On The Money: Trump may impose $200B in China tariffs as soon as next week | Trump nixes federal worker pay raise | Biz groups push for deal with Canada | Trump threatens to leave WTO

On The Money: Trump may impose $200B in China tariffs as soon as next week | Trump nixes federal worker pay raise | Biz groups push for deal with Canada | Trump threatens to leave WTO
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Happy Thursday and welcome back to On The Money. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.

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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--Trump mulling $200 billion more in tariffs on China: President TrumpDonald John TrumpHouse Republican threatens to push for Rosenstein impeachment unless he testifies Judge suggests Trump’s tweet about Stormy Daniels was ‘hyperbole’ not defamation Rosenstein faces Trump showdown MORE may move to impose tariffs on $200 billion in Chinese goods right after the public comment period closes on Sept. 6, Bloomberg News reported

However, some people cautioned that Trump has not yet made a final decision, and could enact the duties in installments, according to Bloomberg. Trump also could announce the tariffs next week, but impose them at a later date.

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The Trump administration said last month it was considering imposing tariffs on a list of $200 billion in Chinese imports. The Office of the U.S. Trade Representative recently held more than a week of hearings with businesses and industry groups, most of which strongly opposed another round of hefty tariffs on China. 

There has been speculation that the tariffs could run as high as 25 percent. The Hill's Megan Keller and Vicki Needham tell us more here

 

  • The tariffs could encompass a long list of imports, including tuna, swordfish, vegetables, nuts, fruits and various minerals.
  • If Trump follows through it would mean that the U.S. will have imposed tariffs on $250 billion worth of Chinese products. China has said it would retaliate with another $60 billion in tit-for-tat tariffs. 
  • The Trump administration has already imposed 25 percent tariffs on imported steel and 10 percent on aluminum, all hitting major trading over what the president said is for national security reasons.

 

Hours before that news broke, a spokesman for China's commerce minister said that Beijing will only resolve its trade dispute with the U.S. through good-faith negotiations, according to The Associated Press.

"Dialogue and consultation based on equality and good faith is the only correct choice for resolving Chinese-U.S. trade frictions," Gao Feng told the news service.

He asserted China's willingness to wait out the trade war until beneficial terms are reached, adding that "China will proceed with reform and opening up at its own pace" no matter what pressure the U.S. applies, according to the AP.

 

Trump threw more fuel on the trade fire during a Thursday interview with Bloomberg News, in which he threatened to pull the U.S. out of the World Trade Organization and rejected a European Union offer to scrap automobile tariffs. We've got more on Trump's interview, including his latest comments on the Federal Reserve, later in the newsletter.

 

LEADING THE DAY

Trump nixes federal pay raise: Trump on Thursday announced that he would cancel a scheduled 2.1 percent across-the-board pay increase for federal workers, as well as locality pay increases.

"In light of our Nation's fiscal situation, Federal employee pay must be performance-based, and aligned strategically toward recruiting, retaining, and rewarding high-performing Federal employees and those with critical skill sets," Trump wrote in a letter to the Speaker of the House and the president of the Senate.

Without such intervention, the move would affect most of the 2.1 million federal employees around the nation, about 1.7 million of which live in areas outside of the Washington, D.C., metro area. Members of the military, on the other hand, are on schedule to receive a 2.6 percent pay increase.

The proposal sets up a fight with Congress, which could effectively overturn the action in upcoming spending legislation. The Hill's Niv Elis tells us why here.

  • Trump's 2019 budget proposal sought to freeze federal pay, but the Senate Appropriations Committee included a 1.9 percent pay bump in its spending plans for 2019. The House version of the bill did not include such an increase, and sought reductions to spending on federal pension plans.
  • The two chambers are scheduled to meet in the coming weeks to work out the differences between their bills, negotiations which could effectively override Trump's move to cut pay. Trump has not indicated if he would veto such a measure if it included a pay increase. 

 

Trump says he doesn't regret picking Powell to lead Fed: President Trump said Thursday that he doesn't regret picking Jerome Powell to lead the Federal Reserve, stepping back from his recent intense criticism of the central bank's chairman.

Trump said in a Thursday interview with Bloomberg that he "put a man in there who I like and respect," backing Powell despite previous comments repeatedly ripping the Fed chairman and his colleagues for raising interest rates.

The Fed has raised interest rates five times since Trump took office and twice since Powell, a Republican, took over the Fed chairmanship from Janet YellenJanet Louise YellenTrump nominates former Fed economist to central bank's board On The Money: Trump may impose 0B in China tariffs as soon as next week | Trump nixes federal worker pay raise | Biz groups push for deal with Canada | Trump threatens to leave WTO Trump says he doesn't regret picking Powell to lead Fed MORE, a Democrat. Powell, like Yellen, has supported gradually raising interest rates after the Fed slashed them to counter the 2008 recession.

Trump has criticized Powell and the Fed for raising rates, a policy he says will derail a torrid job market and hinder his efforts to strike more beneficial trade terms for the U.S. The president has accused the central banks of the European Union and China of driving down their currencies, which the Treasury Department refutes. I've got more on Trump's pullback here.

 

Trump also told Bloomberg that he's considering taking executive action to reduce taxes on investment income by indexing capital gains to inflation -- a high priority for conservatives. My colleague Naomi Jagoda tells us more about that here.

 

THE HILL EVENT

Join us Thursday, September 6 for "Partnerships & Progress: Driving Climate Solutions," featuring Rep. Brian FitzpatrickBrian K. FitzpatrickSinema, Fitzpatrick call for long-term extension of Violence Against Women Act Dems seek to rebuild blue wall in Rust Belt contests Congress prepares to punt biggest political battles until after midterms MORE (R-Pa.) and Sen. Sheldon WhitehouseSheldon WhitehouseKavanaugh accuser agrees to testify next week Dem vows to probe 'why the FBI stood down' on Kavanaugh Senate Democrats increase pressure for FBI investigation of Kavanaugh MORE (D-R.I.). Editor in Chief Bob Cusack will sit down with the headliners to discuss how the public and private sectors can balance environmental progress with healthy economic growth. RSVP here.

 

 GOOD TO KNOW

 

ODDS AND ENDS

  • U.S. consumer spending rose 0.4 percent in July while a key gauge of inflation posted its sharpest annual gain in six years, likely keeping the Fed on track to keep hiking rates.
  • President Trump in a new interview Thursday said that Facebook, Google and Amazon may be in a "very antitrust situation," but declined to elaborate on whether the companies should be broken up.