On The Money: IMF estimates US-China trade war to shave 0.8 percent from global economy | NY prosecutors urge appeals court not to block Trump tax subpoena | Turkish bank linked to Giuliani client charged with fraud, money laundering

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.

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THE BIG DEAL—IMF estimates US-China trade war to shave 0.8 percent from global economy: The U.S.-China trade war will cut into the global economy by 0.8 percent by the end of 2020, according to a new report by the International Monetary Fund (IMF).

In the forward to the IMF’s latest World Economic Outlook report, released Tuesday, IMF economic counsellor Gita Gopinath cited global trade as one of the main reasons for the lowest growth estimates in a decade.

“A notable feature of the sluggish growth in 2019 is the sharp and geographically broad-based slowdown in manufacturing and global trade,” she wrote.

Growth for 2019 is expected to top out at 3 percent, down 0.3 points from what was expected in an April report, and the lowest level since the global financial crisis in 2008 and 2009. Next year, it is expected to pick up to 3.4 percent, a 0.2-point revision down since April. 

The Hill’s Niv Elis breaks it down here.

  

The background: Trump has already imposed tariffs on $360 billion of the roughly $500 billion in Chinese goods imported by the U.S. each year. While the U.S. and China struck a temporary truce on Friday to hold off on further increases, the president is still slated to impose a new round of tariffs in December that would cover almost all Chinese products with U.S. import taxes.

Trump is also set to levy a new round of tariffs on European goods later this week, and has threatened to impose tariffs on all foreign autos and auto parts.

While the U.S. economy has remained resilient throughout Trump’s trade battles, economists say it’s unlikely the country will be able to sustain record-low levels of unemployment with further tariffs.

On tap tomorrow

• The House Financial Services Committee holds a hearing on Consumer Financial Protection Bureau (CFPB) oversight with CFPB Director Kathy Kraninger, 10 a.m.

• The House Budget Committee holds a hearing entitled “Strengthening Our Fiscal Toolkit: Policy Options to Improve Economic Resiliency,” 10 a.m.

• The House Small Business Committee holds a hearing on management and performance challenges at the Small Business Administration,” 11:30 a.m.

• The House Financial Services Committee holds a hearing on renewing the Terrorism Risk Insurance Program,” 2 p.m.

• The Joint Economic Committee holds a hearing on measuring economic inequality in the U.S., 2:15 p.m.

 

LEADING THE DAY

NY prosecutors urge appeals court not to block subpoena for Trump’s tax returns: The Manhattan district attorney’s office on Tuesday urged a federal appeals court to deny President Trump’s effort to block prosecutors’ subpoena for his tax returns.

Trump has “established neither a likelihood of success on the merits of his constitutional claim to immunity, nor that he would suffer irreparable harm should the Court allow production under the grand jury subpoena to proceed in the ordinary course,” the district attorney’s office said in a court filing.

“By contrast, continued delay poses serious concerns for the Office of the District Attorney for New York County and the People of the State of New York: It risks the expiration of statutes of limitation that apply to some of the transactions being investigated by the grand jury, and would immediately infringe rights and obligations of the District Attorney,” the filing added.

The Hill’s Naomi Jagoda breaks it down here.

 

Turkish bank linked to Giuliani client charged with fraud, money laundering: Federal prosecutors have charged a Turkish bank with ties to a former client of President Trump’s personal attorney Rudy Giuliani in connection with an alleged scheme to evade sanctions on Iran, according to the U.S. Attorney’s Office.

The six-count indictment alleges that Turkiye Halk Bankasii AS (Halkbank) was part of a conspiracy to give Tehran access to billions of dollars in defiance of sanctions that it concealed from U.S. regulators.

“As alleged in today’s indictment, Halkbank’s systemic participation in the illicit movement of billions of dollars’ worth of Iranian oil revenue was designed and executed by senior bank officials,” U.S. Attorney for the Southern District of New York Geoffrey Berman said in a statement. 

The Hill’s Zack Budryk tells us more about this breaking story here.

 

The Trump connection: 

• Reports last week said that in 2017 Trump pressured then-Secretary of State Rex Tillerson to help convince the Justice Department to drop a criminal case against Turkish-Iranian gold trader Reza Zarrab, who was himself charged in a sanctions-evasion scheme and represented by Giuliani.

• Zarrab eventually pleaded guilty and testified against Mehmet Hakan Atilla, who headed international banking at Halkbank, also claiming Turkish President Recep Tayyip Erdogan was aware of the laundering effort.

 

GOOD TO KNOW

• Sen. Bernie Sanders (I-Vt.) is shining a light on the U.S. tax code in the lead-up to Tuesday’s Democratic presidential primary debate by releasing new proposals that would aggressively raise rates on corporations and the wealthiest Americans.

• President Trump hired 281 lobbyists to his administration by the halfway point of his first term, which is four times more than President Obama hired six years into office.

• The  Department of Education reportedly blocked the Consumer Financial Protection Bureau’s (CFPB) efforts to investigate high rejection rates among applicants for a student loan forgiveness program meant to aid firefighters, police, and other public servants.

• The Wall Street Journal: “Who Pays What in Taxes? The Answer Isn’t So Simple.”

 

ODDS AND ENDS

• White House trade adviser Peter Navarro frequently cites “Ron Vara” as a China expert in books. The issue? Ron Vara (which is an anagram of Navarro) doesn’t exist, according to The Chronicle Review.