On The Money: Trump reaches agreement with Mexico to overhaul NAFTA | Canadian minister headed to DC for talks | Stocks surge on deal

On The Money: Trump reaches agreement with Mexico to overhaul NAFTA | Canadian minister headed to DC for talks | Stocks surge on deal
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Happy Monday and welcome back to On The Money. I'm Niv Elis, filling in for 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--Trump announces preliminary NAFTA deal with Mexico:  President TrumpDonald John TrumpOver 100 lawmakers consistently voted against chemical safeguards: study CNN's Anderson Cooper unloads on Trump Jr. for spreading 'idiotic' conspiracy theories about him Cohn: Jamie Dimon would be 'phenomenal' president MORE said Monday the U.S. has reached an agreement with Mexico amid contentious talks on revamping the North American Free Trade Agreement (NAFTA).

Trump declared the name "NAFTA" would be scrapped for an updated North American agreement, saying it has "bad connotations."

"It's a big day for trade. It's a big day for our country," the president told reporters in the Oval Office, who were summoned to watch Trump speak by phone with outgoing Mexican President Enrique Peña Nieto.

One big hitch... Trump now needs to get Canada on board. Trump cast doubt on whether Canada would be party to a new trade agreement, ramping up pressure on the country to agree to new terms to remain a part of the pact. "We will see whether or not we decide to put up Canada or just do a separate deal with Canada, if they want to make the deal," Trump said, adding that the two nations would begin talking "relatively soon."

Congress would need to jump in: The president said he plans to "terminate" the existing NAFTA agreement and move forward with the new emerging deal with Mexico. Trump would need Congress to approve the break-up of the three-nation agreement, a move that most on Capitol Hill would likely oppose.

A senior White House official said the administration plans to notify lawmakers of the U.S.-Mexico agreement, even if Canada is not yet on board.

Timeline: U.S. Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerMcConnell urges GOP senators to call Trump about tariffs Companies brace for trade war MORE said the administration plans to notify Congress on Friday that an updated deal is complete.

That would start a 90-day clock, meaning the three nations would need to sign the new deal by the end of November.

Market reaction... Stock markets jumped at the news, and the S&P 500 touched a new all-time high.

In a surreal moment, Trump televised his phone call with Mexican President Enrique Peña Nieto. Trump briefly experienced technical difficulties at the start of the call.

 

The Hill's Jordan Fabian and Vicki Needham break down the busy day on trade here.

 

What you need to know:

  • Under the deal, 75 percent of an auto would need to come from the NAFTA zone, up from 62.5 percent, with at least 40 percent produced by workers earning $16 an hour or more.  
  • There is no sunset clause per se, but there is an agreement to review the deal again in six years.
  • Canadian Foreign Minister Chrystia Freeland will head to Washington on Tuesday for talks on joining the deal. "We will only sign a new NAFTA that is good for Canada and good for the middle class. Canada's signature is required," said Freeland spokesman Adam Austen said.
  • Any deal that excludes Canada could get major pushback from Congress, may face legal obstacle, and could see backlash from trade groups and lawmakers. For example, here's what the National Retail Federation had to say about the announcement: "Coming to terms with Mexico is an encouraging sign, but threatening to pull out of the existing agreement is not. NAFTA supports millions of U.S. jobs and provides hardworking American families access to more products at lower prices."

 

ON TAP TOMORROW

 

LEADING THE DAY

US says it will block WTO appeals judge's reappointment: The United States on Monday told the World Trade Organization (WTO) that it plans to block the reappointment of one of the WTO's four remaining judges.

Blocking the reappointment of Shree Baboo Chekitan Servansing, a judge from Mauritius, could move the WTO closer to ceasing operations.

Why it matters: The move seems to confirm critics' concerns that the Trump administration is trying to quietly kill the international trade body from within instead of simply withdrawing from it, a move that could be legally difficult. 

The WHO typically has seven judges working on its Appellate Body. The latest move will bring that number down to the bare minimum of three. At this point, if any of those judges are forced to recuse themselves from a case, it will not be able to proceed.  

 

Consumer bureau official on student loans resigns: The student loan ombudsman at the Consumer Financial Protection Bureau (CFPB) has resigned, saying the agency's leaders have chosen to serve powerful financial companies instead of consumers, NPR News reported on Monday.

Seth Frotman reportedly said in an official resignation letter that leadership at the CFPB has "turned its back on young people and their financial futures."

"Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting," he letter read, according to NPR. "Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America." 

The letter was reportedly addressed to Office of Management and Budget Director Mick MulvaneyJohn (Mick) Michael MulvaneyFinancial policymakers must be suffering from amnesia On The Money: Broad coalition unites against Trump tariffs | Senate confirms new IRS chief | Median household income rose for third straight year in 2017 | Jamie Dimon's brief battle with Trump Eight weeks out: Dems see narrow path to Senate majority MORE, the CFPB's acting director.

Frotman had served as the student loan ombudsman for the last three years, NPR reported, where he evaluated thousands of complaints from student borrowers and reviewed questionable practices from private lenders, loan services and debt collectors.

 

The nation mourns Sen. John McCainJohn Sidney McCainAnother recession could hit US in 2019, says credit union association chief R-E-S-P-E-C-T: One legacy of Franklin and McCain is up to us To cure Congress, elect more former military members MORESen. John McCain (R-Ariz.), who died on Saturday, will be buried at the U.S. Naval Academy in Annapolis, Md., on Sunday, Sept. 2, following a week of memorial services commemorating his life. 

McCain, 81, died on Aug. 25, just more than a year after being diagnosed with an aggressive form of brain cancer. 

The Senate giant will be laid to rest next to his Naval Academy classmate and friend Adm. Chuck Larson, according to a schedule of events from his office. McCain graduated from the Naval Academy in 1958. 

But much of the focus has been over the White House's response. President Trump on Monday issued a statement expressing his "respect" for the late senator following criticism of his response to McCain's passing. The White House also re-lowered its flags to half mast.

 

GOOD TO KNOW

  • Apple is reportedly set to introduce three new iPhones with the edge-to-edge features that made its iPhone X a hit this past year. Read the report in Bloomberg.
  • A paper from the Brookings Institute says Republicans aren't likely to see any big benefits from their tax law in this November's midterms.
  • A Bloomberg reporter was reassigned from covering Wells Fargo after the bank's CEO called the news organization to complain about the journalist, according to a report from CNN.
  • Toyota and Uber are reportedly going into business together on driverless vehicles.
  • Illinois Gov. Bruce Rauner (R) vetoed a bill Sunday that would have raised the minimum salary for teachers from $9,000 to $40,000 within five years.
  • Turkish Finance Minister Berat Albayrak said Monday that U.S. sanctions on Turkey could make terrorism and the refugee crisis worse.
  • Tesla's stock dropped after CEO Elon Musk admitted that the company would remain public after all. 

 

ODDS AND ENDS

  • Op-Ed: Joseph J. Minarik, senior vice president and director of research at the Committee for Economic Development, explains why it's just too soon to know exactly what effects the GOP tax law is having.