Musk Launches “America Party”, Escalating Rift With President Trump Over Tax Bill

Washington, July 6 — Billionaire entrepreneur Elon Musk announced the formation of a new political party on Saturday, deepening a bitter rift with Republican President Donald Trump over the president’s sweeping new tax and spending package.

“Today, the America Party is formed to give you back your freedom,” Musk posted on his X platform, revealing plans for the party just one day after polling his followers on whether the U.S. needs an alternative to the two dominant parties. “By a factor of 2 to 1, you want a new political party and you shall have it!” he wrote.

The dramatic move follows Trump’s signing on Friday of his so-called “big, beautiful” tax-cut and spending bill legislation Musk sharply condemned, warning it would balloon the federal deficit and “bankrupt the country.”

Musk, who amassed his vast fortune through Tesla and SpaceX, has been one of Trump’s most significant financial backers, reportedly spending hundreds of millions of dollars on the president’s reelection and serving as head of the Department of Government Efficiency in Trump’s second term, tasked with cutting federal spending.

But tensions have steadily grown between the two men. Earlier this week, Trump threatened to strip Musk’s companies of billions in federal subsidies, amid Musk’s threats to finance challenges against lawmakers who supported the tax bill.

Asked by a user on X why he turned on Trump, Musk replied, “Increasing the deficit from an already insane $2T under Biden to $2.5T. This will bankrupt the country.”

The market swiftly reacted to Musk’s announcement. Azoria Partners, an investment firm, said it would postpone the launch of a Tesla-focused exchange-traded fund. Azoria CEO James Fishback urged Tesla’s board to clarify Musk’s political ambitions, warning that the new party could distract Musk from his corporate responsibilities. Investors have grown wary, as Tesla shares have whipsawed in recent months, soaring past $488 after Trump’s November reelection before plunging by more than half to close last week at $315.35.

Despite Musk’s wealth and influence, political analysts say breaking America’s entrenched two-party system remains an immense challenge. The Republican-Democratic duopoly has dominated national politics for more than 160 years, and Trump’s approval ratings in his second term have largely held above 40%, despite frequent controversies.

Neither the White House nor Trump’s campaign immediately responded to requests for comment on Musk’s new party.

As the feud between the world’s richest man and the world’s most powerful leader intensifies, Republicans fear the high-profile split could fracture support ahead of the crucial 2026 midterm elections.