US Section 899: Capital War Averted or Just Delayed?

[slapper]

I’m starting this thread because there’s more going on than just another “Trump policy bluster, markets get jumpy, everything returns to normal”. You may probably seen that the U.S. threatened this mega-tax on foreign capital (Section 899), markets freaked, and then they stop at the last minute. At first I thought, “Okay, here we go again". Looking into the details, it’s obvious this event could set a standard for how global capital might be managed from now on. This is stuff that, frankly, should have everyone wide awake right now

What Went Down?

• Section 899 was basically a threat to drop 20%+ “revenge taxes” on any country the U.S. didn’t like, especially if they dared tax American multinationals. It would have smashed treaties, nuked cross-border finance, and sent a warning shot to every ally that the U.S. will throw markets into chaos if it doesn’t get its way
  
• Wall Street lost it. So did real estate. Data was timed perfectly. First outflows, then a record current account deficit. Treasury made sure everyone felt the heat, and then at the climax, the U.S. got exactly what it wanted: an exemption from new global taxes on its own companies. The rest of the world? Deal with it
  

Why Bother? I care because I’m tired of seeing international agreements that only apply to smaller countries, while the big players give themselves special treatment. I am a realist, of course the U.S. has leverage, but this was on another level: threaten capital flows instead of tariffs, get Wall Street and central banks to amplify the panic, pull back only when allies cave, and keep the threat ready for next time. And people wonder why the appeal of Bitcoin and decentralized finance is exploding… Some things I noticed:

• The payload was Super BEAT tax: the bill was not about foreign companies sending dividends, but would have roped thousands of midsize firms, made U.S. supply chains upside-down, and threatened any non-U.S. business with a presence in the U.S. No one is speaking about that
• The data drops (outflows, deficits) choreography of the Treasury was theater. Policy by Bloomberg headline
• Europe/Japan were the ones most affected by the outcome. Their MNEs are saddled with a 15% minimum tax, U.S. firms are sheltered. The regulatory has become a corporate risk. Are you even paying attention when you are on a board and do not have at least some Bitcoin or decentralized assets?
• Prenetics, a Hong Kong healthcare firm, transferred the majority of its treasury to Bitcoin in the crisis. Neither a tech company, nor a fund, a healthcare company. That speaks louder than IMF report

This must be a time of reckoning to those who still believe that the "dollar" is neutral. When policy can be weaponized this quickly, you can bet capital will begin seeking exits. I used to believe that the majority of companies would not even dare to park reserves in BTC. Now I can see that the boardrooms are already doing it. They are not stupid. They see the writing on the wall

U.S. will continue to exploit this strategy. When they want a carve-out (carbon border taxes, tech standards, you name it), another Section 899 moment will occur. Allies may retaliate, or just quietly mimic the game. Nobody believes the OECD as a neutral referee any more. Crypto becomes the default hedge for geopolitical and regulatory risk. The risk premium for U.S. assets might go up for the first time in years. Think about that if you are heavy in stocks or Treasuries

[WillyAp]

Why Bother? I care because I’m tired of seeing international agreements that only apply to smaller countries, while the big players give themselves special treatment. I am a realist, of course the U.S. has leverage, but this was on another level: threaten capital flows instead of tariffs, get Wall Street and central banks to amplify the panic, pull back only when allies cave, and keep the threat ready for next time. And people wonder why the appeal of Bitcoin and decentralized finance is exploding....

Its a pretty nice piece you wrote up here.

Most people are not that exposed, especially here in Bitcointalk there are not too many folks, holding a lot of US$ in the US.
People being exposed should take notice,

What the DT administration is pushing has nothing to do with Milei's agenda.

[Fortify]

I’m starting this thread because there’s more going on than just another “Trump policy bluster, markets get jumpy, everything returns to normal”. You may probably seen that the U.S. threatened this mega-tax on foreign capital (Section 899), markets freaked, and then they stop at the last minute. At first I thought, “Okay, here we go again". Looking into the details, it’s obvious this event could set a standard for how global capital might be managed from now on. This is stuff that, frankly, should have everyone wide awake right now

What Went Down?

• Section 899 was basically a threat to drop 20%+ “revenge taxes” on any country the U.S. didn’t like, especially if they dared tax American multinationals. It would have smashed treaties, nuked cross-border finance, and sent a warning shot to every ally that the U.S. will throw markets into chaos if it doesn’t get its way
  
• Wall Street lost it. So did real estate. Data was timed perfectly. First outflows, then a record current account deficit. Treasury made sure everyone felt the heat, and then at the climax, the U.S. got exactly what it wanted: an exemption from new global taxes on its own companies. The rest of the world? Deal with it
  

Trump is an anomaly, even if he has been elected twice, that hopefully causes the American people to wake up and realise that you cannot bully every single other country in the world without their being a backlash. Trump will never admit it, but he caved after seeing that other countries would not bow to his bullshit tariffs (they'll make minor concessions so he can appear victorious but China would not even do that). When the ports started to empty and it looked like the US economy was ready to fall of a cliff, he blinked. He definitely has and maybe intended to engineer a scenario where the dollar weakens because it is actually advantageous to manufacturers - at the expense of every other industry that has replaced it.

This urge to return to a manufacturing economy is so naive and short sighted, but he wants to return to some imagined golden era of his childhood back in the 1960's - yet the world moved on.

[takuma sato]

Section 889 would crash the SP500, because a lot of money would get out of the market since you would get taxed way too much and this capital would probably go into European stocks, gold, Bitcoin, whatever else. Everyone knows most americans have their retirement money on the stock market, so they don't want the stock market to crash. Conclusion: They will do anything it takes to keep the stock market up, including backpedaling when/if they put this in place, so this is just more FUD by Trump to try to get his way.

The reality is that Trump is not achieving his goals. He failed to stop the wars, he failed to force others pay more via tariffs, and fools think he got his way with the NATO 5% thing (no one is going to be complying with that, and they know it, they are playing Trump in any case). It gets revised by 2029 so nobody cares. He is also failing to get rates down as he wanted. So yeah, americans are deluded and think they have more power than they think they have, the reality is you are limited in what you can do.

[WillyAp]

Yesterday's new fortunately

Lawmakers remove ‘revenge’ tax provision from Trump’s big bill after Treasury Department request

https://apnews.com/article/trump-revenge-tax-section-899-foreign-companies-e3b3718a46081413426ed743c97539ab

The flight of foreign capital shows effect.

[Webetcoins]

Personally I am not considering anything from Trump to influence in my everyday economy. He may bring new taxes or may not but after his government or within next 2 years he may lose power in senate and what is viable for every county kind of stand will persist. I mean Trump's all stunts are temporary and in-between we need to bear.

Anything he may bring which is ONLY good for America and bad for rest of world will not sustain. So, all the hassles must be short term (and bitcoin market have been used to that for years if any here to consider). I have already stopped following Trump's policy changes.

[₿itcoin]

Damn, this 899 play was just pure banking warfare arrayed as tax policy, I will say. At first they frighten the capital and swing the groundwork, then pull back just as allies flinch, best brinkmanship, isn't it? It seems like the dollar is becoming a loaded missile instead of a unit of account. Same thing happened with Prenetics. When some healthcare business started stacking satoshi, its nothing to hype anymore, it is a survival inducement..

The US just proved how policy panic can be scheduled. If boardrooms are not hedging with BTC now, they are already late.

[slapper]

~

Trump is an anomaly, even if he has been elected twice, that hopefully causes the American people to wake up and realise that you cannot bully every single other country in the world without their being a backlash. Trump will never admit it, but he caved after seeing that other countries would not bow to his bullshit tariffs (they'll make minor concessions so he can appear victorious but China would not even do that). When the ports started to empty and it looked like the US economy was ready to fall of a cliff, he blinked. He definitely has and maybe intended to engineer a scenario where the dollar weakens because it is actually advantageous to manufacturers - at the expense of every other industry that has replaced it.

This urge to return to a manufacturing economy is so naive and short sighted, but he wants to return to some imagined golden era of his childhood back in the 1960's - yet the world moved on.

Time hasn’t moved on and global value chains haven’t changed. The nostalgia thing runs deep, not just for Trump, but for a chunk of the political base that still wants to believe America can just snap its fingers and be the industrial engine again. The reality (as you say) is every time they try to push that kind of brute-force economic nationalism, the rest of the world does eventually push back, not in the obvious way people expect

The Section 899 showdown was more of a manufacturing narratives than anything of policy. Yeah, the ports were emptying out and the data was getting ugly, but what people forget is that the appearance of economic toughness was more important than winning a sustainable trade war. When the second real pain began to hit (market outflows, dollar wobbles), the retreat was choreographed in a manner that no one needed to say “we lost”. It is just a theater for the voters, investors, and "the base"

I 'm less convinced that it is all about Trump. The temptation to save "national champions" and use fiscal policy as a weapon appears to be hard-wired into both parties these days. It’s just Trump’s version is louder and messier

I also ask myself how long other nations will continue to play along, making "minor concessions" so that America can save face. You said that China did not blink. Do you believe that Europe or other parts of the world will begin to follow that model more forcefully? Or will we all find ways to escape in silence as the U.S. continues to spin its stories?

Section 889 would crash the SP500, because a lot of money would get out of the market since you would get taxed way too much and this capital would probably go into European stocks, gold, Bitcoin, whatever else. Everyone knows most americans have their retirement money on the stock market, so they don't want the stock market to crash. Conclusion: They will do anything it takes to keep the stock market up, including backpedaling when/if they put this in place, so this is just more FUD by Trump to try to get his way.

The reality is that Trump is not achieving his goals. He failed to stop the wars, he failed to force others pay more via tariffs, and fools think he got his way with the NATO 5% thing (no one is going to be complying with that, and they know it, they are playing Trump in any case). It gets revised by 2029 so nobody cares. He is also failing to get rates down as he wanted. So yeah, americans are deluded and think they have more power than they think they have, the reality is you are limited in what you can do.

Fair take. If Section 899 had actually implemented, the S&P would have been on fire. Not only due to the short term tax pain, but the chain reaction of global investors running for the exits. I understand: it's not only Wall Street fat cats, it's the pension of every firefighter and schoolteacher that is on the line, so of course politicians put on the brakes. That is why the threat was powerful, yet the follow-through was never. I can also understand your "Trump FUD". All this has a certain manufactured crisis to it. Cause the world to flinch, then retreat and declare a victory, even when nothing really happened (at least in the public’s eyes)

Even if most people know the U.S. won’t let the market crash, every time these threats happen, a little more trust leaks out. Not all at once, but enough that some capital does move, or at least hedges get bigger. That slow erosion isn’t sexy headline news, but over years, it can change the game. It’s not just Americans who are deluded about their power. Every country is acting, to some degree, out of old assumptions about what markets “must” do

I also don’t think the U.S. is all-powerful. 2025 proved that even the biggest players can get checked by market reality, by allies, and sometimes even by their own data. But even these failed or fake moves have side effects. They signal to everyone (corporates, sovereigns, regular folks) that the game can change overnight, and that is what creates long-term shifts. Sometimes what matters isn’t whether Trump gets his way, but how much people believe the rules can change on a tweet

[slapper]

Personally I am not considering anything from Trump to influence in my everyday economy. He may bring new taxes or may not but after his government or within next 2 years he may lose power in senate and what is viable for every county kind of stand will persist. I mean Trump's all stunts are temporary and in-between we need to bear.

Anything he may bring which is ONLY good for America and bad for rest of world will not sustain. So, all the hassles must be short term (and bitcoin market have been used to that for years if any here to consider). I have already stopped following Trump's policy changes.

Most of these political “stunts” are short-term noise, and everyday life (real work, real spending, even Bitcoin market swings) keeps rolling regardless of what any one administration does

I relate to just tuning out the drama and focusing on what lasts. Like you said, every country eventually settles back to its own interest, and most policies that are lopsided enough to really hurt other nations end up getting reversed or neutered. Especially with the U.S., the minute something truly damages their alliances or hits too hard at home, you see the system snap back pretty fast

I get the fatigue too. After a few cycles, the urge to just ignore it all is strong. The only thing I keep an eye on is whether these “temporary” moves add up to something over years. Not in the policy details, but in the background habits: companies relocating, new ways of hedging, regular folks (like us) getting less trusting or more creative with their money. The Bitcoin community is built for that kind of turbulence, so maybe you’re right that it’s all just more background noise for us at this point

...banking warfare arrayed as tax policy...

Love it

The script has changed to: engineer panic, signal threat, and reel it back after you get the flinch you want. Just about as a way of scheduling volatility, and then monetizing on the response. This is no longer a matter of tax. The dollar isn’t even pretending to be neutral. It’s a power tool, pure and simple. Boardrooms understand it, although the majority of retail people continue to believe it is about GDP or rates

The Prenetics shift is a blow to me also. Of all industries, healthcare is not the first to jump into the lifeboats, but they are stacking sats like it is just another compliance line. It’s not about believing in Bitcoin anymore, it’s about not trusting anything else to be apolitical when the system is openly weaponized. No more victory laps in Bitcoin treasury adoption, now it is just companies treating it like fire insurance