Legislation

On The Money: Trump imposes $50B in tariffs on China | China blasts ‘fickle’ Trump, promises payback | Trump to name consumer bureau director next week

Happy Friday and welcome back to On The Money, which is glad that the DNC’s 2020 convention won’t interfere with watching the Summer Olympics. 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: President TrumpDonald John TrumpTrump announces North Dakota rally for June 27 Kim Kardashian on running for office: ‘Never say never’ State Dept. warns Americans of terrorist threat at World Cup MORE on Friday announced that the United States would impose tariffs on $50 billion in Chinese products, making good on a threat that has been months in the making.

The White House’s move is expected to ramp up trade tensions with Beijing and possibly risk a key cooperative partnership to help denuclearize the Korean peninsula.

“My great friendship with President Xi of China and our country’s relationship with China are both very important to me,” Trump said in a statement.

“Trade between our nations, however, has been very unfair, for a very long time. This situation is no longer sustainable,” he said. The Hill’s Vicki Needham and Max Greenwood break down the new tariffs here.

The nitty gritty: U.S. Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerMcConnell urges GOP senators to call Trump about tariffs Companies brace for trade war MORE released a list of 1,102 products that will be hit by the 25 percent tariff.

Lighthizer said the list “focuses on products from industrial sectors that contribute to or benefit from the “Made in China 2025” industrial policy, which include industries such as aerospace, information and communications technology, robotics, industrial machinery, new materials and automobiles.  

The list does not include popular goods purchased by U.S. consumers such as cellphones or televisions, he said. 

The first round of tariffs on 818 products worth $34 billion will go into effect on July 6, according to the US trade representative’s office (USTR). A second batch of 284 products valued at $16 billion will undergo further review.

China bashes “fickle” Trump, promises payback: China’s Commerce Ministry released a scathing statement expressing its firm opposition to the president’s move and accusing the Trump administration of being “fickle” and “provoking a trade war” by imposing massive tariffs on China.

“This move is not only damaging bilateral interests but also undermining the world trade order,” the statement said. 

China said it would “immediately introduce taxation measures of the same scale and strength.”

“All the economic and trade achievements previously reached by the two parties will no longer be valid at the same time,” the statement said.

Reactions:

  • “Imposing tariffs places the cost of China’s unfair trade practices squarely on the shoulders of American consumers, manufacturers, farmers and ranchers. This is not the right approach.” – Tom Donohue, U.S. Chamber of Commerce president and CEO
  • “Tariffs are the wrong answer to China’s ongoing discriminatory and damaging trade practices.” — Dean Garfield, president and CEO of the Information Technology Industry Council (ITI)

LEADING THE DAY

Canadians boycott US goods, Trump over tariffs: Canadians have started to boycott U.S. goods in the wake of President Trump’s war of words with Canadian Prime Minister Justin Trudeau and the recent steel and aluminum tariffs on Canada, the European Union, and Mexico. 

CTV News reported on Thursday that Canadian shoppers were boycotting Florida oranges, Kentucky bourbon and California wine over the diplomatic rift.

Canadians have also employed hashtags such as #BoycottUSProducts, #BuyCanadian and #BoycottUSA.

 

Morgan Stanley: Tax refunds could increase by $62 billion next year: Tax refunds could increase by about $62 billion next year, the first year when taxpayers will file under the new tax code, according to a paper released this week by Morgan Stanley.

“With the change in taxes … American workers who generally overwithhold each year are now likely to be significantly overwithheld this year,” economists with the bank wrote.

President Trump signed a large reform bill last year that lowers tax rates and increases the standard deduction. The tax changes generally take effect for the 2018 tax year, meaning that they first apply to the tax returns that people file in early 2019.

Morgan Stanley estimated that, based on Joint Committee on Taxation data, that the tax law will lower personal income taxes by about $104 billion for the 2018 tax year. The Hill’s Naomi Jagoda breaks down the data here.

ON TAP NEXT WEEK

Tuesday:

  • SIFMA and The Clearing House host the 2018 Prudential Regulation Conference, featuring interviews with Comptroller of the Currency Joseph Otting and Federal Deposit Insurance Corporation Chairman Jelena McWilliams, 8 a.m.
  • Senate Judiciary Committee: Hearing on the EB-5 investor visa program, 10 a.m.

Wednesday:

Thursday:

NEXT WEEK’S NEWS, NOW

  • President Trump is expected to announce his nominee to be the next Consumer Financial Protection Bureau director before the end of Thursday, the final day of Acting Director Mick Mulvaney’s term leading the agency. Trump is expected to pick either National Credit Union Administration Chairman Mark McWatters or George Mason University law professor Todd Zywicki, but other names have circulated as potential candidates.
  • Senators will grill Commerce Secretary Wilbur Ross on Tuesday during a Finance Committee hearing on the Trump administration’s imposed and planned tariffs. Ross will be on the hotseat as concerned Republicans blast the president’s trade policies and seek clarity before tensions spiral into a trade war

GOOD TO KNOW

ODDS AND ENDS


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