On The Money: Judge upholds House subpoena for Trump financial records | Trump vows to appeal ruling by ‘Obama-appointed judge’ | Canada, Mexico lift retaliatory tariffs on US | IRS audit rate falls

Happy Monday and welcome back to On The Money, the new Master of Coin for Westeros. 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–Judge upholds House subpoena for Trump financial records: District Judge Amit Mehta on Monday ruled in favor of a subpoena issued by the House Oversight Committee for President Trump’s financial records from the accounting firm Mazars.

In a 41-page-long opinion, Mehta found that “President Trump cannot block the subpoena to Mazars.”

Trump’s attorneys had argued that the subpoena, issued by Chairman Elijah Cummings (D-Md.), was unconstitutional because it wasn’t tied to legislation. But attorneys for the House said that the records will help strengthen ethics and disclosure laws and see if Trump is in compliance with the Emoluments Clause of the Constitution.{mosads}

“These are facially valid legislative purposes, and it is not for the court to question whether the Committee’s actions are truly motivated by political considerations,” Mehta wrote.

The Hill’s Jacqueline Thomsen explains the ruling here.

 

The decision:

• In his ruling, Mehta – an Obama appointee – noted that the House Oversight panel’s “broad investigative power is not new,” pointing to investigations conducted by the committee while it was under Republican control.
• And he found that “it is not for the court to question whether the Committee’s actions are truly motivated by political considerations,” as the president’s attorneys have argued.
• “The court is well aware that this case involves records concerning the private and business affairs of the President of the United States,” Mehta wrote. “But on the question of whether to grant a stay pending appeal, the President is subject to the same legal standard as any other litigant that does not prevail.”

 

Trump blasts judge: President Trump on Monday said he would appeal a federal judge’s decision upholding a subpoena for his financial records, blasting it as a “crazy” ruling by “an Obama-appointed judge.”

“We will appeal it,” Trump told reporters at the White House before leaving for a campaign rally in Pennsylvania. “It’s totally the wrong decision by, obviously, an Obama-appointed judge.” The Hill’s Jordan Fabian has the president’s reaction.

 

What comes next: The order is a blow to Trump and his administration, who have vowed to fight all subpoenas issued as part of the investigation into the president, his family and his businesses.

Mehta also denied a request from Trump lawyer William Consovoy that he issue a stay on the ruling while they appeal the decision to a higher court, meaning that the House Democrats could quickly obtain the president’s financial records if Mazars complies with the request before an appeals court potentially intervenes.

Mehta’s decision could have far reaching implications for other congressional investigations into the president, including the probe of his nexus to Deutsche Bank and potential financial crimes committed by the German company.

The New York Times reported Sunday that Deutsche Bank anti-money laundering personnel reportedly recommended turning over information about transactions by entities owned by President Trump and his son-in-law, Jared Kushner, to a government watchdog in 2016 and 2017, but the bank’s executives apparently declined to do so.

The latest red flag involving Trump’s finances and Deutsche Bank prompted a letter to the bank from two Senate Banking Committee Democrats–Ranking Member Sherrod Brown (Ohio) and Sen. Chris Van Hollen (Md.) for more information.

Brown and Van Hollen asked Deutsche Bank chief executive Christian Sewing if the Times story was true and the full extent of the bank efforts to suppress suspicious activity reports on the Trump and Kushner accounts.

 

ON TAP TOMORROW

• Secretary of Housing and Urban Development (HUD) Ben Carson testifies before the House Financial Services Committee for a hearing on HUD oversight, 10 a.m.

• The Senate Banking Committee holds a hearing on shell companies and beneficial ownership requirements, 10 a.m.

• The House Appropriations Committee marks up the fiscal 2020 Energy, Water and Defense bills, 10:30 a.m.

 

LEADING THE DAY

Canada, Mexico lift tariffs on US goods after Trump scraps steel, aluminum levies: Canada and Mexico on Monday lifted tariffs on a slew of U.S. goods, including steel, aluminum, whiskey and beef as the three countries push for ratification of an updated trade agreement.

The moves by Canada and Mexico come three days after President Trump struck a deal to exempt both trading partners from U.S. tariffs on steel and aluminum imports.

Trump imposed tariffs of 25 percent on imported steel and 10 percent on imported aluminum in March 2018 and ended an exemption for Canada, Mexico and several others two months later.

Canada and Mexico were among several countries to impose tariffs on U.S. steel and aluminum last June in retaliation, also targeting American orange juice, whiskey and beef. I’ve got more on that here.

 

How it affects Trump’s trade agenda: Trump imposed the steel and aluminum tariffs in part to create leverage over Canada and Mexico as the three nations renegotiated the North American Free Trade Agreement (NAFTA). Both countries insisted that the steel and aluminum tariffs be lifted before ratifying the new version of NAFTA that was finalized in October.

• The new deal, called the U.S.-Mexico-Canada Agreement (USMCA), requires the approval of legislatures in all three countries before it can go into effect.

• Sen. Chuck Grassley (R-Iowa), chairman of the Senate Finance Committee, pledged to block a vote to ratify the USMCA unless Trump lifted tariffs on Canadian and Mexican steel and aluminum.

• With that out of the way, Vice President Pence will travel to Canada next week to meet with Prime Minister Justin Trudeau and push for adoption of USMCA.

But the president still faces long odds in getting the USMCA through the House, where Democrats are largely opposed to the deal.

Top Democratic lawmakers, including Speaker Nancy Pelosi (Calif.), say the USMCA must include tighter labor and environmental standards to win support from the party.

 

While Trump is making progress toward ratifying USMCA, he’s facing more backlash over his trade war with China.

GOP Sen. Jerry Moran (Kan.) called Monday for the resolution of the U.S. and China’s trade dispute in a letter to Agriculture Secretary Sonny Perdue, highlighting damages to farmers.

“The tariffs our country levied against China, and China’s retaliatory tariffs targeted at our farmers and ranchers, threaten to cause long term damage to U.S. agriculture,” Moran wrote.

“Kansas farmers and ranchers understand the need to hold China accountable for bad behavior on trade. Yet, net farm income has fallen by 50 percent since 2013 and the trade war has pushed commodity prices down even further. Many farmers and ranchers are on the verge of financial collapse,” Moran added.

And if Trump proceeds with his proposed 25 percent tariffs on $300 billion of Chinese imports, he would tip the global economy into recession, according to a Morgan Stanley analysis.

Last week, Trump threatened to add tariffs on top of the import taxes he has imposed on $250 billion worth of Chinese imports as talks for a new trade deal hit a roadblock.

“If talks stall, no deal is agreed upon and the U.S. imposes 25% tariffs on the remaining ~US$300 billion of imports from China, we see the global economy heading towards recession,” the Morgan Stanley analysis says.

That would mean a loss of 2.5 percent from the global economy.

The U.S. trade representative’s office earlier this month released a list of about $300 billion in Chinese products that the administration is proposing to hit with a 25 percent tariff. The list includes shoes, clothing, food items and agricultural products.

For that reason, a group of more than 170 companies, including major brands such as Nike and Adidas, are urging Trump to remove footwear from the list.

“The proposed additional tariff of 25 percent on footwear would be catastrophic for our consumers, our companies, and the American economy as a whole,” the companies wrote in a letter to Trump.

 

GOOD TO KNOW

• The IRS audited a slightly smaller percentage of individual tax returns in fiscal 2018, according to data released Monday.
• Ford Motor Co. announced Monday it will cut its global salaried workforce by 10 percent and eliminate roughly 7,000 management jobs by the end of August, moves that will save the company about $600 million per year.
• The Republican-controlled Federal Communications Commission indicated on Monday that it would approve the T-Mobile-Sprint merger after the two companies agreed to spin off Boost Mobile and submit to other conditions for the $26 billion deal.
• Republican and Democratic senators on Monday that they’ve reached an agreement on aid for Puerto Rico, moving closer to a deal on a stalled disaster relief package.

 

ODDS AND ENDS

• Representatives for business giants including Microsoft, Capital One and Johnson & Johnson, are heading to Capitol Hill this week to push for a carbon tax, Roll Call reported Monday.
• More than 4 in 10 respondents in a new Gallup poll now say that socialism would be a good thing for the U.S.