Musk’s new political party sparks backlash from Trump allies and investors

Elon Musk’s surprise announcement of the “America Party” has deepened his rift with Donald Trump and drawn criticism from both political and business circles. A day after Musk revealed plans to launch the new party in response to Trump’s tax and spending legislation, Treasury Secretary Scott Bessent suggested Musk should focus on running his companies instead of diving into politics.

“”I imagine that those boards of directors did not like this announcement yesterday (Saturday) and will be encouraging him to focus on his business activities, not his political activities,” Bessent told CNN’s State of the Union on Sunday.

The feud erupted after Musk accused Trump’s recently signed tax-cut and defense spending bill of threatening the nation’s financial stability. Musk, once a key adviser to Trump during the early part of his second presidency, now plans to challenge Republican lawmakers who supported the legislation in next year’s midterms.

Meanwhile, investment firm Azoria Partners delayed the launch of a Tesla-focused (NASDAQ:TSLA) exchange-traded fund, citing concerns over Musk’s new political ambitions. Azoria CEO James Fishback, a vocal Trump supporter, criticized Musk’s move on social media, urging Tesla’s (NASDAQ:TSLA) board to clarify whether Musk can effectively balance his political pursuits with his role as CEO.

Musk, who previously contributed heavily to Trump’s 2024 campaign, saw their relationship sour over the spending bill. Trump has since hinted at pulling federal contracts and subsidies from Musk’s companies, claiming the new law’s elimination of green-energy incentives for electric vehicles angered the billionaire, according to multiple press reports.

Treasury Secretary Bessent also downplayed Musk’s political influence, noting that voters were more fond of Musk’s Department of Government Efficiency initiatives than the man himself.

“The principles of DOGE were very popular,” he said. “If you look at the polling, Elon was not.”

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