• Trump denies plans to strip Musk's companies of federal subsidies.
• Musk responds skeptically, stating the claimed subsidies do not exist.
• Deteriorating relationship stems from disagreements over Trump's economic policies.
• Musk warns of “rough quarters” ahead for Tesla, linked to subsidy cuts.
• Trump previously threatened to cancel government contracts with Musk's companies.

On July 24, President Donald Trump publicly refuted claims that he intends to dismantle Elon Musk's business empire. He stated on Truth Social, “I want Elon, and all businesses within our Country, to THRIVE, in fact, THRIVE like never before!” emphasizing that the success of businesses is mutually beneficial for the US economy, according to India Times, aa, and Reuters.

This statement comes amidst a backdrop of increasing tensions between Trump and Musk. Their fallout began after Musk criticized Trump's tax and spending policies, which led Trump to threaten the cancellation of federal contracts with Musk’s companies, particularly SpaceX. Reports indicate that the White House has been gathering information on these contracts in anticipation of potential actions against Musk, according to South China Morning Post and Channel News Asia.

Musk has reacted to Trump's claims by asserting that the subsidies Trump refers to “do not exist,” emphasizing that Tesla's financial challenges stem from a loss of substantial federal incentives, including the $7,500 tax credit for electric vehicles. He noted that future sales could be jeopardized due to these changes, as reported by Business Insider and India Times.

Despite Trump’s assertions of support, doubts linger as he has previously suggested the easiest way to reduce government spending would be to terminate subsidies and contracts associated with Musk. This contradiction highlights the complex dynamics of their relationship, with both figures having exchanged barbs on social media following a period of collaboration, according to HuffPost and India Times.