Written by | (Finance) Special Correspondent Jin Yan
On May 1, local time, U.S. media reported that National Security Advisor Mike Walz is set to leave his position to become the U.S. Ambassador to the United Nations, with the vacancy to be filled by Secretary of State Rubio. Walz's deputy, Alex Wong, will also leave; he assisted in arranging the summit between Trump and North Korean leader Kim Jong Un and is one of the few senior officials with practical diplomatic experience in East Asia. U.S. President Trump's special envoy for Middle East issues, Wietkoff, is considering replacing Mike Walz as National Security Advisor, but no decision has been made yet.
Trump's first term was characterized by frequent changes in high-level personnel, but during his second term, he only made his first significant personnel change after being in the White House for 100 days. The National Security Council (NSC) is the core agency through which U.S. presidents formulate and coordinate security policies, and its members often make key decisions regarding global hot conflicts. Walz was seen as a strong supporter of traditional security alliances like NATO and was one of the more moderate voices advocating for external coordination within the Trump administration. This personnel change came very suddenly; even State Department spokesperson Tammy Bruce learned about it from reporters during the daily briefing.
Meanwhile, the once-dominant global business tycoon Musk has faded, sidelined from the core decision-making circle. On April 30, local time, Musk claimed at a White House meeting that his led Department of Government Efficiency (DOGE) had saved $160 billion in expenditures to date. This is far from the 'at least $2 trillion' he promised last autumn.
Some organizations estimate that the 'layoffs, rehires, productivity losses, and paid leave for thousands of staff related to DOGE will cost over $135 billion in this fiscal year,' which means that the DOGE project could actually lead to an increase in net government spending.
Dual Departure
Musk played a very special role in the Trump administration by supporting Trump’s election with campaign funding reaching nine figures. He frequently participated in phone consultations with foreign heads of state, chaired high-level meetings at the Pentagon and the National Security Agency, and even spoke directly with Indian Prime Minister Modi. Now, Trump's right-hand men are taking shape, including trade advisor Navarro, who has risen to become a key figure in the Trump administration, sitting in a rare position of 'one-man rule'; another is Secretary of the Treasury Mnuchin, whose influence has grown as Trump’s policies have shaken the dollar's supremacy and led to a 'sell-off of America.' Musk has had fierce disputes with both of these White House heavyweights. Treasury Secretary Mnuchin and Musk exchanged expletives outside the Oval Office; Musk referred to Navarro as an 'idiot' on social media platform X.
U.S. media report that the first female White House Chief of Staff, Wiles, played an important role in Musk's exit. She believed Musk's presence in the White House would threaten the collaborative spirit she wanted to establish. Her struggle significantly reduced Musk's opportunities to appear in the West Wing of the White House, leading to his eventual fade-out.
On April 30, Musk attended a cabinet meeting at the White House wearing two hats, one a red 'Make America Great Again' hat favored by Trump, and the other a DOGE hat. Musk repeatedly switched hats during the meeting, ultimately deciding to wear both stacked on top of each other. Facing a dual exit, Musk, who wants to play both sides in politics and business, is now confronted with a challenging outcome.
Musk's formal role in the cabinet will end around May 30, after which he will serve as an informal advisor. Additionally, due to a drop in the stock price of American automaker Tesla and some investors' dissatisfaction with Musk's deep involvement in politics, Tesla's board has begun to seriously consider finding Musk's successor. Although Tesla subsequently issued a rare public denial, Musk's status as a liability for Tesla has already caused the company's revenue to decline by 9% year-on-year in the first quarter, with automotive revenue down 20% year-on-year and net profit plummeting by 71%.
Recently, Musk told investors during a Tesla earnings call that starting in May, he would significantly reduce his working hours on DOGE and refocus on Tesla. The Tesla brand has suffered severely due to Musk's political involvement and is facing performance challenges—sales and performance have both significantly declined. An unnamed employee from the Department of Government Efficiency told (Finance) that Musk had led a demand for government employees to work 40 hours a week in the office, or risk losing their jobs. They found that it essentially took ten government employees to do the work of one person, and Musk chose to go to war with the large group of government employees, who vented their dissatisfaction on Musk.
Musk is seen as the soul of Tesla. Wedbush Securities analyst Dan Ives once said, 'Tesla is Musk, and Musk is Tesla.' However, Tesla is currently facing numerous challenges, including an aging product line, increased competition from China, and the political backlash triggered by the DOGE initiative, all of which have led to declines in both product demand and profits.
Recently, Musk's rocket and satellite company is collaborating with software manufacturer Palantir and drone manufacturer Anduril to bid for the construction of a key part of the 'Iron Dome' (Golden Dome), a project that has attracted great interest from rapidly growing defense startups in the tech industry. Reports suggest that Musk's SpaceX and its two partners are expected to win a bid for a key part of President Trump's 'Iron Dome' missile defense system. However, 42 Democratic lawmakers have called for scrutiny of Musk's role in this missile defense system bidding process.
Musk's SpaceX has attracted significant attention. SpaceX and its two partners are expected to win a bid for a key part of President Trump's 'Iron Dome' missile defense system. Photo by Jin Yan
Personnel Turmoil
In March of this year, Walz drew close attention for mistakenly adding Jeffrey Goldberg of The Atlantic to a group chat on Signal. Goldberg revealed discussions Walz had with senior national security officials regarding plans for military strikes against Houthi targets in Yemen. After Walz privately acknowledged the truth of the report, White House officials debated whether he should resign, but Walz never offered to step down, and Trump did not demand his resignation at that time. Trump publicly expressed support for Walz, calling him 'a good man' and saying he 'learned his lesson.'
Walz's departure marked the end of a month-long personnel turmoil within Trump's national security apparatus. Since April 1, the National Security Council has fired at least 20 members, leading to severe personnel shortages in several key departments. Informed sources revealed that the actual scale of layoffs was greater than previously reported, resulting in some crucial national security agencies facing staffing shortages.
The layoffs were prompted by conservative commentator Laura Loomer submitting a list of officials deemed 'disloyal' to President Trump, with about 15 people dismissed in the first week, and the layoff process continues. Media reports indicate that multiple important departments within the NSC are currently facing near paralysis, including teams responsible for Latin American policy, international organization affairs, and legislative affairs.
Additionally, on April 18, the U.S. Department of Defense fired three senior officials who were accused of 'unauthorized disclosure of national security information.' The three officials subsequently issued a joint statement firmly denying the allegations and accused the Pentagon of 'baseless defamation.' The U.S. Department of Defense had previously launched investigations into multiple 'leak incidents' to determine how sensitive information, including the deployment of the U.S. Navy's second aircraft carrier to the Red Sea, military action plans against the Panama Canal, and Musk's visit to the Pentagon, as well as the U.S. suspension of intelligence collection for Ukraine, was exposed to the media.
The U.S. Department of Defense has launched investigations into multiple 'leak incidents.' Photo by Jin Yan
After Trump returned to the White House, the Pentagon conducted a 'purge' of senior officials, firing high-ranking officials appointed by the Biden administration, including Chairman of the Joint Chiefs of Staff Charles Brown in February.
These purges severely impacted the morale of certain departments within the national security apparatus. These officials also added that some government departments lack relevant national security expertise, making it difficult in some cases to attract senior talent.
