The Big Beautiful Bill: Impacts on the U.S. Economy and Beyond

The big beautiful bill is now law.

Trump signed the legislation on the 4th of July.

He says the bill will deliver the US the strongest border and military in the world, but it's not a big, beautiful bill to Elon Musk.

He was predictably angry after it passed, and now he says he'll launch a third party to shake up next year's midterms.

Details.

Or scars, but Musk says the party will target just 2 or 3 Senate seats and 8 to 10 House districts.

Well, joining me as we kick off a new trading week is Patrick L.

Young, chairman and founder of Exchange Invest.

Patrick, good morning.

Thank you so much for joining us.

So first starting out with the big beautiful bill, what impact do you think it will have on the US economy?

Look, I think one thing the big beautiful bill is going to have on the US economy is a lack of concern or uncertainty.

The big beautiful bill is flawed.

We know that because Trump's trying to reconcile 4 years of fairly dissolute government and disorganization.

He's trying to bring a series of things together so that he can tackle the rest of them during the rest of.

Presidency.

It was never perfect, but actually most people thought it would never get through, and I think the fact that Trump has managed to triumph in his domestic agenda in the same way this foreign policy agenda has been going very well is a strong message that the Trump administration means business.

They are succeeding at what they said they were going to do.

Yeah, and Patrick, historically third parties haven't had much luck in American politics, so does Elon Musk understand what he's getting himself into?

And let's talk about the impact on Tesla's stock.

What do you make of what we're seeing as we kick off the week?

Well, look, I mean, one thing is, yes, US third party has always been a failure.

We can go back 110 years to the Bull Moose Party.

We can look at the efforts more recently by Ross Perot, who I suppose was successful in one way because he managed to elect Bill Clinton and not elect George HW Bush or re-elect George HW Bush, but fundamentally they have a great difficulty in breaking through in the in the binary system of US politics, even with a targeted adventure such as Elon Musk is now presenting.

The big problem here is, and actually Treasury Secretary Besant said it himself just the other evening.

Surely Elon Musk should now take his time to concentrate on his companies, and I think it's got to be a big worry for everybody because you're looking at Tesla.

Tesla produces a lot of cars in China.

It therefore has a big issue.

Is it an American company?

Is it a Chinese company?

Some people in China are not identifying it as an American company, which means they're more likely to buy BYD or other electric vehicles, and that's obviously also hit.

Home in the US because what we've seen is appalling numbers in terms of the number of cars that are being delivered.

So fundamentally I think if I was a shareholder, I would remain very, very concerned that he's allowing his ego to take hold of what's going on rather than focusing on SpaceX, focusing on the whole business of what he should be doing with Tesla, and that's got to be difficult for a Tesla stock which, let's face it, lives its life on the frothy side of the PE earnings ratio.

Yeah, and Patrick, we're keeping our focus here on the US but for a moment, I want to zoom out and take a look at geopolitics while we have you here.

So, what are you expecting to see from the meeting between Trump and Netanyahu today?

I think it's very interesting because look, Netanyahu has essentially reshaped the entirety of Middle Eastern politics over the course of the last year and now we see, OK, he's going after the Houthis.

Why?

Because that's the last satellite group that was funded by the Iranians who are still predominantly active.

Trump is going to want to do two things.

He probably wants to push forward very Fast his attempt to manage to get a Hamas Israeli Palestine peace deal going, but at the same time there's also got to be a degree of being mindful of Netanyahu himself is looking incredibly successful from somebody who was a completely burned out candidate just two years ago after the 7th October attacks.

And therefore it's going to be a very tense meeting this.

Two huge egos.

Both of them believe that they've managed to do something incredible in the course of the last several weeks, and Trump is obviously going to be pushing Netanyahu hard for peace.

But at the same time, mindful of the fact that the Middle East is actually a more peaceful place than it was just even two months ago thanks to what's going on with the defenestration of Iran and its various terrorist proxies.

Yeah, Patrick, we have to keep in mind that today is July 7th, and we've all been keeping a close eye on the July 9th day and Trump confirmed that tariffs will take effect on August 1st now.

So what are you expecting from tariffs and trade deals in the coming days as well as weeks with the shifting goalposts out there and the take it or leave it deadline?

Look at the detail.

The devil is in the details here, and a lot of people are worried about the absolute headline rates.

But look at what happened, for example, last week, Vietnam.

Vietnam signed a very interesting deal.

Essentially they're going to have a tariff of 20% on their goods going into the USA.

The US is going to get tariff-free goods going into Vietnam, but actually the fascinating nugget transshipment if your product is identified as a trans ship. products you're going to get 40% tariff going into the USA.

What does that mean?

Well, what we know is Vietnam, Thailand, a number of other countries are proxies for third party providers, particularly China, are manufacturing goods, sending them out for finishing in those countries, or possibly even just shipping them straight through, perfect transshipment to the USA.

The USA has realized that that is the problem, and that's why All eyes now must really be on the deal with China.

A number of other 2nd tier, 3rd tier economies, they've received their warning notes or they're going to receive warning notes in the post, and Trump's going to essentially say, Well, you haven't negotiated hard enough, so therefore your time has come and gone, and they're going to have to come back very, very quickly to the negotiating table.

And the move is obviously clearly to focus minds in China and the European Union.

The European Union, remember, the problem And there is not the monetary tariffs.

The problem is actually the number amount of tariffs that you are getting in relation to regulation with China.

It's a big, beautiful bill of its own right in there and obviously there are a lot of concerns because why was President Xi not at the G7 meeting at the weekend?

That seemed rather strange, leaving Narendra Modi as the most important man in the room alongside host Brazil's President Lula.

Yeah, and speaking of that BRICS meeting, as you mentioned, China's Xi Jinping was noticeably absent from that gathering.

Trump threatening an additional 10% tariff on countries aligning with the anti-American policies of BRICS.

So what are you looking out for from the meeting of the nations that include Iran as well as Russia?

Well, I think we can already see some really, really interesting details here, Remy, because actually, for instance, defense of Iran, solidarity has been very moot.

Why is that?

Well, first of all, President, Xi was not in the room, most importantly present.

Putin was not in the room.

Therefore, the people who instantly scurry around to try and offer some degree of support for Iran have not been there.

So actually what we've seen is much more of a pro-business kind of approach to this particular BRICS meeting, which I think is positive.

Narendra Modi of India, he's not going to sit there and fight the Iranians' wars, although obviously he likes getting some cheap oil from them.

And at the same time, actually the focus of the BRICS, they've been saying quite bellicose things.

In a way about tariffs, but actually the message is that everybody in the BRICS, to my mind, looks to be there to do a deal with the USA.

They appreciate the might of US power that we've seen in recent weeks, and they realize that the world economy, yeah, it doesn't function without the BRICS, but it certainly doesn't function and it sure isn't going to grow without the United States of America.

Well, Patrick, we will see what the gatherings this week bring and we look forward to speaking with you again next week.

Thank you so much for joining us and thank you for sharing your perspective.