He can't quit him — easily. Why SpaceX could complicate the
Trump-Musk split
AnalysisMark Gollom
| CBC News | Posted: June 7, 2025 8:00 AM | Last Updated: June
7
U.S. president could put regulatory squeeze on former ally's
companies
Image | Trump
Caption: U.S. President Donald Trump speaks to reporters with
Elon Musk in the Oval Office on May 30. The sudden, very public
split between the former allies raises questions about
Washington's reliance on Musk's companies, and vice versa.
(Evan Vucci/The Associated Press)
(BUTTON) Load Image
Open Image in New Tab
Billions of dollars lost in government contracts. A slew of
regulatory headaches. These are just some of the ramifications
Elon Musk could face over his fallout with U.S. President
Donald Trump.
The two men may have personally split, at least for now. But if
Trump is seeking to retaliate against the tech billionaire,
severing the relationship between Musk's many companies and the
U.S. government could prove difficult, analysts say.
"I would say the president has more cards than Musk does, but
it doesn't mean that [Musk] doesn't have any," said Peter Hays,
a lecturer of space policy and international affairs at George
Washington University's Space Policy Institute.
Both sides have "all kinds of leverage on each other," added
Dan Grazier, senior fellow and program director at the
D.C.-based Stimson Center, a think-tank focused on
international security.
The public fallout came after Musk repeatedly criticized
Trump's spending bill. Trump eventually lashed back, posting on
Truth Social that the easiest way to save "Billions and Billion
of Dollars" would be to "terminate Elon's Governmental
Subsidies and Contracts."
However, those threats might not be so simple to implement.
Image | APTOPIX SpaceX Stuck Astronauts
Caption: A SpaceX Falcon 9 rocket, with a crew of four aboard
the Crew Dragon spacecraft, lifts off on a mission to the
International Space Station from the Kennedy Space Center in
Cape Canaveral, Fla., on March 14. (John Raoux/The Associated
Press)
(BUTTON) Load Image
Open Image in New Tab
SpaceX, satellite contracts
SpaceX has $15 billion US worth of contracts from NASA for the
company's Falcon 9 rockets and its development of the
multipurpose Starship rocket system, tapped to land NASA
astronauts on the moon this decade.
The company has also been awarded billions of dollars to launch
most of the Pentagon's national security satellites into space
while it builds a massive spy satellite constellation.
That's why, if Trump cancels those contracts, SpaceX would have
to seriously rethink its business model, Grazier says.
Musk "needs the government to keep his company operating as
they are," he said.
But the U.S. government is also reliant on SpaceX, he says. For
example, it's the only U.S. company capable right now of
transporting crews to and from the International Space Station,
using its four-person Dragon capsules.
"Trump needs Elon Musk in pretty much the exact same way that
Elon Musk needs President Trump, as far as SpaceX goes,"
Grazier said.
"It's not like the United States has a credible alternative to
SpaceX right now as far as space launch goes," he said. "And
the United States needs reliable space launch capabilities."
WATCH | Feud explodes into public view:
Media Video | The National : Threats, insults as Trump-Musk
feud explodes into public view
Caption: U.S. President Donald Trump’s feud with the world’s
richest man, Elon Musk, has exploded into public view as the
two trade threats and insults on social media. Trump accused
Musk of going ‘crazy,’ while Musk alleged Trump is ‘in the
Epstein files.’
Open Full Embed in New Tab Loading external pages may require
significantly more data usage than loading CBC Lite story
pages.
Tearing up SpaceX contracts would have a huge domino effect
across a lot of the government's critical functions in space,
according to Clayton Swope, senior fellow at the Center for
Strategic and International Studies.
And those functions are "most closely centred around the
Pentagon and NASA," he told Bloomberg News.
But if Trump holds off on cancelling SpaceX contracts, and is
looking for another way to poke at Musk, he could put the
squeeze on Musk's companies through the government's regulatory
agencies, some experts say.
"Those can all be leverage points for the administration," said
Cary Coglianese, director of the University of Pennsylvania's
Penn program on regulation.
Last year, Musk was waging at least 11 separate regulatory or
legal battles with the Biden administration or independent
federal agencies related to his business empire, according to
NBC News. This might have been why, in part, Musk eventually
endorsed Trump, who had pledged during the presidential
campaign to slash regulations.
WATCH | How the feud started:
Media Video | Hanomansing Tonight : How Trump’s tax bill
ignited his feud with Musk | Hanomansing Tonight
Caption: Jeff Mason, Reuters White House correspondent,
explains how U.S. President Donald Trump’s signature ‘big,
beautiful’ tax bill was the source of his public feud with
billionaire Elon Musk and the potential impact it will have.
Open Full Embed in New Tab Loading external pages may require
significantly more data usage than loading CBC Lite story
pages.
Yet Trump could now pressure those same agencies to make Musk's
life difficult. Just some of the regulators Musk's business
empire must deal with include the Federal Communications
Commission for his satellite internet service Starlink, the
National Highway Traffic Safety Administration for Tesla, and
the Federal Aviation Administration (FAA) for SpaceX.
The FAA, under pressure from Trump, or to curry his favour,
could say it's not going to approve any SpaceX launch permits,
says Roger Nober, director of the Regulatory Studies Center,
also at George Washington University.
For Tesla, for example, Trump could pressure regulators to deny
necessary approvals of its autonomous driving program, or could
renew investigations into the safety of its full self-driving
software, some analysts told ABC News.
"If full self-driving were to be invalidated, that would be a
huge hit to Tesla stock and to Musk," Gordon Johnson, CEO and
founder of the data firm GLJ Research, told ABC.
Although the courts shouldn't tolerate such actions if they are
shown to be vindictive, the president wouldn't necessarily need
a "litigation-proof strategy to really mess up" Musk's life,
Coglianese said.
It could still be "very painful and problematic" for Musk,
while courts sorted out the issues, he said.
* Musk vs. Trump: A power couple tumbles into a messy divorce
* Elon Musk leaves Trump administration after leading effort
to slash U.S. government
* Here's why Elon Musk has lost billions (and is still the
richest person in the world)
"And if Musk's operations get delayed or disrupted, that can
mean real money."
Nober says he believes that any lasting regulatory change
against Musk's companies would be difficult to implement, given
his very public spat with Trump and that the president said
he's going to punish his one-time friend.
"If they then initiate regulatory action that's intended punish
any of Musk's business… it's going to be vulnerable to
challenge on the theory that it was arbitrary," he said.
However, there may be other minor administrative regulatory
roadblocks that government agencies could impose on Musk that
would be difficult to challenge in court, Nober says.
"They can make life difficult" for Musk, he said.
On Thursday, amid their war of words, shares of Tesla plunged
more than 14 per cent, leaving $150 billion US of the electric
automaker's value erased by the end of trading day.
The plunge was probably because Tesla, like a lot of Musk's
companies, have a lot of little things they deal with, with a
lot of regulatory bodies, Nober says.
"Just making those more difficult, or slowing them down, or
reviewing them, or taking longer to turn things around, has a
cumulative impact," he said.
Image | TESLA-RECALL/
Caption: A Tesla Cybertruck is displayed at the SAE WCX
conference in Detroit, on April 18, 2024. Trump could pressure
regulators to deny necessary approvals of Tesla's autonomous
driving program, or could renew investigations into the safety
of its self-driving software. (Rebecca Cook/Reuters)
(BUTTON) Load Image
Open Image in New Tab
More Stories Like This
The related links below are generated automatically based on
the story you’ve just read.
Loading...
CBC Lite is a low-bandwidth website. To see what's new, check
out our release notes. For high quality images, media,
comments, and other additional features visit the full version
of this story.
We and select advertising partners use trackers to collect some
of your data in order to enhance your experience and to deliver
personalized content and advertising. If you are not
comfortable with the use of this information, please review
your device and browser privacy settings before continuing your
visit. Learn more about Online Tracking and Privacy Choices.
* Corrections and Clarifications
* Terms of Use
* Reuse & Permission
* Privacy
* Accessibility
* Contact a Newsroom
* Submit Feedback
* Lite Help Centre
* Jobs
* RSS
