US President, Donald Trump has threatened to cancel government contracts with Elon Musk’s companies as they continue to feud over a major tax bill.

Trump, in a Truth Social post, wrote: "The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon's Governmental Subsidies and Contracts."

President Trump threatens to cut billions of dollars in federal funding for Elon Musk

Musk’s company SpaceX has billions of dollars worth of contracts with the federal government, mostly with the Pentagon and NASA. He has other business interests with the government, particularly involving SpaceX’s Starlink satellite service.

The threat to cancel government contracts could be particularly damaging for Musk as their feud continues to escalate.

Earlier, Trump told reporters in an Oval Office meeting with German Chancellor Friedrich Merz earlier Thursday that he was “very surprised” and “very disappointed” in Musk, who spent millions of dollars to help Trump get elected and served in his administration for four months, criticized his tax bill.

“I’ve always liked Elon. And so I was very surprised. You saw the words he had for me, and he hasn’t said anything about me that’s bad. I’d rather have him criticize me than the bill. Because the bill is incredible,” Trump said during Thursday’s meeting with the German chancellor.

Musk responded on social media, claiming credit for Trump’s electoral victory last November.

“Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate,” Musk wrote in response to a video of Trump’s comments.

“Such ingratitude,” he added.

Musk officially left his government role last Friday after leading the Department of Government Efficiency and its efforts to slash government spending.