Capital Gains Cut — On the Table; Canada Faces New Tariffs Within Days
Author: Greg Valliere
July 23, 2025
REPUBLICANS SEEKING A STRONGER ECONOMY are actively considering capital gains cuts for housing sales. This idea has caught fire, with President Trump indicating his support yesterday and House conservatives vowing to put it on the table this fall.
DETAILS ARE SCARCE — some members want to abolish the tax entirely while others would reduce it. The earliest effective date probably would be Jan. 1, 2026; it could be a winning issue for Republicans to pass the bill as 2026 House and Senate election campaigns heat up next winter.
NO WORD ON THE COST — CONGRESS HAS GIVEN UP on deficit reduction, with red ink in the trillions looming for the next several years, even if tariffs bring in some revenue. We’ll follow the capital gains issue closely this fall — it could have a major impact on the sluggish housing industry.
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CANADIAN OFFICIALS LEFT AN EMERGENCY MEEETING YESTERDAY in a gloomy mood, as enactment of a tariff deal with the U.S. looks increasingly unlikely. Prime Minister Mark Carney seemed to lower expectations that there could be a deal by the target date of Aug. 1.
CARNEY REPORTEDLY IS considering government aid for workers in Canada’s automotive and steel sectors, which face U.S. tariffs of 25% and 50% respectively. He also may provide aid for the forest paper, copper and pharmaceutical industries.
DOMINIC LeBLANC, the minister in charge of U.S-Canada trade relations, will be in Washington for the rest of this week to continue negotiating, but the ministers are preparing to retaliate, with a growing likelihood of higher tariffs coming on Aug. 1.
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