**Examining Economic Uncertainty and Government Actions**
Countries originally had until July 9 to reach trade deals with the United States or face steep tariffs. However, President Donald Trump ultimately pushed the effective date to August 1.
Given this shifting deadline, it’s not surprising that Marcus & Millichap Senior Vice President John Chang pointed to two key factors influencing investor decision-making today: interest rates and overall economic uncertainty. Much of this uncertainty stems from fluctuating tariff policies that have been in place since “Liberation Day” in early April.
### The Ongoing Tariff Muddle
In a recent Marcus & Millichap video titled *The Eye of the Storm: Interest Rates, Tariffs and Uncertainty*, Chang discussed how the constant back-and-forth on tariffs is gradually becoming background noise for many investors. This has, to a certain extent, eased some uncertainty.
“Most economists anticipate that the tariff rates will continue unchanged,” said Chang. However, he warned that unpredictability still lingers. “President Trump recently leveraged the threat of raising tariffs to force Canada to change a recent digital tax policy,” he noted. “It’s entirely possible that tariffs could be changed on short notice. If that starts to happen, uncertainty could begin to rise again.”
### Then, There’s the OBBB
The “One Big Beautiful Bill” (OBBB) was signed into law on July 4, having passed through both the House and Senate—though just barely. While it includes several notable measures, Chang pointed out that provisions like cuts to Medicaid funding may generate more economic uncertainty.
“Because the bill went through Congress at lightning speed, there will undoubtedly be some facets that need additional interpretation, much like what we saw with the 2017 Tax Cuts and Jobs Act,” he explained.
The legislation is also projected to increase the U.S. budget deficit by around $3.3 billion over the next decade. As a result, Congress raised the debt ceiling to $5 billion. According to Chang, this will lead to more Treasury securities being issued, which could create upward pressure on interest rates. Compounding the situation, both the Federal Reserve and foreign investors are showing reduced demand for Treasuries—another factor that could push rates higher.
### The Impact on Commercial Real Estate
“I’m not saying that uncertainty will surge or that interest rates will definitely run up,” said Chang, “but the probability of these risks are things we need to consider as investors.” He emphasized that as tariff policies stabilize and the OBBB becomes better understood, there is hope that current instability will turn out to be a short-term hurdle.
There is some good news for commercial real estate investors: the 100% bonus depreciation included in OBBB could help improve first-year returns on new property acquisitions. Furthermore, Chang remains optimistic about the general CRE outlook. “Healthy demographics and the durability of the U.S. economy will eventually play through,” he concluded.
