WASHINGTON — US President Donald Trump threatened on Thursday to cut off government contracts with tech billionaire Elon Musk's companies, while the latter suggested that Trump should be "impeached", turning their once-close relationship into an all-out brawl on social media.

The hostilities began when Trump criticized the Tesla CEO in the Oval Office. Within hours the relationship had disintegrated in full public view, as the two threw personal barbs at one another on Trump's Truth Social and Musk's X.

"The easiest way to save money in our budget, billions and billions of dollars, is to terminate Elon's governmental subsidies and contracts," Trump posted on Truth Social.

Wall Street traders dumped shares of Musk's electric vehicle company and Tesla closed 14.3 percent down, losing about $150 billion in market value. It was Tesla's largest single-day decline in value in its history.

Minutes after the closing bell, Musk replied, "Yes", to a post on X saying Trump should be impeached.

The clashes between the two started brewing days ago when Musk denounced Trump's sweeping tax cut and spending bill. The president initially held his tongue while Musk campaigned to torpedo the bill, saying it would add too much to the nation's $36.2 trillion in debt.

Trump broke his silence on Thursday, telling reporters in the Oval Office that he was "very disappointed" in Musk.

"Look, Elon and I had a great relationship. I don't know if we will anymore," Trump said.

While Trump spoke, Musk responded with increasingly harsh posts on X.

"Without me, Trump would have lost the election," wrote Musk, who spent nearly $300 million backing Trump and other Republicans in last year's election.

Trump, not one to slouch from a fight, posted that Musk had been "wearing thin", that he had "asked him to leave" his administration, and that the tech titan had "gone crazy".

In another post, Musk asserted that Trump's signature tariffs would push the US into a recession later this year.

Besides Tesla, Musk's businesses include rocket company and government contractor SpaceX and its satellite unit Starlink.

Space program in doubt

Musk, whose space business plays a critical role in the US government's space program, said that as a result of Trump's threats, he would begin decommissioning SpaceX's Dragon spacecraft. Dragon is the only US spacecraft currently capable of sending astronauts to the International Space Station.

Hours later, Musk appeared to reverse that move. Responding to a follower on X urging him and Trump to "cool off and take a step back for a couple of days," Musk wrote: "Good advice. OK, we won't decommission Dragon."

Still, Musk's mere threat to abruptly pull its Dragon spacecraft out of service marked an unprecedented outburst from one of NASA's leading commercial partners.

Under a roughly $5 billion contract, the Dragon capsule has been the agency's only US vessel capable of carrying astronauts to and from the International Space Station.

In another possible sign of de-escalation on Thursday evening, Musk separately posted, "You're not wrong," in response to hedge fund manager Bill Ackman saying Trump and Musk should make peace.

Trump told Politico on Thursday: "Oh, it's okay," and, "It's going very well, never done better," when asked about the latest clashes with Musk.

Politico had reported that White House aides scheduled a call on Friday with Musk to broker peace. However, a White House source with knowledge of the matter told Reuters that there were no such plans on Friday.

Musk was, till recently, a staunch ally of Trump, spending nearly $300 million to support Trump's campaign in 2024. After Trump won the presidential election, Musk joined the newly established Department of Government Efficiency, or DOGE, responsible for checking bureaucratic corruption and reducing the national debt.

DOGE's work led to thousands of federal government layoffs and cuts of billions of dollars in foreign aid and other programs, sparking multiple protests in the US and around the world. On Wednesday last week, Musk announced his departure.

Musk also started a survey on Twitter, posting, "Is it time to create a new political party in America that actually represents the 80 percent in the middle?" This drew more than 510,000 votes in about one hour.

The Tesla CEO's increasing focus on politics provoked widespread protests at Tesla sites in the US and Europe, driving down sales while investors fretted that Musk's attention was too divided.

Agencies - Xinhua