Did Trump get his ‘Big Beautiful Bill' at the US dollar's expense?
Advertisement
Winning a narrow 218-214 vote in the House of Representatives on Thursday, the 'One Big Beautiful Bill Act' – which
raises spending on border security and defence while making the record tax cuts enacted in 2017 permanent – now heads to US President Donald Trump for his signature, which he is expected to give on Friday.
It is also set to raise the federal government's debt ceiling by US$5 trillion, surpassing the US$4 trillion allocated by an earlier version of the bill. This creates more room for the Treasury Department to borrow to repay future obligations, but allows for greater debt accrual in the future.
Raymond Yeung, chief Greater China economist at ANZ, said while the bill may lower the immediate risk of a government default, it also
deepens worries over US debt sustainability and the interest rate structure.
'In the months leading up to the bill's passage, investors had already been discussing how to diversify risk and reduce their exposure to US dollar assets,' he said.
Advertisement
Even without the bill, Yeung noted, momentum for diversification has been building in a number of countries.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South China Morning Post
2 hours ago
- South China Morning Post
What the Vietnam war can teach us about Trump's Asia policy
This year marks the 50th anniversary of the end of 'America's war' in Vietnam from 1965 to 1975. The US entered the war in the closing years of an era when it was prepared to fight communist expansion wherever it occurred, a policy initially signalled by the Truman Doctrine. The Vietnam war was a catastrophe in terms of its huge human toll and economic cost, and many Americans viewed it as a tragic folly. However, it proved to be a protective shield against the spread of communism in Southeast Asia . Without direct US military intervention in Vietnam in 1965, the Southeast Asia that we know today may not have existed. Despite the US' setbacks in Vietnam, it has remained a vital component of the Asia-Pacific power balance. However, now the policies of Donald Trump 's administration – to reshape the global trade order and US security posture – have generated uncertainties about the adjustments to come, including the roles of its allies and partners. The domino theory, fashionable in US policy circles in the 1950s and early 1960s in its extreme form, assumed that if Vietnam fell to the communists, the rest of Southeast Asia would follow suit. In the US, the theory had its leftist and progressive critics and establishment figures, who thought it was too simplistic. Huey helicopters carrying US troops land near Plei Ho Drong, Vietnam, in August 1965. Photo: AP Non-communist Southeast Asian governments were also deeply concerned about the potential spread of communism from Vietnam.
RTHK
6 hours ago
- RTHK
Trump signs his mega tax and spending bill into law
Trump signs his mega tax and spending bill into law US President Donald Trump holds a gavel after signing the "Big Beautiful Bill Act" at the White House in Washington, DC. Photo: AFP US President Donald Trump signed into law a massive package of tax and spending cuts at the White House on Friday, staging an outdoor ceremony on the Fourth of July holiday that took on the air of a Trump political rally. With military jets flying overhead and hundreds of supporters in attendance, Trump signed the bill one day after the Republican-controlled House of Representatives narrowly approved the signature legislation of the president's second term. The bill, which will fund Trump's immigration crackdown, make his 2017 tax cuts permanent, and is expected to knock millions of Americans off health insurance, was passed with a 218-214 vote after an emotional debate on the House floor. "I've never seen people so happy in our country because of that, because so many different groups of people are being taken care of: the military, civilians of all types, jobs of all types," Trump said at the ceremony, thanking House Speaker Mike Johnson and Senate Majority Leader John Thune for leading the bill through the two houses of Congress. "So you have the biggest tax cut, the biggest spending cut, the largest border security investment in American history," Trump said. Trump scheduled the ceremony on the South Lawn of the White House for the July 4 Independence Day holiday, replete with a flyover by stealth bombers and fighter jets like those that took part in the recent US strikes on nuclear facilities in Iran. Hundreds of Trump supporters attended, including White House aides, members of Congress, and military families. After a speech that included boastful claims about the ascendance of America on his watch, Trump signed the bill, posed for pictures with Republican congressional leaders and members of his cabinet, and waded through the crowd of happy supporters. The bill's passage amounts to a big win for Trump and his Republican allies, who have argued it will boost economic growth, while largely dismissing a nonpartisan analysis predicting it will add more than US$3 trillion to the nation's US$36.2 trillion debt. While some lawmakers in Trump's party expressed concerns over the bill's price tag and its hit to healthcare programs, in the end just two of the House's 220 Republicans voted against it, joining all 212 Democrats in opposition. The tense standoff over the bill included a record-long floor speech by House Democratic Leader Hakeem Jeffries, who spoke for eight hours and 46 minutes, blasting the bill as a giveaway to the wealthy that would strip low-income Americans of federally-backed health insurance and food aid benefits. Democratic National Committee Chair Ken Martin predicted the law would cost Republicans votes in congressional elections in 2026. "Today, Donald Trump sealed the fate of the Republican Party, cementing them as the party for billionaires and special interests - not working families," Martin said in a statement. "This legislation will hang around the necks of the GOP for years to come. This was a full betrayal of the American people. Today, we are putting Republicans on notice: you will lose your majority." (Reuters)
South China Morning Post
7 hours ago
- South China Morning Post
Trump signs signature tax-cut and spending bill into law
US President Donald Trump signed into law a massive package of tax and spending cuts in a ceremony at the White House on Friday, one day after the Republican-controlled House of Representatives narrowly approved the signature legislation of Trump's second term. The bill, which will fund Trump's immigration crackdown, make his 2017 tax cuts permanent, and is expected to knock millions of Americans off health insurance, was passed with a 218-214 vote after an emotional debate on the House floor. 'I've never seen people so happy in our country because of that, because so many different groups of people are being taken care of: the military, civilians of all types, jobs of all types,' Trump said at the ceremony, thanking House Speaker Mike Johnson and Senate Majority Leader John Thune for leading the bill through the two houses of Congress. 'So you have the biggest tax cut, the biggest spending cut, the largest border security investment in American history,' Trump said. US President Donald Trump presents a sweeping spending and tax legislation after he signed it at the White House on Friday. Photo: Reuters Trump scheduled the ceremony on the South Lawn of the White House for the July 4 Independence Day holiday, replete with a flyover by stealth bombers and fighter aircraft like those that took part in the recent US strikes on nuclear facilities in Iran.
