On The Money: US, Mexico fail to get deal on tariffs | Trump says 'not nearly enough' progress | Dems needle GOP to buck Trump on trade | SEC approves new financial adviser rule

On The Money: US, Mexico fail to get deal on tariffs | Trump says 'not nearly enough' progress | Dems needle GOP to buck Trump on trade | SEC approves new financial adviser rule
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Happy Wednesday and welcome back to On The Money, where we always have your best interest in mind.  I'm 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--US, Mexico fail to reach deal on tariffs: The U.S. and Mexico failed to reach an agreement to avert sweeping tariffs during a Wednesday meeting between top officials from both countries, according to media reports.

Vice President Pence on Wednesday met with top Mexican officials who were seeking to persuade the Trump administration to abandon plans to impose sweeping tariffs that leaders on both sides of the border warn could damage the continent's economy.

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Mexican Foreign Minister Marcelo Ebrard argue that his country has already taken steps to detain more migrants as well as other steps designed to prevent them from crossing into the U.S.

Secretary of State Mike PompeoMichael (Mike) Richard PompeoOvernight Defense: Shanahan exit shocks Washington | Pentagon left rudderless | Lawmakers want answers on Mideast troop deployment | Senate could vote on Saudi arms deal this week | Pompeo says Trump doesn't want war with Iran Progressive nonprofits sue White House over missing notes from Putin meeting Progressive nonprofits sue White House over missing notes from Putin meeting MORE left Trump's trip in Europe to attend the meeting in Washington. Homeland Security Secretary Kevin McAleenan also joined the meeting.

Trump weighs in: President TrumpDonald John TrumpGOP senator introduces bill to hold online platforms liable for political bias Rubio responds to journalist who called it 'strange' to see him at Trump rally Rubio responds to journalist who called it 'strange' to see him at Trump rally MORE said Wednesday that “not nearly enough” progress was made in negotiations with Mexican officials over curbing illegal migration, adding the U.S. plans to go ahead with punitive tariffs starting Monday.

“If no agreement is reached, Tariffs at the 5% level will begin on Monday, with monthly increases as per schedule. The higher the Tariffs go, the higher the number of companies that will move back to the USA!” the president tweeted.

Trump said the discussions yielded progress on key issues, “but not nearly enough,” citing a report the Department of Homeland Security released earlier on Wednesday saying that border arrests in May had hit 133,000—a total not reached in more than a decade.

The background: Trump announced last week he would slap a 5 percent tariff on all Mexican goods beginning on Monday, which could rise to 25 percent by October unless Mexico cracks down on illegal border crossings.

Before the meeting, Trump said Tuesday during a press conference in London that "it's more likely that the tariffs go on" according to schedule, dimming hopes for a quick resolution.

 

Tensions flare in GOP: The meeting comes a day after Republican senators warned White House officials Tuesday afternoon that Trump should not impose tariffs on all Mexican imports or face a potential rebellion from the Senate GOP conference.

Republican senators warned the officials that they could block the tariffs with a disapproval resolution and overturn Trump's potential veto of the measure. Democrats are also needling their Republican colleagues to do more than complain about it, saying they are doubtful that the GOP will take concrete steps to block the president.

Several GOP senators have fumed about the tariffs but expressed doubts that they can do anything to stop the president.

  • "We're holding a gun to our own heads," said Sen. John Cornyn (R-Texas), according to The New York Times.

Even if a disapproval resolution passes the Senate, it would likely fall to a Trump veto without support from roughly 50 House Republicans, who rarely break with the president.

"End of the day, we should support the president so we can get an agreement so we don't have tariffs. Them talking about not supporting him undercuts his ability to do that," said House Minority Leader Kevin McCarthyKevin Owen McCarthyCongressional leaders, White House officials to meet Wednesday on spending Congressional leaders, White House officials to meet Wednesday on spending The Congressional Award — a beacon of hope  MORE (R-Calif.) on Wednesday.

 

The border situation: Apprehensions at the U.S.-Mexico border hit a 13-year high in the month of May, topping 130,000, according to newly released federal figures, so Trump isn't likely to cool down on immigration issues any time soon.

But the top White House trade adviser suggested Wednesday that President Trump may not need to impose tariffs on Mexican goods because the threat of import taxes alone caught "the Mexicans' attention."

We believe that these tariffs may not have to go into effect precisely because we have the Mexicans' attention," said Peter Navarro said on "CNN Newsroom." "I think let's stay calm and look at the chessboard here."

 

ON TAP TOMORROW

  • Consumer Financial Protection Bureau advisory board meetings, 10 a.m.

 

LEADING THE DAY

SEC approves new rule for financial advisers, setting stage for legal challenge: The Securities and Exchange Commission (SEC) on Wednesday approved new financial advisory standards for stock brokers and financial advisers, likely setting up a legal battle with consumer advocates who have called for stricter rules.

The Republican-controlled SEC voted along party lines to finalize a package of four measures aimed at enhancing and clarifying rules on broker-dealers and investment advisers while limiting conflicts of interest with their clients.

SEC Chairman Jay Clayton, along with GOP Commissioners Hester Peirce and Elad Roisman, voted for the measures. Robert Jackson Jr., the agency's sole Democratic commissioner, voted against them.

"This action is long overdue," Clayton said Wednesday, touting the SEC "staff's decades of experience and expertise, the information and feedback we received from investors and other market participants" in the 14 months since the package was proposed in April. I've got more on it here.

 

The background: The SEC rule comes almost a decade after the 2010 Dodd-Frank Act ordered the agency to write regulations for broker-dealer and investment advisers. Last year, a tougher rule issued in 2016 by the Obama Labor Department was struck down in federal court.

  • Dodd-Frank empowered the SEC to set a universal standard for broker-dealers and investment advisors. But the commission made little headway on the rule under former SEC Chair Mary Jo White, drawing ire from progressive politicians.
  • Amid pressure from consumer activists and their allies in Congress, the Labor Department preempted the SEC in 2016 and released its own proposal. That rule required broker-dealers to adopt the "fiduciary" standard applied to investment advisers, which imposed strict conduct requirements to protect retail investors.
  • A federal court struck down the Labor Department rule in June 2018, just two months after the SEC finally released its own proposal in April 2018.

 

The rule: The centerpiece of the new SEC proposal, a rule dubbed Regulation Best Interest, sets new standards for broker-dealers, with the goal of ensuring they provide clients with the financial products best suited to their needs.

  • The rule imposes a code of conduct for broker-dealers that requires them to prioritize the financial needs of customers over fees or commissions they would receive from selling a less suitable product.
  • The rule also instructs broker-dealers to mitigate or eliminate potential conflicts of interest by disclosing any financial incentives the broker has to sell certain products. The broker-dealer must also "exercise reasonable diligence, care, skill, and prudence" to ensure their recommended products are in the customer's best interest.

 

The Hill event: On Tuesday, June 11th, The Hill will host Affordable Housing & the American Dream at the Newseum in Washington, D.C. The Hill's Editor-at-Large Steve Clemons and staff writer Rafael Bernal will sit down with Reps. Emanuel Cleaver (D-Mo.) and Steve StiversSteven (Steve) Ernst StiversLawmakers battle over HUD protections for homeless transgender people Lawmakers battle over HUD protections for homeless transgender people Lawmakers say major changes needed to expand access to affordable housing MORE (R-Ohio) and an expert panel for a discussion on how leaders in Washington and the private sector can help ensure that every American has an equal chance of owning a home. RSVP here.

 

GOOD TO KNOW

  • House lawmakers are expected to offer a new version of a bipartisan IRS reform bill that drops a controversial provision that would codify the agency's "Free File" program.
  • The International Monetary Fund (IMF) fears that active and potential tariffs between the U.S. and China could hinder global economic output by 0.5 percent in 2020.
  • Democrats advanced a homeland security spending bill on Wednesday that included no money for President Trump's border wall, an action one Republican suggested could lead to another government shutdown.

 

ODDS AND ENDS

  • Op-Ed: Jerry Haar, a global fellow at the Woodrow Wilson International Center, argues why Trump's tariffs on Mexico would be "bad politics" and a "harebrained policy."