Overnight Finance: Stocks bleed as Trump seeks new tariffs on China | House passes $1.3T omnibus | Senate delay could risk shutdown | All eyes on Rand Paul | Omnibus winners and losers

Overnight Finance: Stocks bleed as Trump seeks new tariffs on China | House passes $1.3T omnibus | Senate delay could risk shutdown | All eyes on Rand Paul | Omnibus winners and losers
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Happy Thursday and welcome back to Overnight Finance, your favorite tariff-free newsletter. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.

See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.


THE BIG DEAL: President TrumpDonald John TrumpMnuchin knocks Greta Thunberg's activism: Study economics and then 'come back' to us The Hill's Morning Report - House prosecutes Trump as 'lawless,' 'corrupt' What to watch for on Day 3 of Senate impeachment trial MORE roiled financial markets and triggered deeper fears of a trade war Thursday when he announced his plan to impose up to $60 billion in tariffs on China as a response to intellectual property theft from U.S. companies.

The president signed a memorandum directing the Office of the U.S. Trade Representative (USTR) and the Treasury Department to launch a broad range of actions against China.

During an event at the White House, Trump said that imposing tariffs on China is "going to make us a much stronger, much richer nation."


The president called China a "friend" but demanded the world's second-largest economy adopt more favorable trade practices with the U.S.

"We want reciprocal, mirror," he said. "If they charge us, we charge them the same thing. That's the way it's gotta be."

The memorandum is a result of a Section 301 investigation launched in August that found that China's theft of U.S. intellectual property is costing the U.S. economy billions of dollars. 

But a coalition of the nation's largest retailers and prominent business groups fear the tariffs will hit a wide swath of U.S. products. 

Business and trade groups wrote two separate letters to Trump urging him to avoid applying tariffs on Chinese imports because they will drive up prices for U.S. consumers, hurt their businesses and hamper economic growth.

The Chinese ambassador to the United States on Thursday warned that China will not hesitate to retaliate if President Trump follows through with his proposed tariffs against Beijing.

"We don't want a trade war with the United States, or with anybody else. But we are not afraid of it. If somebody tries to impose a trade war on us, we will fight," Ambassador Cui Tiankai said in a video posted to the Chinese Embassy's Facebook page.


The markets react: Wall Street has been rattled by a series of political shocks that investors fear could roil the world economy, including Trump's previously announced tariffs on steel and aluminum. U.S. stocks took heavy losses over growing fears of a trade war triggered by the announcement of further tariffs on China.

The Dow Jones industrial average ended Thursday down 722 points, a 2.9 percent drop. The index briefly fell into correction territory, 10 percent below its 52-week high, before the closing bell.

The Nasdaq fell roughy 2.4 percent, while the Standard and Poor's 500 index slid 2.5 percent. It was the worst day for U.S stocks since Feb. 8, when the Dow lost 1,033 points amid a massive sell-off.


Good news for allies: The Trump administration did offer one measure of relief to U.S. trading partners. U.S. Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerGOP senator warns quick vote on new NAFTA would be 'huge mistake' Pelosi casts doubt on USMCA deal in 2019 Pelosi sounds hopeful on new NAFTA deal despite tensions with White House MORE said that the EU, Canada, Mexico, Australia, South Korea, Argentina and Brazil will be exempted from the steep tariffs of 25 percent on steel and 10 percent on aluminum.

Lighthizer said Trump has decided to "pause the imposition of the tariffs with respect to those countries," during questioning by Senate Finance Committee ranking member Ron WydenRonald (Ron) Lee WydenRestlessness, light rule-breaking and milk spotted on Senate floor as impeachment trial rolls on Hillicon Valley — Presented by Philip Morris International — UN calls for probe into alleged Saudi hack of Bezos | Experts see effort to 'silence' Washington Post | Bezos tweets tribute to Khashoggi Bezos tweets tribute to Khashoggi in wake of reports of Saudi phone hacking MORE (D-Ore.) at a hearing on trade.


What comes next: The Trump administration will go through the process of implementing and applying these tariffs, which are far more broadly supported among GOP lawmakers than his levies on aluminum and steel.



House approves funding bill with just a day until shutdown: The House easily passed a $1.3 trillion spending package on Thursday, sending legislation to the Senate that would prevent a shutdown and deliver the largest federal spending increase in years.

Lawmakers approved the bill in a 256-167 vote on Thursday, with majorities in each caucus backing the measure. Ninety Republicans and 77 Democrats voted against the bill. A large numbers of conservative Republicans were among those voting no over the measure's massive price tag and the lack of transparency in the bill-writing process.

Conservative unrest came close to knocking the bill out during a procedural vote on Thursday on the rule governing debate. An unusually high number of Republicans -- 25 -- voted against their own party's rule and in defiance of President Trump, who had publicly backed the package.

The Hill's Juliegrace Brufke tells us how conservative unrest came close to knocking the bill out during a procedural vote, and more on how the deal came together.


READ: The 2,232-page spending bill.


Washington waits to see what Rand will do: As the Senate barrels toward the third government funding deadline of the year, Republicans appear in the dark about one key question: 

The libertarian-minded senator caused an hours-long shutdown in February. He's yet to say if he'll give a repeat performance going into the midnight Friday deadline to avoid a partial closure.

"Shame, shame. A pox on both Houses -- and parties. $1.3 trillion. Busts budget caps. 2200 pages, with just hours to try to read it," he tweeted on Thursday.

  • "There are a lot of people who are going to put pressure on him," said Sen. David Perdue (R-Ga.).


Under the Senate's rules the earliest the chamber could hold an initial vote would be early Saturday morning -- roughly an hour after the midnight deadline to avoid a partial government closure.

Highlights from the spending bill

  • The bill rejects President Trump's proposal to slash the Environmental Protection Agency (EPA) budget by 31 percent. Senior lawmakers chose to give the agency $8.1 billion for fiscal 2018, keeping it at the same funding level as 2017.
  • The omnibus would provide $700 billion for defense spending in fiscal 2018, an $80 billion increase over caps that were lifted as part of a budget deal.


To round it all out, The Hill's Melanie Zanona put together a list of the biggest winners and losers from the funding bill.


Merge Wars: The government and AT&T delivered their opening arguments Thursday in the trial over the telecom giant's proposed $85 billion merger with Time Warner.

Justice Department attorney Craig Conrath focused on the "ability and incentive" AT&T would have to use popular Time Warner programming -- which includes HBO shows, March Madness, NBA games and more -- to hurt competition. And he warned that consumers could end up paying more for television subscriptions.

But Daniel Petrocelli, the lead attorney for the merging companies, dismissed that argument as "preposterous," saying that AT&T's business relies on finding innovative ways to distribute content to consumers.

"We're not trying to suppress or impede this transformation," Petrocelli said. The Hill's Harper Neidig takes us inside the courtroom.



  • Citibank announced Thursday that it will start requiring clients to place some restrictions on gun sales, including banning the sale of firearms to anyone under the age of 21.
  • The Government Accountability Office in a new report called on financial regulators to collaborate on the best ways to manage emerging financial technology applications.
  • The $1.3 trillion spending deal includes language to prevent employers from being able to steal workers' tips under the Labor Department's controversial tip-pooling rule.