Musk-Trump Feud Puts $22B SpaceX Contracts at Risk

Roughly $22 billion in government contracts with SpaceX are now in jeopardy after a public feud between Elon Musk and former President Donald Trump erupted on June 5, threatening to disrupt critical U.S. space programs.

The clash began when Musk publicly criticized Trump’s tax-and-spending legislation, calling it “reckless” and "politically motivated." Trump responded in kind, lashing out during an Oval Office meeting and later on social media. Musk fired back in a series of pointed posts on X, mocking Trump’s leadership and warning of serious consequences—chief among them, the potential withdrawal of SpaceX’s Dragon spacecraft, which NASA relies on to ferry astronauts to the International Space Station.

“I’ve instructed the team to begin decommissioning Dragon,” Musk posted, sparking immediate alarm. The Dragon capsule, operating under a $5 billion NASA contract, is currently the only U.S. spacecraft capable of human transport to and from the ISS.

However, within hours, Musk appeared to reverse course. Responding to a user urging a cooling-off period, Musk wrote: “Good advice. Ok, we won’t decommission Dragon.”

Despite the walk-back, the threat alone marked an unprecedented moment in the history of NASA’s commercial partnerships—and raised urgent questions about the stability of the U.S. space program.
A High-Stakes Rift

Until recently, Musk was a key ally in Trump’s effort to downsize the federal government. Their alliance had yielded tangible benefits for SpaceX, including proposed redirection of NASA’s moon program toward Mars, support for a space-based missile defense initiative, and influence in Pentagon contracting.

But that partnership is now in freefall. Trump has reportedly threatened to terminate SpaceX’s federal contracts, prompting widespread concern in Washington about the future of joint NASA-Pentagon initiatives.

"If political retaliation results in canceling those contracts, it could significantly delay U.S. space capabilities,” said a senior congressional aide familiar with NASA budgeting.

NASA declined to comment directly on the situation. Spokesperson Bethany Stevens said only: “We continue working with all industry partners to ensure the president’s objectives in space are met.”
Fallout Begins

One early casualty of the feud appears to be Jared Isaacman, Musk’s preferred pick to lead NASA. The billionaire private astronaut was abruptly removed from consideration for NASA Administrator last weekend. Trump later defended the decision by accusing Isaacman of being “totally Democrat”—despite records showing bipartisan donations.

The situation has rattled the space industry. Former NASA Deputy Administrator Lori Garver said canceling contracts with SpaceX would likely be illegal. But she added: “A rogue CEO threatening to decommission spacecraft and jeopardize astronaut safety is simply untenable.”

SpaceX has been instrumental in transforming the U.S. space sector, winning $15 billion in NASA contracts for its Falcon 9 rocket and Starship lunar lander. The company also holds the majority of Pentagon satellite launch contracts and is building a massive surveillance satellite constellation for the U.S. intelligence community.

Analysts say SpaceX’s global dominance in launch services may cushion it from political headwinds—but not without cost.

“It wouldn’t be catastrophic, but it would definitely hurt,” said Justus Parmar, CEO of Fortuna Investments, a SpaceX investor. “Lost revenue and contract opportunities would set back development and open doors for competitors.”
Future of Artemis and SLS in Flux

The feud also casts uncertainty over the future of NASA’s Artemis program. Trump’s latest budget proposal seeks to cancel Artemis missions beyond the third, and phase out the expensive Space Launch System (SLS) rocket. However, the Senate’s version of the bill, released just hours after the Musk-Trump spat, would restore funding for Artemis IV and V—providing at least $1 billion annually for SLS through 2029.

SpaceX’s Starship, seen as a cost-effective alternative to SLS, stands to benefit or suffer depending on how the Trump administration responds to the Senate's changes—offering a potential barometer of Musk’s remaining influence in Washington.
A Crossroads for U.S. Space

Founded in 2002, SpaceX has grown into a linchpin of U.S. space strategy—commercially, militarily, and diplomatically. But the drama surrounding Musk and Trump threatens to fracture the delicate ecosystem of public-private cooperation on which U.S. space dominance increasingly depends.

With astronauts’ safety, billions in taxpayer-funded missions, and America’s strategic leadership in space hanging in the balance, the Musk-Trump feud is no longer a personal spat—it’s a national risk.