Trump’s “Beautiful” Bill Could Backfire — and Help China Win the Future

Photo by Gage Skidmore

U.S. President Donald Trump has just passed a major economic law known as the One Big Beautiful Bill. It's packed with dramatic changes: permanent tax cuts, higher defense spending, cuts to healthcare, and a US$5 trillion increase in America’s debt ceiling.

While the bill isn’t directly targeting China, many experts believe its effects will be felt far beyond U.S. borders — especially in Beijing.

Clean Energy Takes a Hit

One of the bill’s biggest shakeups is to clean energy. By slashing subsidies and delaying green investment, Trump’s move could derail dozens of U.S.-based solar, wind, and EV projects — many of which are connected to Chinese supply chains.

Some Chinese analysts say this could hurt demand for Chinese-made parts in the short term. But others argue it might actually help China in the long run, by allowing Beijing to pull further ahead in global green tech while the U.S. slows down.

$3 Trillion and Counting

The U.S. is now on track to add over US$3 trillion to its deficit within the next 10 years, according to official projections. That’s raising red flags about America’s economic stability — and shifting global investment strategies.

Higher deficits often mean higher interest rates. That can strengthen the U.S. dollar, making Chinese exports more expensive globally. But it may also cause U.S. companies to bring more cash back home, disrupting the global flow of capital.

Some analysts believe the U.S. may eventually try to stabilize relations with China — not out of friendship, but to focus on building strength at home.

New Powers for Trump on Trade

The bill gives President Trump broader authority to act on trade. He can now impose tariffs or offer subsidies with less oversight — something that could increase economic pressure on China, especially in tech and critical raw materials.

Chinese researchers say this might lead to a more aggressive U.S. push to cut reliance on Chinese energy and tech, while simultaneously isolating China from U.S.-led markets.

More Tension — or a New Balance?

There are concerns the law could deepen military competition, especially as it boosts defense and drone spending. That said, some analysts believe the U.S. may eventually try to stabilize relations with China — not out of friendship, but to focus on building strength at home.

Trump’s hardline economic approach may reduce U.S. soft power globally, but it could also reshape its internal structure, attracting capital and talent. That could make America a stronger rival — but with new vulnerabilities.

China's Strategic Opening

Despite the risks, China might still find ways to benefit. If the U.S. damages its own clean-energy sector, Beijing could expand its global lead in electric vehicles, solar energy, and autonomous driving.

As Thomas Friedman wrote in The New York Times, “The Chinese can’t believe their luck.” America’s decision to weaken its own future industries may offer China space to grow stronger in areas critical to the global economy.

The Bigger Picture

This new law is not just about tax and spending. It reflects a deeper shift in U.S. strategy — inward-looking, unpredictable, and increasingly focused on competition with China.

Whether this becomes a moment of advantage for Beijing or a turning point in U.S.–China tensions will depend on how both sides adapt.