"Trump vs. Musk" – Let’s consider the fundamental reason behind Tesla stock crash

A Structural Clash over the Future of Economic Power

There’s been much debate today over the clash between Elon Musk and Donald Trump that rocked the market.Some cite conflicting views on tax cuts and tariffs, others point to their long-standing political tensions.

At a surface level, all these interpretations seem valid. The divergence in economic policy—especially on taxes and tariffs—is substantial. Considering their personalities and the history of friction between Musk and Trump’s inner circle, it's no surprise that some experts had predicted this fallout.

But when we dig a little deeper, the core issue comes into focus.This isn’t just about policy or personality—it’s a clash of power structures.We believe the real driver is the collision between Trump’s "big government" and Musk’s "transnational enterprise".

In other words, it’s about who gets to lead the industries of the future.

Surface-Level Conflict: Tax Cuts vs. Tariffs

The Trump administration’s agenda is quite clear:Use tax cuts and tariffs to reconstruct an American-centric economic system, and through that, sustain dollar hegemony.

Tariffs are meant to reshape supply chains and encourage the reshoring of key manufacturing sectors.

Once that’s done, tax cuts are offered to both attract and boost investment into these “future industries,” enhancing America’s global competitiveness.If successful, this would position the U.S. once again as a manufacturing hub and support a trade surplus to underpin the dollar’s dominance.

But this strategy directly threatens Musk and his businesses.Let’s look at what he’s built.Companies like Starlink and SpaceX require collaboration with foreign satellite and infrastructure networks.

Tesla, too, is deeply integrated into the global supply chain.Although U.S. trade barriers currently help Tesla hold back Chinese competition, Musk needs open access to global markets if he wants to scale beyond American borders.

Trump’s policies, by contrast, strain relationships with foreign partners and erect industrial walls.

What Musk sees is a “blockification” of the global economy—one that shrinks the market for transnational enterprises like his.In his view, the very tariffs and tax cuts designed to boost industry are instead undermining him and his companies.

The Real Conflict: Competing Models of Power

This is where we begin to understand the essence of the conflict.It’s not just personal or political—it’s about who gets to design the structure of global power.

Trump envisions a U.S.-centered, government-directed economy, fortified by trade blocs and backed by big government.Musk, on the other hand, is building a transnational empire.He wants absolute competitiveness and aims to seize global industrial dominance—not within the rules laid out by government, but beyond them.

He opposes the notion that corporations must fit inside a national framework.He wants corporations like his to operate above borders, beyond ideology, and outside state-defined industrial policy.

Of course, this doesn’t mean the relationship is irreparably broken.Musk, for now, still needs to work within government boundaries—especially due to China.

Tesla doesn’t yet dominate Chinese EVs, autonomous systems are still early-stage, and the regulatory environment for global expansion is immature.So in the short term, Musk has no choice but to tolerate government involvement.

Trump, too, can’t afford to escalate the feud.He’s in the middle of sensitive tariff negotiations with several countries and preparing for a full-blown trade war with China.

Publicly clashing with a domestic ally like Musk wouldn’t be a good look.So while the two may reconcile for now, the long-term divergence is hard to ignore.

Who Will Be the Anchor of Trust?

This is the ultimate question: Who defines the new order?Musk believes that with autonomy, scalability, and market-first principles, companies can grow and define the rules themselves.

Trump believes the state must set direction, using taxation and public investment to rebuild a U.S.-led world order.

The core overlap?

Both want to create new rules for a new era.The core divergence?

Whether trust lies in government or enterprise.

Their visions could coexist temporarily—but over time, their interests will diverge.They will inevitably view each other as threats.And this has serious implications for the U.S. economy.

Can the U.S. Still Be the Center of Global Trust?

Until now, the world has relied on the United States to anchor global order.But today’s question isn’t about China or America—it’s about whether a transnational company can replace the role of the nation-state.

Let’s break that down:

In the past, hegemonic powers built global infrastructure, controlled finance, and assigned roles to the world’s industries and companies within their system.Now Musk is saying:

• Infrastructure? That’s Starlink.

• Defense and logistics? SpaceX.

• Data sovereignty? Tesla.

  
  

If this structure works, then trust no longer lies with governments, but with corporations.It’s entirely possible that trust migrates from Washington to companies like Tesla.

But here’s the risk:Such a shift undermines U.S. credibility at a critical time.America is already facing challenges—ballooning debt, strained alliances due to tariffs, and questions over the dollar’s stability.If the internal power structure also starts to fracture, confidence could deteriorate rapidly.

In the short term, this Musk-Trump conflict may cool.But the unease it triggered in the markets will linger.Investor confidence in the long-term trajectory of the U.S. economy may be blurred,and uncertainty will grow.

This is why the June market feels murky and disoriented.