Elon Musk launches 'America Party' in dramatic break from Trump over Deficit and Spending Bill

The once-close alliance between former U.S. President Donald Trump and billionaire entrepreneur Elon Musk took a dramatic turn on Saturday, as Musk officially launched a new political entity — the America Party — following a bitter fallout over Trump’s newly signed tax and spending legislation.

Just a day after polling his followers on X (formerly Twitter) about the formation of a new political party, Musk announced:

“Today, the America Party is formed to give you back your freedom.” Citing overwhelming support from users, he added: “By a factor of two to one, you want a new political party — and you shall have it!”

The announcement follows Trump's signing of what he called his "big, beautiful" tax-cut and spending bill into law on Friday — a move Musk has vocally condemned.

The Tesla and SpaceX chief, who had been one of Trump’s largest campaign donors and was tapped to head the Department of Government Efficiency in Trump’s second term, accused the bill of endangering America’s fiscal health.

“Increasing the deficit from an already insane $2 trillion under Biden to $2.5 trillion — this will bankrupt the country,” Musk stated in a follow-up post, explaining what prompted his sharp break from Trump.

He further warned that the country is heading toward economic ruin, while invoking a historical analogy to Epaminondas and the Battle of Leuctra, calling for a “concentrated force at a precise location” to dismantle the “uniparty system” he believes controls Washington.

Read more: Elon Musk says he regrets criticising Donald Trump on social media

Tensions have been building between the two men in recent weeks. Musk previously threatened to fund primary challenges against lawmakers who supported Trump’s bill and hinted at launching a third party — now realized with the formation of the America Party.

Trump, in response, reportedly warned of revoking federal subsidies to Musk’s businesses, including Tesla and SpaceX.

Republican leaders are now voicing concern that the feud could fracture the party’s base and jeopardize their prospects in the 2026 midterm elections.

The GOP’s internal struggles could be further exacerbated if Musk channels significant resources into a third-party challenge.

Tesla’s stock has felt the fallout from the deteriorating relationship. After surging to over $488 in December following Trump’s re-election, shares plunged by more than half by April and ended last week at $315.35.

Neither Trump nor the White House has issued an official response to Musk’s political move.

However, analysts say the rift between “the world’s richest man and the world’s most powerful” could reshape the contours of American politics heading into the next electoral cycle.