Big Beautiful Bill: The Economic Stimulus That May Hurt EVs, Healthcare, and Consumer Brands
In a major development for U.S. investors, consumers, and citizens — and with ripple effects for economies worldwide — the U.S. Congress has passed the highly anticipated “Big Beautiful Bill,” championed by President Donald Trump. The legislation now heads to his desk for signature and is set to bring sweeping changes to tax policy, government spending, and entitlement programs over the next decade.
While the bill aims to stimulate economic growth through significant tax cuts, it also introduces spending cuts that will impact millions of Americans and several key industries. Investors need to understand how these shifts will play out across different sectors of the economy — and how to position their portfolios accordingly.
Let’s dive into the details of what’s in the bill, what it means for economic growth overall, and which industries are likely to win and lose as a result.
The Big Picture: Growth Today, Debt Tomorrow
At its core, the Big Beautiful Bill delivers nearly $3.7 trillion in tax cuts over the next decade, benefiting both individuals and businesses. The bill also provides $144 billion in additional defense spending and another $175 billion in various discretionary programs.
However, it comes at the cost of further expanding the already high federal debt, with the Congressional Budget Office (CBO) projecting about $551 billion in additional interest payments over 10 years. If current trends continue, the U.S. national debt could approach $40 trillion by 2035.
On the savings side, the bill cuts about $1.5 trillion in spending, including:
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Over $1 trillion in Medicaid reductions
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$238 billion in cuts to the Supplemental Nutrition Assistance Program (SNAP)
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$350 billion in cuts to Education Department funding
Overall, the bill adds nearly $3 trillion in deficit spending over the decade — meaning the government will continue spending more than it collects in revenue.
Why Deficit Spending Stimulates Growth
From a macroeconomic perspective, deficit spending tends to boost economic activity in the short-to-medium term. When the government injects more money into the economy than it withdraws, it creates additional demand: businesses earn more revenue, consumers have more disposable income, and the resulting spending creates a multiplier effect throughout the economy.
Put simply: more government spending and lower taxes generally mean faster growth than the alternative of austerity.
So, as a blanket observation, the U.S. economy is likely to grow faster over the next decade than it would have if the Trump-era tax cuts were allowed to expire.
But while the overall economic impact is expected to be positive, not every sector will benefit equally.
Sector Impacts: Winners and Losers
Big Loser: Electric Vehicles
Perhaps the clearest negative impact falls on the electric vehicle (EV) industry. The bill eliminates the federal $7,500 EV buyer tax credit, which had already been propping up demand for EVs.
Even with this incentive, Tesla reported year-over-year sales declines in the first half of 2025, and Rivian has warned of falling deliveries. Without the tax credit, demand for EVs will almost certainly weaken further.
This makes an already-challenged industry even less attractive to investors. As someone who has long cautioned against overexposure to EV stocks, I believe this legislation is yet another reason to avoid names in this space.
Healthcare: Uncertain Outlook
The healthcare industry faces more ambiguous consequences. The bill’s Medicaid cuts are projected to leave about 10 million Americans without coverage, according to CBO estimates. Fewer people with subsidized insurance means lower utilization of healthcare services.
That said, the impact will differ across segments:
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Pharmaceutical companies like Eli Lilly and Novo Nordisk may be less affected, thanks to their pricing power and international markets.
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Healthcare service providers such as UnitedHealth Group could face more headwinds due to lower patient volumes and tighter budgets.
Investors should assess each company individually rather than paint the entire sector with a broad brush.
Consumer Staples & Retail: Trading Down Accelerates
The bill’s significant cuts to SNAP benefits will reduce food budgets for millions of households, likely accelerating a trend already visible in consumer behavior.
Consumers have been trading down from premium branded products (e.g., Coca-Cola, PepsiCo, Keurig Dr Pepper) to store brands and private-label alternatives as inflation and tight budgets squeeze discretionary spending. These cuts could further pressure branded food and beverage companies.
At the same time, discount retailers and warehouse clubs like Walmart and Costco, which offer value-oriented products and private labels, may stand to gain market share as consumers shift toward cost savings.
On the other hand, retailers like Target, which occupy a more mid-market niche, may find it harder to compete.
Key Insights for Investors
Here are six crucial takeaways from this legislation:
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Stimulus Effect: Tax cuts and deficit spending should support higher U.S. economic growth over the next decade compared to letting Trump-era tax cuts expire.
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EV Industry Hit: The elimination of EV tax credits is a major blow to demand, making the sector even less attractive to investors.
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Healthcare Uncertainty: Medicaid cuts will reduce healthcare consumption, but the impact will vary between pharma and service providers.
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Consumer Staples Pressure: Cuts to SNAP will further strain branded food and beverage companies as consumers trade down.
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Opportunities in Value Retail: Discount and warehouse retailers could benefit as consumer behavior shifts toward value.
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Growing Debt Burden: The U.S. joins other developed economies in running higher deficits, raising longer-term questions about fiscal sustainability.
Conclusion: Growth, But With Winners and Losers
The Big Beautiful Bill is a defining piece of legislation that will shape the U.S. economy and investment landscape for years to come. It stimulates growth at the macro level but creates clear winners and losers at the industry level.
Investors should take advantage of the tailwinds to the economy while being selective about which sectors and companies they own. At this stage, I recommend:
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Avoiding EV stocks, which face new headwinds.
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Watching healthcare closely for divergent impacts.
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Looking for opportunities in value-oriented retailers and private-label producers.
As always, understanding how policy changes flow through to consumer behavior, company earnings, and industry dynamics is critical for long-term investing success.
I’ll continue to analyze the specific company-level implications in the weeks ahead as more data comes in and the market adjusts to this major policy shift.
For now, the message is clear: better growth overall, but selectivity is key — and the EV industry remains squarely in the danger zone.
Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.
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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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