WASHINGTON, July 5 – Elon Musk has officially announced the formation of a new political movement: the America Party. The move marks a major split from former ally and current President Donald Trump, intensifying the rift between the two powerful figures and sending ripples through both Wall Street and Washington.
Just a day after teasing the idea of a new political party in a poll on his X platform, Musk made the declaration official on Saturday:
Elon Musk reveals plans for a new political group, the ‘America Party,’ standing against the latest tax legislation and targeting its backers in Congress.
The timing of the announcement was no coincidence. It came only 24 hours after Trump signed into law a sweeping new tax-cut and spending bill—one Musk has harshly criticized as fiscally reckless and economically disastrous.
A Costly Split
Musk, whose immense wealth stems from companies like Tesla and SpaceX, has long been seen as one of the Republican Party’s most influential backers. He reportedly invested hundreds of millions into Trump’s re-election efforts and served as head of the federal Department of Government Efficiency, a position he used to advocate for leaner spending.
However, Musk’s disenchantment with Trump became public earlier this week, when he slammed the president’s new tax legislation, warning that it would deepen the federal deficit to unsustainable levels.
“Increasing the deficit from an already insane $2 trillion under Biden to $2.5 trillion is a recipe for economic collapse,” Musk posted in a response to a user on X who asked why his views on Trump had changed.
Trump’s bill, which slashes taxes for corporations and the wealthy while increasing military and infrastructure spending, was branded as a “big, beautiful” reform by the president. Musk, however, sees it differently—calling it “economic suicide.”
Political Fallout
The launch of the America Party is not just symbolic; it represents a significant strategic challenge to Trump’s Republican base ahead of the 2026 midterm congressional elections. Musk has openly stated his intention to unseat lawmakers who backed Trump’s tax bill, signaling plans to fund opposition candidates and campaign aggressively in contested districts.
This move has caused alarm among Republican strategists, who worry that a divided right-wing vote could hand key victories to Democrats or other third-party candidates. With Musk’s massive following and virtually unlimited personal capital, his new party may have the power to fracture the GOP’s dominance in critical swing states.
A high-ranking Republican staffer, who asked not to be named, remarked, “This goes beyond a simple war of words between Trump and Musk. This has real implications for our hold on Congress. Musk has the money and the media pull to make a dent.”
Market Reaction and Investor Anxiety
Musk’s announcement also had an immediate impact on his business empire. Later the same day, investment firm Azoria Partners revealed it would delay the launch of a Tesla-focused exchange-traded fund (ETF), citing concerns over Musk’s increasingly political profile.
Azoria CEO James Fishback openly raised concerns about whether Musk could still provide full focus to Tesla, given his growing political involvement. In a post on X, he urged Tesla’s board to provide clarity on Musk’s long-term commitment to the company amid his growing political ambitions.
Tesla’s stock, which had experienced a strong run following Trump’s re-election, has been on a downward trend since April, when Musk began distancing himself from the president. After peaking above $480 late last year, Tesla shares have plunged, closing the previous week at $315.35—a decline of over 35%.
Some analysts suggest that the political drama is contributing to shareholder jitters, with fears that Musk may become too distracted from his corporate responsibilities.
Billionaire vs. President
The Musk-Trump feud has become one of the defining power struggles of this election cycle. With Trump still holding firm approval ratings north of 40%, especially among his conservative base, Musk faces a steep uphill battle in trying to disrupt the political duopoly that has defined U.S. elections for more than 160 years.
Nonetheless, Musk’s rise as a political force cannot be underestimated. His grip on tech innovation, social media, and public attention gives him an edge few political newcomers have ever had.
While Trump has yet to respond officially to the formation of the America Party, insiders suggest the White House is closely monitoring the situation. Earlier this week, Trump hinted at retaliation, threatening to withdraw billions in federal subsidies currently flowing to Musk’s companies.
Despite the mounting tensions and financial risks, Musk remains undeterred. He insists that forming a new party is not about revenge or personal rivalry, but about “fixing a broken system and protecting future generations from financial ruin.”