Happy Tuesday and welcome back to On The Money, where will be returning to your inbox on Thursday after taking tomorrow off to celebrate America’s birthday. 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–Trump defends tariff moves as allies strike back: President Trump is defending his plans to levy billions of tariffs on the nation’s closest trading partners even as allies retaliate one by one.
Trump and his top administration officials remain steadfast on his protectionist trade policies, arguing that growing trade deficits prove the United States has been losing on the global stage for years.
The United States has levied hefty steel and aluminum tariffs for national security reasons on all but a handful of countries, hit China with duties over the alleged theft of intellectual property and is contemplating another round of taxes on imported cars.
The tariffs have rocked the relationships with close allies such as Canada, Mexico and the European Union, all of which have retaliated, pushing the world’s top economies to the brink of a global trade war. The Hill’s Vicki Needham tells us what’s at stake here.
Reactions:
- “It’s going to all work out.” — President Trump
- “Tariffs that beget tariffs that beget more tariffs only lead to a trade war that will cost American jobs and economic growth.” — Thomas Donohue, president and CEO of the U.S. Chamber of Commerce
- “I think all these claims about the sky is falling are at best premature and probably quite inaccurate.” — Commerce Secretary Wilbur Ross
- “It’s not positive. We have to work something out.” — Dutch Prime Minister Mark Rutte
What comes next: China intends to hit $45 billion in U.S. exports after Trump said he would levy tariffs on $50 billion in Chinese goods. The first round of 25 percent tariffs on $29.6 billion of U.S. exports is expected to start on Friday. Beijing will implement the remaining $15.4 billion at a later time, after gauging U.S. reaction.
Trump has since countered with another round of tit-for-tat tariffs on $200 billion in Chinese goods. As of this week, approximately $75 billion worth of U.S. exports will be subject to retaliatory tariffs.
ON TAP TOMORROW
- Happy Independence Day!
LEADING THE DAY
Maxine Waters is done with ‘nice guy politics’: From the perspective of some House Democrats, Rep. Maxine Waters (D-Calif.) has the right message. She’s just not always the best messenger.
The Los Angeles lawmaker’s early calls for President Trump’s impeachment and viral showdowns with administration officials have endeared Waters to the party’s young, liberal base. And those stances have also garnered the respect of many House Democrats, who admire how Waters, 79, sticks to her political convictions.
“She is up-to-date, she is smart, she is authentic and she is not scared to express herself,” Rep. Gwen Moore (D-Wis.) told The Hill, adding that her constituents in Milwaukee often ask her if she knows Waters.
Yet her most recent remarks — encouraging public confrontation with Cabinet members — rankled some of those colleagues and raised concerns about how Waters would handle increased authority if Democrats regain control of the House in November. I explain it all here.
- “She is transformative in terms of appealing to different generations of people.” — Rep. Gwen Moore (D-Wis.).
- “We’ve got a division, because some people are very concerned that she’s going to be pushing an ideological agenda.” — A House Democrat on the Financial Services Committee.
- “She also takes some very hard stands, and you know the Republicans don’t like it and they try to push back. But she’s every bit as tough or tougher than they are.” — Rep. Ed Perlmutter (D-Colo.).
- “What Maxine and her generation did was make this country a better country by protesting, by sitting at lunch counters, by marching. She reached back into that era of saying, ‘When you see them, protest.'” — Rep. Cedric Richmond (D-La.).
- “She is very, very much a minority in the House of Representatives, and that hasn’t dissuaded her from speaking her truth in a room surrounded by people who do not look like her. It’s easy to be quieted because you’re scared, and she’s not scared.” — A former aide to Waters.
ZTE BACK IN BUSINESS (FOR NOW):
The Trump administration will allow Chinese phone maker ZTE to temporarily resume some of its operations as the U.S. considers undoing its seven-year ban on the manufacturer doing business with American companies.
The reprieve: The new authorization from the Commerce Department will go from July 2 to Aug. 1, according to a document obtained by Bloomberg. The company told the outlet that it will be in compliance with U.S. demands by the end of this period.
The background: President Trump has said he is working to ease the penalties on ZTE that the Commerce Department imposed on the company for violating sanctions with Iran. His move has sparked heavy backlash from lawmakers on both sides of the aisle. Lawmakers last month passed the National Defense Authorization Act (NDAA) with amendments including provisions aimed at reversing Trump’s attempts to ease the penalties. They see the company as a national security threat because of its ties to the Chinese government.
Our Ali Breland has the latest in the fight.
MARKET CHECK: From CNBC: “Stocks fell on Tuesday as tech shares dropped sharply, while lingering concerns over a trade dispute between the U.S. and other major economies rattled investors.
“The Dow Jones Industrial Average declined 132.36 points to close at 24,174.82, with Apple falling more than 1.5 percent. The S&P 500 fell 0.5 percent to 2,713.22, with tech sliding 1.4 percent. The Nasdaq composite pulled back 0.9 percent to 7,502.67 as Micron and Facebook dropped 5.5 percent and 2.4 percent. The indexes also snapped their three-day winning streaks.”
GOOD TO KNOW
- Chinese Foreign Ministry spokesman Lu Kang told reporters that China hopes the U.S. will “do something conducive to the mutual trust,” but that the country is prepared to take “necessary measures” when the U.S. imposes tariffs on Chinese goods this week.
- A leaked propaganda notice from the Chinese government states that the country is using to tariffs to try to disrupt and split President Trump’s base, Business Insider reported on Tuesday.
- A Senate panel will hold a hearing next week on paid family leave — an issue that has become a priority for some lawmakers in both parties as well as for the president’s daughter and adviser, Ivanka Trump.
- Saudi Arabia’s government said Tuesday that the nation has the capacity to increase oil production, days after President Trump claimed that Saudi King Salman had agreed to increase output by as much as 2 million barrels per day to make up for the loss of Iran’s capacity as the United States starts enforcing sanctions.
- China is putting pressure on the European Union to issue a strong joint statement against President Donald Trump’s trade policies at a summit later this month but is facing resistance, Reuters reported.
- Spending on U.S. construction projects edged up 0.4 percent in May, while April’s figure was revised down significantly — signs that new building is still uneven despite a growing economy, according to the AP.
- In their hyperinflationary South American country, where bank notes are as difficult to find as chronically scarce food and medicine, Venezuelans are increasingly relying on barter for basic transactions, according to Reuters.
ODDS AND ENDS
- A new New ‘Family Feud’-style game show wants to pay off your student loans.
- David Kostin, chief U.S. equity strategist at Goldman Sachs, told Bloomberg News that 100 percent of the S&P 500’s total return of nearly 3 percent in the first half is attributable to just 10 stocks.