I could hardly believe the tweet when I read it.
Elon Musk has turned on Donald Trump, directly accusing him of involvement in the Epstein affair.
Their feud has dealt another blow to financial markets and our little crypto bags...
But how did we get here?
The One Big Beautiful Bill’s tax reforms
It all starts with a bill passed on 22 May: the One Big Beautiful Bill.
Among other things, it proposes to:
- Extend the 2017 tax cuts due to expire at the end of 2025
- Remove tax on tips
- Remove tax on overtime pay
- Remove tax on certain car loans
- Add a 3.5% tax on money transfers abroad by non-citizens
According to the Congressional Budget Office, an independent agency that assesses the budget impact of legislation, the reform would add $3 trillion to US debt over ten years.
So why does Donald Trump care so much about it?
Because he promised to extend the 2017 tax cuts.
Without this law, Americans will pay more tax from 2026.
The second reason is that he wants to stay true to his usual "Make America Great Again" message.
To him, that means lower taxes and measures that appeal to his voters.
In his view, everyone wins: people pay less tax, keep more money, spend more and get the economy moving.
At least, that’s his vision. The situation in the United States is already worrying:
- The budget deficit remains high
- Treasury yields are high
- Inflation hasn’t stabilised
- The geopolitical situation is still uncertain
Why does Musk disagree with Trump?
To Elon Musk, the bill makes no sense. It worsens the deficit instead of reducing it.
He was leading DOGE, a group whose very purpose was to cut public spending.
Now Trump and his party are passing a bill that does the opposite.
And that’s before mentioning tariffs on all their trading partners...
But something more personal also seems to be bothering Musk.
The One Big Beautiful Bill removes some support for electric vehicles, which hurts Tesla.
Trump even accused him of reacting for that reason alone.
Musk, for his part, pointed out that he supported Trump’s campaign and that without him, Trump might never have become president.
The fallout from the feud
This adds yet another layer of uncertainty, as if we didn’t have enough already.
You have to wonder how two figures supposedly "showing the way" can argue so publicly over such sensitive issues.
Trump says he’s "very disappointed" and threatens to cancel Musk’s government contracts, with SpaceX clearly in the firing line.
When it comes to prices, Tesla stock often moves against the expected direction in this sort of situation.
Not this time. It fell immediately, as did the TRUMP token:
Relations have stayed tense, though there are signs behind the scenes that things may be calming down.
As always, one to watch!