US President Donald Trump’s latest tax and spending act might “cause some trouble” for China, according to analysts.
However, they also said Beijing may be able to benefit in certain areas if the act – known officially as the One Big Beautiful Bill – generates further political instability and damages domestic industries such as the US clean energy sector.
The act aims to make permanent tax cuts, lock in Trump’s priorities on border and defence financing, increase Washington’s debt limit by US$5 trillion, slash healthcare funding and jeopardise dozens of planned clean energy projects with ties to China.
It has sparked widespread concern across the world over an anticipated surge in US federal deficit – estimated by the Congressional Budget Office to reach at least US$3 trillion over the next decade – and its capacity to reshape global capital flows by sharply reducing incentives for US multinationals to keep profits and investments overseas.
The act “is not aimed at China” but will indirectly affect it and other countries, according to Zhu Junwei, director of Horizon Insights Centre, a Chinese think tank.
“Nowadays, when Americans oppose certain domestic policies, they often invoke China – claiming that a certain measure would benefit Beijing and should therefore be rejected. Whether there are exaggerations in such claims requires closer analysis,” she said.
