Trump Orders Review of SpaceX Contracts After Dispute with Musk
High Dependence on SpaceX Prevents Contract Termination
It has been reported that Donald Trump, President of the United States, who previously experienced a conflict with Elon Musk, CEO of Tesla, ordered a comprehensive review of SpaceX's government contracts following their dispute.
Donald Trump, President of the United States, is sitting in the driver's seat of Tesla's 'Model S' vehicle at the South Lawn of the White House in Washington, D.C., on March 11 (local time). Elon Musk, CEO of Tesla, who was leading the U.S. Government Efficiency Department (DOGE) at the time, is sitting beside him, smiling. Photo by AP Yonhap News
On July 19 (local time), The Wall Street Journal (WSJ) reported that President Trump had instructed a full review of all government contracts with SpaceX. However, it was concluded that these contracts could not be terminated, as SpaceX's involvement is essential for the core missions of the Department of Defense and NASA.
Previously, the White House had directed major federal agencies, including the Department of Defense and NASA, to submit detailed reports on their contracts with SpaceX. The review was led by the General Services Administration (GSA), an independent U.S. government agency. Each agency was required to assess the value of its contracts with SpaceX and to complete a "performance scorecard" evaluating whether competitors could perform the same tasks more effectively. However, it was found that there is a high level of dependence on SpaceX for the following areas: crewed spaceflight, resupply missions to the International Space Station (ISS), security-related satellite launches, and military-purpose satellite internet networks.
Foreign media outlets have predicted that it will be difficult for the U.S. government to sever ties with Musk. The government is trying to reduce its excessive reliance on SpaceX by fostering other space companies such as Boeing, Rocket Lab, and Amazon's Blue Origin, and by promoting competition. However, these companies are facing technical challenges and delays in rocket and spacecraft development, making it difficult for them to catch up with SpaceX's technological capabilities and price competitiveness in reusable launch vehicle technology and satellite internet services in the near future.
In fact, even after the conflict between President Trump and Musk, SpaceX has continued to win additional government contracts and carry out major missions. In April, SpaceX secured a new contract worth $5.9 billion (approximately 8.2217 trillion won) and was awarded 28 security-related launch missions. In May, it launched an upgraded GPS satellite for the U.S. Space Force. At the end of this month, NASA also plans to send astronauts to the ISS aboard a SpaceX rocket.
Meanwhile, a rift developed between Musk, who was once called President Trump's "first buddy," and Trump himself, after Musk opposed the "One Big Beautiful Bill" (OBBBA), earning the pair the nickname "bromance of the century." As tensions escalated, President Trump publicly threatened on his social media platform, Truth Social, stating, "The easiest way to save the federal budget is to cancel government contracts with Musk's companies." In response to President Trump's actions, Musk founded the "America Party" and posted content alleging that President Trump was involved in billionaire Jeffrey Epstein's sex scandal.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
