Elon Musk's SpaceX contracts under scrutiny from Trump’s White House after public fallout

The White House ordered NASA and the Defense Department to collect detailed records on SpaceX’s federal contracts after President Trump clashed publicly with Elon Musk, according to Reuters.

The decision was made earlier this month, and the review now underway could allow the administration to cut off Elon’s companies from billions in government deals if Trump decides to retaliate.

The ongoing review involves at least $22 billion in government funding tied to Elon’s space company. One of the contracts under review is a $5 billion NASA deal involving the Dragon spacecraft, the only American system currently flying astronauts to and from the International Space Station.

Trump mentioned the possibility of action during a press briefing on June 6 aboard Air Force One, saying, “We’ll take a look at everything.”

Pentagon considers limiting SpaceX’s role in missile defense

Officials at the Pentagon are now discussing whether Elon’s firm should continue playing a major part in Trump’s new missile defense system, nicknamed the Golden Dome.

The system is part of a broader defense upgrade backed by the current administration. The Pentagon’s review of SpaceX’s participation runs in parallel with the White House contract review and could lead to reduced involvement in future projects.

The White House did not respond to questions about Elon’s businesses but issued a short statement saying the Trump administration was “committed to a rigorous review process for all bids and contracts.” NASA said it would keep working with its industry partners to meet “the president’s objectives in space.”

Elon, who Trump called his best friend and ‘First Buddy’ on more than one occasion, held a key role as the head of the Department of Government Efficiency (DOGE) to cut spending and audit waste across the government, and now, that same process is being directed at Elon himself. A person involved in the review called it “political ammunition” to prepare if Trump chooses to cancel deals or subsidies.

Scott Amey, general counsel at the Project on Government Oversight, said Elon may now face the same type of targeted scrutiny he once applied to others. “There’s an irony here that Elon’s contracts could be under the same type of subjective political scrutiny that he and his DOGE team have put on thousands of other contracts,” Amey said. “Any decision shouldn’t be based on the egos of two men but on the best interests of the public and national security.”

NASA, intelligence contracts also at risk in political clash

SpaceX isn’t just involved in launching rockets. It has a secretive deal with the National Reconnaissance Office, a top US intelligence agency, to build hundreds of surveillance satellites. That classified project expanded Elon’s reach into the defense sector and gave SpaceX a stronger role in national security. That contract, which remains active, is also being included in the federal review.

Trump’s decision to escalate the fight came after Elon posted several now-deleted comments about the president. Elon had called for Trump’s impeachment and connected him to a convicted sex offender. He later tried to reverse course and walk back the attacks, but the government’s review had already been triggered.

Before backing down, Elon threatened to shut down the Dragon spacecraft operation. That warning carried weight because no other US-owned vehicle is capable of transporting astronauts. Losing that system would disrupt both current and future NASA missions. The $5 billion Dragon contract is a cornerstone of US space activity, and tampering with it would have serious consequences.

Whether Trump can legally cancel existing deals remains unclear, but federal lawyers are reportedly looking into it. What’s clear is that the administration wants to be ready. And perhaps just a tiny bit petty.

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