A high-stakes political battle is brewing between Elon Musk and Donald Trump, as the billionaire entrepreneur has threatened to launch his own political party if a flagship budget bill championed by the former president passes Congress. This dramatic ultimatum signals a deep fracture between the two powerful figures, with Musk, once a key Republican supporter, now positioning himself as a direct political challenger over fundamental disagreements on fiscal policy.
The source of the conflict is a controversial budget proposal, which Trump has dubbed a “big and beautiful law.” The bill, which narrowly passed the House of Representatives, calls for an unprecedented increase in defense spending to over $1 trillion while extending Trump-era tax cuts. Conversely, it proposes sharp cuts to social programs, government-funded healthcare, and climate initiatives, drawing fierce criticism from Democrats who accuse Trump of favoring the rich at the expense of the poor.
For Musk, the budget represents a personal betrayal. He views the legislation as a direct assault on his previous work heading the Department of Government Efficiency (DOGE), where he aimed to slash government spending. The proposed bill not only reverses this effort but is projected to balloon the national debt, a prospect Musk vehemently opposes. In response, he has vowed to withdraw his substantial financial backing from the Republican Party and instead funnel it into a new political startup, tentatively named the “American Party,” should the bill become law.
Trump, facing the potential loss of a major donor and the rise of a spoiler candidate, has retaliated not with persuasion but with threats. In a post on his Truth Social platform, he suggested that government agencies should scrutinize the vast federal subsidies and contracts awarded to Musk’s companies. Trump implied that without this government support for entities like SpaceX and Tesla, Musk would be “back in South Africa,” effectively threatening to dismantle the billionaire’s empire through administrative measures.
While the prospect of a Musk-led party could siphon crucial votes from Trump, political analysts remain skeptical of its long-term viability. The United States has a deeply entrenched two-party system that has historically crushed third-party movements. Furthermore, Musk’s own brief forays into political activism have been described as bizarre and ineffective, notably a recent campaign appearance in Wisconsin that damaged his public image and fueled speculation about his judgment. Therefore, the immediate danger to Trump is less about Musk as a politician and more about Musk as a disgruntled billionaire with the resources to disrupt a campaign.
The standoff has set the stage for a dramatic showdown, with the passage of the budget bill in July serving as the trigger. The fallout could extend far beyond the political arena, potentially impacting key sectors of the U.S. economy and national security. With Musk’s companies central to America’s space program and electric vehicle industry, this a clash of titans that could destabilize not just a political party, but also critical national interests.