On The Money: Stocks tumble on Trump China trade remarks | Trump says deal could come after 2020 | Why Wall Street freaked | Trump loses appeal over Deutsche Bank subpoena

Happy Tuesday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

See something I missed? Let me know at slane@digital-release.thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.

Write us with tips, suggestions and news: slane@digital-release.thehill.com, njagoda@digital-release.thehill.com and nelis@digital-release.thehill.com. Follow us on Twitter: @SylvanLane, @NJagoda and @NivElis.

 

THE BIG DEAL–Stocks tumble after Trump says China trade deal could come after 2020: 

President Trump shook Wall Street on Tuesday after telling reporters he doesn’t have a deadline to strike a trade deal with China, spooking investors eager for an end to the 20-month-long conflict.

“I don’t have a deadline,” Trump told reporters during a meeting with NATO Secretary General Jens Stoltenberg in London. “In some ways, I think it’s better to wait until after the election with China.”

“But they want to make a deal now, and we’ll see whether or not the deal’s going to be right, it’s got to be right,” Trump said.  

Stocks took heavy losses soon after, with the Dow Jones Industrial Average falling more than 400 points before recovering to close down 280. The S&P 500 index also sunk 0.66 percent, while the Nasdaq composite fell 0.55 percent.

 

Why Wall Street freaked: Investors are desperate for any sign of progress toward a China trade agreement and have been eagerly awaiting the finalization “Phase One” deal that Trump touted in October. 

The president and White House officials said last week that the U.S. and China were incredibly close to a preliminary deal to cut U.S. tariffs in exchange for Beijing buying more U.S. crops. But Trump’s comments today were seen by Wall Street as yet another stall in trade talks.

 

What comes next: Trump is set to impose a new tranche of tariffs on Dec. 15 more than $100 billion in Chinese products, predominantly consumer goods, in what some economists call the most direct threat the trade war may pose to household budgets. 

It’s unclear whether Trump will go ahead with the tariffs given his desire to wrap up a Phase One deal soon. But if progress stalls further, Trump may keep the pending tariffs as a show of strength to bring Beijing to the table. 

 

ON TAP TOMORROW

• The House Financial Services Committee holds a hearing on prudential bank and credit union regulation with Federal Reserve Vice Chairman for Supervision Randal Quarles, Federal Deposit Insurance Corp. Chairman Jelena McWilliams, and National Credit Union Administration Chairman Rodney Hood, 10 a.m.

 

LEADING THE DAY

Appeals court rules Deutsche Bank must turn over Trump financial records to House: Deutsche Bank and Capital One must comply with a House subpoena seeking a broad range of financial documents related to President Trump and his businesses, a federal appeals court ruled on Tuesday.

A three-judge panel of the 2nd Circuit Court of Appeals on Monday ruled 2-1 in favor of ordering “prompt compliance” with the subpoenas from the House Financial Services and Intelligence committees. Judges Jon Newman, who was appointed by former President Jimmy Carter, and Peter Hall, a George W. Bush appointee, joined for the majority decision. Judge Debra Ann Livinston, another Bush appointee, issued a partial dissent.

“The public interest in vindicating the Committees’ constitutional authority is clear and substantial,” the judges wrote in the decision. The Hill’s Harper Neidig breaks it down here.

 

What it means: The ruling is the latest blow to the president’s efforts to fight off congressional oversight of his business dealings and personal finances.

• The 2nd Circuit and the D.C. Circuit have both ruled that Trump’s accounting firm must comply with separate subpoenas from the Manhattan district attorney and House investigators. The president has asked the Supreme Court to intervene in some of those cases.

• And Trump’s lawyers have already suggested appealing this decision to the high court.

• “We believe the subpoena is invalid as issued,” Jay Sekulow, Trump’s personal attorney, wrote on Twitter. “In light of the Second Circuit decision, we are evaluating our next options including seeking review at the Supreme Court of the United States.”

 

France warns of retaliation after Trump administration tariff threat: France is threatening to retaliate after the Trump administration late Monday proposed tariffs of up to 100 percent on $2.4 billion of French products.

French Finance Minister Bruno Le Maire characterized the U.S. tariffs as “unacceptable,” according to multiple reports. 

“In case of new American sanctions, the European Union would be ready to retaliate,” Le Maire told Radio Classique, according to Reuters. 

“We are not targeting any country,” he later said at a press conference.

 

How we got here: The U.S. Trade Representative (USTR) on Monday said that France’s digital services tax discriminates against U.S. firms and proposed tariffs on $2.4 billion of French products.

• French President Emmanuel Macron signed legislation earlier this year placing a 3 percent tax on major companies’ revenues from digital services. 

• The USTR determined in a report issued Monday that France’s tax was meant to discriminate against U.S. tech firms. 

• Le Maire, however, defended France’s tax, saying it was aimed at “establishing tax justice,” according to The Associated Press.

 

GOOD TO KNOW

• Tariffs on solar panels implemented under President Trump have significantly harmed the U.S. solar industry, according to a new analysis released Tuesday.

• Senate Appropriations Committee Chairman Richard Shelby (R-Ala.) warned on Tuesday that budget negotiators need to reach an “understanding” on fiscal 2020 spending bills within days to meet a Dec. 20 funding deadline.

• Bloomberg News: “Mexico is considering a U.S. proposal to remove protections for biologic drugs from a renegotiated Nafta trade deal, a plan that could help clear a hurdle to an agreement and deal a blow to brand-name pharmaceutical companies.”

• The New York Times: “Federal and state bank regulators announced Tuesday that they were scrapping a burdensome requirement that banks said kept them away from the hemp business. Banks will no longer have to treat their hemp customers as suspicious and file reams of paperwork to anti-money-laundering authorities for each interaction.”

• ProPublica: “High-interest loan companies are using Utah’s small claims courts to arrest borrowers and take their bail money. Technically, the warrants are issued for missing court hearings. For many, that’s a distinction without a difference.”

 

ODDS AND ENDS

• Bloomberg News: “Online outrage over a Peloton Interactive Inc. holiday ad drove down shares and prompted calls for the stationary-bike maker to pull the commercial.”

• Google co-founders Larry Page and Sergey Brin announced Tuesday they will be stepping down from the leadership of the search giant’s parent company, Alphabet.

• Speaking of Google, the company’s decision last month to fire four longtime employees involved in worker activism has kicked off a firestorm of internal protest and public demonstrations.