“Another trade war is brewing – one between President Trump and the Koch brothers,” ABC News reports.
“Days after the president moved forward with imposing steel and aluminum tariffs on the European Union, Canada and Mexico, three political groups affiliated with the billionaire Koch brothers are launching a multi-year, multi-million dollar campaign to tout free trade and oppose tariffs.”
Politico reports that “before he left the White House, former National Economic Council Director Gary Cohn would withhold jobs report data from President Trump until shortly before their release because he was worried the president couldn’t help but say something about them.”
“A group of top business economists believes the major tax cuts President Donald Trump pushed through Congress will give a significant boost to economic growth this year and next year. But they worry that by 2020, the country could be entering a new recession,” the AP reports.
“Part of the drop-off in optimism reflects growing worries about what Trump’s get-tough approach on trade might do to U.S. growth prospects.”
“President Trump appears prepared to unravel 70 years of painstaking effort that the United States has led to build an international system of trade based on mutually accepted rules and principles,” the Washington Post reports.
“Ever since an agreement on trade emerged in 1947 from the ashes of World War II, presidents of both parties have pushed this system as a way to strengthen alliances and promote the expansion of democracy and prosperity in Europe and Asia.”
“But with Trump’s decision last week to enact aluminum and steel tariffs against U.S. allies in Europe and North America, he is subverting previously agreed-upon trade pacts. The result is a brewing trade war with Canada, Mexico and Europe, which are expressing shock and bitter frustration while enacting tariffs of their own on a bevy of American products.”
“U.S. employers extended a streak of solid hiring in May, adding 223,000 jobs and helping lower the unemployment rate to an 18-year low of 3.8 percent from 3.9 percent in April,” the AP reports.
President Trump “broke with decades of protocol and commented publicly about the highly anticipated jobs report data 69 minutes before they were released by the Bureau of Labor Statistics,” the Washington Post reports.
Treasury yields moved sharply higher within seconds of a Twitter post from President Trump that said he was “looking forward to seeing the employment numbers at 8:30 this morning.”
“The jobs data come out once a month, and often can lead to massive buying or selling trends on Wall Street depending on how the information is received. It is extremely closely held and kept under tight control until it is released at 8:30 a.m. on the first Friday of each month. The Chairman of the Council of Economic Advisers is traditionally given the report the day before it is released, and it can often be shared with the president after that time. But the president – and other administration officials – never tip their hand about what the numbers reveal.”
John Harwood: “President Trump has embarked on an unorthodox follow-up to cutting the taxes American families pay: raising the prices of goods they buy.”
“Higher prices will result directly from tariffs the White House plans to impose on steel and aluminum imports from allies such as Canada, Mexico and the European Union as well as other countries… But combined with additional tariffs against other imports from China and retaliatory steps by our trading partners, the measures Trump announced promise to make an impact. And mainstream economists across the political spectrum agree it will be negative.”
Said Douglas Holtz-Eakin, a Republican economist who advised President George W. Bush: “Unambiguously bad. The only question is how big.”
“Republicans are bitterly protesting the Trump administration’s decision to impose sweeping tariffs on U.S. allies — alarmed that the White House ignored their frenzied lobbying campaign and afraid that the party could suffer at the polls in November,” Politico reports.
Canadian Prime Minister Justin Trudeau “said months of intense negotiations between his country, the United States and Mexico imploded Tuesday when Vice President Pence demanded that any deal expire automatically in five years,” the Washington Post reports.
“Trudeau said he was prepared to travel to Washington this week to try to finalize a rework of the North American Free Trade Agreement, but Pence, in the phone call, said a meeting would occur only if the ‘sunset’ provision was agreed to in advance.”
“This is dumb. Europe, Canada, and Mexico are not China, and you don’t treat allies the same way you treat opponents. We’ve been down this road before—blanket protectionism is a big part of why America had a Great Depression. ‘Make America Great Again’ shouldn’t mean ‘Make America 1929 Again.'”
— Sen. Ben Sasse (R-NE), quoted by the Washington Post, on President Trump’s decision to impose steel and aluminum tariffs.
President Trump imposed steel and aluminum tariffs on the European Union, Canada and Mexico, the Washington Post reports.
“The move is certain to trigger retaliation by the E.U. against a range of American products, including Kentucky bourbon and Harley-Davidson motorcycles, and could complicate talks over a possible new North American trade deal — further straining ties between the United States and some of its closest allies.”
New York Times: “A 25% tariff on steel and a 10 percent tariff on aluminum from the European Union, Canada and Mexico, which supply nearly half of America’s imported metal, will go into effect at midnight Thursday.”
Wilbur Ross “was brought into the administration as one of President Trump’s ‘killers’ – but in recent months, the commerce secretary has been increasingly marginalized, with his agency widely seen in the White House as a mess,” Politico reports.
“Trump himself has lashed out at Ross in Oval Office meetings, telling the man who once helped bail him out in Atlantic City that he’s ‘past his prime’ and ‘no longer a killer’ and trying to bench him from making trade deals… Despite being one of the administration’s leading protectionist voices early on, Ross was initially left off a May trade delegation to China led by Treasury Secretary Steven Mnuchin.”
“But now Ross is heading back to China in early June in hope of cutting some type of trade deal that delivers on Trump’s campaign promises to extract concessions from Beijing on behalf of American workers.”
“The Trump administration is using national-security laws to consider imposing new tariffs on vehicle and auto-parts imports… President Trump is asking for new tariffs of as much as 25% on automobile imports… after he repeatedly signaled his intention to impose such tariffs,” the Wall Street Journal reports
“Mr. Trump has asked his team to investigate using a legal provision of the 1962 Trade Expansion Act to find whether tariffs or other restrictions are needed on imported cars. It is the same legal justification the administration used to impose tariffs on steel and aluminum imports in March.”
Treasury Secretary Steven Mnuchin said that the United States and China are stepping back from a possible trade war after two days of talks that produced “meaningful progress,” the Washington Post reports.
“Despite not getting China to agree to trim its overall trade surplus with America by a specific amount, Mnuchin said the U.S. team did get a number of commitments on a framework for reducing the deficit over time, including big increases in purchases of farm products and a doubling of purchases of U.S. energy products.”
Said Mnuchin: “We are putting the trade war on hold.”
Bloomberg: “While equities have added $22 trillion in value since 2009, wages stagnated and workers’ share of business income remained near record lows.”
