The One, Big, Beautiful Bill (OBBB) was enacted on July 4, ushering in a new wave of tax law that includes both retroactive and prospective changes. Certain retroactive changes may require immediate action by some taxpayers. Even certain prospective changes, such as changes to various Inflation Reduction Act (IRA) credits, may similarly require quick action to ensure continued qualification. The enactment of the OBBB also further cements the continued theme on both sides of the aisle of increasing deficit spending, partially fueled by temporary tax reductions that are eventually extended or become permanent.
Read on for a roundup on some of the most significant recent tax policy developments.
- It was here before we knew it: The OBBB becomes law
- The here and now: Immediate OBBB considerations
- Planning for the future: Longer-term OBBB considerations
- How will states respond to the OBBB?
- What got left out of the OBBB
- Inflation Reduction Act credits changes in the OBBB
- The reconciliation process and budget math lessons for the future
- A chance to level set on tariffs
It was here before we knew it: The OBBB becomes law
Republican lawmakers rushed to deliver tax legislation to President Trump’s desk by the July 4 holiday. The GOP had been targeting July 4 as the deadline to enact the OBBB, and many assumed this self-imposed deadline was ambitious. However, after a frenetic few days leading up to the holiday, the party gained enough votes in the Senate to secure passage and then convinced enough House lawmakers who had announced themselves as “Nos” or “Maybes” to instead vote “Yes” to ensure final passage, with the president himself applying pressure to these lawmakers. The OBBB includes voluminous tax changes, including extension of rules from the Tax Cuts and Jobs Act (TCJA), implementation of campaign promises, and the modification or creation of many other rules. With much to unpack, our specialists surveyed most of the tax provisions included in the bill.
The here and now: Immediate OBBB considerations
With many of the OBBB provisions effective immediately or retroactively, it will cause certain taxpayers to take immediate action to ensure they’re both complying with the law and not missing out on key tax-saving opportunities.
Deductions for tips, overtime pay, seniors, and auto loan interest
A new suite of individual-related tax changes in the OBBB are scheduled to run through 2028. These include the provisions that create deductions for tip and overtime income, for seniors aged 65 and older, and for auto loan interest payments. Each of these deductions take effect retroactively as of the beginning of the 2025 tax year and are available even to individuals who claim the standard deduction.
For individuals who already qualify, this may result in immediate tax savings on activity that happened in the first half of the year, which may then justify revisiting withholding or estimated tax payments going forward. While the OBBB includes significant guardrails and caps/phaseouts on both the tip income and overtime exclusions, many taxpayers will still see a significant tax decrease that could cause them to reconsider how and when they work.
Similarly, businesses may have to reconsider how they approach employment practices to the extent that these changes could increase motivation and productivity of workers. For example, overtime pay being exempt from tax for certain workers could create increased productivity among employees eligible for these benefits even though it could increase the overall wage expense for the employer. Employers in professions where tipping has historically been customary may similarly want to revisit whether or how they encourage tipping among customers and how that impacts their employees. While taxes are rarely the sole driver of business practices, these tax law changes may still cause employers to revisit existing practices to determine if changes could result in both benefits to the business and tax savings to employees.
At the very least, these employers will need to consider the reporting obligations that come along with many of these deductions. Tip income and overtime will both be required to be reported separately on Forms W-2 and similar information reports and wage withholding will also be impacted. These considerations will require more immediate action to ensure that proper steps are being taken considering we are already in the back half of the year and information system updates may be necessary to implement these changes.
With respect to the auto loan interest deduction, this has the potential to increase demand of qualifying automobiles in the short term now that the deduction makes it cheaper for individuals to finance car purchases. This will be impactful to businesses that sell qualifying vehicles, those that finance those purchases, and the vast system of businesses that support both the sales process and ownership. But, regardless of the impact on demand, businesses that participate in the sales process may have to participate in the reporting process regarding which vehicles qualify for the deduction and supporting the financing company’s new reporting obligations.
The IRS has already promised transition guidance for 2025 that will address each of these deductions for both employees and employers as well as lenders and recipients of qualified car loan interest.
The “trifecta” of business-related measures: R&D, bonus depreciation, and interest expense limitation
While the TCJA created significant tax savings for many businesses starting in 2018, it also paid for some of that by creating some tax increases on businesses in later years. The three most prominent domestic policies, commonly referred to as the “trifecta” of business tax provisions, included the requirement to amortize research and development (R&D) expenses beginning in 2022, the more restrictive deduction of interest under Section 163(j) beginning in 2022, and the phasedown of bonus depreciation from 100% to 0% from 2023 through 2027.
This “trifecta” of provisions has been of foundational importance to key leaders in the GOP — like Finance Chair Mike Crapo and Treasury Secretary Scott Bessent — who have both pushed for the trifecta’s permanent extension during the OBBB negotiations. Many Democrats in Congress have also similarly pushed for relief. The OBBB did exactly that by reverting to more favorable versions of each provision, but with some carveouts and transition rules that will require businesses to evaluate scenarios to determine how to maximize tax savings.
This is especially true of R&D expenses. The law as it existed immediately prior to the OBBB distinguished between domestic and foreign costs. Domestic costs were amortized over five years while foreign costs had to be amortized over 15 years. The OBBB maintains and amplifies the distinction by allowing immediate expensing of domestic costs while maintaining the 15-year amortization for foreign costs. For domestic costs capitalized in 2022 through 2024, taxpayers will have the option to expense them entirely in 2025 or spread them across 2025 and 2026. Certain small taxpayers will have the option to apply the law retroactively to 2022 and amend previous returns. This can provide dramatic and immediate tax savings to many businesses, but the path that provides the most savings will require modeling of the options and how they interact with other areas of tax law.
With respect to Section 163(j), the OBBB relaxes the interest expense limitation as it had existed from 2022. When it was first enacted for the 2018 tax year, the limitation was calculated based on 30% of tax basis EBITDA. Beginning in 2022, this was changed to EBIT — meaning that depreciation and amortization were no longer added back in determining the limitation. The OBBB returns the limitation to the broader EBITDA base. This is welcome news for taxpayers, many of whom had been feeling the heightened constraints of the EBIT-based limitation in combination, especially as borrowing costs have markedly increased since 2022. On the other hand, the law restricts the interest limitation of other taxpayers by preventing: the voluntary capitalization of interest from increasing the amount of interest that’s deductible beginning in 2026 and taxpayers with certain foreign income from increasing their interest limitation base.
Bonus depreciation has been phasing down in 20% year-over-year increments for several years now. The deduction dropped to 80% for 2023, 60% for 2024, and 40% for the current year. It was set to phase out to 0% in the 2027 tax year, but the OBBB brought back the 100% deduction on a permanent basis. Bonus depreciation was first enacted as a temporary stimulus measure in 2001, and it’s been consistently used as a temporary stimulus measure ever since. This marks the first time that bonus depreciation is available on a permanent basis. This could, of course, be changed by future changes in law, particularly if there’s a desire to raise revenue in the future. But for now, the 100% deduction is here to stay.
The full 100% deduction is available for property acquired after Jan. 19, 2025. Taxpayers familiar with bonus depreciation as it existed under the TCJA know that bonus is usually keyed off a property’s placed in service date. There is also a transition rule under the OBBB for certain property.
Given that each of the “trifecta” have an element of retroactivity to them, they will have a dramatic impact on the current tax liabilities of many businesses. Immediate modeling will be key to determine how quarterly tax payments will be impacted, how various options in implementation will impact current and future cash taxes, and whether future business decisions should be revisited in light of increased tax benefits on domestic R&D and capex expenditures.
Estate and gift exemption
The OBBB increases and makes permanent the estate and gift tax exemption at $15 million in the 2026 tax year, up from $13.99 million in 2025. Without the OBBB, the exemption was set to decrease to approximately half that threshold in 2026. While this change may seem like it just cements the status quo, a lot of estate tax planning over the past few decades has revolved around the temporary nature of the gift and estate tax exemption, which has also caused some individuals to sit on the sidelines and wait to see what changes Congress makes to the law. With the exemption now set at a permanent level (at least to the extent a future Congress doesn’t change the law), it’s now time for individuals to immediately revisit their overall estate plans to determine if any actions are necessary to take full advantage of the current exemption.
Employee retention credit (ERC)
Congress created the ERC at the outset of the COVID-19 pandemic in March 2020. As time has progressed, the IRS has been increasingly concerned about fraudulent ERC claims and took extraordinary measures in response, including pausing processing and allowing taxpayers access to multiple rounds of voluntary disclosure and recission programs. The OBBB disallows refund claims filed for the third and fourth quarters of 2021 that weren’t filed by Jan. 31, 2024. Generally, the statute of limitations for assessment will also be extended to six years, and additional rules will coordinate wage deductions for disallowed claims. Most of these provisions will take effect immediately upon enactment. Taxpayers with outstanding refund claims — as well as those who have already collected previous refund claims — should pay close attention to these developments as they could directly impact those refund claims or indirectly impact the continued IRS reaction to ERCs in general.
Planning for the future: Longer-term OBBB considerations
Qualified small business stock (QSBS) exclusion
Section 1202 incentivizes investment in small businesses by allowing individuals, estates, and trusts to exclude from income up to 100% of capital gain on the sale of C corporation stock. There are specific, strict requirements that, before the OBBB, included a five-year holding period and a $50 million limit on the amount of tax basis in assets that a corporation could hold and still issue qualified stock. Both restrictions have been significantly relaxed by the OBBB concerning stock issued beginning on July 4, 2025. Specifically, the exclusion is phased in between years three and five, and the asset limit is increased to $75 million. The amount of gain subject to exclusion also jumped to a minimum of $15 million under the OBBB. The Section 1202 exclusion for QSBS was already a very popular provision that caused many investors to look toward investing in structures that would provide the potential for these tax benefits. These taxpayer-favorable changes will significantly increase the pool of businesses that are eligible to issue QSBS while also increasing the overall value to investors. However, taking full advantage of these changes will take careful planning.
Opportunity zones and other real estate/investment incentives
The policy idea behind opportunity zones (OZ) as first enacted by the TCJA was to incentivize investments in low-income communities — investments in commercial and industrial properties, residential buildings, and operating businesses. Investors were permitted to defer gain through equity investments and in exchange take tax incentives in the forms of gain deferral and basis step-ups.
There can be long runways when it comes to planning OZs, but the program under the TCJA was due to sunset, allowing tax deferral on eligible capital gains to run until 2027 and not permitting basis step-ups for more recent investments. The OBBB creates long-term planning stability by permanently extending the OZ incentives and broadening the incentives by creating a new class of qualified opportunity fund (QOF) as to rural areas, among a number of other rules changes.
While the OZ program covers investment in real estate and businesses, it has been most popular among real estate developers in OZs. These types of developments could also be combined with the low-income housing tax credit (LIHTC) and the New Markets Tax Credit (NMTC). Investors in these arrangements get returns on their capital investments in the form of credits to support the overall cost of the project. The OBBB is a boon to these investors, as it increases the amount states may allocate to the LIHTC by 3% — from 9 to 12% — and makes both the LIHTC and the NMTC permanent.
In addition, the OBBB made a change to the percentage-of-completion method (PCM) of accounting under Section 460(e) by permitting developers of larger residential projects to use the completed contract or cash method instead of PCM. This permits these developers to better match the tax liability resulting from the income on a residential construction project to the time it has access to the cash from its customers.
Similarly, these changes will provide significant incentives to investors, developers, or real estate projects across the country. While these types of projects have significant lead times, the permanency of each provision may provide some comfort that the cashflows to support the project will be more likely to be available when the project comes to fruition.
Another 100% deduction: A new kind of qualified production property
A new provision, codified at Section 168(n), allows 100% expensing for nonresidential real property located in the United States that’s integral to the manufacture or refining of tangible property, agricultural, and chemical production. While this might fall short of a reduced tax rate on manufacturing income as discussed by Trump on the campaign trail, it will provide a significant benefit to those manufacturers that do qualify. While the provisions are designed to most easily accommodate newly constructed facilities, they are also flexible enough to permit the expensing of the acquisition and refurbishment of existing facilities. When combined with 100% expensing of equipment under the general bonus depreciation rules, the entire cost of opening a new facility, other than costs of acquiring land, could be immediately deductible under the right facts. This is a dramatic shift from prior law and has the potential to create a new financing mechanism generated by immediate tax savings.
How will states respond to the OBBB?
State and local taxes (SALT) have the potential to be significantly impacted by the OBBB, in both direct and indirect ways. The direct impacts largely focus around the OBBB’s increase of the SALT cap to $40,000 beginning in 2025 and the decision to retain the ability for pass-through entities to deduct state taxes at the entity level. While the SALT cap is now scheduled to revert back to its $10,000 limit beginning in 2030, states may still be emboldened to alter their policies knowing that taxpayers might have the potential to recoup a portion of certain tax increases through federal tax savings.
At the same time, savings in Medicaid and supplemental nutrition assistance programs (SNAP), among others, were used to pay for some of the tax savings included in the OBBB. These savings will generally result in reduced funding to states that administer these types of programs. Most states are required to balance their budgets annually, so they will have to decide whether to cut benefits from these programs to better match the reduced federal spending on the programs or to balance the budget in other manners, such as by increasing taxes.
While some state legislatures and governors might be comfortable overtly increasing tax rates, many others will be hesitant to do so. This will raise a basic question of conformity with federal tax law. In many states, the starting point for taxable income is federal adjusted gross income or taxable income. Whenever a federal tax law is enacted that impacts these amounts, states need to decide whether they will follow along and ride the same wave or increased or reduced tax collections. Some states have rolling conformity, meaning they conform with federal tax laws as and when they change unless the legislature specifically decouples from a particular federal tax law through a separate legislative action. Other states have static or fixed conformity, meaning they conform with federal tax, but only as of a certain date in time which has to be periodically updated by the legislature through enactment of legislation.
Whether a state has rolling or static/fixed conformity will have a direct impact on whether the OBBB provides immediate state tax savings for individuals and businesses. However, even rolling conformity states may later choose to retroactively decouple from a federal tax provision, causing the state tax savings resulting from a federal tax change to not be realized.
Further exacerbating the issue is the ongoing debate in Congress and the Trump administration on the role of the federal government. The current funding for the federal government expires on September 30, and Congress is currently debating how to best fund the federal government beyond that date. It’s possible that funding for various programs like Medicaid and SNAP could be further impacted along with other programs that provide significant funding to states.
As states reevaluate their budgets in light of the totality of the OBBB and future federal government actions, they may decide that they can’t afford to follow along with the tax savings included in OBBB and decouple from certain provisions. While most states have generally conformed to most federal tax law, with limited exceptions for provisions such as bonus depreciation, it’s possible that the OBBB may cause a wave of broad disconformity to preserve state budgets. It’s also possible that a wave of other income and sales tax changes could occur.
Staying in touch with how states modify or address broader policy decisions, including federal tax conformity, will be crucial when it comes to maximizing efficiency for multistate businesses in the wake of the OBBB.
What got left out of the OBBB
The OBBB went through many iterations in both the House and the Senate as it made its way through various committees and tense negotiations. There were many provisions included in earlier drafts that were ultimately dropped from the final version of the OBBB. While these provisions aren’t current law and don’t have an immediate impact on taxpayers, they’re worth keeping an eye on because once a tax provision makes its way into proposed legislation such as the OBBB, they tend to have a way to reappearing at some point in the future.
One proposed change that wasn’t included in the final version of the OBBB was a modification to P.L. 86-272, the federal preemption law that prevents states from imposing net income taxes on businesses that are doing nothing more than soliciting orders of tangible property in the state. The change would’ve been definitional as to what it means to solicit orders and significant given the foundational importance of P.L. 86-272 to state income tax nexus for sellers of property.
Another provision that drew much attention when it was added in the House was Section 899, which would have increased taxes on entities and individuals based in countries that, in the U.S.’ view, impose discriminatory taxes on U.S. taxpayers. These sort of discriminatory taxes would have included excise taxes on digital services and “top-up” taxes under the Pillar 2 framework. Section 899 would have been intricate and onerous from a compliance perspective and was already causing small waves on the global stage. Treasury asked for Section 899’s withdrawal because it had reached a tentative agreement with other G7 countries whereby those other countries would exclude U.S. companies from “top-up” taxes in exchange for dropping Section 899.
Other provisions that were left on the cutting room floor included:
- Small manufacturer tax relief — A meaningful increase, from $25 to $80 million, to the gross receipts threshold, which would permit many more manufacturers to use the cash method of accounting and relax inventory capitalization requirements.
- Sports team amortization — A proposal that would have introduced a 50% limitation on the amount of basis in Section 197 intangibles for professional sports teams that would be eligible for amortization.
- Tax-exempt parking tax — The House proposed to reinstitute the “parking tax” that was originally enacted by the TCJA in 2017 and later repealed in 2019.
- Foundation investment income — The House had originally proposed to alter the investment tax on private foundations from the current flat rate of 1.39% for certain foundations to a graduated rate system that maxed out at 10% for foundations with assets of $5 billion.
Inflation Reduction Act credits changes in the OBBB
How IRA tax credits would be treated under the OBBB was a major question pressing down on lawmakers in both chambers as the legislation ebbed and flowed its way toward passage. While it was clear that GOP lawmakers were intent on paring back IRA credits, the extent of such changes were subject to continual negotiations. With final passage, the broader themes on IRA credits appear clearer; the themes we’ll be watching in the years to come are restrictions on foreign involvement, the guidance process for IRA credits, including in the definition of “beginning of construction,” and the special focus on wind and solar projects.
Foreign restrictions
One overall policy theme for the administration has been extracting revenue from foreign entities seeking access to U.S. markets. This theme, when it comes to IRA credits, extends to disallowing U.S. tax benefits, like lucrative IRA credits, to foreign entities and individuals. The OBBB works to disallow credits where the taxpayer is a prohibited foreign entity. It goes even further by creating barriers to the credits where foreign entities have control over the taxpayer, provide material assistance to the taxpayer, or receive payments from the taxpayer.
OBBB implementation guidance
A basic difficulty that has persisted throughout the relatively short lives of the IRA credits has been the lack of specificity in guidance in some areas and the scarcity of guidance in others. The statutory frameworks for the credits seem simple in concept, but in practice, they can present difficult questions without clear answers.
The OBBB’s text contemplates additional guidance from Treasury, and there is reason to expect that guidance sooner rather than later. There were last-minute discussions between Trump and several GOP lawmakers that touched on lawmakers’ sticking points to voting “Yes” on the OBBB. These sticking points certainly included the treatment of IRA credits. Timing is everything, and just one working day after signing the OBBB into law, Trump issued an executive order directing Treasury to “take prompt action” within 45 days of enactment as to enforcement of the new foreign entity restrictions and to prevent the circumvention of the “beginning of construction” provisions in the new law. While it seems clear that the Trump administration doesn’t approve of previous definitions of “beginning of construction” that has existed for many years, it’s not yet clear whether Treasury feels that it has the flexibility to change that definition at this juncture.
Wind and solar
The executive order further instructs Treasury to “strictly enforce” the early termination of wind and solar projects that would have otherwise qualified for the investment tax credit (ITC) or the production tax credit (PTC) before the OBBB’s enactment.
The OBBB identifies wind and solar ITC and PTC projects for early termination. In general, wind and solar projects that qualify under the current version of the ITC at Section 48E and the current version of the PTC at Section 45Y must be placed in service before 2028 to qualify. But having a project being placed in service and establishing beginning of construction are two distinct concepts when it comes to IRA credits. The OBBB provides some extra breathing room based on this distinction: Projects that begin construction within one year of OBBB’s enactment date — that is, by July 4, 2026 — fall in a safe harbor and are shielded from the general rule that requires wind and solar projects to be placed in service by the end of 2027. This is welcome news, as the reality is that large wind and solar projects can easily take several years to construct. However, there is a lot more to this analysis that taxpayers must consider in the short term.
The reconciliation process and budget math lessons for the future
Debt ceiling
The OBBB has increased the U.S. government debt limit by $5 trillion, an amount that’s $1 trillion more than the increase originally proposed by the House. Having this increase included in the OBBB makes life easier for Trump and congressional Republicans in the near term because it was always going to be necessary to increase this limit and if negotiations on the OBBB dragged on for too long, it would have put pressure on the need to enact separate stand-alone legislation to address the debt limit. The so-called “X date,” the date at which the government no longer had sufficient cash to fund all daily expenditures, had been vaguely looming over Washington for months leading up to the OBBB’s passage. The $5 trillion increase relieves this pressure. In any case, certain members of the Republican Party are particularly frustrated with this increase, which may pose problems in the future.
The intensity of the conversations about the debt limit leading up to the OBBB’s passage underscores the fact that the concerns about the debt limit will persist into the future and have as much to do with the dollar number attached to the statutory limit as with foundational questions about the relative economic value of borrowing costs. It also remains to be seen whether the $5 trillion increase is sufficient to extend beyond the 2028 election cycle which could cause further political complications.
Deficit spending
The most significant early policy debate around the OBBB was the total cost of the legislation, including both the total costs of tax cuts and how much would be offset by tax increases or other spending cuts. While some in Congress, such as the House Freedom Caucus (HFC), demanded that meaningful deficit reductions be a core feature of the legislation, the legislative framework agreed to within the GOP permitted cutting taxes by more than the budget savings generated in other areas.
The Congressional Budget Office (CBO) projects that the OBBB will increase the federal debt by roughly $3.4 trillion over the next 10 years compared to the law that existed prior to the OBBB. This $3.4 trillion figure was large enough to cause many fiscal conservatives, including the HFC, within the GOP to at least seriously threaten to withdraw their support from the bill. With most of these lawmakers quickly falling into party line behind Trump, it remains an open question how much overall influence fiscal conservatives will have on tax policy going forward.
Additionally, it remains to be seen how this will impact future legislative efforts. For example, appropriations for the government fiscal year beginning Oct. 1, 2025, are currently being debated within Congress. To the extent that members view the OBBB spending cuts as insufficient, it’s possible they’ll seek further cuts in the annual appropriations process. Given that appropriations bills generally require 60 votes in the Senate, they’re typically a bipartisan effort. It’s not clear that such bipartisanship tendencies will exist within the Democratic caucus over the next few months, but that may be tempered by the desire to avoid further spending cuts on favored government programs. Conservatives in Congress have indicated that they were promised that further spending cuts would be entertained in the coming year and have indicated that they expect further budget reconciliation legislation to occur to facilitate this, but if this occurs it will likely be separate from the government appropriations process.
Many in Congress are asking whether they will get serious about deficit spending and the growing national debt. The appropriations legislation will be the next test of this concern.
The budget reconciliation process and temporary tax measures
The budget reconciliation process has increasingly become the tool of the majority party in Washington because it avoids the 60-vote threshold necessary to break a filibuster in the Senate. This permits the majority party in the Senate to pass legislation without support from the minority party. The process traces its origins back to legislation from the 1970s, and is technically limited to debt, revenue, and spending issues as a means to ensure that budget savings could get enacted through Congress. But in more recent years, the reality has been that reconciliation has resulted in legislation primarily focused on tax cuts enacted by both parties that have significantly increased deficits.
Since budget reconciliation legislation generally can’t implement policies that don’t meaningfully impact the budget, this has caused many policy priorities to be implemented through tax law. This process has also caused many tax provisions to be enacted on a temporary basis since it’s more difficult to have tax decreases that extend beyond 10 years from the year of enactment. While the reconciliation process frustrates people for various reasons, there do not appear to be nearly as many practical reasons why we might expect the process to fall out of political fashion. Republicans in Congress have already indicated that they may look to enact another one or two budget reconciliation packages over the coming months.
In addition, Congress will still be confronted with the remaining temporary tax measures that exist in the law. While the OBBB significantly decreased the number of them, it also created more. For example, the tax deduction for tip income, overtime pay, seniors, and auto loan interest all expire after 2028; the SALT cap reverts to $10,000 after 2029; and many IRA credits expire at various points in time. The OBBB also didn’t address other provisions, such as the Work Opportunity Tax Credit that still expires after 2025 and has otherwise been extended a number of times in the past. So, while the perceived need for “tax extender” legislation has been significantly reduced, it is still alive and well in certain areas.
When these concepts are combined together, there’s a high likelihood of continued complex debates among members of Congress on both the future policies that are best for the country as well as the procedures that should be used to enact them.
A chance to level set on tariffs
On April 2, the administration announced a sweeping set of “Liberation Day” tariffs. There were, broadly speaking, three types of tariffs included in this set: universal tariffs, sector-specific tariffs, and reciprocal tariffs. The universal, baseline tariffs apply across the board, without regard to a specific country or product. Sector-specific tariffs relate to products like aluminum, steel, timber, and pharmaceuticals. Reciprocal tariffs are country-specific. The reciprocal tariffs were announced at different rates, depending on the country, and are partially based on the U.S. trade deficit as to a given country.
The White House paused the reciprocal tariffs for 90 days on April 9, less than a week after announcing them; this meant these country-specific tariffs were set to take effect on July 9. The big exception to this pause was China. Heavy tariffs on both the U.S. and Chinese goods were in place for over a month before the two countries agreed to a separate 90-day pause as of May 12.
With the ink barely dry on the OBBB, on July 7, the administration signaled the pause on reciprocal tariffs will be extended through to the beginning of August. This will allow the United States and dozens of its trading partners an additional few weeks of negotiation time. Treasury has indicated the focus will be on hammering out deals with 18 major trade partners, and the administration has already intimated that some deal work could extend beyond early August.
