The One Big Beautiful Bill (OBBB) recently passed the House, and it’s now awaiting Senate scrutiny.

Most analyst coverage focused on the bill piling up further government spending on existing deficits, but by far the most important part of the OBBB was deep down in the docs, specifically, in section 899.

So, what did the Trump administration include in section 899 – the first step towards Tariffs on Money?

1. What is it -> Section 899 also known as the ‘’revenge bill’’ imposes taxes on passive income (e.g. dividends) deriving from foreign ownership of US assets on countries that have enacted ‘’unfair foreign taxes’’ on the US (read: digital service tax or minimum corporate taxes like Canada, Europe and others);

2. Who gets charged -> For a country to be subject to such taxes, it’s enough for the Treasury Department to include them in a specific list of DFC – discriminatory foreign countries;

3. The applicable entities -> They include governments, individuals, and corporations – pretty much every investor, including sovereign wealth funds and foreign central banks;

4. How high is the tax rate -> Section 899 generally increases the current U.S. tax rates imposed on applicable entities by 5% in the first year following enactment, increased by an additional 5% for each subsequent year, with the increases capped at 20% above the statutory rate. This is key: for section 899 to apply, there must already be an applicable tax rate (before or after tax treaties) to push up.

5. When could it kick in -> Assuming the BBB is enacted before October 2025, the Section 899 will take effect as of January 1st 2026.

Although in its current form, Section 899 wouldn’t apply to coupons earned on Treasury securities, this sends a strong message to foreign investors in US securities: the US could be after your money.

Do you think the Trump administration will move ahead with this?

And if they do so to the fullest extent, what would be the impact on financial markets?

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