The political fallout from Elon Musk’s explosive announcement of a new U.S. political party continues to reverberate, as Trump administration officials, investors, and corporate boards weigh in with concerns about the billionaire’s growing political ambitions.
Just one day after Musk revealed plans to form the “America Party” — aimed at challenging the Republican establishment over a controversial tax-cut and spending bill — the reaction has been swift and critical. Speaking on CNN’s State of the Union, Treasury Secretary Scott Bessent questioned Musk’s judgment and suggested that the boards of Tesla and SpaceX are likely unhappy with his political pivot.
“I imagine that those boards of directors did not like this announcement yesterday and will be encouraging him to focus on his business activities, not his political activities,” Bessent said.
Musk, who was once a close adviser to President Trump, made the announcement on Saturday in response to what he called a “disastrous” fiscal measure — dubbed by Trump as the “big, beautiful bill.” The legislation, passed on strict party lines last week, includes sweeping tax cuts and a major boost to defense and border security spending, while slashing green-energy subsidies — a direct hit to Tesla’s bottom line.
Investor Concerns and ETF Postponement
The backlash wasn’t limited to Washington. Azoria Partners, an investment firm that had been preparing to launch a Tesla-focused ETF, said it was shelving the initiative due to Musk’s political move.
“We believe this creates a conflict with his full-time responsibilities as CEO,” said Azoria CEO James Fishback, who also took to X (formerly Twitter) to criticize Musk and urge Tesla’s board to “evaluate whether his ambitions are compatible with shareholder interests.”
Fishback added on Sunday, “Elon left us with no other choice.”
Trump Camp Responds
While the White House did not directly address Musk’s challenge, a spokesperson praised the party’s unity under Trump’s leadership:
“As the leader of the Republican Party, President Trump has unified and grown the party in a way we’ve never seen,” said White House spokesperson Harrison Fields.
However, the president himself reportedly remains furious over Musk’s perceived betrayal. According to sources, Trump has privately floated the idea of canceling federal contracts and subsidies for both Tesla and SpaceX, which together receive billions of dollars in government support. Trump also claimed Musk was angry because the spending bill eliminated electric vehicle (EV) credits that benefited Tesla.
From Insider to Rival
The public feud is a stunning reversal for Musk, who not only backed Trump’s 2024 re-election campaign with millions but also served as head of the short-lived Department of Government Efficiency (DOGE) during Trump’s first term. At the time, Musk was often seen at Trump’s side in the Oval Office, promoting deregulation and tech innovation.
Treasury Secretary Bessent acknowledged that while the principles behind DOGE were popular, Musk’s personal favorability remained low:
“The principles of DOGE were very popular. I think if you looked at the polling, Elon was not.”
Midterm Ambitions
Musk’s newly formed America Party is reportedly preparing to field candidates in the 2026 midterm elections, targeting Republican lawmakers who supported Trump’s bill. The move could divide conservative voters, potentially opening up opportunities for Democrats.
Democratic leaders welcomed the Republican rift.
“Trump’s MAGA party is splitting at the seams in the wake of his nightmare budget bill,” said Abhi Rahman, spokesperson for the Democratic National Committee. “Republicans are waking up and facing the reality that they just signed their pink slips, and are desperate for someone else to blame.”
Uncertain Future for Musk’s Party
Despite the headlines, political analysts remain skeptical about Musk’s long-term political influence. While his online following is massive, it remains unclear whether the America Party can mount a viable challenge to the entrenched Republican and Democratic establishments.
For now, however, Musk appears undeterred, using his platform to rally support and amplify his opposition to what he calls a “financially reckless and morally corrupt agenda.”
Whether this is a passing feud or the start of a full-blown political realignment remains to be seen. One thing is certain: the once-powerful alliance between Donald Trump and Elon Musk has fractured — and the political, financial, and corporate consequences are already taking shape.
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