On The Money — Sponsored by Prudential — Markets roiled by Trump’s new tariff threat | Trump lashes out at Canada over trade | Warren looks to block Trump pick for consumer agency

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: 

Markets reacted to President Trump’s latest threat of $200 billion in tariffs against China with stocks dropping.

From CNBC: “Stocks fell on Tuesday after President Donald Trump’s latest threat to China increased fears of an impending trade war between the world’s largest economies.

“The Dow Jones industrial average fell 287.26 points to close at 24,700.21, with Boeing, DowDuPont and Caterpillar as the worst-performing stocks in the index. The 30-stock index also erased all of its gains for the year and posted a six-day losing streak, its longest since March 2017.

“The S&P 500 dropped 0.4 percent to 2,762.45, with materials, industrials and tech lagging. The Nasdaq composite closed 0.3 percent lower at 7,725.59. Both indexes briefly fell more than 1 percent earlier in the session.”

 

International panic: Global markets also convulsed Tuesday after Trump called for further tariffs against China, according to The Wall Street Journal, which called it “the starkest sign yet that the threat of a trade war–once dismissed by many investors as unlikely–is rising again.”

 

 

 

 

How we got here: President Trump late Monday said he is directing his top trade official to identify $200 billion more worth of Chinese goods that will be subject to tariffs, escalating the ongoing trade dispute between the U.S. and China. 

Trump said China’s decision to retaliate in kind against his first batch of $50 billion in tariffs — announced on Friday — required a U.S. response to encourage China to change its unfair practices.

The president asked U.S. Trade Representative Robert Lighthizer to find $200 billion worth of Chinese goods that would be hit with a 10 percent import tax. 

“China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology,” Trump said in a statement.

“After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced,” Trump said.

The Hill’s Vicki Needham tells us more about the new tariffs here.

  

ON TAP TOMORROW

• Senate Finance Committee: Hearing on Trump’s tariffs with Commerce Secretary Wilbur Ross, 9 a.m.

• House Financial Services Committee: Hearing on “Empowering a Pro-Growth Economy by Cutting Taxes and Regulatory Red Tape,” 10 a.m.

• House Financial Services Committee: Hearing on “Illicit Use of Virtual Currency and the Law Enforcement Response,” 2 p.m.

• Senate Banking Committee: Hearing on combating illicit finance and money laundering, 2:30 p.m.

 

Join us Tuesday, June 26 for “Mergers and Innovation: Measuring Performance and Patient Care,” featuring HHS Deputy Secretary Eric Hargan, Sen. Bill Cassidy (R-La.) and Rep. Gene Green (D-Texas). Topics of discussion include how the landscape of health care delivery in the United States is undergoing a dramatic shift, its implications for health care industry stakeholders and patients and also the role of Congress in ensuring all Americans have access to quality care. RSVP Here.

 

LEADING THE DAY

Trump lashes out Canada over trade: Trump on Tuesday lashed out again at close ally Canada, injecting more uncertainty into the future of the North American Free Trade Agreement (NAFTA).

Trump accused Canadians of crossing the border with the U.S. to buy products and “smuggle” them back into their country because their tariffs are so high.

“They buy shoes and they wear them. They scuff them up to make them sound old, or look old,” Trump told the National Federation of Independent Businesses during a summit in Washington.

“No, we’re treated horribly,” he said.

The president, who called NAFTA “one of the worst deals ever made by this country, a disaster,” said again that he may pursue separate deals with Mexico and Canada instead of sticking with the three-nation deal. 

“We’ll see whether or not we can make a reasonable NAFTA deal,” Trump said.

Vicki Needham breaks down the tensions with our neighbor to the north here.

 

Warren to put hold on Trump consumer bureau nominee: Sen. Elizabeth Warren (D-Mass.) on Tuesday said she would block President Trump’s nominee to lead a consumer protection agency until the White House budget official explains her role in the administration’s controversial “zero tolerance” immigration policy.

Warren said in a tweet she would put a hold up Kathy Kraninger’s nomination to be director of the Consumer Financial Protection Bureau (CFPB) until questions are answered about her involvement in policies that include separating migrant children from parents seeking asylum for their family in the United States.

“Kathy Kraninger helps oversee the agencies that are ripping kids from their parents,” Warren said Tuesday on Twitter. “Now @realDonaldTrump wants her to run the @CFPB. I will put a hold on her nomination — & fight it at every step — until she turns over all documents about her role in this.”

 

In a nutshell:

• Trump on Monday nominated Kraninger, an associate director at the Office of Management and Budget, to serve as director of the CFPB, a polarizing financial sector watchdog agency.
• Kraninger oversees budgeting and policy implementation at seven Cabinet departments, including the Department of Homeland Security (DHS), which administers immigration law.
• The Justice Department in April announced a zero tolerance policy on illegal border crossings, which requires families traveling together to be separated so adults can be detained and prosecuted.

 

Why it matters: Warren’s hold would slow down the confirmation process for Kraninger under Senate rules. Attempting to override Warren’s hold would force the Senate to spend significantly more time to confirm Kraninger through procedural votes.

 

TEMPERS FLARE OVER INVESTOR VISAS: From The Hill’s Jesus Rodriguez: A visa category that allows foreign investors a fast track to citizenship faces an uncertain future, with lawmakers pushing a Trump administration official at a Tuesday hearing to reform the “beleaguered” program they say is plagued by scandals.

The program, known as EB-5, permits aspiring immigrants to apply for a green card within two years of investing $500,000 or $1 million in enterprises that would spur the creation of at least 10 jobs for authorized workers.

But the visa has a long legacy of fraud and corruption, and in recent years there have been 19 confirmed cases of foreign nationals using the program to threaten U.S. national security.

Sen. Chuck Grassley (R-Iowa), who chairs the Judiciary Committee and has written about 30 letters highlighting EB-5’s vulnerabilities, unloaded on Lee Cissna, the director of United States Citizenship and Immigration Services for not moving quickly enough on regulations he has proposed since the Obama administration.

“I write letters! ‘When are these regulations going to be done?’ and they still — 18 months — they are still not done!” Grassley said at the hearing. “How long does it take the bureaucracy to move something?”

Cissna offered little hope for quick reforms at the bureaucratic level, but he assured the leadership at the Department of Homeland Security is “aware of the urgency of this.”

Instead of reforming and saving the program which many lawmakers would like he floated killing it.

“In the absence of legislative reforms, I believe Congress should indeed consider allowing the program to expire,” Cissna said. 

 

 

GOOD TO KNOW

 

• Bank of America’s Merrill Lynch unit admitted to misleading brokerage customers about which firms processed their trades and agreed to pay a $42 million fine under a settlement with the U.S. Securities and Exchange Commission announced on Tuesday.
• The FDIC’s new chairman said she’s ready to rethink bank oversight, according to Bloomberg.
• Much like Capitol Hill, the influence industry remains dominated by men, creating an environment where women say they are often subject to harassment and worse. Unlike in other industries, however, few women have been willing to come forward to talk about it. The Hill’s Megan Wilson tells us the horrifying stories of women abused and silenced by a broken system.
• House Republicans offered a budget proposal on Tuesday that would cut mandatory spending by $5.4 billion over a decade, including $537 billion in cuts to Medicare and $1.5 trillion in cuts to Medicaid and other health programs.
• Op-Ed: Earl Anthony Wayne, a former U.S. Ambassador to Mexico and Argentina, writes for The Hill on why negotiators must redouble efforts as the clock ticks on NAFTA.
• GE was booted from the Dow and will be replaced by Walgreens.
• Lawmakers, businesses and tax professionals are eagerly awaiting a guidance package from the Treasury Department and IRS on a key deduction in the new tax-cut law that will play a huge role in determining just how much certain business owners can reduce their tax bills.
• As much as $1.7 trillion of non-financial corporate bonds matures globally this year, and $2 trillion or more could mature in each of the next four years, according to The Wall Street Journal.

 

ODDS AND ENDS

• The U.S. government and Chinese telecoms giant ZTE are hashing out the details of an escrow account that must be settled before a ban on the Chinese firm doing business with U.S. companies is lifted, according to Reuters.
• T-Mobile and Sprint on Tuesday laid out the case for a $26 billion merger, filing for approval at the Federal Communications Commission (FCC).