Happy Wednesday and welcome back to Overnight Finance, which, like Canada, has never burned down the White House. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL: Senators are moving forward with legislation that would curb President Trump’s authority on tariffs, despite opposition from the White House.
The bill would require Trump to submit tariffs implemented under Section 232 of the trade law for approval to Congress. Any approval legislation would then be fast-tracked through both chambers.
“If the president truly believes invoking Section 232 is necessary to protect the United States from a genuine threat, he should make the case to Congress and to the American people and do the hard work necessary to secure congressional approval,” Corker said in a statement announcing the bill.
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In addition to Corker, Sens. Heidi Heitkamp (D-N.D.), Pat Toomey (R-Pa.), Mark Warner (D-Va.), Lamar Alexander (R-Tenn.), Brian Schatz (D-Hawaii), Ron Johnson (R-Wis.), Chris Van Hollen (D-Md.), Mike Lee (R-Utah), Jeff Flake (R-Ariz.), Ben Sasse (R-Neb.) and Johnny Isakson (R-Ga.) are supporting the bill.
“There is no real national security threat that these tariffs are a response to. They are an effort to impose a protectionist policy for economic purposes,” Toomey said in a floor speech blasting the administration’s decisions.
The Hill’s Jordain Carney tells us more about the bill here.
Corker rebukes Trump’s personal plea: Senators are introducing the legislation despite receiving pushback from Trump, who earlier on Wednesday privately urged Corker not to file his bill.
“I talked at length with the president about it today. He’s obviously not pleased with this effort,” Corker separately told reporters.
Corker added that Trump’s main message in the phone call, which the president initiated, was for Corker to not move forward with the proposal.
But congressional Republicans are becoming increasingly frustrated with Trump’s trade policy, which they worry could roil the economy just months before a midterm election. The Hill’s Alexander Bolton has more about their concerns here.
No endgame in sight: Trump cranked up long-simmering tensions late last week when he announced he’d impose steep tariffs on steel and aluminum imports from Canada, Mexico and the European Union, ending an exemption for the trading allies.
A group of GOP senators are meeting with Trump on Wednesday at the White House to discuss trade. The meeting was organized by GOP Sen. Lindsey Graham (S.C.).
“I think Senator Graham, who is the leader of that meeting, just wants to talk to the president about his endgame,” GOP Sen. John Cornyn (Texas) told reporters, when asked about the meeting.
Notably missing from the supporters of Corker’s bill are members of Senate GOP leadership.
Reactions:
- “There is no real national security threat that these tariffs are a response to. They are an effort to impose a protectionist policy for economic purposes.” — Sen. Pat Toomey (R-Pa.).
- “My preference would be to convince the president that perhaps he should take a different approach.” — Sen. Pat Roberts (R-Kan.)
- “The president is too smart to start a trade war.” — Sen. John Kennedy (R-La.).
- “You would have to pass a law that [Trump] would want to sign into law.” — House Speaker Paul Ryan (R-Wis.)
- “Now is not the time to undercut President Trump’s ability to negotiate better trade deals. I will not support any efforts that weaken his position.” — Sen. Lindsey Graham (R-S.C.)
What comes next: Senate GOP leaders have ruled out the chance of Corker’s bill getting a vote on its own. But Senate Majority Leader Mitch McConnell (R-Ky.) suggested it could be added to the National Defense Authorization Act (NDAA), a sprawling defense spending bill.
Sen. James Inhofe (R-Okla.), who is managing the bill, said he wouldn’t oppose allowing a vote on Corker’s bill to be added as an amendment, but wouldn’t support the amendment himself.
But Jordain tells us that the process for setting up roll call votes on amendments to the NDAA has frozen in recent years. Senators will often object to a vote on any amendment unless they can also get a vote on their own proposals.
McConnell doesn’t back bill: But McConnell also said in a Wednesday radio interview that he wouldn’t support Corker’s bill, which he called “an exercise in futility.”
“Yeah, I don’t think we need to be trying to rein in the president through legislation,” McConnell said.
Takeaway: Opposition to the bill from McConnell and the White House could prove critical to squelching support for it in the Senate, where the GOP leader is well respected and many Republican senators are wary of crossing the White House months before a midterm election.
ON TAP TOMORROW
- House Financial Services Committee: Markup of seven bills related to disaster recovery, flood insurance and capital markets access, 11 a.m.
- House Foreign Affairs Committee: Hearing on “Advancing U.S. Business Investment and Trade in the Americas,” 2 p.m.
- American Enterprise Institute hosts an event on the lessons learned from 10 years of quantitative easing featuring former Fed Chairman Ben Bernanke, 2 p.m.
LEADING THE DAY
The latest in the global backlash to President Trump’s tariffs:
EU to impose retaliatory tariffs on US in July: The European Union (EU) is expected to place additional duties on U.S. imports starting in July in response to Trump’s tariffs on EU steel and aluminum, according to Reuters.
EU members have given support for a plan that would set 25 percent duties on up to $3.3 billion worth of U.S. goods, Reuters reported.
“The Commission expects to conclude the relevant procedure in coordination with member states before the end of June so that the new duties start applying in July,” Commissioner Maros Sefcovic said on Wednesday at a press conference.
According to Reuters, EU exports now subject to Trump’s tariffs are worth more than $7.5 billion.
The EU plan would also impose duties between 10 and 50 percent on $4.2 billion worth of U.S. goods in March 2021, or sooner if the World Trade Organization (WTO) rules that Trump’s tariffs are illegal, Reuters reported. The EU challenged the tariffs at the WTO on Friday.
Background: The WTO advanced trade complaints from the European Union and Canada against the United States on Wednesday.
Kudlow warns WTO won’t determine US policy as summit nears: The president’s top economic adviser on Wednesday implied that the U.S. may not abide by any rulings from the WTO, a tough signal ahead of a Group of Seven summit this weekend where Trump is expected to face a backlash from allied leaders over his protectionist trade agenda.
“International, multilateral organizations are not going to determine American policy,” White House National Economic Council Director Larry Kudlow told reporters at a press briefing organized to preview President Trump’s trip to Canada for the G-7.
The comments paint an unyielding stance on trade as the president prepares to meet with leaders from Canada, the United Kingdom, France, Germany, Italy and Japan. Ahead of the summit, the WTO circulated formal complaints from Canada and the European Union against the tariffs. The Hill’s Niv Elis explains here.
FINANCE IN FOCUS–Trump to face lion’s den at G-7 summit: President Trump will walk into a lion’s den of angry allied leaders at this week’s Group of Seven summit, where he is expected to face a firestorm of criticism over his decision to hit them with steep tariffs on steel and aluminum.
Trump’s decision to levy tariffs has rankled allies and created divisions in the longstanding relationships. It’s creating a stark contrast from the last decade of G-7 summits, which generally have served as opportunities for the world’s seven largest economies to close ranks on major political and economic issues.
Washington’s moves have brought the closely linked nations to the brink of an all-out trade war, setting the stage for a showdown in Quebec and one of the most difficult G-7 meetings for a U.S. president. The Hill’s Vicki Needham and Niv Elis tell us why here.
Mulvaney deepens feud with consumer advocates after board shutdown: The Consumer Financial Protection Bureau (CFPB) on Wednesday said it is making cuts to three key advisory boards, enraging advocates who say the agency’s acting director doesn’t want to engage with dissenting opinions.
The CFPB told members of the advisory boards Wednesday that the bureau would shrink the groups and shift the agency’s external outreach to town halls and roundtables across the U.S., citing cost concerns.
The CFPB told board members in a Wednesday email that the groups wouldn’t meet until the bureau selects their replacements.
Members of the bureau’s Consumer Advisory Board expressed the most outrage over the decision, and have feuded with Mulvaney over the CFPB’s direction for months. The 25-person board represents a slew of consumer advocacy, legal aid and fair lending groups that have opposed Mulvaney’s efforts to ease the CFPB’s regulation of banks and lenders.
Mulvaney has sought to slash the CFPB’s budget and reshape the bureau from within, aiming to streamline an agency he has insisted should not exist.
But CAB members said Mulvaney’s move to reshape the board is meant to silence opponents of the bureau’s new direction. I explain why here.
MARKET CHECK: From CNBC: “Stocks rose on Wednesday as bank shares rallied on higher interest rates, while Boeing rose.
“The Dow Jones industrial average closed 346.41 points higher at 25,146.39 with Boeing rising 3.2 percent and contributing the most to the gains. J.P Morgan and Goldman Sachs were also among the biggest contributors of gains. The Dow also closed above 25,000 for the first time since mid-March.
“The S&P 500 gained 0.9 percent to finish at 2,772.35 as financials rose 1.9 percent. The benchmark 10-year Treasury note yield rose to 2.98 percent on Wednesday, following yields in Europe after the European Central Bank hinted at winding down its asset-purchasing program.”
GOOD TO KNOW
- The House is expected to vote Thursday on a White House proposal to claw back roughly $15 billion in previously approved government spending.
- The chief of the Securities and Exchange Commission (SEC) said Wednesday that the agency should not change its longstanding definition about what constitutes a security to ease the rules for cryptocurrencies.
- The World Bank is warning that trade tensions between the United States and other countries could hurt global trade as badly as the financial crisis did in 2008.
- House Minority Leader Nancy Pelosi (Calif.) and other top Democrats are vowing to abide by fiscally hawkish pay-as-you-go rules if they seize the majority next year, rejecting calls from liberals who feel they’d be an impediment to big legislative gains.
- Op-ed: Former Rep. Brad Miller (D-N.C.) writes for The Hill on remembering the lessons from the 2007-8 financial crisis.
- Defense Secretary James Mattis said Wednesday that he does not believe European and Canadian anger over U.S. tariffs will hurt military relations with NATO, The Associated Press reported.
- Shareholders, including top executives of Google’s parent company, Alphabet, voted down a proposal on Wednesday aimed at increasing the company’s diversity.
ODDS AND ENDS
- Huawei, which the U.S. had flagged as a national security threat, was one of at least four companies that Facebook had data-sharing partnerships with, The New York Times reported.