FEATURED:

On The Money: Harley-Davidson decision raises trade tensions with Trump | Senate panel to take up tariff legislation | CBO projects grim budget outlook under Trump | White House objects to measure on reinstating ZTE ban

On The Money: Harley-Davidson decision raises trade tensions with Trump | Senate panel to take up tariff legislation | CBO projects grim budget outlook under Trump | White House objects to measure on reinstating ZTE ban
© Getty Images

Happy Tuesday and welcome back to On The Money, where we're confused by so much of this new Russian music video. 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: Harley-Davidson's announcement that it is moving some production overseas to avoid European tariffs coupled with triple-digit drops on Wall Street are raising pressure on lawmakers to do something about President TrumpDonald John TrumpThe Guardian slams Trump over comments about assault on reporter Five takeaways from the first North Dakota Senate debate Watchdog org: Tillerson used million in taxpayer funds to fly throughout US MORE's trade war.

The European Union began imposing new tariffs on American goods on Friday, targeting Wisconsin-based Harley-Davidson with a 31 percent tariff.

To escape those tariffs, the iconic U.S. company said it would shift some production to Europe.

A spokeswoman for Speaker Paul RyanPaul Davis RyanThe Memo: Saudi storm darkens for Trump The Hill's 12:30 Report — Mnuchin won't attend Saudi conference | Pompeo advises giving Saudis 'few more days' to investigate | Trump threatens military action over caravan The Hill's Morning Report — Presented by the Coalition for Affordable Prescription Drugs — Health care a top policy message in fall campaigns MORE (R-Wis.) said it's "further proof of the harm from unilateral tariffs."

"The best way to help American workers, consumers and manufacturers is to open new markets for them, not to raise barriers to our own market," said Ryan spokeswoman AshLee Strong.

Trump responded to the news later on Monday, criticizing Harley-Davidson for moving production.

"Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag," Trump tweeted. "I fought hard for them and ultimately they will not pay tariffs selling into the E.U., which has hurt us badly on trade, down $151 Billion. Taxes just a Harley excuse -- be patient! #MAGA."

The Hill's Alexander Bolton has more on the showdown here.

CNBC: Stocks close higher after Monday's big loss but confusion about trade policies lingers

Senate panel plans to take up tariff legislation: Sen. Orrin HatchOrrin Grant HatchGOP leaders hesitant to challenge Trump on Saudi Arabia Congress should work with Trump and not 'cowboy' on Saudi Arabia, says GOP senator US to open trade talks with Japan, EU, UK MORE (R-Utah) on Tuesday said that the Senate Finance Committee will take up legislation on tariffs implemented under the guise of national security.

Hatch was tightlipped about what would be in the bill, noting he was still working it out, but his comments come amid growing concern on Capitol Hill about President Trump's trade policies.

"Actually I do plan on moving some tariff legislation in the committee," Hatch said after he left a closed-door caucus lunch.

Pressed when he would bring up the bill or if it would narrow the national security provisions of the trade law, known as Section 232, Hatch demurred.

"Not necessarily. We'll have to wait and see. I haven't quite formulated it yet. But we're going to try to get some of these things resolved in a way that makes sense," he said. The Hill's Jordain Carney explains the plan here.

 

GOP Sen. Bob CorkerRobert (Bob) Phillips CorkerOvernight Defense: Trump shifts tone on Saudis | New pressure from lawmakers | Trump: 'Certainly looks' like Khashoggi dead | Pompeo gives Saudis days to wrap up investigation | Trump threatens military action on border to stop migrants Trump changes tone on Saudi Arabia amid mounting pressure The Hill's 12:30 Report — Mnuchin won't attend Saudi conference | Pompeo advises giving Saudis 'few more days' to investigate | Trump threatens military action over caravan MORE (Tenn.) is also renewing his effort to rein in President Trump's tariff authority amid an escalating trade war.

Corker, an outspoken critic of Trump who's retiring at the end of this term, has filed an amendment to the Senate's farm bill that would require congressional approval if the president wants to impose tariffs under Section 232.

It's unclear whether the Senate will vote on the amendment authored by Corker, who's chairman of the Foreign Relations Committee. Republicans blocked a similar proposal, backed by a bipartisan coalition, during the chamber's consideration of an annual defense policy bill earlier this month.

Catch up: Trade tensions have dominated the first half of 2018 as the Trump administration opens up new battles on several fronts around the world. From China and ZTE to NAFTA and imported autos, The Hill's Vicki Needham tells you here about the five things you absolutely need to know about the current state of Trump's trade war.

 

ON TAP TOMORROW

  • House Small Business Committee: Hearing entitled "ZTE: A Threat to America's Small Businesses," 11 a.m.
  • Federal Reserve Vice Chairman of Supervision Randal Quarles delivers a speech on international regulatory cooperation at a bankers' conference in Idaho, 11 a.m.

 

LEADING THE DAY

Dem lawmakers seek distance from Waters call for confrontation: Hill Democrats are mad as hell about President Trump's "zero-tolerance" immigration policy, but they're distancing themselves from Rep. Maxine WatersMaxine Moore WatersGOP targets likely Dem committee chairmen in midterm push Trump attacks fuel GOP fears about losing suburban women Two Minnesota Republicans report attacks MORE (D-Calif.) and her calls for public confrontations with administration officials.

While some liberal commentators and progressive activists have voiced support for Waters, few if any Democrats in Congress back her tactics.

"The worst. What has happened to our country," one fellow House Democrat said of Waters's call to action.

"Each member has got to decide for his or herself. I wouldn't do it," said Rep. G.K. ButterfieldGeorge (G.K.) Kenneth ButterfieldWorking together to improve diversity and inclusion Jackson Lee: Dems must be 'vigilant' in ensuring all Americans have right to vote  Facebook to remove over 5K ad target options to curb discrimination MORE (D-N.C.), who like Waters is a past chairman of the Congressional Black Caucus (CBC).

"That's a tactic she has chosen. ... I have my own tactics," added another CBC member, Rep. Frederica WilsonFrederica Patricia WilsonTrump, Obamas and Clintons among leaders mourning Aretha Franklin Clyburn rips Trump over Omarosa 'dog' comment: 'I don’t know of anything that has been more troubling to me' Dem lawmaker calls Trump racist in response to 'dog' comment MORE (D-Fla.).

"I speak on the floor. I speak at events as far as what our secretaries are doing to roll back regulations. Different people have different ways of expressing themselves, their displeasure and their disgust."

The Hill's Scott Wong has more on the backlash here.

 

CBO projects grim budget outlook under Trump: A new report from the Congressional Budget Office (CBO) projects a grim fiscal outlook for the United States, which is seeing rising red ink under President Trump.

In 30 years, the U.S. debt burden is projected to double, eclipsing even the debt carried by the United States during World War II.

Payments the U.S. government makes to China and others holding U.S. debt would surpass projected Social Security spending in 2048, the report found. Interest payments will also exceed discretionary spending, the amount that Congress approves for defense and nondefense spending each year, which is projected to hit 5.4 percent of gross domestic (GDP) product by 2048.

Most of the rising debt is related to an aging population and rising entitlement spending, problems that were bedeviling the United States well before Trump's election.

The Hill's Niv Elis breaks it down here.

 

Warner, Rubio ask Trump to reinstate ZTE ban: Sens. Mark WarnerMark Robert WarnerDems can use subpoena power to reclaim the mantle of populism Is there a difference between good and bad online election targeting? Collusion judgment looms for key Senate panel MORE (D-Va.) and Marco RubioMarco Antonio RubioThe Memo: Saudi storm darkens for Trump GOP leaders hesitant to challenge Trump on Saudi Arabia On The Money: Treasury official charged with leaking info on ex-Trump advisers | Trump to seek 5 percent budget cut from Cabinet members | Mnuchin to decide by Thursday on attending Saudi conference MORE (R-Fla.) are asking President Trump to reinstate a Commerce Department ban from earlier this year barring American companies from doing business with Chinese telecom firm ZTE, warning that the company poses a threat to U.S. national security.

"We strongly believe that the April sanctions order--which would have threatened ZTE's survival--should not be used as a bargaining chip in negotiations with China on unrelated matters," the two wrote Tuesday in a letter to the president. "The Senate and the U.S. Intelligence Community are in agreement that ZTE poses a significant threat to our national security."

Amid trade talks with China and ahead of a summit with North Korea, the Trump administration reached a deal to lift sanctions on ZTE earlier this month. In exchange for changes to the company's leadership, the Commerce Department agreed to lift the ban.

The Hill's Harper Neidig has more here.

 

White House objects, but doesn't threaten veto: The White House on Tuesday said it "strongly objects" to a provision in the Senate-passed version of the annual defense policy bill that seeks to block President Trump's deal to revive Chinese telecommunications giant ZTE.

Still, the statement did not include a veto threat, using language similar to the administration's statement on the House-passed version of the National Defense Authorization Act (NDAA) that the administration "supports ultimate passage of an NDAA for the 57th consecutive year."

 

Wells Fargo pays $5 million to settle charges with SEC: Wells Fargo has reached a $5 million settlement with regulators over charges of misconduct in the sale of certain financial products to retail investors.

The products in question are known as market-linked investment (MLIs).

Under the order, the SEC found that "Wells Fargo generated large fees by improperly encouraging retail customers to actively trade the products, which were intended to be held to maturity." That strategy, according to the agency, "generated substantial fees for Wells Fargo, which reduced the customers' investment returns."

"It is important that brokers do their homework before they recommend that their retail customers buy or sell complex structured products," said Daniel Michael, the chief of the SEC's Complex Financial Instruments Unit, in a release.

"The products sold by Wells Fargo came with high fees and commissions, which Wells Fargo should have taken into account before advising retail customers to sell their investments and reinvest the proceeds in similar products." 

Wells Fargo did not admit to wrongdoing but is returning over $1 million to retail investors and is paying a $4 million penalty.

 

GOOD TO KNOW

 

ODDS AND ENDS

  • A federal court of appeals on Monday ruled against Uber's forced arbitration clause, which made customers who had legal issues with the company settle them privately.
  • The Brookings Institution explores why the Supreme Court's decision in Ohio v. Amex will "fatten the wealthy's wallet (at the expense of the middle class)"
  • Op-ed: Desmond Lachman, a resident fellow at the American Enterprise Institute, writes on why the global debt binge is setting us up for a pounding economic headache.