POKING THE BEAR: Capping off an extraordinary week here in Washington, two developments are worth noting - first, the Senate passed a resolution, 98-0, calling on the United States to refuse to make any U.S. officials available for interrogation by the Russian government, a rebuke of President Trump's initial openness to such a move. The White House issued a statement saying Trump rejected the offer from Russian President Vladimir Putin. And more importantly, a bipartisan bill sponsored by Senators Marco Rubio (R-FL) and Chris Van Hollen (D-MD) imposing additional sanctions on Russia in the event they interfere (ahem) in future elections is gaining steam. In a break with Trump, Majority Leader Mitch McConnell will allow the legislation to move forward with the next steps taking place with hearings at the Banking and Foreign Relations Committees.
Also gaining some momentum on the heels of Helsinki are a handful of bills aimed at curbing the Trump Administration’s proposed tariffs on autos and auto parts from the EU. Watch for a bipartisan bill by Senators Lamar Alexander (R-TN) and Doug Jones (D-AL) that would “freeze” the Section 232 investigation underway at the Commerce Department. No word yet on what Congress will do (if anything) on Trump’s escalation of tariffs on China now totaling $500 billion with his latest salvo. Join us next Tuesday at 10am ET as we try to navigate the latest round of tariffs with one of Washington’s top trade analysts. Find the call details here.
TAX CUTS, TAKE TWO: House Ways and Means Chairman Kevin Brady is moving forward with plans for the second round of tax cuts a will be vetting it with House Republican as soon as next week. The second wave of cuts could come in the form of multiple bills introduced in September with the major focus making the individual tax cuts from 2017 permanent. Brady is also looking at lowering the corporate rate as well as a focus on pension plans. We don’t see this garnering enough support in the Senate to make it over the finish line especially with a certain Supreme Court nomination sucking up all of the oxygen in that Chamber after Labor Day.
U.S. HEADED TO COURT: U.S. Trade Representative Robert Lighthizer announced that the United States is challenging retaliatory tariffs imposed by major trading partners such as the European Union and Canada in the World Trade Organization. Those economies levied tariffs on U.S. exports in response to Washington's duties on steel and aluminum imports, but Lighthizer said that the national security justification for the steel and aluminum duties was "wholly legitimate."
APPROPRIATIONS ADVANCE: We mentioned the House was making significant progress on the Approps front in advance of the September 30 funding deadline and now Senate Republicans are stepping up their game and will likely vote next week on a package of four domestic spending bills totaling $155 billion and comprising a third of their workload including Transportation/HUD, Agriculture, Financial Services and Interior-Environment.
TRUMP DRUG PRICE POLICY: A LITTLE LESS TALK, A LOT MORE ACTION | CVS, UNH, MCK, CAH: The Trump Administration is reviewing a rule that would eliminate current discount safe harbor and replace it with..something. Read Emily Evans' take here and contact us for details for her upcoming call on this topic next Thursday, July 26 at 10:00 am ET.
THE POWER OF THE SPREAD: Read Neil Howe's latest analysis on the yield curve and whether the recession predictive pattern will continue here.
