What the "Big Beautiful" Bill Means for U.S. Industries
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What the "Big Beautiful" Bill Means for U.S. Industries
Private equity funds and the coal industry emerged as the biggest winners due to tax incentive provisions, while a significant increase in defense spending benefits sector contractors.
Navigating Web3 tides with focused insightsBy Li Xiaoyin, Wall Street Insights
The recently passed "big beautiful" bill in the U.S. Congress is triggering a profound and complex transformation across American corporate sectors.
After narrowly passing Congress, this large-scale tax and spending legislation is reshaping winners and losers within the U.S. business landscape.
Analysts note that private equity firms and fossil fuel companies emerge as top beneficiaries, while renewable energy industries and certain Silicon Valley tech giants face setbacks.
Private Equity Industry Emerges as Top Winner
The $13 trillion private equity industry stands out as one of the biggest winners under the new bill.
The legislation allows asset management giants such as Blackstone and Apollo to retain the controversial "carried interest" tax loophole—a provision enabling fund managers to pay performance-based profits at the lower long-term capital gains rate rather than the higher ordinary income tax rate, saving the industry billions annually.
Former President Trump had previously pledged to close this loophole but ultimately did not succeed.
Michael Pedroni, former U.S. Treasury official and current head of Highland Global Advisors, said:
"If you're in private assets, this is an excellent bill for you. This represents a major victory for the private equity industry."
In addition, the bill lowers tax rates for many private-equity-backed companies by making interest expense deductions permanent and extending them to include depreciation and amortization.
However, private credit funds failed to secure nearly $11 billion in tax credits, as proposed restrictions on dividend taxes for so-called Business Development Companies (BDCs) were excluded from the final version.
Retail Sector: Aid Cuts and Tariff Policies Increase Pressure
The retail sector faces significant impacts primarily through reductions in federal food assistance funding.
The Supplemental Nutrition Assistance Program (SNAP) is expected to see a $9 billion cut next year—less than 1% overall—but according to Morgan Stanley data, this will directly affect grocery spending on food and beverages nationwide.
Food companies such as Conagra, Kellogg, and Kraft Heinz, which rely heavily on SNAP-related consumer spending, may face downward pressure on sales volumes.
Stephanie Johnson, vice president of the National Grocers Association, warned that grocers serving low-income communities could face "severe challenges," noting stable SNAP benefits are critical for store operations in these areas.
At the same time, eliminating the de minimis tariff exemption for imports valued under $800 benefits brick-and-mortar retailers. Previously exploited by online retailers like Amazon to ship goods directly from overseas at lower costs, this rule weakened the competitiveness of small domestic businesses.
Meanwhile, the restaurant industry benefits from a $25,000 tax deduction for servers' tips and service income.
Healthcare: Avoids Worst Cuts, But Risks Remain
The healthcare sector avoided the harshest cuts in the final bill. While funding for Medicaid—the government health insurance program for low-income Americans—is reduced, the reduction is smaller than initially feared.
This helped drive strong stock rallies for for-profit hospital chains such as Tenet Healthcare and HCA Healthcare, with Tenet reaching its highest level in over two decades in July.
Nonetheless, analysts project the bill could result in 11.8 million Americans losing health coverage by 2034.
Smaller hospitals, particularly those reliant on Medicaid reimbursements, may struggle to survive.
Wesly Pate, senior portfolio manager at Income Research + Management, noted:
"Large hospitals will be far better equipped than small ones to weather this storm."
Energy: Fossil Fuels Revive, Renewables Under Pressure
The energy sector experiences sharply divergent outcomes under the legislation.
Coal emerges as an unexpected winner, as the Trump administration views it as essential to meeting surging electricity demand and supporting manufacturing reshoring. Under the bill, metallurgical coal producers can now claim a 2.5% cost-based tax credit through 2029.
Randall Atkins, CEO of metallurgical coal producer Ramaco Resources, praised the move:
"We’re incredibly grateful for everything Trump has done."
In addition, zero-carbon sources such as geothermal, hydroelectric, and nuclear power retain generous tax credits. Isaac Brown of clean energy venture fund 38 North Ventures called them the "best winners" in the bill.
However, many solar and wind projects will lose investment and production tax credits. The bill repeals electric vehicle tax incentives established under Biden’s Inflation Reduction Act after September, and home solar panel and heat pump installation credits will phase out after 2025.
Treasury Department data shows these credits totaled $8.4 billion in 2023 alone; their removal could trigger a wave of contractor bankruptcies.
Battery manufacturers qualify for tax credits until 2033, but new rules require higher U.S.-made content thresholds, posing challenges for the industry.
Tech Sector Setbacks: AI Regulation and EV Incentives Hit Hard
The technology sector, especially major tech giants, suffers significant setbacks under the bill.
Companies like Tesla, which depend on EV tax incentives and revenue from emissions credit sales, face direct blows. Its battery, charging station, and solar roof businesses all confront adverse conditions.
Previously, Tesla benefited substantially from EV tax credits and earned billions selling emissions allowances.
The AI sector also fails to escape unscathed. Despite heavy lobbying by Amazon, Google, Microsoft, and Meta, the Senate rejected a proposal to suspend state-level AI regulations for 10 years.
This means AI developers including OpenAI and Anthropic will face new regulatory pressures across different states—for example, New York has passed a law requiring AI firms to disclose safety reports or face penalties.
In contrast, private space companies such as SpaceX and Blue Origin benefit from provisions allowing spaceports to raise funds via municipal bond markets—a boost likely to accelerate infrastructure expansion.
Defense Industry: Massive Budget Boost Benefits Contractors
The U.S. defense industrial base ranks among the biggest winners, with defense spending receiving an additional $150 billion, pushing the total budget toward a record $1 trillion.
According to Congressional Budget Office figures, new funds include $23 billion for missile defense systems, $28 billion for shipbuilding—especially unmanned vessels—and increased procurement of shells and ammunition.
Analysts say traditional defense contractors such as Lockheed Martin and RTX, along with emerging tech-focused firms like Anduril and Palantir, will benefit. Shipbuilding funds particularly favor HII and General Dynamics’ Electric Boat division.
Higher Education: Tax Burdens and Indirect Impacts
The bill imposes an up-to-8% excise tax on investment earnings of certain wealthy universities—specifically those where endowment per student exceeds $2 million.
Phillip Levine, economist at Wellesley College, estimates only 16 universities will be affected, with Harvard University projected to lose $267 million annually.
Additionally, cuts to student loans, healthcare, and nutrition support could indirectly increase university operating costs and reduce state funding for public institutions.
Levine adds that in policy priority rankings—healthcare, hunger, and higher education—higher education typically comes last.
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