Core Insights - The article highlights the paradox of American farmers supporting Trump despite the negative impact of the trade war on agricultural exports, which saw a 37% drop in U.S. agricultural product exports [3] - It discusses the illusion of government subsidies as a safety net for farmers, which has led them to view their votes as insurance against losses [4][6] - The article emphasizes the financial benefits farmers have gained from tax reforms and relaxed labor policies, which have allowed them to reduce costs significantly [8][10] Group 1: Government Subsidies - During the 2018 trade war, the U.S. Department of Agriculture provided $52 billion in subsidies, which allowed many farmers to cover up to 80% of their losses [4] - Farmers are currently facing uncertainty as promised subsidies for 2024 have not materialized, leading to skepticism about government support [6] Group 2: Labor Policies - The relaxation of H-2A visa policies has enabled farmers to save 30% on labor costs, as workers are paid less than the legal minimum wage and are discouraged from complaining due to visa risks [8] Group 3: Tax Reforms - The reduction of corporate tax rates from 35% to 21% has resulted in significant savings for large agricultural businesses, with some farmers reporting annual tax savings of hundreds of thousands of dollars [10] - The article notes that the shift in Chinese import patterns towards Brazil and Argentina has led to a 28% drop in U.S. soybean export prices, highlighting the risks associated with these financial strategies [10]

Core Viewpoint - The proposal of a "new tax reform" by Lai Ching-te aims to exempt single workers earning below 620,000 NTD annually from income tax, suggesting that the tax burden will shift to the top 1% income earners, which has sparked discussions in Taiwanese society [2] Group 1 - Lai Ching-te claims that next year will be the year with the least tax payments in Taiwan's history, estimating that around 40% to 50% of the population will be exempt from taxes [2] - Senior media figure Zhao Shaokang criticizes the proposal as politically motivated, suggesting it is aimed at attracting young voters for the 2026 "Nine-in-One" elections, rather than addressing broader economic issues [2] - Zhao argues that the focus should be on increasing income for Taiwanese citizens rather than relying on tax reductions, highlighting that a monthly salary of 50,000 NTD may not be sufficient to cover living expenses [2] Group 2 - Zhao emphasizes that opening up tourism from mainland China could generate significant economic opportunities, potentially bringing in over 100 billion NTD and creating more jobs and income, which he believes is a more effective policy than tax exemptions [2] - He criticizes the Democratic Progressive Party's (DPP) approach as being election-centric, pointing out that the recent increase in electricity prices occurred without election pressure, while the tax exemption announcement is clearly timed for electoral considerations [2] - Zhao concludes that not paying taxes should not be a source of pride, stressing the importance of wealth creation and income improvement for the Taiwanese populace, as any policy benefits that do not address these issues are merely electoral maneuvers [2]

Real Estate - The future potential of real estate is bleak outside of first-tier and super first-tier cities (Shanghai, Beijing), especially in lower-tier cities where properties are likely to depreciate [1] - First-tier cities have superior medical, educational, and living conveniences compared to smaller cities, which is a reason for the stability of real estate prices in these areas [2] - A significant concern is the future population decline, which could lead to increased vacancies and depreciation of real estate unless foreign populations are attracted [3] - Regions like Hainan and Yunnan have unique real estate dynamics due to their popularity as retirement destinations, but they still lag behind first-tier cities in terms of resources like healthcare and education [4] Baijiu (Chinese Liquor) - There is a noticeable decline in consumption of baijiu among younger demographics, raising questions about the future viability of this market [2] - Baijiu is a non-essential product with many substitutes (e.g., beer, craft beer, soft drinks), which could impact its demand [3] - The reliance on middle-aged consumers for sustained high profitability is uncertain, especially in light of potential regulatory changes like alcohol bans [3] Market Dynamics - The market appears to be in a rotation phase, where different sectors experience growth based on cyclical trends [6] - There is a sentiment that investing in certain consumer stocks could be a safer strategy during market fluctuations [6] - The current bull market may lead to a reevaluation of past investment strategies, particularly in sectors like baijiu [7] Taxation and Regulation - There are indications that wealthier individuals may face increased taxation in the future, which could impact asset accumulation strategies [11] - The potential for property and liquor to be taxed based on their financial attributes rather than their consumption attributes is a concern for investors [12] - A significant tax reform is anticipated in China, which may include asset-based taxation to boost local government revenues [12][13]

Market Overview - US stock market showed mixed performance with Dow Jones increasing by 400.17 points, a rise of 0.91%, while Nasdaq fell by 0.82% and S&P 500 decreased by 0.11% [1] - Major tech stocks mostly declined, with Tesla dropping over 5%, Netflix down more than 3%, and Nvidia falling over 2% [2] Legislative Developments - The US Senate passed Trump's tax reform bill with a vote of 51 to 50, with Vice President Pence casting the deciding vote. The bill combines $4.5 trillion in tax cuts with $1.2 trillion in spending cuts and will now be reviewed by the House of Representatives [3] Trade Negotiations - President Trump stated he does not plan to extend the July 9 deadline for trade negotiations with other countries, expressing skepticism about reaching an agreement with Japan. He mentioned the possibility of imposing tariffs on Japanese imports as high as 30% or 35% [4] International Development Agency Closure - The Trump administration announced the formal closure of the US Agency for International Development (USAID) after nearly 64 years of operation, transferring remaining projects to the State Department. The agency has spent over $715 billion on foreign aid but has been criticized for its effectiveness [5]

Economic Indicators - In May, US consumer spending experienced the largest decline since the beginning of the year, while the core PCE price index, a key inflation measure monitored by the Federal Reserve, saw a slight month-on-month increase of 0.2% [2][5] - The University of Michigan's June survey indicated a significant drop in inflation expectations, with the consumer confidence index rising to its highest level in four months [2][5] Stock Market Performance - US stock markets continued their upward trend, with the S&P 500 and Nasdaq reaching record closing highs, supported by economic data that reinforced expectations for interest rate cuts [3] - The Nasdaq index closed at 20,273.46, up 0.52% for the day and 4.99% year-to-date, while the S&P 500 index closed at 6,173.07, also up 0.52% for the day and 4.96% year-to-date [4] Interest Rates and Treasury Yields - US Treasury yields saw a slight increase, with the 2-year Treasury yield at 3.7480, up 0.77% for the day and down 11.88% year-to-date [4] Trade Relations - President Trump announced the termination of all trade negotiations with Canada due to the implementation of a digital services tax, indicating potential new tariffs against Canada [7] - The Senate Republicans unveiled a new tax reform proposal estimated to increase the US fiscal deficit by nearly $3.3 trillion over the next decade [7] Oil and Commodity Markets - Oil prices experienced a slight recovery after reports suggested OPEC+ plans to increase production in August, which had previously led to a decline in prices [3][19] - Gold prices fell, reaching a near one-month low, as trade agreements between the US and China reduced safe-haven demand [3][19]

Core Points - The Senate Republicans have unveiled a new version of a $4.2 trillion tax and spending bill, reflecting compromises among different factions within the Senate GOP [1] - The new draft includes a temporary agreement with House Republicans regarding the increase of the state and local tax (SALT) deduction [1] - Republicans plan to begin voting on the tax reform proposal as early as Saturday noon local time, with a final vote potentially occurring by Sunday morning [1]

Group 1: Market Reactions - The U.S. stock market experienced a significant decline, with major indices falling sharply amid rising geopolitical tensions and concerns over U.S. intervention in the Israel-Iran conflict [2][3] - The VIX index surged to its highest level since May 23, closing at 21.6 points, indicating increased market volatility and investor anxiety [2][3] Group 2: Sector Performance - All sectors of the S&P 500 index declined, except for the energy sector, which saw gains [3] - Defense and aerospace stocks rose, with Lockheed Martin increasing by 2.6% [3] - Clean energy stocks plummeted due to proposed tax reforms that aim to phase out renewable energy tax credits by 2028, with Enphase Energy dropping 24% and Sunrun falling 40% [3] Group 3: Company News - Eli Lilly announced plans to acquire gene-editing company Verve Therapeutics for up to $1.3 billion, resulting in a 2% drop in Eli Lilly's stock, while Verve's stock surged by 81.5% [3] - Tesla led declines in technology stocks, falling nearly 4%, while other major tech companies like Apple, Microsoft, and Amazon also experienced varying degrees of decline [3] Group 4: Economic Data - U.S. retail sales fell by 0.9% in May, marking the largest decline in four months, with a 0.3% decrease excluding auto sales [4] - Industrial output declined for the second time in three months, with utility output down by 2.9% and weak manufacturing growth [4] Group 5: Commodity Market - Oil prices rebounded strongly due to Middle Eastern risks, with WTI crude futures rising by 4.3% to $73.27 per barrel and Brent crude increasing by 4.4% to $76.45 [5] - Gold prices faced pressure, with COMEX gold futures falling by 0.3% to $3,406.9 per ounce [5]

Core Viewpoint - The U.S. Senate is engaged in lengthy revisions of President Trump's multi-trillion dollar tax reform and spending plan, putting unprecedented pressure on the country's fiscal capacity [1] Group 1: Legislative Process - The Republican leadership has tied the debt ceiling increase to this significant economic legislation, which accelerates the legislative process but complicates the avoidance of a debt default [1] - The tax reform bill faces a long review in the Senate, with Republican lawmakers indicating substantial modifications will be made before passage [1] - The House version of the bill narrowly passed, and any revisions sent back to the House may lead to further contention [1] Group 2: Market Reactions - As the potential default deadline approaches, the political standoff may trigger market panic, with Treasury Secretary warning that the U.S. could exhaust its borrowing capacity by August if the debt ceiling is not raised [2] - Prices of short-term Treasury bonds have dropped significantly, with yields on bonds maturing in August reaching 4.34% [2] Group 3: Internal Republican Dynamics - The ability to raise the debt ceiling hinges on whether Republicans can reach a consensus on the tax reform proposal [3] - Senate Republican leaders face challenges in securing the necessary votes, with some senators insisting on rewriting parts of the bill [3] - The process of revising the $4 trillion tax cut proposal is fraught with tension, as some Republicans demand permanent corporate tax cuts while fiscal hawks push for increased spending cuts [3] Group 4: Proposed Modifications - Senators are advocating for various amendments, including increasing child tax credits and imposing taxes on private equity and venture capital [4] - Wisconsin Senator Johnson is prepared to challenge House colleagues from high-tax states regarding state and local tax deductions, which are critical for the bill's passage [5] - Democrats, although excluded from the budget reconciliation process, can still invoke Senate rules to remove non-fiscal provisions from the bill, potentially prolonging the review process [5]

Core Viewpoint - Deutsche Bank warns that the biggest threat to the US dollar may stem from the US government's own fiscal situation, with the fiscal uncertainty index reaching a historical high due to ongoing disputes over tax reform and budget deficits [1][4]. Group 1: Fiscal Situation and Debt Market - The US fiscal uncertainty index has surged to a historical high, primarily driven by continuous debates surrounding tax reform, fiscal deficits, and long-term budget outlooks [4][6]. - Despite a relatively strong economic backdrop, the US fiscal deficit remains exceptionally large and unsustainable, contradicting historical patterns where deficits correlate with high unemployment rates [4][6]. - Investor interest in US Treasuries is waning, as evidenced by the 30-year and 20-year Treasury yields both surpassing 5%, yet the latest 20-year Treasury auction results were disappointing, indicating a quiet withdrawal of foreign capital [3][6]. Group 2: Domestic vs. Foreign Investment - Historically, foreign investors have been the primary buyers of US Treasuries, and if this trend of withdrawal continues, the question of who will step in to purchase these bonds becomes critical [6][7]. - Domestic institutions may be incentivized to buy US Treasuries due to high yields, but their holdings in the Treasury market have significantly decreased compared to decades past, and they are less sensitive to US fiscal deficits than foreign investors [7][9]. - Even if domestic investors increase their Treasury purchases, it may not prevent the dollar from weakening, as they lack sufficient overseas assets to offset the outflow of foreign capital [7][11]. Group 3: Market Dynamics - Domestic institutions currently hold a historically high position in the stock market, and any significant shift towards increasing Treasury allocations would likely require them to reduce their stock holdings, potentially leading to a chain reaction in the markets [9][11]. - Overall, while domestic institutions may find opportunities in US Treasuries, the ongoing withdrawal of foreign investors poses a clear downside risk for the US dollar [11].

Core Viewpoint - The Republican Party in the U.S. House of Representatives has released a tax reform bill that includes an increase in the cap for state and local tax deductions (SALT) [1] Group 1 - The tax reform bill aims to adjust the SALT deduction cap, which could have significant implications for taxpayers in high-tax states [1] - The proposed changes are expected to benefit individuals and families who itemize their deductions, particularly in states with higher local taxes [1] - This legislative move reflects ongoing discussions about tax policy and its impact on state economies and federal revenue [1]