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On July 4, U.S. President Trump signed the 'Big and Beautiful' bill, which has pleased his supporters, but analysts warn that this move may also make Chinese President Xi Jinping happy. The bill is set to increase the national debt by $4.1 trillion while canceling clean energy subsidies, effectively withdrawing the U.S. from the renewable energy race and paving the way for China's dominance in related industries.

An analysis by Barron's states that if Xi Jinping's Communist Party were to design a blueprint to weaken America's potential over the next decade, it would be hard to do better than the 'Big and Beautiful' bill signed by Trump on July 4. The purpose of the bill is mainly to placate Trump's base, extending the tax cuts he promoted during his first term and temporarily exempting tips and overtime tax from his campaign promises.

However, the bill also slashes social welfare programs, aligning with the long-standing conservative position. The Republican Party may inadvertently be handing over much of the country's future to China. The Committee for a Responsible Federal Budget (CRFB) points out that this legislation will increase national debt by $4.1 trillion by 2034. If many temporary provisions are made permanent, the debt could skyrocket to $5.5 trillion.

This enormous spending could force the U.S. Treasury to rely on countries like China to foot the bill, as these regions are the largest buyers of U.S. bonds. Beijing currently holds $757 billion in U.S. debt, and if it were to increase its holdings, Xi’s influence on Trump’s economy would grow stronger.

America's exit from the clean energy race is beneficial for China. China's ambitions to dominate renewable energy, electric vehicles, and sustainable infrastructure now receive political support from the U.S. The 'Big and Beautiful' bill backs coal and ends clean energy tax credits, essentially allowing the U.S. to voluntarily withdraw from competition in solar, wind, and geothermal energy.

Asian expert Jeff Kingston bluntly states that America has given up on the 'primary growth market' and 'embraced the energy of losers'. He adds, 'Beijing will be popping champagne over this.'

BYD indeed has reasons to celebrate. The prospects of this Chinese electric vehicle star have never looked brighter, forecasted to surpass Tesla (TSLA-US) in revenue by 2024, and under Republican support, the path for Chinese EV startups and battery manufacturers to dominate globally has become smoother.

Meanwhile, Trump is cutting government jobs and raising tariffs, which could lead the world’s largest economy into recession. Although the labor market remains stable, the upcoming high import taxes pose a significant threat to employment prospects. Trump's bill also marks the largest reduction in the social safety net in decades, with millions set to lose healthcare.

The fiscal consequences of the tax cuts could severely impact the dollar. Brookings Institution economist Robin Brooks pointed out that the recent 'counterintuitive price movements' of the dollar and U.S. yields are concerning. The dollar has fallen against other G-10 currencies this year, which Brooks finds 'particularly alarming' as the decline coincides with rising U.S. interest rates—similar to the situation in 2022 during the debt crisis triggered by former British Prime Minister Liz Truss.

As the Republican Party potentially pushes the U.S. into a debt crisis, Trump is making the Federal Reserve 'China-like'. His ambiguous stance on firing Fed Chairman Powell continues to unsettle global markets. If imitation is the highest form of flattery, then Xi Jinping's inner circle would be blushing over Trump's shift towards Chinese-style policies since January 20.

Trump is also attempting to silence news outlets that dare to report the truth—a hallmark of behavior from the political bureau. He threatens lawsuits against the New York Times and CNN and has coerced ABC and CBS into compliance through settlements. Trump may be leading the U.S. down a dangerous path of media suppression of critical voices. His preference for central planning is becoming increasingly evident. His way of demanding loyalty from American corporations mirrors that of Xi Jinping and Putin. For instance, Trump approved a U.S. steel acquisition of Japan's steel company on the condition that the Japanese company grants the U.S. 'golden shares' which would prevent name changes, factory closures, or layoffs without Trump's consent.

After decades of effort, Xi Jinping has positioned China to challenge U.S. dominance. With the passage of the 'Big and Beautiful' bill and Trump’s 'China-like' policies, the Republican Party is making it easier for Beijing to achieve its goals. Barron's writes that while Trump’s bill shouts 'America First,' it cannot obscure the reality that Xi Jinping’s China is celebrating a historic victory.