Senate moves to final passage on Trump’s ‘One Big Beautiful Bill’... The Senate is nearing a crucial final vote on the so-called One Big Beautiful Bill, President Donald Trump’s marquee tax and spending legislation. But with at least 10 hours of debate and a lengthy “vote-a-rama” still to come, the final passage isn’t expected until late tonight.
The House is tentatively set to take up the measure on Tuesday, aiming to pass it before the July 4 deadline. However, the path is fraught with internal party drama and unresolved policy disputes that threaten the bill’s future.
A major flashpoint is the use of the current policy baseline, which effectively erases the $3.8 trillion cost of extending the Trump tax cuts from official scorekeeping. The Congressional Budget Office still estimates the bill will raise the deficit by $3.3 trillion over a decade, with $4.5 trillion in tax cuts and $1.5 trillion in federal spending cuts. Democrats argue this sets a dangerous precedent for reconciliation and undermines the filibuster.
House Republicans remain divided. If the Senate passes the bill, House GOP leaders must quickly unite their razor-thin majority. The House Freedom Caucus says the bill doesn’t meet agreed-upon budget targets, while moderates oppose steep Medicaid cuts. Blue-state Republicans object to the compromise on state and local tax (SALT) deductions, and other hardliners remain opposed altogether. With only a few days left before July 4, any changes in the House could delay the entire process.
Senate modifies, strengthens 45Z credit... The Senate’s updated legislative text for the 45Z Clean Fuel Production Credit as part of the reconciliation package would extend for two years the clean fuel production credit, which applies to low-emission fuels made from renewable materials such as soybeans and corn. It’s currently slated to expire at the end of 2027 and would be extended through 2029. The House bill would extend it for four years (through the end of 2031). This will likely be a point of negotiation in the conference process.
The Senate version upholds the House-passed requirement that would prohibit the credit for any feedstock produced outside the U.S., Mexico, or Canada, excluding imported feedstocks like Chinese used cooking oil (UCO) and South American tallow from receiving U.S. taxpayer support. The Senate bill would eliminate a larger credit for sustainable aviation fuel, largely bar negative emissions rates that lead to larger credits and modify emission rates to exclude indirect land use changes.
The Small Agri-Biodiesel Producer credit is increased to 20 cents per gallon and the 45Z credit is now transferable, making it easier for smaller biofuel producers to benefit from the program.
Senate vs. House: SCO and ARC... The Senate Ag Committee’s bill strips out the provision that currently disallows Supplemental Coverage Option (SCO) crop insurance on ARC-enrolled acreage. That means producers who choose ARC can also layer on SCO for added shallow-loss coverage.
The House Ag Committee retains the status quo: if you elect ARC for a crop/acreage, you remain ineligible for SCO on that same acre.
Given that both chambers are using reconciliation for farm safety-net revisions — and given the Senate’s push to remove the ban while the House hasn’t budged — any compromise is likely to include:
- Allowance of SCO on ARC acreage, but with some guardrails, such as:
- Higher premiums or reduced subsidy for that combo compared to choosing PLC + SCO;
- An opt-in opt-out election, where producers must formally choose to combine SCO and ARC with full understanding of coverage tradeoffs.
- Original ARC + SCO separation preserved, but only if a producer specifically opts out of the enhanced subsidy or combo.
In short: producers could have the option, but with added fiscal safeguards to limit abuse.
Some constraints
- Senate Committee backing: bipartisan support in Senate Ag for SCO + ARC via reconciliation.
- Byrd Rule constraints: requirement to meet Senate’s narrow budget instruction means retention of SCO ban may be seen as “extraneous,” making its removal more likely.
- House holdout: House members are wary of stacking programs without offsets to protect budget savings.
Bottom Line: Senate wants SCO allowed on ARC acres; House does not. Possible compromise: both chambers agree to allow the combo, but only with additional structure (e.g., opt-in, premium subsidy reduction, or eligibility limitations). This would satisfy the Senate’s desire to expand flexibility, while giving House officials the fiscal guardrails they’re pushing for. If not, the House version prevails.
Canada tries to revive U.S. trade talks... Canada has announced it will rescind its Digital Services Tax (DST) in a significant concession after President Donald Trump announced last Friday he was terminating trade talks with Ottawa.
Canadian Prime Minister Mark Carney and President Donald Trump have agreed that both sides will resume negotiations immediately, with the goal of reaching a final deal by July 21. The Canadian government’s move comes after months of U.S. pressure and repeated warnings the DST was a major sticking point in efforts to reset the cross-border trading relationship.
Meanwhile, Canada Bill C-202 is now law after passing both the House of Commons and Senate and garnering a Royal Assent. The legislation prohibits Canadian trade negotiators from making commitments that would increase tariff rate quotas (TRQs) or reduce tariffs on supply-managed goods — namely dairy, poultry, and eggs — in future trade negotiations. However, its actual power to prevent the government from adjusting its negotiating stance is limited, sources signal.
India draws ‘red line’ on agriculture in U.S. trade talks... India’s agriculture and dairy sectors are “big red lines” in ongoing trade negotiations with the U.S., according to Indian Finance Minister Nirmala Sitharaman. In an interview with Financial Express, Sitharaman emphasized that New Delhi is exercising “a high degree of caution” on agricultural and dairy concessions, which are politically sensitive areas in the talks.
The negotiations come ahead of President Donald Trump’s July 9 deadline to impose reciprocal tariffs on Indian goods if no agreement is reached. While Sitharaman said she supports a “big, good, beautiful” agreement, she made clear that an early deal must respect India’s core interests in agriculture.
The U.S. is pressing for greater access to India’s agricultural and ethanol markets, as well as expanded opportunities in dairy, alcoholic beverages, automobiles, pharmaceuticals and medical devices, citing a persistent trade imbalance. Meanwhile, Indian automakers, pharmaceutical companies, and small businesses are lobbying for a gradual opening to avoid a surge of U.S. imports.
Sitharaman said the government is holding “deep consultations” with affected sectors to address concerns, particularly in the auto industry and other protected fields. She reiterated that any deal would have to balance U.S. demands with India’s domestic priorities.
California approves stricter LCFS, raising political and market stakes... California’s Air Resources Board (CARB) has finalized and scheduled immediate enforcement of tough new low-carbon road fuel standards, applying to gasoline and diesel supplied from July 1, 2025. The move comes after the state’s Office of Administrative Law (OAL) unexpectedly cleared long-delayed revisions to California’s Low Carbon Fuel Standard (LCFS), which had been stalled for six months.
The revised LCFS requires a 9% reduction in the carbon intensity of gasoline and diesel in the second half of this year, escalating to a 30% reduction target by 2030 — up from the previous 20%. The new rules limit credit generation from crop-based biofuels, automatically advance targets when surplus credits pile up, and implement several other changes phased in over 15 years.
CARB Chair Liane Randolph said the program is central to California’s efforts to deploy more zero-emission vehicles, cut fossil fuel use, and boost market competition: “Our efforts to deploy more zero-emission vehicles and reduce fossil fuel use is working to cut demand and create more competition in the fuels market, and the LCFS is a big part of that effort.”
While the new LCFS standards take effect July 1, legal and legislative battles continue:
- Legislation to cap LCFS credit prices and coordinate with neighboring states remains pending.
- Court cases challenging the rule are unresolved as the program shifts into enforcement.
Bottom Line: The changes mark a significant — and politically charged — step in California’s climate strategy, with fuel suppliers, traders and consumers watching closely to see how the market and prices respond in the months ahead.