While U.S. President Donald Trump’s tariffs play out in U.S. courts, another one of his proposed laws could weaponize the American tax system. Investment banks and law firms warn this step could prove to be as significant as the impact of duties on investors. The “One Big Beautiful Bill Act,” which passed through the U.S. House of Representatives last week, includes the most sweeping changes to the tax treatment of foreign capital in the U.S. in decades under a provision known as Section 899. The bill must still gain the Senate’s approval. “We see this legislation as creating the scope for the US administration to transform a trade war into a capital war if it so wishes,” said George Saravelos, global head of FX research at Deutsche Bank on Thursday. “Section 899 challenges the open nature of US capital markets by explicitly using taxation on foreign holdings of US assets…
