Economy
Trump’s ‘big, beautiful bill’ faces rocky ride in Senate
U.S. senators have kicked off weeks of talks that are certain to be fierce as they take on the mammoth policy package President Donald Trump hopes will seal his legacy, headlined by tax cuts slated to add up to $3 trillion to the nation’s debt.
The Republican leader celebrated when the House passed his “big, beautiful bill,” which partially covers an extension of his 2017 tax relief through budget cuts projected to strip health care from millions of low-income Americans.
The Senate now gets to make its own changes, and the upper chamber’s version could make or break Republicans’ 2026 midterm election prospects – and define Trump’s second term.
But the 1,116-page blueprint faces an uphill climb, with moderate Republicans balking at $1.5 trillion in spending cuts while fiscal hawks are blasting the bill as a ticking debt bomb.
“We have enough (holdouts) to stop the process until the president gets serious about spending reduction and reducing the deficit,” Senator Ron Johnson, one of half a dozen Republican opponents to the bill, told CNN.
Democrats – whose support is not required if Republicans can maintain a united front – have focused on the tax cuts, mostly benefiting the rich on the backs of a working class already struggling with high prices.
The White House says the legislation will spur robust economic growth to neutralize its potential to blow up America’s already burgeoning debt pile, which has ballooned to $36.9 trillion.
But several independent analyses have found that – even considering growth – it will add between $2.5 trillion and $3.1 trillion to deficits over the next decade.
Meanwhile, the nonpartisan Congressional Budget Office found that the combined effects of tax cuts and cost savings would be a giant transfer of wealth from the poorest 10% to the richest 10%.
Republicans muscled the measure through the House by a single vote on May 22 by a combination of bargaining vote holdouts on policies and deploying Trump himself to twist arms.
House Speaker Mike Johnson is now pleading with the Senate not to alter the bill too much, as any tweaks will need to go back to the lower chamber.
Fault lines
The Senate wants to get the bill to Trump’s desk by U.S. Independence Day on July 4 – an ambitious timeline given Republicans’ narrow three-vote majority and wide faultlines that have opened over the proposed specifics.
Independent analysts expect that around seven million beneficiaries of the Medicaid health insurance program will be deprived of coverage due to new proposed eligibility restrictions and work requirements.
Polling shows that the vast majority of Americans oppose cutting Medicaid – including Trump himself, as well as some Republicans in poorer states that rely heavily on federal welfare.
Senate moderates are also worried about proposed changes to funding food aid that could deprive up to 3.2 million people of vital nutrition support.
One thing is almost certain – Trump himself will get involved at some point, though his negotiation tactics may be more subtle than they were when he threatened “grandstanders” holding up the tax bill in the House.
Trump took to his Truth Social website on Monday to decry “so many false statements (that) are being made about ‘THE ONE, BIG, BEAUTIFUL BILL'” – and to falsely claim that it would not cut Medicaid.
“The only ‘cutting’ we will do is for Waste, Fraud and Abuse, something that should have been done by the Incompetent, Radical Left Democrats for the last four years, but wasn’t,” he said.
One more wrinkle for Trump: tech billionaire Elon Musk, no longer one of his closest aides but still an influential commentator, has already broken with the president to criticize the mega-bill.
“A bill can be big or it can be beautiful. But I don’t know if it can be both,” Musk said in a CBS interview criticizing its effect on debt.
Shares of Deutsche Telekom slipped 1.5% on Wednesday after reports of potential merger talks between the German telecoms conglomerate and U.S.-based T-Mobile US, which would be the largest ever public merger if it goes ahead.
Details of the early-stage talks were reported by Reuters, which cited two sources familiar with the matter on Wednesday. Telekom, which already holds a majority 53% stake in T-Mobile, did not respond to a request for comment.
Bloomberg first reported the potential deal.
Any combination, which would need buy-in from Germany, which is Deutsche Telekom’s single biggest shareholder, would create the world’s biggest wireless operator by market capitalization, with operations spanning the United States and Europe.
T-Mobile’s market value is about $218 billion, while Deutsche Telekom has a valuation of about $166 billion.
While the discussions are at a preliminary stage, the proposed idea is for a new holding company that would make a stock bid for both companies, owned by existing investors, and then list in the U.S. and Europe, Bloomberg said.
The German stake is roughly split between the government and state-lender KfW, whose stake could be diluted in a merged entity.
The deal would create a giant firm with potentially greater liquidity, which could also be useful for future dealmaking, according to a person familiar with the matter, speaking on condition of anonymity because the matter is private.
T-Mobile’s stock has lost a quarter of its value in the last year, while Deutsche Telekom’s shares have lost 10%.
Inflation in the U.K. jumped to 3.3% in March from 3.0% in February, official data showed on Wednesday, driven mainly by a notable rise in energy prices following the start of U.S. and Israel’s war with Iran.
Factory gate prices also jumped and by much more than expected, the figures from the Office for National Statistics (ONS) revealed.
Economists said the increases – driven largely by fuel – were unlikely to push the Bank of England’s (BoE) Monetary Policy Committee (MPC) to raise interest rates as soon as next week’s meeting, and the key question was whether the jump in energy prices would ignite a broader inflation problem.
“Inflation will probably fall to 2.9% in April as the big hikes in regulated prices drop out of the annual comparison,” said Ruth Gregory, deputy chief U.K. economist at Capital Economics.
“But the next eight months will be an uncomfortable ride for the MPC.”
Economists polled by Reuters had mostly expected the headline consumer price inflation rate to accelerate to 3.3%, driven by a rise in petrol and other fuel costs in March.
The price of motor fuels jumped by 8.7% on the month, the biggest rise since June 2022, shortly after Russia’s full-scale invasion of Ukraine, the ONS said.
The data showed services price inflation – which the BoE watches closely as a sign of longer-term inflation pressures – rose unexpectedly to 4.5% from 4.3% in February.
But much of that increase was due to a rise in air fares driven by the timing of the Easter holidays.
Core inflation, which excludes more volatile food, energy, alcohol and tobacco prices and is also watched closely by the BoE, weakened to 3.1% from 3.2% in February.
War impact
Before the U.S.-Israeli war on Iran began on Feb. 28, the BoE said Britain’s inflation rate – the highest among the G-7 economies for much of the last four years – was likely to be close to its 2% target in April.
But last month, the BoE sharply increased its inflation forecast due to the energy price shock, predicting it would rise toward 3.5% by the middle of 2026.
The International Monetary Fund (IMF) last week predicted British inflation would peak at 4% in the coming months.
However, the BoE’s interest rate-setters have mostly said it is too soon to know what the rise in headline inflation will mean for underlying price pressures in the economy, given the weak jobs market, which could make it harder for workers to demand higher pay or for businesses to pass on higher costs.
The British central bank is expected to keep borrowing costs on hold on April 30 at the end of its next scheduled Monetary Policy Committee meeting.
Financial markets on Wednesday were betting on one or possibly two quarter-point interest rate rises by the BoE this year. But a Reuters poll of economists showed most expected no change in borrowing costs during 2026.
The ONS figures showed cost inflation reported by manufacturers, some of which will filter through into consumer prices, soared last month.
Producer input price inflation leapt in March alone by 4.4%, the second biggest monthly increase since records began in 1984, behind only the increase in March 2022 due to the energy price shock spurred by the invasion of Ukraine.
Producer prices charged by services firms rose by 3.0% in the first quarter, up from 2.8% in the fourth quarter, the highest reading since the third quarter of 2024.
Spain’s government on Tuesday approved a broad plan to tackle the country’s deepening housing crisis, a key political challenge for Prime Minister Pedro Sanchez ahead of elections next year.
Rising rental and housing costs are pricing many Spaniards out of the market, despite a recent economic boom. Incomes have failed to keep up. Analysts say tourism and population growth in cities driven by immigration have further strained supply.
The new plan, worth 7 billion euros ($8.23 billion), triples government investment in public housing over the next four years. It ensures that subsidized housing cannot be reclassified after a few years. It also includes help for young renters and home buyers.
“It is a significant step forward. For the first time in decades, there is a serious budgetary commitment,” said Raluca Budian, associate director of the Observatory for Decent Housing at the Madrid-based Esade business school.
About 40% of the money will be earmarked for growing the public housing supply, which Spain lacks compared to the European average, while 30% will be set aside for property renovations, the government said. That will include funds for making homes more energy-efficient and building in depopulated parts of the country.
The rest will go toward subsidies, with a focus on young people.
“The public is demanding an agreement to address the main problem currently affecting them,” Housing Minister Isabel Rodríguez said Tuesday. Housing routinely comes up as Spaniards’ top concern, according to state pollster CIS.
Housing costs in Spain rose nearly 13% year-on-year at the end of 2025, according EU statistics agency Eurostat.
Spain ranks near the bottom of Organization for Economic Co-operation and Development countries with public housing for rent, with under 2% of available supply. The OECD average is 7%. In France, it is is 14%, Britain 16% and the Netherlands 34%.
In the past, Spain built housing with public funds that later passed into private ownership. Once they were sold, they disappeared from the public housing stock.
Brazil does not favor either the United States or China as a trading partner, President Luiz Inacio Lula da Silva said Tuesday, underscoring the country’s balanced approach to global economic ties.
Lula said Brazil seeks to maintain strong and pragmatic relations with both Washington and Beijing, prioritizing national interests over geopolitical alignment.
“We want multilateralism,” Lula added during a joint declaration alongside Portuguese Prime Minister Luis Montenegro at Lisbon’s Belem Palace.
Last month, the Brazilian leader described China as his country’s “best partner,” as he welcomed investments by Chinese carmakers in Latin America’s largest economy.
“I am confident that the partnership with China is thriving,” Lula told an event marking the reopening of an automotive plant in Goias state, a partnership between Brazil’s CAOA and Chinese automaker Changan.
Italy’s foreign minister said Tuesday that a proposal to suspend the EU-Israel Association Agreement has been set aside, with member states expected to consider alternative measures in the coming weeks.
Speaking to reporters on the sidelines of the EU Foreign Affairs Council meeting in Luxembourg, Antonio Tajani said the proposal to suspend the trade agreement with Israel over Gaza has been definitively shelved.
“Other possible initiatives will be discussed at the next ministerial meeting on May 11, and we will evaluate them,” he was quoted by the Italian news agency ANSA.
Recalling that his country has recently suspended the automatic confirmation of the defense memorandum with Israel, he noted that Italy is applying pressure.
However, he added: “It must be the government, not the civilian population.”
“We have a different position from Spain, because theirs doesn’t seem like the right path to take. Our position is identical to Germany’s,” said the foreign minister.
It came as European countries were divided over trade ties with Israel, as Spain and Ireland pushed for the suspension, while some other countries, including Germany, had expressed opposition to the idea.
Israeli offensive in Gaza, retaliating to a Hamas attack on southern Israel, has killed more than 72,500 Palestinians, wounded over 172,000 others, while destroying about 90% of Gaza’s civilian infrastructure since Oct. 7, 2023.
Israel has repeatedly violated a cease-fire in place since Oct. 10, 2025, killing 777 Palestinians and injuring 2,193 others.
Türkiye expects to benefit from new regional dynamics after ongoing conflicts subside, Vice President Cevdet Yılmaz said on Tuesday, stressing that the country’s diversified supply structure and relative stability position it as a “safe haven” for investment.
“As a country with diversified supply systems, we do not have a supply shortage in any area. A new regional environment awaits us after the war. New dynamics will come into play, and we believe that as a country that maintains its stability and preserves its character as a safe haven, we have very significant opportunities and possibilities in this environment,” Yılmaz said.
He was speaking at a roundtable organized by the Union of Chambers and Commodity Exchanges of Türkiye (TOBB) and the U.S. Chamber of Commerce.
“Although these events may have negative impacts in the short term, they bring an important perspective and significant opportunities for Türkiye in the medium term,” said the vice president.
Oil and gas prices spiked following the start of joint U.S.-Israeli strikes on Iran on Feb. 28. Global supply chains are facing a historic upheaval as the war disrupts shipments through the Strait of Hormuz, the key transit point for Gulf oil and gas exports, as well as fertilizers.
Yılmaz said Türkiye has managed to shield itself from supply disruptions thanks to diversified sourcing, while taking measures to limit inflationary pressures caused by rising global prices.
“We are making efforts to contain the impact on inflation, even at the cost of taking on some fiscal burden,” he said.
At the same time, Yılmaz underscored Ankara’s dual approach of maintaining strong deterrence while advocating diplomacy, negotiations and cease-fires in regional conflicts.
“We support peace and diplomacy in every field and will continue to contribute to these processes,” he said.
Trade momentum continues, but imbalance widens
The meeting in Ankara, attended by senior representatives from the U.S. business community, focused on expanding bilateral trade and investment ties.
Yılmaz highlighted the strong trajectory of economic relations between Türkiye and the United States, noting that bilateral trade reached $39 billion in 2025, with the U.S. becoming one of Türkiye’s largest export markets.
Trade volume stood at $10.4 billion in the first quarter of 2026, signaling continued momentum toward the long-standing $100 billion trade target, he said. However, Yılmaz acknowledged that the trade balance has recently shifted against Türkiye, partly due to increased imports in energy and defense.
“To ensure a more sustainable and balanced structure, we aim to diversify trade and focus on high value-added sectors,” he added.
Beyond trade, mutual investments have also deepened. Direct U.S. investments in Türkiye totaled $16 billion between 2003 and 2025, with more than 2,300 U.S.-capital companies operating in the country across production, exports, employment and research and development.
Turkish companies, in turn, have invested more than $14 billion in the United States over the same period. Still, Yılmaz said Türkiye has significant untapped potential given the United States’ roughly $8 trillion global foreign direct investment stock.
Business leaders see strong investment potential
TOBB President Rifat Hisarcıklıoğlu echoed the positive outlook, saying the recent surge in trade and investment ties has created strong momentum toward the $100 billion target, though sustainability and balance remain key priorities.
He also pointed to shifting global supply chains, where trends such as near-shoring and friend-shoring are elevating Türkiye’s strategic importance due to its geography, industrial capacity and workforce.
Chobani founder Hamdi Ulukaya, who also heads the U.S.-Türkiye Business Council, said the current geopolitical environment has further underscored Türkiye’s role as a strategic investment destination.
“Türkiye has a young, dynamic business environment,” he said, adding that long-term investors could reap significant returns. “Investments in Türkiye will yield incredible results.”
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