Overnight Finance: Fallout from Trump tariffs | EU, Canada, Mexico vow to retaliate | Markets swoon | Setback for NAFTA talks | Oil industry fears impact | Koch brothers group blasts move

Overnight Finance: Fallout from Trump tariffs | EU, Canada, Mexico vow to retaliate | Markets swoon | Setback for NAFTA talks | Oil industry fears impact | Koch brothers group blasts move
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Happy Thursday and welcome back to Overnight Finance, where we're tempted to start tomorrow morning the way John Boehner began today. 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.

Write us with tips, suggestions and news: slane@thehill.com, vneedham@thehill.com, njagoda@thehill.com and nelis@thehill.com. Follow us on Twitter: @SylvanLane, @VickofTheHill, @NJagoda and @NivElis.

 

THE BIG DEAL: The Trump administration will levy hefty steel and aluminum tariffs on the European Union, Canada and Mexico starting on Friday, a move that brought threats of retaliation from the major trading partners.

Commerce Secretary Wilbur RossWilbur Louis RossTech gets brief reprieve from Trump's Huawei ban Hillicon Valley: Trump takes flak for not joining anti-extremism pact | Phone carriers largely end sharing of location data | Huawei pushes back on ban | Florida lawmakers demand to learn counties hacked by Russians | Feds bust 0M cybercrime group Huawei says inclusion on US trade blacklist is in 'no one's interest' MORE said that President TrumpDonald John TrumpTrump rips Dems' demands, impeachment talk: 'Witch Hunt continues!' Nevada Senate passes bill that would give Electoral College votes to winner of national popular vote The Hill's Morning Report - Pelosi remains firm despite new impeachment push MORE had decided on Thursday morning to end the temporary exemptions for the three key trading allies despite their two months of lobbying to avoid the tariffs, raising tensions among the economic partners.

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Mexico and the EU were swift in saying they would follow through on their promises to impose retaliatory tariffs on U.S. exports.

In a statement, the EU referred to a 10-page list of possible targets they produced in March after Trump first announced the potential tariffs. The EU had vowed to levy tariffs of $3.3 billion on iconic American products such as Kentucky bourbon, jeans and Harley-Davidson motorcycles. 

European leaders also said they would proceed with a complaint at the World Trade Organization (WTO).

The Hill's Vicki Needham breaks down the wild day in trade policy right here.

 

Reactions:

  • "We did everything to avoid this outcome." -- EU Commissioner for Trade Cecilia Malmström.
  • "This is protectionism, pure and simple." -- Jean-Claude Juncker, president of the European Commission.
  • "It's hard for Japan to understand and we cannot accept it." -- Japanese Prime Minister Shinzo Abe, about potential auto tariffs that could be next.
  • "These tariffs are an affront to the long-standing security partnership between Canada and the United States." -- Canadian Prime Minister Justin Trudeau.

The backlash--Allies vow retaliation:

  • The European Union on Thursday said they will take retaliatory action against the United States in response to the Trump administration's decision to issue hefty steel and aluminum tariffs. The EU said it will file a case against the United States at the World Trade Organization (WTO) and take retaliatory action, most likely in the form of reciprocal tariffs. More on that here.
  • The government of Mexico announced on Thursday it would implement new duties on various U.S. products, including steels such as hot and cold foil, lamps, legs and shoulders of pork, sausages, apples, grapes, blueberries and various cheeses in response to the tariffs.
    The Canadian government announced tariffs on dozens of US imports including food products, crops, consumer goods, industrial supplies and boats.

What comes next: Canada and Mexico have said the tariffs are unacceptable and that imports of steel and aluminum don't affect U.S. national security. They warned the tariffs could put the fate of the North American Free Trade Agreement (NAFTA) at stake as all three countries attempt to renegotiate the pact.

 

More fallout from Trump's tariffs:

 

Oil industry fears toll of Trump steel, aluminum tariffs: Oil and gas industry representatives are expressing worries about new tariffs the Trump administration is imposing on steel and aluminum imports from three key U.S. allies.

The American Petroleum Institute (API) said it was "deeply discouraged" by the new tariffs on Mexico, Canada and the European Union that were announced Thursday, saying that the U.S. is moving in "the wrong direction."

"The implementation of new tariffs will disrupt the U.S. oil and natural gas industry's complex supply chain, compromising ongoing and future U.S. energy projects, which could weaken our national security," said API President and CEO Jack Gerard in a statement.

Gerard added that the tariffs could lead to increased prices in specialty steel and raise costs for domestic production of oil, natural gas and natural gas liquids. That would also come as the price of foreign oil imports are at a major high. The Hill's Miranda Green has more here on the industry's concerns.

 

Koch brothers group blasts Trump over new tariffs: A group supported by conservative mega-donors Charles and David Koch slammed President Trump on Tuesday over his announced steel and aluminum tariffs on the European Union, Canada and Mexico. 

"The tax cuts and reduction in regulatory barriers enacted by the Trump administration has helped economic growth and job creation. Wages have increased and unemployment rates are the lowest in decades," Freedom Partners spokesman James Davis said in a statement. 

"All this success will be greatly undermined by the imposition of new taxes on working Americans. Trade barriers make Americans as a whole poorer and they especially harm those already disadvantaged."

 

MARKET CHECK: The Dow Jones industrial average sank 250 points Thursday morning after President Trump announced that he would impose steel and aluminum tariffs on Canada, Mexico and the European Union. The Dow closed for the day down 251.94 points and the S&P was down 0.69 percent.

 

LEADING THE DAY

SEC charges Goldman Sachs vice president with insider trading: The Securities and Exchange Commission (SEC) on Thursday charged a Goldman Sachs vice president with insider trading.

Woojae "Steve" Jung, a San Francisco-based Goldman executive, allegedly made $140,000 in trades on companies that the bank was advising, according to the SEC complaint.

The agency's complaint only referred to a "prominent investment bank," but a listing in the industry database of brokers and a LinkedIn account with Jung's name identified him as a Goldman Sachs vice president for investment banking.

"Jung tried to insulate himself by allegedly placing trades in the brokerage account of a friend who lived overseas," said Joseph G. Sansone, chief of the SEC's market abuse unit.

"Like others before him, Jung's alleged scheme failed when our data analysis uncovered the account's suspicious trading pattern and, despite Jung's attempts at evasion, traced the trading back to him."  I've got more on the case here.

  

GOOD TO KNOW

  • The Federal Deposit Insurance Corporation (FDIC) approved the opening of public comment on the interagency Volcker rule rewrite Thursday. Outgoing FDIC Chairman Martin Gruenberg, an Obama appointee who helped write the rule, said the proposal preserved the intent of the rule while making it easier to understand and enforce. The Securities and Exchange Commission and Commodity Futures Trading Commission are expected to approve the notice of proposed rulemaking soon. Read more on the proposal here.
  • House Democrats on Thursday launched an anti-poverty tour designed to highlight the plight of the poor under Republican control of Congress and the White House.
    The Fed has designated Deutsche Bank's sprawling U.S. business in "troubled condition," a rare rebuke for a major bank, according to The Wall Street Journal.
  • Leverage levels for buyouts are close to pre-credit crisis levels as banks are more willing to underwrite highly leveraged deals following the Office of the Comptroller of the Currency's softened stance towards lending risk, according to Reuters.

 

ODDS AND ENDS

  • President Trump's net worth slipped to $2.8 billion, a decline of $100 million over the past year, as revenue at his namesake Fifth Avenue tower and golf courses fell, according to Bloomberg.