The U.S. House of Representatives approved President Donald Trump’s tax and border policy package with a narrow 217-215 vote, which included one Republican opposing the bill and no support from Democrats.

Speaker Mike Johnson had initially postponed the vote, citing insufficient support, but later proceeded after extensive lobbying by Johnson, House Majority Leader Steve Scalise, and Trump.

The $4.5 trillion package aims to extend Trump’s 2017 tax cuts, while also addressing deportation funding, enhanced border security, energy deregulation, and increased military expenditure. Trump’s involvement was aimed at ensuring legislative support for his policy priorities.

Trump’s backing helped rally House Republicans around the bill, though the tight margin underscores ongoing resistance within his own party. Democrats, unified in opposition, criticised the package as fiscally irresponsible and politically motivated, particularly the tax extensions, which they argue disproportionately benefit wealthier Americans while adding to the national debt. Still, for House Republicans, securing approval for this package was a key step toward shaping the government’s approach to economic and immigration policy ahead of the next election.

Attention now shifts to the Senate, where passage is far from assured. With Democrats in control, outright rejection is a possibility unless Republicans negotiate changes. Senate Majority Leader Chuck Schumer signalled that his caucus remains firmly opposed to the bill’s tax provisions and border measures. Some moderate Republicans have also expressed concern, particularly over the projected deficits expected to follow if the tax cuts remain in place without offsetting revenue.

Financial markets have already started reacting. Bond yields edged higher as investors priced in the prospect of increased government borrowing, particularly if tax extensions become law. Stocks tied to defence spending and energy deregulation saw moderate gains, reflecting confidence that certain provisions might survive even if the broader package faces resistance.

One major question now is whether Trump’s influence will be enough to pressure Senate Republicans to hold their line. The former president remains active in shaping party strategy, frequently meeting with congressional allies in an effort to keep his agenda intact. While House support suggests strong backing from core Republican legislators, some in the Senate may see political risk in endorsing tax policies that deepen deficits.

As negotiations unfold, traders should be prepared for volatility. Political developments can shift expectations quickly, particularly if signs emerge that Republicans might concede on key elements. Sector positioning will be important, especially in areas tied to fiscal policy, and a close watch on legislative movement in the coming days will be necessary.