Geopolitics and Economics: The Impact of Trump’s Domestic Policy Bill

The major US stock averages have been surging, climbing 26% since April and hitting all-time highs, despite Trump's tariff threats.

A new wave of levy set to take effect on August 1st, and investors now watching for how markets will respond as the deadlines near and US inflation data roll in.

Joining me as we kick off the trading week is Pan.

Policy founder Terry Haynes.

Hi Terry, good morning.

Great to have you on the show.

Now Trump's new 35% tariffs on Canadian goods set to take effect on August 1st.

He also issued new 30% tariffs to EU and Mexico.

So when it comes to effective negotiation strategy, who is the most vulnerable right now and why?

Good morning, Remy.

The answer to the question, I think the most vulnerable is anybody who's in the sights of the tariffs.

These tariffs are meant to be used as negotiating tactics, and markets have figured that out, I think, which is one reason why, as you cite, you know, there's been a huge increase in the markets over the past quarter.

So you know what markets have to look forward to here is for the next few weeks is negotiating is two things really.

One is negotiating down tariff levels to get deals, and the second is having a variety of deals already announced that are about to be announced with India and others.

Yeah, and negotiation being the key word here, Terry, we have to keep in mind that there are separate deficit structures between the US as well as the EU with the US exporting services while running goods deficits.

So what do you think is being overlooked here as negotiations get underway?

I think fundamentally there are there are sticking points autos, agriculture, GMO related things for one thing.

Secondly, I think what is being overlooked, frankly, is the desire of both parties to do a deal.

Uh what what the what the supposed trade war is about is partially about trade, but it's a lot about geopolitics.

Fundamentally what it's designed to do is lower tariffs from the other country so that it increases the United States United States' market access.

So fundamentally the increase in US market access is something I would always point markets and investors towards as the beneficiaries of the deal.

Yeah, and geopolitics are an area that we're keeping a close eye on, but on July 4th, Trump did sign what he calls his big beautiful domestic policy bill, and that includes a range of tax breaks, but many of these benefits do come with strings attached.

So why do these tax changes actually help, or do they just complicate the code even more for Americans?

Well, they don't complicate the code in the sense that the core of the bill extends beyond 2025, the 2017 tax cuts.

It also increases manufacturing. incentives that that allow and try to incent for reshoring, onshoring, and the like, particularly on critical materials, and I think you all have really led the field in pointing out that one of the biggest beneficiaries here from the so-called big beautiful bill.

Not only defense but related defense industrial base that Trump and Scott Bessett and others are really trying to make sure that there's a great, a great amount of incentives to onshore so that we don't have a, a supply chain situation that impedes our ability to defend the country and defend allies.

Yeah, and finally, Terry, this week we get key US economic data on inflation as well as retail sales, but we know that growing debt could have real economic consequences here.

So as the government borrows more, we could see higher rates, whether we're talking about mortgages or car loans and also lower paychecks and fewer jobs.

But for Americans out there, how can they protect their finances and what are the key takeaways here as we head into the second half?

Well, you know, there are, there are statistics showing that Americans are saving more as well as investing more in the markets.

I was particularly glad to see the increased investment, or excuse me, the increased savings strategies, #1. #2, I would watch very closely for what's likely to happen in the.

Fall where where the United States government tries to start getting its hands around debt, around deficit, and around debt service, which is now the largest category of government spending.

Its ability to do that is going to largely dictate whether this remains a world power or not, frankly.

OK, Terry, well, thank you so much for joining us as we kick off a new trading week.

I appreciate your time and all of your insights.

Thank you, Roy.