The U.S. Senate passed President Trump's "big and beautiful" tax and spending bill by an extremely narrow margin and submitted it to the House of Representatives. The two houses must reach an agreement on the final version of the bill before it can be submitted to Trump for signature.

Reuters reported that the U.S. Senate passed the bill on Tuesday (July 1) with 51 votes in favor and 50 votes against, advancing a plan to cut taxes, reduce social safety net programs, increase military and immigration enforcement spending, and increase the national debt by $3.3 trillion (about S$4.2 trillion) in the next 10 years.

The bill includes extending the corporate and individual tax cuts passed by Trump in 2017 during his first term, exempting tips and overtime wages from tax, cutting investment in medical insurance and nutrition subsidy programs, and authorizing hundreds of billions of dollars in funding for combating illegal immigration and defense.

The bill passed by the Senate also stipulates that the United States will no longer provide tax credits for electric vehicles from September 30 this year, and only wind power and solar power projects that are put into production before the end of 2027 can enjoy tax credits.

The bill exposes divisions within the Republican Party over the United States' rapidly growing $36.2 trillion debt. The Senate version of the bill will raise the federal government's self-imposed debt ceiling by $5 trillion, higher than the amount previously passed by the House of Representatives. Congress must raise this ceiling in the coming months or face a catastrophic risk of default.Trump has asked for the Big and Beautiful Act to be signed into law before the July 4 Independence Day holiday, and House Speaker Johnson said his goal is to pass the bill before this deadline. The House of Representatives will debate and vote on the Senate version of the bill on Wednesday (2nd), and some Republican House members have expressed opposition to some provisions of the Senate version.

The "Big and Beautiful" bill narrowly passed the Senate by a single vote, marking a key step in Trump's plan to cut taxes and increase spending, but the final path to becoming law is still uncertain.Its huge fiscal impact, potential trade policy adjustments (such as immigration enforcement funding) and impact on specific industries (new energy, medical, etc.) cannot be ignored.

Hanyue International reminds relevant shippers and trading partners: pay close attention to the final version of the bill and the effective timetable: Especially the changes in terms involving energy, medical products and other fields may affect supply chain costs and compliance requirements. And The impact of the bill on the economy, inflation and subsequent policy trends after its implementation needs to be tracked continuously. Hanyue International will continue to monitor the progress of the bill and market trends, and combine your specific business needs to flexibly plan the best logistics plan, effectively avoid potential delays and cost risks, and fully guarantee the stable and efficient operation of your cross-border supply chain.