The White House is in turmoil, Musk says goodbye with two hats

Written by Jin Yan, a special contributor of "Finance"

On Thursday, May 1 local time, US media reported that US national security adviser Mike Waltz is about to leave and transferred to the United States ambassador to the United Nations. Secretary of State Rubio will be the same. Walz's deputy Alex Wong is also leaving. He has helped arrange a summit between Trump and North Korean leader Kim Jong-un. He is one of the few senior officials with experience in East Asia's practical diplomacy. U.S. President Trump's special envoy for the Middle East is considering replacing Mike Waltz as national security adviser, and no decision has been made yet.

Trump's first term was characterized by frequent changes in senior management, but Trump's second term did not launch his first major personnel change until he entered the White House for a hundred days. The National Security Council (NSC) is the core body for successive U.S. presidents to formulate and coordinate security policies, and its members often make key decisions on global hotspot conflicts. Waltz is seen as an official who firmly supports traditional security alliances (such as NATO) and is also a more modest voice within the Trump administration and advocates external coordination. The incident happened very suddenly, and even US State Department spokesman Tammy Bruce learned the news from reporters at the briefing that day.

At the same time, Musk, a global wealthy business giant who was once the most popular at the beginning of the year, has lost his power and has been squeezed out of the core circle of decision-making. On Wednesday, April 30, local time, Musk declared at a White House meeting that the Department of Efficiency (DOGE), which he led, has saved $160 billion in spending so far. That's far from his promise of "at least $2 trillion cuts" last fall.

Some institutions say that "dismissals, rehiring, loss of productivity and paid leave for thousands of staff will cost more than $135 billion in the current fiscal year", which means that the DOGE project may actually lead to an increase in government net spending.

Double out

Musk played an extremely special role in the Trump administration by supporting Trump's election with up to nine-digit campaign funds. Not only did they frequently participate in telephone consultations with foreign heads of state, they chaired high-standard meetings at the Pentagon and the National Security Agency, and even talked directly with Indian Prime Minister Modi. Now, Trump's right-hand man is gradually taking shape, including trade adviser Navarro, who has jumped to become a core figure in the Trump administration. Because no one dares to challenge his views head-on, Navarro has a rare "one-man show" status; the other is Treasury Secretary Bescent, whose weight and influence of his speeches have increased when Trump's policy caused the dollar to shake and "sell the United States" one after another. Musk had a fierce dispute with these two White House bigwigs. Finance Minister Bescent and Musk "swear" outside the president's office; Musk called Navarro an "idiot" on social platform X.

American media said that the first female White House chief of staff, Wiles, played an important role in Musk's elimination. She believes Musk's physical office in the White House would threaten the spirit of cooperation she wants to build. Her struggle greatly reduced Musk's chances of appearing on the West Wing of the White House and eventually faded out.

On April 30, Musk wore two hats when attending a cabinet meeting at the White House, one for the red "America Bay" hat that Trump likes, and the other for the DOGE hat. Musk repeatedly changed his hats during the meeting and finally decided to put the two hats on the stack. Musk, who wants to play with two hats in politics and business, is facing a double-edition ending at this time.

Musk's official position in the cabinet will end around May 30, after which he will serve as informal adviser. In addition, due to the decline in the share price of US automaker Tesla and some investors are dissatisfied with Musk's deep involvement in politics, Tesla's board of directors has begun to seriously consider finding Musk's successor. Although Tesla later rarely publicly denied it publicly, Musk's negative assets have caused its first-quarter revenue to drop 9% year-on-year, automobile business revenue fell 20% year-on-year, and net profit plummeted 71% year-on-year.

Musk told investors on a Tesla earnings call that from May, he will significantly reduce his working hours at DOGE and refocus on Tesla's work. The Tesla brand has been severely damaged by the political work Musk has invested in and faces performance challenges - sales and performance are falling sharply. An unknown employee of the Ministry of Efficiency told Finance that Musk had taken the lead in making a request that government staff must work in the office for 40 hours a week, otherwise they will lose their jobs. Because they found that basically 10 people in the US government civil servants were doing work that could be done by one person, and Musk chose to go to war with a huge group of government employees, and this interest group would vent its dissatisfaction on Musk.

Musk is regarded as Tesla's soul figure. Dan Ives, an analyst at Wedbush Securities, once said: "Tesla is Musk, and Musk is Tesla." However, Tesla is currently facing many difficulties, with aging product line, intensifying competition from China, and the DOGE action and the political counterattack triggered have all caused both product demand and profit to decline.

Musk's rocket and satellite companies are working with software maker Palantir and drone maker Anduril to bid for a key part of the Golden Dome, a project that has attracted great interest from rapidly growing defense startups in the technology industry. It is reported that Musk's SpaceX and two partners are expected to win bids for a key part of the "Golden Dome" missile defense system for US President Trump. But 42 Democratic lawmakers have called for a review of Musk's role in bidding for the missile defense system.

 Musk\'s SpaceX has attracted a lot of attention. SpaceX and the two partners are expected to win bids for a key part of the \"Golden Dome\" missile defense system for U.S. President Trump. Photo/Jin Yan

Personnel turmoil

In March this year, Waltz received close attention for mistakenly adding Atlantic's Jeffrey Goldberg to the group chat. Goldberg disclosed discussions between Waltz and senior national security officials on a U.S. military strike plan against Houthi armed targets in Yemen. After Waltz admitted the authenticity of the report behind closed doors, White House officials had debated whether he should resign, but Waltz never made a resignation and Trump did not ask him to resign at the time. Trump has publicly expressed his support for Waltz, calling him "a good guy" and "learned a lesson."

Waltz's resignation marks the end of a month-long personnel turmoil within Trump's national security agency. Since April 1, the National Security Council has fired at least 20 members, resulting in severe staff shortages in multiple key departments. People familiar with the matter revealed that the actual layoffs exceeded previous reports, causing some key institutions involved in national security to fall into a dilemma of insufficient staff.

The layoffs were fired after conservative commentator Laura Lumer submitted a list of officials accused of being "unfaithful" to President Trump. About 15 people were fired in the first week and the layoffs proceedings continued. Media said that several important departments within the NSC are currently facing a near shutdown, including a working team responsible for Latin American policy, international organization affairs and legislative affairs.

In addition, the U.S. Department of Defense fired three senior officials on April 18, who were accused of "unauthorized disclosure of national security information." The three officials then issued a joint statement, firmly denied the allegations and accused the Pentagon of "unfounded slandering" them. The US Department of Defense has previously launched an investigation into several "leakage incidents" to determine how sensitive information such as the US military's second aircraft carrier is headed to the Red Sea, the US military has formulated a military action plan against the Panama Canal, Musk's visit to the Pentagon by the head of the "Department of Government Efficiency" and the US suspension of collecting intelligence for Ukraine have been exposed by the media.

 The US Department of Defense launched an investigation into several \"leakage incidents\". Photo/Jin Yan

After Trump returned to the White House, the Pentagon has carried out a "cleaning" of senior officials, fired senior officials such as Charles Brown, a Biden administration-appointed chairman of the US Joint Chiefs of Staff.

These cleaning operations have severely hit the morale of certain sectors of national security agencies. The officials also added that some government departments lack relevant national security expertise and, in some cases, it is difficult to attract senior talent.