Congress has left Washington for the August recess amid signals about how the two parties may be able to work together to keep the government funded when members return in September. A 30 September deadline to fund the government will almost certainly require Congress to enact a temporary continuing resolution to extend funding past that date to keep the federal government open. This will require the support of Democrats to clear the 60-vote threshold to pass in the Senate.

Republicans have indicated they intend to act on another GOP-only reconciliation bill later this year to address items left out of the "One Big, Beautiful Bill Act" (OBBBA). House Speaker Mike Johnson (R-LA) envisions the second bill's being completed "late in the fall."

There are a number of possible areas for action when Congress returns. As was reported in June, House Ways & Means Committee Chairman Jason Smith (R-MO) has said tax-writers could revive the IRC Section 899 retaliatory tax regime removed from the OBBBA following this summer's G7 agreement if other nations fail to comply with the agreement or charge new levies that lawmakers deem too punitive. Proposals on cryptocurrency tax issues have also been floated and Taiwan tax relief legislation held over from the last Congress could be revived.

The United States on 7 August implemented its new tariff policy that President Trump announced in an Executive Order issued on 31 July. Under the new policy, the so-called "universal" tariff remains 10%, but only applies to countries with which the United States has a trade surplus. Many countries now face tariff rates higher than 10%, however, either based on trade framework agreements or because they received a letter from the US stating a higher tariff rate will apply.

President Trump on 6 August also issued an Executive Order, titled "Addressing Threats to the United States by the Government of the Russian Federation," which imposes an additional 25% ad valorem duty on certain imports from India due to its indirect importation of Russian oil. This action increases the cumulative additional tariff on Indian goods to 50% ad valorem. The new tariffs will take effect on 27 August 2025, with specific exceptions for goods already in transit. A Global Tax Alert has details.