Trump and Musk's Quarrel: Consequences for the Global Economy Named

One of the main events of the first week of June was the public conflict that broke out between US President Donald Trump and American billionaire, the richest man in the world, Elon Musk. The recent ardent allies and friends fell out to pieces. The reason for this was Musk's teeth-clearing criticism of Trump's new tax bill.

The head of the White House responded by saying that he was disappointed in the entrepreneur who recently left the US presidential administration and called him crazy. Musk, in turn, said that without his assistance, Trump would not have won the presidential election, and also hinted that the head of state was involved in dirty stories from the recent past related to the sexual exploitation of underage girls. He even supported the impeachment of the president. The public quarrel between Musk and Trump, which ended in mutual threats, made the front pages of many world media outlets, displacing the "hot" news of politics and economics. Natalia Milchakova, leading analyst at Freedom Finance Global, told MK about the economic consequences of this quarrel:

- Both Trump and Musk, figuratively speaking, are worth hundreds of billions of dollars. Has their public conflict somehow affected global capital?

- The epic spat between US President Donald Trump and his former ally and campaign partner, billionaire Elon Musk, over criticism of the tax bill has already led to Musk's company Tesla losing more than 17% of its capitalization in just two days, which now stands at $912 billion.

And this is just the beginning... Trump is threatening to deprive Musk's automobile corporation of government contracts and subsidies, and given the US President's determination in the fight against political opponents, such a probability is high. Musk, in turn, initially tried to threaten to decommission the Dragon spacecraft created by his company Space X, which, among other things, carried out NASA orders, but today it seems he has already abandoned these threats.

- Is there any understanding why yesterday's allies suddenly not only broke up, but fell out completely?

- In our opinion, the real problem with the relationship between the American president and the head of a large corporation is that Musk, understanding the entire enormous scale of the real challenges and problems facing the US economy, simply decided to step away from government affairs and return to his business, which has noticeably suffered from competition and attacks from Trump's opponents.

- What's wrong with the US economy?

- The size of the US national debt is $36.9 trillion, the budget deficit is over $2 trillion. And it is possible that the worsening relations between the businessman and the authorities are simply due to the fact that Musk is well aware of the scale of a possible economic crisis in the US and does not see the possibility of being in power when the country is heading for a crisis. It can be assumed that he knows much more about the problems of the US economy and especially the public sector than he says publicly.

- And what will happen next? Will we see an even greater escalation of the conflict between Trump and Musk, or will the parties begin to look for ways to reconcile?

- Since the scandal has negatively affected Tesla's capitalization (Musk's other companies and projects, such as Space X, Starlink, Neuralink and xAI, are not public), and has also affected the reputation of the US President, both conflicting parties, as reported by American media, are preparing some measures to de-escalate the conflict. It is possible that if the quarrel goes too far, Musk may refuse to help Ukraine with Starlink satellites, and this would be critically important for the US and Trump's political stability.

- Elon Musk is recognized as the richest man in the world and his actions are closely monitored by the business community in all corners of the planet. What can we expect from him in the near future?

- It is possible that in the future Elon Musk may turn towards China, at least maintaining Tesla's high share of the domestic Chinese electric vehicle market is extremely important for the entrepreneur. Therefore, it is quite possible that Musk and Trump will publicly restore relations, but if this does not happen, the American leader may face new unpleasant surprises from the richest billionaire, and these will be surprises of a geopolitical scale.