White House Deputy Chief of Staff Stephen Miller promised the “largest tax cut in history” on Thursday as pressure ramps up on the White House over tariffs.
Miller touted legislation that lawmakers on Capitol Hill are currently negotiating, which is expected to make President Donald Trump’s 2017 tax cuts permanent. The White House official said during a press conference that the proposal would encourage companies to invest in the United States.
“The relief for small businesses is going to come in the form of the largest tax cut in American history – a tax cut, by the way, that every single Democrat is planning to vote against,” Miller said. “They’re voting for a tax hike for every middle-class family of about $4000.”
“Companies that invest in the United States will be able to deduct 100% of that cost from their tax liability. This will be the most pro-small business tax bill in American history,” he continued. “At the same time, this is what you have to understand about the plan, as they’re able to do that, as they’re able to reshore those supply chains, that also means they’ll pay no tariff. So, you’ll have the lowest tax environment and there’ll be no tariff because their production and supply chains will be in the United States.”
On Wednesday, the stock market dropped after new data from the Department of Commerce showed that U.S. gross domestic product (GDP), a measure of the economy’s health, shrank 0.3% in the first quarter of 2025.
The reduction in GDP came as Trump waged trade wars with China, Canada, and Mexico, and levied a flat 10% tariff across dozens of countries, with higher tariffs threatened. The tariffs sparked a surge in imports as companies rushed to get products to the United States before the tariffs took effect. The rise in imports significantly prevented a positive U.S. GDP.
Wells Fargo economist Shannon Grein said that the topline GDP contraction makes the U.S. economy appear weaker than it is.
“The headline decline overstates weakness because a lot of that was tariff-induced pull-forward,” Grein said. “Overall, I think that it was a relatively solid underlying report when it comes to demand.”
The White House has played up the expectation of new trade deals soon to avoid tariffs on dozens of countries. An absence of trade deals in the future could shake investor confidence and push stock prices lower still.
