Chartbook 388: Trump v. Musk - Alien v. Predator or "death march" into a political vacuum?

(Oh, and Mr Merz goes to Washington, too.)

Future historians are going to have their work cut out for them! How are they going to explain this still from an Indian news website about what appears to be a feud between the most powerful man in the world and what was until recently the richest man in the world in front of someone called “Merz". Why the feud? Why the shame? And who is Merz anyway?

It turns out that the visit to the White House by German Chancellor Friedrich Merz on Thursday June 5 2025 may after all go down in history. Not as the carefully staged-managed non-event in US-European relations that Berlin craved, but because of remarks made by Trump during the excruciatingly one-sided press conference.

As the cameras ignored Merz and focused on POTUS, this was the moment that Trump laid into Musk for his criticism of Trump’s Big Beautiful (Budget) Bill.

The German side were delighted that Trump took all the oxygen out of the room. It minimized the chance that Merz would make a misstep and it kept J.D. Vance on the sidelines. Berlin was terrified that Vance might ventilate the themes of his Munich Security Conference speech. In particular they feared that either Trump or, more likely, Vance would publicly take the side of the far-right AfD and force Merz into an embarrassing statement of principle on democratic “firewalls”.

In the event, Trump rambled on. The meeting wrapped. Merz, Trump and their teams retired for a business lunch, which by all accounts was uneventful. Meanwhile, the world exploded, as Musk retaliated against Trump. Musk claimed that without his support Trump and the Republicans would not be in power. He brought up the Epstein files and endorsed calls for Trump’s impeachment.

The Trump v. Musk dynamic will draw endless comment. The bigger question is how is this possible:

a. How can the dominant faction of power in the US be tied this loosely together? How can the lines of power be so unclear?

and

b. Viewed from the side of policy: Why is the political majority in support of Trump’s key policy agenda so fragile that it is conceivable for Trump’s most important piece of legislation to be come under such aggressive fire from within his own camp?

Since the incoherence of the Republicans as a power bloc has been well explored, lets focus on the side of policy.

After all, at least on its face the Trump v. Musk argument is an argument about policy. Musk objects to Trump’s Big Beautiful Bill (BBB) because of the huge deficits it projects and the failure to cut government spending more aggressively. The fact that such a vivid clash is possible between the President and a supporter as central as Musk, points to the fragility of Trump’s policy agenda. And this highlights, once more, a truly remarkable aspect of Trump’s second term.

The startling thing about both Trump’s tariff policy and the giant amalgam of policies that is BBB, is the extent to which, for all their aggression and scale, they exist in the political vacuum created by Trump’s sway over the GOP.

The GOP wants to be “all about Trump”. If they aren’t, what are they? So Trump gets what Trump wants. But when Trump does get what Trump wants - really big tariffs and the making permanent of his grotesquely unequal tax cuts of 2017 - who else in the political class actually wants it?

The tariffs are the most gratuitous instance of this vacuum of Trumpian politics.

The striking thing about the tariffs is not just that they are so high, or that they are so wild, but that no powerful interest group in American society is actually calling for them. Sure, some businesses and some trade unions would like to see a measure of protection. No surprise. But no one is calling for a trade war with Canada or Mexico, or 140 percent tariffs on trade with China.

This lack of backing is exposed in the weakness of Trump’s bargaining position vis a vis China. For all his bluster about Barbie dolls, it has clearly been born in on the President that a giant consumption tax on the average American household would be a bad idea. Meanwhile, the tensions caused by Trump’s tariff aggression are splintering his coalition in important ways. These fissures are less spectacular than the fight with Musk, but nevertheless highly significant.

Matt Ford in a recent piece in the New Republic exposed a conflict with the Trump coalition around the role of the courts in adjudicating Trump’s Presidential powers to impose tariffs. Trump now faces inconvenient rulings by judges that were appointed in his first term in close cooperation with that stalwart of the right-wing in the US, the Federalist Society. Referring to Leonard Leo, co-chairman of the Federalist Society board of directors, the New Republic headlines shouts:

“The former Federalist Society power broker used the president to achieve judicial supremacy. Now all that work could get wrecked by the monster he turned loose.”

A recent ruling by the otherwise obscure three-judge panel of the U.S. Court of International Trade striking down the White House’s flagship economic policy poses a fundamental threat to Trump’s flagship trade policy. Tellingly, the case against the Presidential tariffs was brought by a constituency you might expect to belong to the MAGA base, a “coalition of small-business owners” who objected on a variety of legal grounds to Trump’s arbitrary trade policies.

The court’s ruling left no room for argument. Whichever interpretation one applied “any interpretation of [the International Emergency Economic Powers Act of 1977] that delegates unlimited tariff authority (to the President) is unconstitutional”.

A Federal Appeals Court quickly intervened and the Supreme Court may ultimately be forced to resolve the dispute. But as Ford remarks, the clash exposes a “public fissure between Trump and the conservative legal movement”. And it is not just the judges or the small-business owners who are up in arms. Trump is furious too. In a TruthSocial post Trump denounced the ruling by the U.S. Court of International Trade as

“so wrong, and so political! … Hopefully, the Supreme Court will reverse this horrible, Country threatening decision, QUICKLY and DECISIVELY. Backroom ‘hustlers’ must not be allowed to destroy our Nation! The horrific decision stated that I would have to get the approval of Congress for these Tariffs .. In other words, hundreds of politicians would sit around D.C. for weeks, and even months, trying to come to a conclusion as to what to charge other Countries that are treating us unfairly.”

Of course, this is precisely what the conventional interpretation of the US Constitution requires. And that means that not only the small business owners, but the deep professional commitments of conservative lawyers are engaged. Conservative lawyers are a substantial lobby. They are deeply entrenched in the fabric of the US state. And in Trump’s first administration they were a key ally.

As Ford explains, at the time of his Presidential run in 2016:

“Trump had about as much interest in legal conservative theories as he did in medieval Bulgarian poetry. Conservative legal elites feared that he would choose his own slate of judicial nominees instead of the ones that they had been grooming for a generation. The two camps reconciled after Trump released a short list of Supreme Court nominees that September that he would choose from to replace Scalia if elected. The short list included some of the most prominent conservative jurists at the time; it gave former adversaries like Texas Senator Ted Cruz a rationale to openly endorse him. After he won and took office, Trump relied on those same conservative legal elites to shape his overall judicial nominee strategy, fulfilling his side of the implicit bargain.”

Now Trump is furious.

“I am so disappointed in The Federalist Society because of the bad advice they gave me on numerous Judicial Nominations,” Trump vented “This is something that cannot be forgotten!”

A split between the Federalist Society and Trump may not attract the same attention as his split with Musk, but it matters. There is no more important battleground in American politics and society today than the law and the courts and there is no more influential group than the Federalist Society.

How this struggle will end, we do not know, but as Ford remarks: “The conservative legal movement’s problem is that Trump does not really need them anymore. His grip over the Republican Party is ironclad.”

That is clearly how it seemed up to this point. But that is also the question that is being put to the test in what is actually the point of conflict between Trump and Musk, the struggle to pass Trump’s so-called Big Beautiful Bill through Congress.

Cam and I talked about this on the latest episode of the Pod.

And I also had a piece in the Times this week placing America’s current budgetary situation in historical perspective.

The BBB offers such gratuitously huge benefits to the American upper class, that you might think that there would be powerful political momentum behind it. As Emily Jashinsky of UnHerd explains:

“The tax cut bill was a signature GOP campaign pledge, and the White House has been pitching it as a necessary supplement to harsh tariff increases. The BBB contains an industrial policy of sorts, with provisions meant to entice onshoring and domestic investment.”

Trump is impatient. He wants the bill on his desk by 4 July. But listen to conservative voices and you begin to wonder whether this might even be a bridge to far. The “House Republicans barely even kicked the reconciliation package over to the Senate, and changes made by the Senate still need the approval of the House.” Even allowing for the outsized and fragile egos involved, the more closely you look at the maneuvering around BBB, the more it seems that the Trump v. Musk explosion was an accident waiting to happen.

After all, opposing Trump’s BBB, though for different reasons, is one thing that Steve Bannon and Elon Musk actually agree on. Whilst Musk declared that this “massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination”, Bannon demanded that, to stop the “debt bomb”, the wealthy “can’t get an extension of the tax cut”. Several Senators have expressed doubts about the lack of adequate spending cuts and excessive debts. Others like Josh Hawley have distanced themselves from the cuts to Medicare.

As Jashinsky puts it, the BBB “fight is pitting so many different strains of MAGA Republicanism against one another that it’s practically a battle royale for the soul of Trump’s GOP.”

On the mood in the Republican ranks around BBB, I found an interview given by Oren Cass to Politico particularly illuminating.

Cass is the chief economist of the right-leaning think tank American Compass and as Politico puts it, a “leading proponent of conservative economic populism”. In the interview, Cass does not mince his words. As far as he sees it, the effort to pass the Big Beautiful Bill is “a death march through a series of choices that nobody really wanted to be making”.

As Politico summarizes it:

here are a handful provisions in the bill that appeal to those trying to move away from Republican economic orthodoxy. But on the whole, he said, the bill is a messy hodge-podge of conventional conservative priorities that won’t do much to help Trump’s working-class constituencies or the broader public. The centerpiece of the legislation is an extension of the 2017 Trump tax cuts, and it will significantly increase the federal deficit even as it includes deep cuts to Medicaid and food stamp programs for low-income Americans. “[It’s] not something that has an especially coherent logic to it or much prospect of actually accomplishing the things that I think people want,”

Cass’s responses are illuminating. When asked whether BBB is not a conventional exercise in Republican tax-cutting he replies:

I think “conventional” might be a little generous, insofar as a conventional Republican tax package actually starts from a motivating economic idea that people are excited about. This one just seems to be — I liken it to a death march through a series of choices that nobody really wanted to be making. Nobody really has a case for it, and it’s not clear why it’s happening. I guess that might be the best that can be said for it. … It seems to be that they passed the tax cut in 2017 and it was expiring, and therefore it must be extended. But obviously, there wasn’t even especially robust support for that. It’s striking the extent to which we’re not actually hearing a coherent case for why this is something the economy needs, or what relationship it actually has to some important priority or to boosting growth or anything else. If there’s an interesting shift, it’s that whereas in the past you would have just said, “Well, this thing pays for itself,” this time there’s a recognition that it does not pay for itself … I think the process by which they got it over the finish line speaks to how little enthusiasm there is for it and how little coherence it has. … Remember what the discussion looked like last time Donald Trump was elected president and came into office with majorities in Congress, and contrast that to what this discussion looks like. Things have obviously changed a great deal. There’s much less confidence in the 1980-style, supply-side tax cutting, much more concern about cutting safety-net programs and more enthusiasm for family policy and directing resources toward families. … I think it’s a really interesting thought exercise to ask, “If there weren’t this expiring tax cut sitting here for year one of the second Trump administration, is this what would be at the top of the list?” Based on how people are approaching it, the answer is pretty obviously no. Whereas in 2001, with George W. Bush coming in, this was the absolute priority, and with Trump coming into his first term with Paul Ryan sitting there in the speaker’s office, this was what everybody was excited to do. I don’t think “Let’s do a big tax cut” is what would be central to the agenda absent the fact that you had the last big tax cut set to expire right in the middle of this. … the reality is that you have an expiring set of provisions that this set of people by and large voted for the first time around, and you obviously have a president who put a very high priority on extending them.

So, put the two major policy planks of the first six months of the Trump administration end to end - tariffs and BBB - and you have a truly strange political phenomenon, driven ultimately by Trump’s preoccupations with his own personal legacy, which is both powerful, and domineering and fragile.

One plausible scenario is that the result is disintegration and deadlock. Will the clash with Musk hinder or accelerate the passage of BBB? Who knows? Recently one would have imagined that Musk would wage no-holds political war against BBB’s backers. Perhaps now he has other worries on his mind.

But we should not ignore the possibility that polycratic rivalry and dysfunction around a single dominant figure leads not to impasse but to cumulative radicalization.

To see this logic at work, ask the question: If Trump’s high-handedness on tariffs and the lop-sidedness of BBB are beginning to generate dissent and disagreement, what might the Republicans unify around? One obvious answer is racist xenophobia. And who better to deliver that message than Stephen Miller?

As Emily Jashinsky reported in UnHerd in rather dramatic terms:

White House advisor Stephen Miller spent Tuesday evening making the case on X that Donald Trump’s embattled tax bill is “the most essential piece of legislation currently under consideration in the entire Western World, in generations”. Miller based that claim on the “Big, Beautiful Bill” — now known in Washington as the BBB — increasing “by orders of magnitude the scope, scale and speed of removing illegal and criminal aliens from the United States”. This dramatic framing comes as the White House flails to convince fiscal hawks that they should swallow tax cuts in the middle of a debt crisis. … Miller’s dramatic X posts, framing the immigration provisions as “[making] this the most important legislation for the conservative project in the history of the nation”, are telling. Cracking down on illegal immigration is what unites the Trump-aligned GOP, both in Washington and among voters. Miller and Trump, desperate to make good on a key campaign promise and augment the tariff policy to staunch further bleeding, know this is their best weapon to pressure fiscal hawks and moderates. Railing against the BBB will then look like railing against immigration enforcement. As senators huddle with Trump to strike compromises, they can likely leverage these provisions to give up less during negotiations. Ultimately, with the House and Senate, Trump will be able to pass a bill that Republicans can sell as a big win. The question is whether that will actually be true, politically and ideologically, and whether they’re able to get it in before the Independence Day holiday, before August recess, and before heading into a midterm year.

Where political economy of a more straight-forward kind no longer has traction, expect racism, xenophobia and civilizational appeals to the “West” to enter in. It was fitting that a day that started with a German Chancellor appealing to shared American-German “DNA” and the spirit of D-Day to woo Donald Trump for the Atlantic alliance, should end with Steve Bannon calling for Elon Musk to be declared an illegal alien and for SpaceX to be nationalized.

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