Although President Donald Trump did not sign his sweeping agenda proposal into law until July 4, the White House maintains that the tax, spending, and immigration legislation is already paying policy dividends. Treasury Secretary Scott Bessent is making the media rounds to boast of what he calls the “capex comeback,” touting benefits derived by the nation from Trump’s self-proclaimed One Big Beautiful Bill Act, even before he and Congress enacted it.

Capital expenditures, the spending a business invests in fixed assets such as improved factory equipment or a new building, were up nearly 17% in the first half of the year. Excluding the anomaly of the COVID-19 pandemic, that’s the largest two-quarter gain in capex in this century. But why is an Independence Day-enacted law responsible for increased domestic business spending in the first six months of this year?

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A senior Treasury Department official said the Trump agenda law’s crucial stipulation to make full expensing retroactive to the start of the year is to thank.

“So as long as you have confidence in the president and confidence in Secretary Bessent, his ability to work with the Congress to get it done, you think, ‘OK, this is going to get done, and whether it gets done July 4,’ seems pretty aggressive, but of course he did,” the official told the Washington Examiner.

The new law also dramatically expands the scope of business expensing relative to the original 2017 Tax Cuts and Jobs Act, Trump’s signature domestic achievement during his first, nonconsecutive term. While under the TCJA in its original form, expensing was limited and phased down completely by 2026, the new law makes expensing permanent and expands eligibility to new qualified production property.

“So that ‘one big, beautiful bill’ is more expansive because now it expenses even for plants,” the Treasury Department official said. “You build a plant, not just invest in a computer or software or whatever it might be, you actually build something, you get a full credit. But secondly, the tariffs as structured are going to encourage that capital to come in. This isn’t just lip service. Companies are incentivized now to come in, because they’re paying, in some areas, significantly high tariffs if they don’t want to bring their operations to the U.S. And again, the fact that the tax cuts from 2017 are now permanent, everything kind of reinforces each other, and we know from the tariffs we’re generating the revenue.”

Indeed, Trump’s unprecedented universal tariffs have generated some $120 billion in new revenue for the year thus far, with June posting its first monthly fiscal surplus in 20 years. But business uncertainty over the tariffs has also proven a bit of a wildcard since the start of the second Trump administration.

Although Trump, reportedly at the behest of Bessent and the bond markets, agreed to walk back his sweeping “reciprocal” tariff schedule at the start of April and impose an extended pause to negotiate new bilateral trade deals while holding tariffs uniformly at 10%, the new trade deals announced in the run-up to the Aug. 1 deadline have been much more punitive than current levels.

Inflation data indicate that companies have been mostly capable of absorbing the cost of the 10% tariffs rather than passing them on to consumers. But new trade deals with Japan and the Philippines, which bring duties on our exports down to zero, will now charge Americans 19% to import goods from those countries.

The administration maintains that the naysayers are wrong, and alas, there is indeed reason to suspect the official narrative of financial experts. Tariffs did not have the inflationary effects many economists projected, and despite pessimism from the political commentariat, Trump’s public pledges that foreign companies will increase domestic investment have already begun to be fulfilled. The Japanese trade deal comes with a $400 billion investment fund from Tokyo that Trump will be in charge of allocating.

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So who is right? The Richmond Federal Reserve Manufacturing Index projects lowered capex in the next six months, and Goldman Sachs predicts that higher equipment costs because of tariffs will drive capex down.

But if the biggest hurdle corporate America has faced thus far is uncertainty, its worries might be over. The Trump agenda bill makes full expensing the law of the land. And like the Trump tariff regime or not, negotiations are about to come to a conclusion.