DOGE eats Musk? Billionaire entrepreneur's companies at risk as he reignites feud with Trump

WASHINGTON (AP) — Elon Musk may find out what happens when DOGE bites man.

The billionaire SpaceX, Tesla and X owner who catapulted his zealous embrace of President Donald Trump into a powerful position, slashing government spending, now risks sweeping cuts to his own bottom line after resuming the feud that led to their very public bitter split last month.

Musk's renewed heckling of Trump's big tax breaks and spending cuts bill, which passed the Senate on Tuesday, threatens to put billions of dollars of his government contracts in jeopardy if Trump retaliates. The rupture of their tenuous peace has resulted in a wobbling of the stock price of a market-moving company and led the president to muse about deporting Musk to his native South Africa.

In a Frankenstein-style twist, as Musk volleyed fresh critiques about the cost of Trump’s signature legislation, Trump mused Tuesday about turning Musk's Department of Government Efficiency back on its creator.

“DOGE is the monster that might have to go back and eat Elon,” Trump told reporters as he left the White House for a tour of a new immigration detention center in Florida.

Trump also suggested in an early morning social media post that if Musk lost his government contracts, he “would probably have to close up shop and head back home to South Africa.”

Asked by a reporter later if he would deport Musk, Trump paused and said, “I don’t know. We’ll have to take a look.”

In response, Musk wrote on X: “So tempting to escalate this. So, so tempting. But I will refrain for now.” Tesla and SpaceX did not respond to messages seeking comment about their CEO.

Musk has called Trump’s big bill a financial boondoggle for America that would kill jobs and bog down burgeoning industries. He’s not limiting himself to harsh assessments on social media. On Monday, he threatened to reinsert himself into politics and try to oust every member of Congress who votes for the bill.

“They will lose their primary next year if it is the last thing I do on this Earth,” Musk said in one post.

In other posts, he branded Republicans “the PORKY PIG PARTY!!” and threatened to create a new political party.

Trump has said Musk is actually irritated by the legislation’s dramatic rollback of the Biden-era green energy tax breaks for electric vehicles and related technologies. Musk has denied this, but the rollback could hurt Tesla's finances.

“Elon may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa,” Trump wrote in a post on his Truth Social media network.

Musk became a U.S. citizen in 2002, according to a biography of him by Walter Isaacson. It’s unclear if Trump would take the extraordinary step of having the government explore the rare process of removing his citizenship, known as denaturalization.

Musk’s rocket and satellite company, SpaceX, is also in Trump’s crosshairs.

“No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE,” Trump said in his post. “BIG MONEY TO BE SAVED!!!”

SpaceX has received billions of federal dollars to help send astronauts into space and perform other work for NASA, including a contract to send a team from the space agency to the moon next year.

But the most immediate fallout of their feud was the tumbling stock in Tesla, down 5.3% on Tuesday.

Tesla stock’s performance can have an outsize impact on the stock market index funds in which millions of Americans’ 401(k)s have invested their retirement savings. The electric vehicle maker is one of the Magnificent Seven, the group of companies that includes Apple and Google parent Alphabet and that account for about a third of the value of the S&P 500.

Musk’s social media outbursts come at a delicate time for his car company. Tesla is just a week into its test run of its self-driving “robotaxi” service in Austin, Texas. Musk needs that test to succeed if he hopes to make good on his promise to investors that he will be able to quickly offer the service in other cities over the next few months.

One possible hurdle to that: federal safety regulators.

The National Highway Traffic Safety Administration requested information from Tesla last week after videos began circulating on social media of a few of its autonomous cabs in Austin driving erratically, including one heading down an opposing lane.

That followed a NHTSA request for data last month on how the driverless taxis will perform in low-visibility conditions, which itself followed an investigation last year into 2.4 million Teslas equipped with full self-driving software after several accidents, including one that killed a pedestrian.

Musk needs robotaxis to take off because Tesla's main business of selling cars is going poorly.

Musk has acknowledged that boycotts by people angry with his political views have hurt sales, but he has largely blamed a less frightening, temporary factor: People are so excited about Tesla's forthcoming latest version of their Model Y SUV that they decided to hold off on purchases for a few months.

But now that the new version is available, and sales are still tanking. Figures out last week showed sales in Europe plunged 28% in May over the prior year, the fifth month in a row of big drops. A new batch of sales data, including the U.S. and other parts of the world, is coming out on Wednesday.

The irony is that Musk's social media spat with Trump threatens his businesses from both sides. People won’t buy his cars because of the memories of his friendship with Trump, and now that and his other businesses could get hurt because that friendship has soured.

“In a bizzarro world, he’s alienated both sides,” said Dan Ives, a Wedbush Securities financial analyst. “It seems impossible, but he’s actually done it.”

Condon and Chapman reported from New York.

President Donald Trump speaks to the media before walking across the South Lawn of the White House to board Marine One en route to Joint Base Andrews, Md., and on to Florida, Tuesday, July 1, 2025, in Washington. (AP Photo/Mark Schiefelbein)

President Donald Trump speaks to the media before walking across the South Lawn of the White House to board Marine One en route to Joint Base Andrews, Md., and on to Florida, Tuesday, July 1, 2025, in Washington. (AP Photo/Mark Schiefelbein)

FILE - Elon Musk attends a news conference with President Donald Trump in the Oval Office of the White House, May 30, 2025, in Washington. (AP Photo/Evan Vucci, File)

NEW YORK (AP) — Reviving a campaign pledge, President Donald Trump wants a one-year, 10% cap on credit card interest rates, a move that could save Americans tens of billions of dollars but drew immediate opposition from an industry that has been in his corner.

Trump was not clear in his social media post Friday night whether a cap might take effect through executive action or legislation, though one Republican senator said he had spoken with the president and would work on a bill with his “full support.” Trump said he hoped it would be in place Jan. 20, one year after he took office.

Strong opposition is certain from Wall Street in addition to the credit card companies, which donated heavily to his 2024 campaign and have supported Trump's second-term agenda. Banks are making the argument that such a plan would most hurt poor people, at a time of economic concern, by curtailing or eliminating credit lines, driving them to high-cost alternatives like payday loans or pawnshops.

“We will no longer let the American Public be ripped off by Credit Card Companies that are charging Interest Rates of 20 to 30%,” Trump wrote on his Truth Social platform.

Researchers who studied Trump’s campaign pledge after it was first announced found that Americans would save roughly $100 billion in interest a year if credit card rates were capped at 10%. The same researchers found that while the credit card industry would take a major hit, it would still be profitable, although credit card rewards and other perks might be scaled back.

About 195 million people in the United States had credit cards in 2024 and were assessed $160 billion in interest charges, the Consumer Financial Protection Bureau says. Americans are now carrying more credit card debt than ever, to the tune of about $1.23 trillion, according to figures from the New York Federal Reserve for the third quarter last year.

Further, Americans are paying, on average, between 19.65% and 21.5% in interest on credit cards according to the Federal Reserve and other industry tracking sources. That has come down in the past year as the central bank lowered benchmark rates, but is near the highs since federal regulators started tracking credit card rates in the mid-1990s. That’s significantly higher than a decade ago, when the average credit card interest rate was roughly 12%.

The Republican administration has proved particularly friendly until now to the credit card industry.

Capital One got little resistance from the White House when it finalized its purchase and merger with Discover Financial in early 2025, a deal that created the nation’s largest credit card company. The Consumer Financial Protection Bureau, which is largely tasked with going after credit card companies for alleged wrongdoing, has been largely nonfunctional since Trump took office.

In a joint statement, the banking industry was opposed to Trump's proposal.

“If enacted, this cap would only drive consumers toward less regulated, more costly alternatives," the American Bankers Association and allied groups said.

Bank lobbyists have long argued that lowering interest rates on their credit card products would require the banks to lend less to high-risk borrowers. When Congress enacted a cap on the fee that stores pay large banks when customers use a debit card, banks responded by removing all rewards and perks from those cards. Debit card rewards only recently have trickled back into consumers' hands. For example, United Airlines now has a debit card that gives miles with purchases.

The U.S. already places interest rate caps on some financial products and for some demographics. The Military Lending Act makes it illegal to charge active-duty service members more than 36% for any financial product. The national regulator for credit unions has capped interest rates on credit union credit cards at 18%.

Credit card companies earn three streams of revenue from their products: fees charged to merchants, fees charged to customers and the interest charged on balances. The argument from some researchers and left-leaning policymakers is that the banks earn enough revenue from merchants to keep them profitable if interest rates were capped.

"A 10% credit card interest cap would save Americans $100 billion a year without causing massive account closures, as banks claim. That’s because the few large banks that dominate the credit card market are making absolutely massive profits on customers at all income levels," said Brian Shearer, director of competition and regulatory policy at the Vanderbilt Policy Accelerator, who wrote the research on the industry's impact of Trump's proposal last year.

There are some historic examples that interest rate caps do cut off the less creditworthy to financial products because banks are not able to price risk correctly. Arkansas has a strictly enforced interest rate cap of 17% and evidence points to the poor and less creditworthy being cut out of consumer credit markets in the state. Shearer's research showed that an interest rate cap of 10% would likely result in banks lending less to those with credit scores below 600.

The White House did not respond to questions about how the president seeks to cap the rate or whether he has spoken with credit card companies about the idea.

Sen. Roger Marshall, R-Kan., who said he talked with Trump on Friday night, said the effort is meant to “lower costs for American families and to reign in greedy credit card companies who have been ripping off hardworking Americans for too long."

Legislation in both the House and the Senate would do what Trump is seeking.

Sens. Bernie Sanders, I-Vt., and Josh Hawley, R-Mo., released a plan in February that would immediately cap interest rates at 10% for five years, hoping to use Trump’s campaign promise to build momentum for their measure.

Hours before Trump's post, Sanders said that the president, rather than working to cap interest rates, had taken steps to deregulate big banks that allowed them to charge much higher credit card fees.

Reps. Alexandria Ocasio-Cortez, D-N.Y., and Anna Paulina Luna, R-Fla., have proposed similar legislation. Ocasio-Cortez is a frequent political target of Trump, while Luna is a close ally of the president.

Seung Min Kim reported from West Palm Beach, Fla.

President Donald Trump arrives on Air Force One at Palm Beach International Airport, Friday, Jan. 9, 2025, in West Palm Beach, Fla. (AP Photo/Julia Demaree Nikhinson)

FILE - Visa and Mastercard credit cards are shown in Buffalo Grove, Ill., Feb. 8, 2024. (AP Photo/Nam Y. Huh, File)