Publications: Notes at the Margin

Trump's Big Beautiful Bill: Total Surrender to China; OPEC Piles on Falling Oil (July 7, 2025)

 

The US House of Representatives passed Donald Trump’s “Big Beautiful Bill” (BBB) on Thursday, July 3. Republicans praised the achievement and promised that the law would stimulate strong economic growth, thereby avoiding an increase in the US deficit of $3 trillion. They have got it wrong. Instead, the legislation marks the likely surrender of US global economic leadership to China, as New York Times columnist Thomas Friedman pointed out with this headline in a July 3 op-ed:

 

How Trump’s “Big, Beautiful Bill” Will Make China Great Again[i]

 

Friedman’s article focused on the legislation’s roadblocks to expanding solar and wind electricity generation in the United States. He explained that this will limit the US's electricity capacity growth while China rapidly expands its green generation. The key losers will be US consumers and ultimately the US artificial intelligence sector.

 

The slower growth of US generating capacity will lead to increasingly higher electricity prices. Rising power costs will spark a consumer (voter) reaction that will probably constrain AI expansion here as China and other nations race ahead. US growth will stagnate or decline as the BBB distorts investment allocations, pushes up electricity costs, and likely leads to brownouts and blackouts. Meanwhile, US debt, and interest rates likely, will rise. The economic distortions will depress global oil use.

 

By 2028, President Trump may find himself signing instruments of surrender to China as the latter surges economically and the US founders or, worse, collapses.

 

Amid all of this, the oil-exporting countries “piled on” the befuddled president by boosting oil production Saturday, further undermining his goal of energy dominance. The US may soon have to replace “dominance” with “submission” as the key word in its energy policy.

 

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