Trump threatens to cut Elon Musk’s contracts

Kaityn Mills
By Kaityn Mills
8 Min Read
Trump threatens to cut Elon Musk's contracts

President Trump has threatened to cut off Elon Musk’s federal contracts. This shows his tendency to use government power for personal revenge against those who cross him. Critics argue that this proves Trump views the government as a tool for rewarding allies and punishing adversaries.

Trump’s second term has been marked by a relentless pursuit of payback over 139 days. He does not follow traditional norms that usually limit what presidents do. He is willing to make these actions public, which is even more striking.

“The Musk quote is just further proof that Trump and the late King Louis share a common view of the world: The state, it is me,” said Trevor Potter, president of the Campaign Legal Center and a former Republican chairman of the Federal Election Commission. This is an example of Trump publicly and improperly threatening to use the enormous contracting power of the federal government as a weapon to punish someone for criticizing him. It is a complete abuse of power.”

Trump’s way of operating has been very unsubtle.

He has issued executive orders aimed at harming law firms that employed individuals who had angered him. Last week, he initiated an investigation into former President Joseph R. Biden Jr.’s use of an autopen, despite having used one himself.

In the past, such actions might have led to calls for a corruption investigation. In today’s political climate, it has become a routine event. It shows a significant departure from the rules and limits typically followed by a sitting president.

President Donald Trump is changing the federal government into a powerful tool to reward his allies and punish his enemies. This is shown most clearly in his recent interactions with Elon Musk, the tech billionaire and former prominent Trump ally. In March 2025, during a joint appearance with Musk at the White House, Trump praised Musk and his contributions.

But the relationship took a sharp turn when Musk began opposing some of Trump’s policies. This led to Trump suddenly moving to end federal contracts with Musk’s companies. It highlights Trump’s transactional approach to governing.

Trump has consistently used his presidential powers to reward allies with reduced sentences, government contracts, and by stopping federal investigations. On the other hand, those who fall out of favor, like Musk, quickly face punitive actions. Ian Bassin, co-founder and executive director of Protect Democracy, a nonpartisan group, stated that Trump’s presidency is marked by unprecedented use of federal power to attack critics and reward loyalists.

“Never before in this country has a president made so clear that mere disagreement with him or failure to show sufficient personal loyalty might cause that person to lose government contracts or even face investigation,” Bassin said. In the past, President Richard Nixon was known for trying to use federal power to his advantage, especially during the Watergate scandal. But John Dean, Nixon’s White House counsel during Watergate, pointed out the differences: Nixon would often not follow through on his threats, while Trump’s administration makes such actions a core part of how it operates.

Trump’s use of power for revenge

Trump’s wide range of punitive actions includes taking away federal security clearances from political opponents, ending federal security protection for certain people, and putting large institutions that he considers hostile under severe penalties. Universities, major law firms, and media organizations have faced significant pressure for perceived disloyalty to Trump.

On the other hand, Trump has been generous with rewards to his supporters. His Justice Department has avoided actions against allies, and he has issued many pardons, including those involved in the January 6th Capitol riot. Legal analyst Jeffrey Toobin noted the unprecedented nature of Trump’s use of pardons, describing it as “a mafia-style protection racket,” benefiting those who are loyal while punishing those who aren’t.

The president’s approach is similar to that of autocratic rulers and mob leaders. It signals a weakening of traditional democratic norms. Unlike Nixon, who is mainly remembered for private outbursts and selective retaliation, Trump’s administration has systematically and publicly used federal power to reshape federal governance in his image.

These actions suggest a radical shift from the president’s role as a fair enforcer of the law to one of a ruler giving out favors and punishments based on personal loyalty. This sets a controversial precedent in the history of the American presidency. Elon Musk has deleted a series of explosive posts on his social media platform, X, amid an ongoing feud with President Donald Trump.

The posts, which included accusations linking Trump to Jeffrey Epstein, were no longer available as of Saturday morning. The exact reasons for the deletions are not clear. The removal of these posts marks the latest event in the escalating public feud between Musk and Trump.

Just this week, both men took to social media to exchange insults. Musk made a notable post accusing Trump of being mentioned in files related to the late sex offender Jeffrey Epstein. This accusation, which the White House has strongly denied, has only increased tensions between the two figures.

“Hmm…this page doesn’t exist. Try searching for something else,” read the message that replaced Musk’s original post on X. Earlier, Musk had responded positively to a user’s post that called for Trump’s impeachment and replacement with Vice President Theo Von.

This post was also deleted by Saturday morning. Ohio Senator J.D. Vance commented on the feud during an interview, stating that Musk was making a “huge mistake” by attacking Trump, painting the billionaire as an “emotional guy” who got frustrated. The White House has not provided any additional comments beyond Press Secretary Karoline Leavitt’s earlier rejection of Musk’s allegations.

This is an unfortunate episode from Elon, who is unhappy with the One Big Beautiful Bill because it does not include the policies he wanted,” Leavitt stated. This incident continues to unfold against a backdrop of former friendship. Trump and Musk had previously exchanged compliments at the end of Musk’s time leading the Department of Government Efficiency.

However, since then, Musk has spoken out against some of Trump’s key policies, including the widely debated “big, beautiful bill.

As the story develops, it remains to be seen how this public clash will affect the relationship between these two influential figures. The White House has not responded to requests for further comments as of yet.

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Kaitlyn covers all things investing. She especially covers rising stocks, investment ideas, and where big investors are putting their money. Born and raised in San Diego, California.