Tax bill will 'sterilize' some of the negative impacts of Trump's tariffs: Strategas' Dan Clifton

Fiscal Policy & Tax Bill Impact - A tax bill is expected by July 4th, crucial for the President's agenda [2] - The tax bill aims to offset the negative economic impact of tariffs, particularly through business tax cuts, including expensing factories, capital goods, and R&D equipment [3] - Consumers can anticipate significant tax refunds in February, March, and April due to the child credit, standard deduction, and increased SALT deduction [4] - The passage of the tax bill will likely lead to the raising of the debt ceiling, requiring the Treasury to issue debt [6] - The central fiscal policy is designed to "sterilize" any adverse effects from tariffs [8] Trade Policy & Tariffs - Tariffs are expected to increase slightly, supported by the fiscal policy cushion [10] - Previously, the tariff on China was about 145%, but currently stands at approximately 55% (35% plus 20% from the first term) [13] - The Trump administration aims to reduce transshipments by making it more expensive to reroute goods through other countries [14] - Mexico and Canada are expected to benefit from the trade policies, with supply chains potentially moving closer to home [14][16] - A 10% tariff exists on every country in the world except Mexico and Canada [16] Investment Strategy - Investors should focus on how the Treasury Secretary will fund the US government, with expectations of increased short-term Treasury bill issuance [7] - Financial deregulation is anticipated following the debt ceiling resolution [7]