Will Donald Trump deliver “one big beautiful tax bill”?

After turbulent weeks of conflict between Israel and Iran, the market situation has begun to calm down. Investors are eagerly awaiting positive news, especially as July 9 approaches – the expiry date of the three-month suspension of customs duties, which paves the way for the conclusion of key trade agreements.. At the same time, Donald Trump is pushing the Senate to pass his “one, big, beautiful bill” by July 4, which is supposed to strengthen his position in the country. Will he succeed?

Trump, who has apparently defused tensions in the Middle East and is soon to sign trade deals with key U.S. partners, now wants to deliver on promises of tax cuts and support for Americans. The proposed legislation, informally called the “One Big Beautiful Bill Act,” is essentially a full budget bill of nearly 1000 pages.. The document primarily assumes the extension of the 2017 tax cuts, the introduction of new reliefs, as well as increased spending on the military and border protection.

The bill also includes cuts to some benefits, such as Medicaid and food assistance programs. The cuts also include tax breaks for electric vehicles and renewable energy sources (RES), and an additional excise tax on foreign components for renewable energy production.

Voting on the bill soon

Most studies indicate that the bill would significantly increase the US debt, which could create even more uncertainty in financial markets. For this reason, many Republican senators oppose it, arguing that more spending cuts should be made. Meanwhile, the entire Democratic Party criticizes the bill for limiting support for the poorest and favoring the wealthiest.

The bill would cut taxes by $4,5 trillion over 10 years, while cutting spending by $1,2 trillion.The Congressional Budget Office estimates that the debt will increase by $3,3 trillion over the decade as a result. What's more, some Republicans oppose raising the debt limit by another $5 trillion.

The bill is expected to be voted on today or tomorrow. Before it reaches the president's desk, however, it must still pass the House of Representatives, where doubts are also growing among Republicans. These divisions are bad for the dollar, even as Wall Street eagerly awaits continued tax cutsIf the bill is not signed by the president by July 4, it could be seen as a defeat for the White House, which would certainly affect both the currency and stock markets.

The dollar remains under pressure on the last day of June. The USD/PLN rate is PLN 3,6128, EUR/PLN – PLN 4,2395, GBP/PLN – PLN 4,9540, and CHF/PLN – PLN 4,5295.

Source: Michał Stajniak CFA, XTB