Musk-Trump breakup puts billions in SpaceX contracts at risk, jolting US space program

SpaceX headquarters is shown in Hawthorne, California, on June 5, 2025. (REUTERS)
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  • Trump threatens to cancel Musk companies鈥� contracts amid tax cut bill dispute
  • Musk says SpaceX will decommission spacecraft used by NASA

WASHINGTON: About $22 billion worth of SpaceX鈥檚 government contracts is at risk and multiple US space programs could face dramatic changes in the fallout of Elon Musk and President Donald Trump鈥檚 explosive feud on Thursday.
The disagreement, rooted in Musk鈥檚 criticism of Trump鈥檚 tax-cut and spending legislation that began last week, quickly spiraled out of control. Trump lashed out at Musk when the president spoke in the Oval Office. Then in a series of X posts, Musk launched barbs at Trump, who threatened to terminate government contracts with Musk鈥檚 companies.
Taking the threat seriously, Musk said he would begin 鈥渄ecommissioning鈥� SpaceX鈥檚 Dragon spacecraft used by NASA. Under a roughly $5 billion contract, the craft has been the agency鈥檚 only US vessel capable of carrying astronauts to and from the International Space Station, making Musk鈥檚 company a critical element of the US space program.




In this photo illustration, social media posts by US President Donald Trump and Elon Musk are displayed on a smartphone on June 05, 2025. (Getty Images via AFP)

The feud raised questions about how far Trump, an often unpredictable force who has intervened in past procurement efforts, would go to punish Musk, who until last week headed Trump鈥檚 initiative to downsize the federal government.
If the president prioritized political retaliation and canceled billions of dollars worth of SpaceX contracts with NASA and the Pentagon, it could slow US space progress.
NASA press secretary Bethany Stevens declined to comment on SpaceX, but said: 鈥淲e will continue to work with our industry partners to ensure the president鈥檚 objectives in space are met.鈥�
Musk and Trump鈥檚 tussle ruptured an unprecedented relationship between a US president and industry titan that had yielded some key favors for SpaceX: a proposed overhaul of NASA鈥檚 moon program into a Mars program, a planned effort to build a gigantic missile defense shield in space, and the naming of an Air Force leader who favored SpaceX in a contract award.
Taking Dragon out of service would likely disrupt the ISS program, which involves dozens of countries under a two-decade-old international agreement. But it was unclear how quickly such a decommissioning would occur. NASA uses Russia鈥檚 Soyuz spacecraft as a secondary ride for its astronauts to the ISS.

SpaceX鈥檚 rise
SpaceX rose to dominance long before Musk鈥檚 foray into Republican politics last year, building formidable market share in the rocket launch and satellite communications industries that could shield it somewhat from Musk鈥檚 split with Trump, analysts said.
鈥淚t fortunately wouldn鈥檛 be catastrophic, since SpaceX has developed itself into a global powerhouse that dominates most of the space industry, but there鈥檚 no question that it would result in significant lost revenue and missed contract opportunities,鈥� said Justus Parmar, CEO of SpaceX investor Fortuna Investments.
Under Trump in recent months, the US space industry and NASA鈥檚 workforce of 18,000 have been whipsawed by looming layoffs and proposed budget cuts that would cancel dozens of science programs, while the US space agency remains without a confirmed administrator.
Trump鈥檚 nominee for NASA administrator, Musk ally and billionaire private astronaut Jared Isaacman, appeared to be an early casualty of Musk鈥檚 rift with the president when the White House abruptly removed him from consideration over the weekend, denying Musk his pick to lead the space agency.

 

Trump on Thursday explained dumping Isaacman by saying he was 鈥渢otally Democrat.鈥�
Musk鈥檚 quest to send humans to Mars has been a critical element of Trump鈥檚 space agenda. The effort has threatened to take resources away from NASA鈥檚 flagship effort to send humans back to the moon.
Trump鈥檚 budget plan sought to cancel Artemis moon missions beyond its third mission, effectively ending the over-budget Space Launch System rocket used for those missions.
But the Senate Commerce Committee version of Trump鈥檚 bill released late on Thursday would restore funding for missions four and five, providing at least $1 billion annually for SLS through 2029.
Since SpaceX鈥檚 rockets are a less expensive alternative to SLS, whether the Trump administration opposes the Senate鈥檚 changes in the coming weeks will give an indication of Musk鈥檚 remaining political power.
SpaceX, founded in 2002, has won $15 billion worth of contracts from NASA for the company鈥檚 Falcon 9 rockets and development of SpaceX鈥檚 Starship, a multipurpose rocket system tapped to land NASA astronauts on the moon this decade.
The company has also won billions of dollars to launch a majority of the Pentagon鈥檚 national security satellites into space while it builds a massive spy satellite constellation in orbit for a US intelligence agency.
In addition to not being in US interests, former NASA Deputy Administrator Lori Garver said canceling SpaceX鈥檚 contracts would probably not be legal.
But she also added, 鈥淎 rogue CEO threatening to decommission spacecraft, putting astronauts lives at risk, is untenable.鈥�