The political rift between Republican President Donald Trump and his top campaign financier Elon Musk deepened on Saturday, as the billionaire entrepreneur announced the formation of a new political party, accusing Trump of pushing America toward financial ruin, according to a report by Reuters.
In a dramatic declaration on his X platform, formerly Twitter, Musk introduced the “America Party,” stating it would restore “freedom” to the American people. “By a factor of 2 to 1, you want a new political party and you shall have it!” Musk wrote, citing a poll conducted on his platform the previous day. “Today, the America Party is formed to give you back your freedom.”
The announcement came just 24 hours after President Trump signed into law a sweeping tax-cut and spending package, dubbed his “big, beautiful” bill that Musk has strongly opposed. The Tesla and SpaceX CEO warned the legislation would swell the U.S. deficit and “bankrupt the country.”
In a response to a user asking what prompted his dramatic turn against Trump, Musk said, “Increasing the deficit from an already insane $2T under Biden to $2.5T. This will bankrupt the country.”
Though Musk had been a close ally, spending hundreds of millions to back Trump’s re-election and even leading the Department of Government Efficiency in Trump’s second term, his break with the president appears both ideological and personal. The fallout has sparked immediate political and financial reverberations.
Investor Backlash and Political Tensions
Soon after Musk’s announcement, Azoria Partners, a major investment firm, postponed the planned launch of a Tesla-focused exchange-traded fund. In a post on X, Azoria CEO James Fishback urged Tesla’s board to clarify Musk’s political intentions, arguing the new party undermines investor confidence in Musk’s commitment to the company following his May departure from public service.
“Shareholders were expecting renewed focus on Tesla, not a new political crusade,” Fishback wrote.
Tensions had been brewing even before Saturday’s announcement. Earlier this week, Trump threatened to strip Musk’s companies of the billions in federal subsidies they currently enjoy—an indication that the once-strategic partnership had turned bitterly adversarial.
Republican leaders are increasingly concerned that the feud could fracture the party and damage its prospects in the 2026 midterm congressional elections, where control of the House and Senate hangs in the balance.
A High-Stakes Gamble
Musk’s venture into third-party politics marks a bold, uncharted move in modern American history. While his wealth and social media reach are unmatched, breaking the two-party stronghold that has defined U.S. politics for over 160 years remains an uphill battle.
Trump’s core approval ratings have remained resilient—hovering above 40% despite his polarizing policies—while Musk’s dramatic political pivot is already impacting Tesla’s market performance. Tesla shares, which had surged past $488 following Trump’s reelection in November, have since tumbled, shedding more than half their value to close last week at $315.35.
There has been no official response yet from either President Trump or the White House regarding Musk’s announcement.
Still, the clash between two of the most powerful figures in the world—Trump, the commander-in-chief, and Musk, the world’s richest man—has added a volatile new dynamic to the 2026 political landscape.
*Source: Reuters
