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On The Money: US-China trade talks to resume | Mnuchin warns of more Turkey sanctions | How Turkey's financial crisis could roil the US | Senate GOP seeks tax law fixes

On The Money: US-China trade talks to resume | Mnuchin warns of more Turkey sanctions | How Turkey's financial crisis could roil the US | Senate GOP seeks tax law fixes
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Happy Thursday and welcome back to On The Money, where we're mourning the loss of the Queen of Soul. 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--US, China holding lower level trade talks later this month: A delegation of officials from China and the U.S. will meet later this month to discuss trade between the two countries as a round of additional tariffs from President TrumpDonald TrumpSchumer: Impeachment trial will be quick, doesn't need a lot of witnesses Nurse to be tapped by Biden as acting surgeon general: report Schumer calls for Biden to declare climate emergency MORE looms next week.

Reuters reported Thursday that representatives from the Treasury Department will meet with China's Vice Minister of Commerce Wang Shouwen and other officials in Washington, D.C. 

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News of the meeting boosted the yuan and aided China's stock market, Reuters reported. However, financial observers expressed skepticism that any tangible agreement will come from the meeting, citing that the U.S. Trade Representative was not involved and the talks will occur between lower-level officials.

It's unclear if the meeting will take place before or after Aug. 23, which is when the Trump administration will impose 25 percent tariffs on $16 billion worth of Chinese imports.

 

LEADING THE DAY

Mnuchin: Turkey will face more sanctions if pastor not released 'quickly.' Treasury Secretary Steven MnuchinSteven MnuchinOn The Money: Senate confirms Yellen as first female Treasury secretary | Biden says he's open to tighter income limits for stimulus checks | Administration will look to expedite getting Tubman on bill Senate confirms Yellen as first female Treasury secretary Biden administration will look to expedite getting Tubman on bill MORE said Thursday that his department is preparing to impose more financial sanctions on top Turkish officials as the White House pursues the release of a jailed American pastor.

Mnuchin said during a White House Cabinet meeting that the Treasury Department was preparing further penalties for Turkey in response to a question from President Trump on the status of sanctions, according to media reports.

Mnuchin said Thursday that Treasury would likely target more of Turkish President Recep Tayyip Erdoğan's top officials if Ankara refused to let Brunson return to the U.S.

"We have put sanctions on several of their Cabinet members. We have more that we are planning to do if they don't release him quickly," Mnuchin said.

Trump has cranked up economic pressure on Erdoğan in an effort to free Andrew Brunson, an American pastor detained in Turkey since 2016. The White House last week doubled tariffs on Turkish steel and aluminum, and Treasury blocked Turkey's interior and justice ministers from the U.S. financial system. I've got more on the feud here.

Why it matters: Rapid inflation, a tanking currency and political influence on fiscal policy has plunged Turkey's economy into crisis.

While European leaders and analysts have called on Turkey to boost interest rates and cool down its overheating economy, President Recep Tayyip Erdoğan has defiantly panned western powers for waging "economic war" on his country.

The Hill's Rebecca Kheel, Vicki Needham and I wrote up five ways the U.S. be impacted by the crisis both economically and geopolitically.

  • Turmoil in emerging markets and tough losses for EU banks
  • More trade tensions between the US and Turkey
  • Fallout hindering the US, EU response to Russia
  • Further unrest in the Middle East, complicating life for Trump
  • New pressure to hand over Erdoğan foe Fethullah Gülen

 

Our bad, guys: Republicans on the Senate Finance Committee on Wednesday sought to tackle errors in their signature tax law through a letter meant to clarify Congress's intent in passing the law.

The letter to the IRS and Treasury Secretary Steven Mnuchin was meant "to provide sufficient clarification" on three parts of the law, which was rushed through Congress on a relatively short timeline last year.

The GOP lawmakers hope the letter can be used by Treasury as the basis for writing rules clarifying mistakes in the law.

Republicans hope to pass legislation making technical corrections to the law before the end of the year, but will need to win some Democratic support to get the legislation through the Senate.

"After this review, we intend to introduce technical corrections legislation to address any items identified in the on-going review," the letter said.

The Hill's Niv Elis tells us what Republicans want to fix here.

 

Watchdog files criminal complaint against Ross over stock holdings: A liberal watchdog group filed a criminal complaint Thursday against Commerce Secretary Wilbur RossWilbur Louis RossOn The Money: Retail sales drop in latest sign of weakening economy | Fast-food workers strike for minimum wage | US officials raise concerns over Mexico's handling of energy permits US officials raise concerns over Mexico's handling of energy permits Census Bureau racing to complete noncitizen data, watchdog says MORE over meetings he held with representatives from companies included in his financial holdings.

Citizens for Responsibility and Ethics in Washington (CREW) asked the Justice Department to probe whether Ross had violated criminal conflict of interest laws by meeting with firms lobbying the Commerce Department while the secretary had investments in them.

"Secretary Ross continues to demonstrate a troubling disregard for his ethics obligations, and his systematic failures and omissions suggest that he may have knowingly and willfully violated the law," said CREW executive director Noah Bookbinder.

"On several occasions, Secretary Ross has misled the American public about his financial interests, including failing to disclose holdings in companies directly lobbying the administration on issues he oversees." I've got more on their claims here.

 

The gist:

  • The complaint focuses on four meetings Ross held with representatives of Boeing Company, Chevron Corp., Greenbrier Companies and International Automotive Components (IAC) Group before the secretary divested from those companies.
  • Ross had pledged to pull his investments from Chevron and Boeing within 90 days and IAC-related investments within 180 days of his confirmation. But a Forbes analysis of Ross's schedules found that the secretary met with all three companies before he divested from them.
  • Ross didn't unload his Chevron and Boeing shares until May, and held onto his IAC-related investments until October, according to federal records cited by CREW, meaning the secretary had financial stakes in companies seeking to influence his department.

 

MARKET CHECK: CNBC: "Stocks closed higher on Thursday on renewed hope that a resolution to a trade dispute with China could be on the horizon. Investors also cheered strong quarterly results from Walmart and Cisco Systems.

"The Dow Jones Industrial Average rose 396.32 points to 25,558.73 -- its biggest one-day jump since April 10, when it surged 429 points -- led by gains in Walmart, Cisco Systems, Boeing and Caterpillar. The S&P 500 gained 0.8 percent to 2,840.69 as consumer staples and telecom outperformed. The Nasdaq Composite advanced 0.4 percent to 7,806.52.

"The S&P 500 also closed 1.1 percent below its record high set on Jan. 26 while the Nasdaq finished the session 1.6 percent off its all-time high. The Dow, meanwhile, is about 4 percent removed from an all-time high."

 

GOOD TO KNOW

 

ODDS AND ENDS:

From The Hill's Jasper Goodman: Advocates and employees of the U.S. Department of Agriculture (USDA) are raising concerns over the agency's surprise announcement last week that two departments are being moved out of Washington, D.C.

The USDA announced plans last Thursday to move the Economic Research Service (ERS) and the National Institute of Food and Agriculture (NIFA) away from the capital. The ERS will also be realigned under the Office of the Chief Economist (OCE), which operates at the direction of the Office of the Secretary. 

ERS and NIFA staffers only found out about the changes shortly before they were announced in a press release.

"'It's taking a shot to the heart of the agency,' said one ERS economist, who spoke with The Hill on the condition of anonymity. 'They're sending a very strong signal that they don't value the research or the work, so a lot of people may not stick with the move.'"