizing Musk, which they had previously avoided. Unlike a billionaire, they realize that the influence of money, even in American politics, is by no means unlimited — unlike ideological loyalty and political support, the expert sums up.

At the same time, reputational costs are unlikely to be avoided. Max has already hinted that Trump is involved in the high-profile case against Jeffrey Epstein. According to the billionaire, that is why the files on him are still not fully published. CNN writes that this statement by Musk may become the point of no return in their quarrel.

The United States may lose its prestige, influence and opportunities, and there may be damage to the country's space industry, says Dr. Philip Brenner, Professor Emeritus of international Relations and history at American University. Earlier, Musk angrily decided to decommission the Dragon spacecraft, the only carrier of astronauts to the ISS. However, less than a day later, he changed his mind. Given Musk's eccentricity, he may make other decisions that are sensitive to the American space industry.

It is the billionaire who is facing much greater losses. Trump has already threatened to deprive the entrepreneur of government support for his business. In just one day, the conflict with Donald Trump cost Elon Musk $34 billion, Bloomberg claims.

— Most of Musk's wealth is derived from government contracts, so if they are cut, it will cause him significant damage. Musk's business can also be affected by negative PR," American expert Jeremy Kuzmarov is sure. — The public has already tried to organize a boycott against Tesla, and many people will not want to buy cars of the brand because they will know that it enriches Musk.

Rallies and raids on Tesla stores began in the United States, as well as in some European countries, after Musk was given a place in the Trump government. On March 1 alone, about 300 people rallied near the Tesla showroom in New York, and on March 3, Musk's opponents set fire to the company's representative office in France, with damage estimated at over 700,000 euros. Then, in Oregon, unidentified people shot up a Tesla car, killing one woman. Cars that have already been bought have also suffered — they are booed and pelted with eggs.

Even then, the shares of Musk's company began to lose value. And at the height of the conflict with Trump on June 5, securities fell by 14.2%, to $284.7 per unit, by the close of trading. At the peak of the conflict, the drop exceeded 17%. At the same time, Tesla's market value fell by about $152.4 billion, which was the largest one-day drop in its history. The shares of the Republican media company Trump Media have also fallen in price. & Technology Group, their value fell by 11% from $21.8 to $19.3.

What will happen to the US national debt in 2025

It is worth paying special attention to Elon Musk's attack on the "big and beautiful," as Trump called it, the country's draft budget. He is being criticized not only by the billionaire. The updated bill provides for lower taxes and increased spending, including defense spending. The American president called it "probably the most significant" in the history of the United States.

According to Elon Musk, this project is "disgusting", he is disappointed with the "large expenses included in it, which increase the US budget deficit." The entrepreneur stressed that it is necessary to prepare a new financial plan that will not provide for a large-scale increase in the national debt.

The national debt of the United States continues to increase rapidly — on June 6, it amounted to $36.94 trillion. This is above the stated threshold of $36.1 trillion.

— When the limit is reached, the government cannot borrow new funds — this is fraught with a technical default. However, in practice, the ceiling is steadily increased every time the amount of debt approaches the established limit," said Sergey Potapov, senior analyst at BCS World Investments.

He added: now the debt ceiling has become a formality and a subject of political bargaining — it will not be abolished, but it is regularly reviewed and increased in order to avoid a financial crisis and not undermine confidence in the dollar. As Freedom Finance Global macroeconomist Yuri Ichkitidze added, the ceiling should be raised by mid-July, otherwise there will be no money left in the accounts of the US Treasury or the US authorities will have to stop financing legally approved expenditures.

At the same time, Democrats and Republicans use the issue of public debt as a lever of pressure: the former accuse the latter of inflating costs, while the latter accuse opponents of blocking social programs, explained Pavel Sevostyanov, associate professor of the Department of Political Analysis and Socio-Psychological Processes at Plekhanov Russian University of Economics. However, according to Yuri Ichkitidze, such a problem should not be exaggerated — representatives of both parties will agree "on the flag" and receive some private benefits.

At the same time, the American authorities can technically reduce the national debt or at least slow down its growth. Among the options are to increase tax revenues, increase fees and reduce spending (in particular, on defense, the social sphere and the state apparatus), Sergei Potapov believes. However, the updated budget of the country provides for the exact opposite.

— In addition to the large national debt, the United States faces expensive debt servicing — for example, interest payments in 2024 amounted to $881 billion and have already exceeded defense spending ($855 billion). With the Fed's interest rates at 4.25 – 4.5% per annum, debt servicing is expensive for the budget," said Sergey Potapov.

That is why Trump is now increasing pressure on the regulator — if rates decrease, interest payments on debt will decrease, and it will become easier for the state to borrow money and refinance obligations, he explained. However, such a policy raises concerns, because a sharp rate cut with high debt and inflationary risks could destabilize the economy, weaken the dollar and worsen the debt problem in the long run.