President Donald Trump's signature tax cuts and spending package is driving what the administration is calling a "capex comeback" as businesses utilize provisions in the new law to invest in areas that will drive productivity growth into the future.
Trump, Treasury Secretary Scott Bessent and Republican lawmakers included a provision in the One Big Beautiful Bill Act (OBBBA) that allows businesses to fully expense capital expenditures (capex) going forward and retroactively to the start of Trump's term in January.
"The One Big Beautiful Bill, which had the provision that expensing would go back to inauguration day, encouraged companies to actually start the capex boom that we were hoping would occur," Joe Lavorgna, counselor to Bessent, told FOX Business in an interview.
President Trump and his administration are touting the "capex comeback" spurred by OBBBA. (Al Drago/Bloomberg via Getty Images / Getty Images)
The Treasury Department on Tuesday touted the law's impact on capex by businesses, noting it has risen 16.6% in the first half of the year while business equipment production rose 11% in the second quarter on the heels of a 23% increase in the first quarter.
Lavorgna said that before the bill was signed into law there was a "near-17% annualized gain in business equipment production," adding that the surge in business equipment investment in the first half of the year is the "strongest non-pandemic gain since Q3-Q4 of 1997."
He added that efforts to boost productivity are like an "investment in the future" and the certainty around tax policy is "encouraging us to invest in America, and the tariffs are also part of that because they're encouraging more capital to come in."
"It's not like a government handout, it's not a stimulus that's just giving people money to use it. This is like creating jobs, which create income, which then create the spending, which in turn will create more jobs. It's really supply-side focused," Lavorgna said.
The Trump administration views its tax policies aimed at spurring investment as working in tandem with the president's tariffs. (Brian Cassella/Chicago Tribune/Tribune News Service via Getty Images / Getty Images)
The Trump administration views the bill's policies as working in concert with its trade and tariff policies, which it hopes will attract more businesses to move production capacity to the U.S. from overseas while spurring wage growth and increased productivity.
"The One Big Beautiful Bill encourages the capital investment which will continue to drive the blue-collar boom which we're already seeing," Lavorgna said. "At the same time, the tariff and the trade policy is designed to attract the foreign capital that then comes in, which will then further lift productivity and wages."
President Donald Trump signed the One Big Beautiful Bill Act into law during an event at the White House on July 4, 2025. (Samuel Corum/Getty Images / Getty Images)
Bessent noted in a Tuesday appearance on FOX Business Network's "Mornings with Maria" that Trump's policies have spurred a capex comeback that he's seen firsthand in two separate trips to Pittsburgh in recent months that affected relatively disparate industries.
The first was when the president announced the deal that will see Nippon Steel invest in U.S. Steel and its facilities, as well as another event last week for an artificial intelligence (AI) summit that will be powered by energy developed in the state.
"You're seeing it on both sides," Bessent said. "Imagine that, steel and AI. And you know, it's a very diversified building boom – we're seeing companies from all over the world want to come in."