Happy Wednesday 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.
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THE BIG DEAL–Trump and EU agree to work toward ‘zero tariffs’ and European Commission President Jean-Claude Juncker on Wednesday announced that they have reached a deal to begin resolving a dispute over tariffs and avoid a trade war.
“We agreed today first of all to work together towards zero tariffs, zero non-tariff barriers and zero subsides for the non-auto industrial goods,” Trump announced in a joint statement with Juncker in the White House Rose Garden.
{mosads}
The EU has agreed to increase U.S. soybean imports, lower industrial tariffs with the aim of dropping them to zero and work more closely together on regulations and energy, including buying much more liquified natural gas (LNG).
Trump said earlier Wednesday that he would propose dropping all tariffs and trade barriers between the U.S. and EU ahead of Junker’s visit. The president also said that “the end result” of his tariffs “will be worth it!’
Trump and Juncker said they also would team up to intensify work on improving the World Trade Organization (WTO), a frequent target of Trump.
“We’re starting the negotiation right now, but we know very much where it’s going,” Trump said during a brief joint statement in the Rose Garden on Wednesday afternoon.
Trump said they would “resolve” the retaliatory tariffs as well as the steel and aluminum tariffs that he imposed on the EU in May.
“When I was invited by the president to the White House, I had one intention: I had the intention to make a deal today. And we made a deal today,” Juncker said.
The Hill’s Vicki Needham and I break it down here.
What comes next: We should see the EU increase its U.S. soybean imports and the building of new LNG terminals in Europe within the near future. But the agreement to hold of on further tariffs could be the most important part of today’s deal.
Trump had been pushing ahead with plans to impose tariffs on foreign autos against the desperate pleas of GOP lawmakers and administration free-traders. EU leaders had warned that U.S. tariffs on their exported autos could cripple European carmakers. They’ve dodged that bullet for now.
ON TAP TOMORROW
- Senate Finance Committee: Confirmation hearing for Justin Muzinich to be Deputy Secretary of the Treasury and Michael J. Desmond to be Chief Counsel for the Internal Revenue Service and an Assistant General Counsel in the Treasury Department, 9:30 a.m.
- Senate Appropriations Committee: U.S. Trade Representative Robert Lighthizer testifies at a hearing on the fiscal 2019 budget request for the Office of the U.S. Trade Representative, 9:45 a.m.
- House Oversight and Government Reform Committee: Hearing on the Federal Trade Commission’s enforcement of Operation Chokepoint to crack down on fraud, 10 a.m.
- Senate Finance Committee: Hearing entitled “Improving Tax Administration Today,” 10:30 a.m.
- House Ways and Means Committee: Hearing entitled “Product Exclusion Process for Section 232 Tariffs on Steel and Aluminum,” 2 p.m.
LEADING THE DAY
Mulvaney asks for patience with Trump trade policy: White House budget director Mick Mulvaney on Wednesday asked for patience with President Trump’s trade policy as GOP lawmakers and businesses fume over escalating costs driven by tariffs.
Mulvaney said during an interview at CNBC’s Capital Exchange event that he was “surprised” by the anger spurred by Trump’s tariffs because the policy is intended to boost the U.S. economy.
“Everything from regulatory policy to tax policy to energy policy to you name it, has been aimed at one thing, and that is getting the American economy back on track,” Mulvaney said.
“So why are we all of sudden now being accused of doing the exact opposite on trade?” he asked.
Mulvaney added that trade policy is uniquely difficult “because you have to get the Chinese and other countries to do what you want them to do and change their behavior.”
“That’s really, really hard. So is it is going to be messier than regulatory reform was or tax reform was? Yes. Is it aimed in the same direction? Absolutely,” he said.
I’ve got more on Mulvaney’s comments here.
Rep. Jeb Hensarling (R-Texas) was also interviewed at the CNBC event and said he is “incredulous” about Trump’s decision to offer “a bailout” to farmers to fix damage caused be his trade policy.
“A tariff is a tax. So we have a policy now that is taxing the American consumer and then bailing out U.S. farmers with welfare.” Hensarling said. “I don’t get it.”
Hensarling called on lawmakers to take back trade powers that Congress delegated to the executive branch over several decades, and predicted a bipartisan uprising if Trump goes through with plans to impose tariffs on foreign automobiles. This was hours before Trump’s agreement with Junker.
Waters lays out agenda for Financial Services panel if she seizes gavel: Rep. Maxine Waters (D-Calif.) capped off the CNBC event and said she’d focus on housing finance reform and holding bank executives legally accountable for crimes committed by their firms.
Waters, the ranking Democrat on the House Financial Services Committee, is in line to take control of the panel if her party captures the lower chamber in November. She said that she’d prioritize finding a long-term solution for Fannie Mae and Freddie Mac to foster a “secondary market for the average homeowner and working people.”
Lawmakers have struggled to sort out what to with the government-sponsored enterprises taken in by the federal government during the 2008 financial crisis, and the federal housing finance system has gone largely untouched since the meltdown.
Waters said releasing the GSEs from federal control and making houses more affordable is crucial to tackling a U.S. “housing crisis.”
“We have working people who cannot afford the first and last month’s rent in order to get into a rental unit,” said Waters, who added that she’s “ashamed of the homelessness in this country.”
“And I’m gonna put a lot of time and attention on seeing what we can do for the National Housing Trust Fund … so that we can provide opportunities for the creation of multiple units for people to be able to rent.”
Waters also said she’d push to undo changes made at the Consumer Financial Protection Bureau by Acting Director Mick Mulvaney in a broader effort to penalize bank executives who preside over fraudulent or abusive activity.
“We’ve got to make the presidents and the CEOs of these banks accountable,” Waters said. “When we take a look at the fines that have been levied on Wells Fargo and some of the other big banks, it’s just a cost of doing business. And we’ve got to get away from that. I think we can do better.”
House panel advances homeland security funding bill with $5B for border wall: A House panel on Wednesday approved the Homeland Security appropriations bill, which includes $5 billion in funding for President Trump’s controversial border wall.
The House Appropriations Committee voted 29-22 along party lines to send the bill to the full House, wrapping up the appropriations committee’s work for the 2019 fiscal year.
- The bill provided $51.4 billion in discretionary funding for the Department of Homeland Security (DHS), a $3.7 billion increase over 2018 levels.
- It includes $7.2 billion funding for the Federal Emergency Management Agency (FEMA), funds for hiring 400 new U.S. Immigration and Customs Enforcement (ICE) agents and $1.9 billion for cyber security efforts.
- Democratic attempts to block or redesignate the $5 billion included to fund 200 miles worth of wall along the United States’ southern border fell flat in the face of Republican opposition.
- Trump has pushed for $25 billion for the wall, but the $5 billion down payment was well above the $1.6 billion in funding included in the Senate’s version of the bill, which only allowed for the money to be used for reinforcing existing barriers.
- The committee also voted to approve amendments to the bill that would protect from deportation recipients of the Deferred Action for Childhood Arrivals (DACA) program that are active-duty military or veterans, and blocked funding for a Trump administration decision to deny asylum to victims of domestic abuse and gang violence.
The Hill’s Niv Elis breaks down the entire bill here.
MARKET CHECK: CNBC: “Stocks closed sharply higher on Wednesday after President Donald Trump reportedly obtained concessions from the European Union to avoid a trade war.
“The Dow Jones Industrial Average rose 172.16 points to close at 25,414.10 after falling more than 100 points earlier in the session. The Nasdaq Composite jumped 1.2 percent to an all-time high of 7,932.24 as Google-parent Alphabet, Facebook and Amazon all jumped. The S&P 500 gained 0.9 percent to 2,846.07, closing less than 1 percent from its record high, as tech rose 1.5 percent.”
GOOD TO KNOW
- The House on Wednesday passed legislation to extend federal flood insurance funding through the end of November without making major changes to the debt-riddled program.
- Senate Minority Leader Charles Schumer (D-N.Y.) blasted the administration’s plan to offer financial aid to farmers impacted by President Trump’s protracted trade battle, calling it a “bailout” and comparing it to a “soviet-style program.”
- Puerto Rico Gov. Ricardo Rosselló declined an invitation to testify at a Wednesday House hearing on the island’s electric utility, dismissing it as a “political exercise.”
- Ajit Pai, the Republican chairman of the Federal Communications Commission (FCC), said on Wednesday that President Trump’s criticism of his agency would not affect its decision to reject Sinclair Broadcast Group’s proposed merger with Tribune Media.
ODDS AND ENDS
- General Motors (GM) on Wednesday downgraded its expected earnings for 2018 because of costs associated with the Trump administration’s steel and aluminum tariffs.
- Lawmakers in the House on Wednesday passed a bill aimed at bolstering skills training for technical jobs in various industries.