THE TICKER

A handful of congressional Republicans are aiming to rebuff President Trump for one of the first times in his presidency, with several supporting legislation that would give them virtual veto power over his protectionist trade agenda.

Eight Republicans have signed on to legislation authored by Trump frenemy Bob Corker (R-Tenn.), the chairman of the Senate Foreign Relations Committee who isn't running for reelection this November, that would give them authority to approve presidential tariffs, which Trump has recently imposed on imports from China, Canada, Mexico and the European Union. It's one of the first times that GOP lawmakers are proactively asserting power over a key presidential priority, and it comes a scant five months before the November elections.

Corker ignored a personal appeal Trump Wednesday and introduced a bill to require congressional approval for any tariffs imposed in the name of national security. That would include the steel and aluminum duties he’s leveled on imports from Canada, Mexico and the E.U.

Several Republican senators have already embraced Corker's legislation -- including Lamar Alexander (Tenn.), Jeff Flake (Ariz.), Ron Johnson (Wis.), Mike Lee (Utah), and Patrick J. Toomey (Pa.), plus Democratic Sens. Heidi Heitkamp (N.D.), Brian Schatz (Hawaii), Chris Van Hollen (Md.), and Mark R. Warner (Va.). Senate Majority Leader Mitch McConnell (R-Ky.) said this week he will not call it up as a stand-alone measure but suggested it could be offered as an amendment to the defense authorization bill – a strategy Corker has embraced. And Toomey on Wednesday told my colleague Erica Werner that he thinks the measure will get a vote and pass.  

Yet McConnell appears loathe to challenge the president on a signature priority in the middle of a campaign year. “I don’t think we need to be trying to rein in the president through legislation,” he told SiriusXM’s Olivier Knox. “I think the best tool for those of us who are concerned about this devolving into a full-scale trade war is to continue to try to convince the president that we need to not let this go on too long or go too far.”

Other Republicans are more explicitly citing an aversion to rebuking Trump — no matter that his tariffs gore decades of conservative orthodoxy on free trade and are translating to near-term pain for some key constituencies. “I don’t think the president would be very pleased,” Senate Agriculture Committee Chairman Pat Roberts (R-Kan.) said, pointing to the need to maintain friendly relations with the White House to pass a farm bill, per the Wall Street Journal’s Siobhan Hughes. (Earlier this year, Roberts accused the administration of using farmers and ranchers as “a playing card,” ripped the tariffs as “terribly counterproductive,” and said they could wipe out the benefits of the tax cuts.)

And Sen. Lindsey Graham (R-S.C.), who joined an afternoon meeting at the White House between Republican senators and Trump, said afterward it was “not the time” to tie Trump's hands in trade talks by passing legislation. From CNN’s Manu Raju: 

The moment presents a quandary for a Republican Party that has largely marched in lockstep with Trump as it has pursued a common agenda of trying to roll back Obama-era laws, slashing regulations and taxes, and approving conservative judges. GOP lawmakers have shown at least one flash of independence, approving a measure last summer that imposed new sanctions on Russia while giving themselves the authority to block Trump from easing penalties on Moscow. And at least rhetorically, for whatever it’s worth, there’s more evidence of Republicans on Capitol Hill asserting themselves this week, with Speaker Paul Ryan (R-Wisc.) and others rejecting Trump’s claim that the FBI planted a spy in his campaign. 

The trade debate is especially fraught for congressional Republicans, though, because it's the first that threatens to cleave those loyal to the president from the party’s traditional big business allies. Those interests believe an escalating trade war could be economically ruinous and have been getting louder. Earlier this week, the political network backed by the billionaire industrialist Koch brothers launched what it is calling a multi-year, multimillion-dollar campaign to defeat Trump’s trade offensive; the Koch company on Wednesday endorsed Corker’s bill. So did the U.S. Chamber of Commerce. This was from Chamber executive vice president Neil Bradley: 

This week’s developments — with some congressional Republicans and deep-pocketed interests rallying around a bill to challenge the president — present a rare test of Trump’s hold on a party that so far has given him little reason to doubt it. 

MARKET MOVERS

JPMorgan: Trade yips cost stocks $1 trillion. CNBC's Thomas Franck: "Trump's tough trade tactics and rhetoric have caused the destruction of more than $1 trillion in market value, according to J.P. Morgan's top quantitative strategist. 'By attributing the trade-related news flow (positive or negative) to the performance of the U.S. market, we estimated the impact on U.S. equities to be negative 4.5 percent' since March, J.P. Morgan's Marko Kolanovic said in a note Wednesday. 'Taking the current market capitalization, this translates into $1.25 trillion of value destruction for U.S. companies. For a comparison, this is about two-thirds of the value of total fiscal stimulus.'"

Volatility turns back the clock. Bloomberg's Elena Popina and Sarah Ponczek: "As far as volatility goes, stocks are moving backward in time. To a more peaceful era: the start of the year, before anyone had ever heard of February’s VIX histrionics or the technology meltdown of March and April. The Cboe Volatility Index closed Wednesday at 11.64, as four straight declines left it at the lowest point in 131 days. More and more, February is a memory. That month’s abrupt blow-up fueled a 116 percent spike in volatility as U.S. stocks slipped into their first correction in two years. Market angst about higher interest rates, slowing growth and international trade have gradually subsided since then, pushing three out of five main U.S. indexes to record highs."

The Dow surged to its highest close in nearly three months Wednesday, with markets calm as investors weighed the latest signals on international trade.
WSJ
U.S. worker productivity rose more slowly than originally estimated in the first three months of 2018, a potential headwind to stronger economic growth going forward.
WSJ
TRUMP TRACKER

TRADE FLY-AROUND:

— Trump is ready for a fight at the G-7. The Post’s Damian Paletta and Anne Gearan: “Trump plans to confront other world leaders at a summit in Quebec on Friday over what he believes is a global economic system tilted against the United States… escalating tensions with U.S. allies who have expressed outrage at his pivot toward protectionism… In a sign Trump is looking to stoke divisions, White House officials are discussing ways to impose additional economic penalties against Canada — the host nation for the summit — in retaliation for Ottawa’s threat to levy tariffs next month on roughly $13 billion in U.S.-made products. Among Canada’s targets: orange juice, soy sauce, sleeping bags and inflatable boats. But there are divergent views within the White House over how to treat Canada, with Treasury Secretary Steven Mnuchin urging both sides to de-escalate, two people close to the discussions said.”

From CNN's Jim Acosta:

Europe says retaliation is coming. The AP's Lorne Cook: "The European Union on Wednesday announced it will start imposing duties from July on a list of U.S. products in response to ... Trump’s decision to slap tariffs on steel and aluminum imports from Europe. 'The new duties start applying in July,' European Commission Vice President Maros Sefcovic told reporters. 'It is a measured and proportionate response to the unilateral and illegal decision taken by the United States.' Sefcovic said that formalities in finalizing the list should be completed this month. The EU says it will introduce 'rebalancing' tariffs on about 2.8 billion euros’ ($3.4 billion) worth of U.S. steel, agricultural and other products, including bourbon, peanut butter, cranberries and orange juice."

Merkel sees rough sledding. The AP's Geir Moulson: "German Chancellor Angela Merkel on Wednesday predicted difficult talks at the Group of Seven summit, warning that there is 'no sense in papering over divisions' on issues such as trade ... 'It is apparent that we have a serious problem with multilateral agreements here, and so there will be contentious discussions,' Merkel said as she addressed her first question time in the German parliament, a format introduced by the governing coalition that took office in March. She said Germany will work at least to preserve what was agreed on at last year’s G-7 and Group of 20 summits on trade and climate ... She added, however, that 'we must not keep watering down' previous summit conclusions committing the G-7 countries to fair multilateral trade and rejecting protectionism."

— The tariffs may sour the mood at a NATO meeting, too. The Wall Street Journal's Valentina Pop and Daniel Michaels: "Trans-Atlantic tensions threaten to disrupt a gathering of NATO defense ministers this week, after the U.S. labeled its allies national security threats in a trade dispute. A regular meeting of defense ministers Thursday and Friday here at the North Atlantic Treaty Organization headquarters was initially aimed at preparing for a summit next month of NATO leaders including... Trump... Trump’s decision last week to impose tariffs on steel and aluminum imports, including from other NATO members, and other disputes are overshadowing the meeting. U.S. allies are angry because the levies were based on national-security grounds. 'I will be very vocal' about the trade fight, said Canadian Defense Minister Harjit Sajjan. 'To consider Canada as a national security risk as a result of steel is beyond ridiculous.'"

Business panics over NAFTA talks. NYT's Ana Swanson: "Documents show corporations and trade groups — such as the U.S. Chamber of Commerce and the National Association of Manufacturers, or NAM — struggling to get their voices heard within a supposedly business-friendly administration and sending increasingly panicked emails to the United States trade representative’s office about its approach to rewriting the pact. Throughout last spring and summer, high-level trade negotiators repeatedly canceled meetings with the chamber, instead finally sending a 24-year-old deputy to meet with a delegation that was expected to include representatives from more than 50 of the largest American companies and organizations, including Walmart, U.P.S., the Walt Disney Company, General Electric, General Motors, Caterpillar and Boeing."

China wants to meet half-way. Bloomberg: "China reiterated that it is willing to expand imports from the U.S. if the world’s two largest economies 'meet half-way' in trade negotiations. The two countries had 'deep and detailed' talks on agricultural and energy products last week, while those details are subject to confirmation, Gao Feng, a spokesman for the Ministry of Commerce, said at a regular briefing Thursday in Beijing. Gao said that China doesn’t want to escalate trade tensions with the U.S., and that boosting imports is an established strategy."

— U.S. trade deficit decreases. The AP's Paul Wiseman: "Record exports shaved the U.S. trade deficit in April for the second straight month. But so far this year, the deficit is up 11.5 percent from a year ago despite... Trump’s vow to close the gap through new tariffs on imports and renegotiated trade deals... The trade deficit in goods with China widened 8.1 percent to $28 billion in April; the monthly gap with Mexico narrowed 29.8 percent to $5.7 billion."

A whiskey maker seeks to get ahead of the trade war. Reuters's Nivedita Balu and Uday Sampath: "Jack Daniel’s maker Brown-Forman Corp... said it has been trying to mitigate risk of potential retaliatory tariffs from top U.S. trade allies by increasing shipments to some markets overseas in the last few months... 'It’s a tough, tricky situation that we’ve been watching now for months. It seems like every day we wake up and it takes a little bit of a twist and turn,' outgoing CEO Paul Varga said... Brown-Forman gets 18 percent of its net sales from the UK, Germany, Poland and France, while Mexico and Canada contribute about 5 percent and 1 percent, respectively."

MELTDOWN WATCH:

— Giuliani blasts Mueller's team. The Post's John Wagner: "Trump’s lawyer Rudolph W. Giuliani said Wednesday that the legal team of special counsel Robert S. Mueller III is 'trying very, very hard to frame' the president. Giuliani’s comments, at a conference in Israel, further escalate the efforts of Trump and his lawyers to discredit the ongoing investigation of Russian interference in the 2016 presidential election, which is also examining whether Trump has obstructed justice ... 'They are a group of 13 highly partisan Democrats that make up the Mueller team — excluding him — [who] are trying very, very hard to frame him, to get him in trouble when he hasn’t done anything wrong,' Giuliani said, according to a video of the event."

— Treasury is silent on senator's inquiry about Michael Cohen. Bloomberg News's James Paton: "The U.S. Treasury Department has refused to respond to Senator Ron Wyden’s request for financial details related to payments that Swiss drugmaker Novartis AG made to ... Trump’s lawyer Michael Cohen, a spokeswoman for the Democratic lawmaker said. Novartis is cooperating fully and provided 'substantial' responses to the letter Wyden sent the company’s chief executive last month as part of a Senate Finance Committee review, according to an email from the Oregon senator’s office Wednesday. The probe is led by Democrats, and would require active participation by Republicans to become formal. While Cohen has also signaled he will cooperate, the Trump administration 'continues to be radio silent,' the spokeswoman said."

Her contact, a Russian Olympic weightlifter, said a meeting between Trump and Putin could expedite a Trump tower in Moscow.
BuzzFeed
POCKET CHANGE

$200 billion stock buybacks in May break record. CNN Money's Talib Visram: "American companies announced a record $201.3 billion in stock buybacks and cash takeovers in May. Apple made up nearly half that total, according to a report from investment research company TrimTabs. Last month, Apple (AAPL) pledged to purchase $100 billion worth of its own stock. It didn't provide a time frame for when it would complete the purchases. Micron Technology ($10 billion) and Qualcomm ($8.8 billion) rounded out the top three in TrimTabs' report… Howard Silverblatt of S&P Dow Jones Indices said that total buybacks and dividends for the past 12 months could top $1 trillion for the first time ever. The massive uptick followed the US corporate tax cut law.”

Schultz ignores 2016 lessons. The Post's Jeff Stein: "Starbucks's Howard Schultz has a plan for America: reduce the federal deficit, reject expensive new government programs and cut spending on existing ones. If Schultz hopes that economic platform will pave the way to a presidential run in 2020, 2016 presidential election veterans from both parties think the departing Starbucks executive is in for a rude awakening. 'I don't understand it,' said Brian Fallon, national press secretary for Hillary Clinton's 2016 presidential bid. 'Just think of how people belittled Hillary Clinton's proposals as too centrist, and her proposals were fairly ambitious, especially compared to this.' ... Republican strategists were also mystified by Schultz's comments."

The Post's Paul Waldman weighs in: "The time has come, America, for us to look our business leaders in the eye and say: Thanks for the coffee and the ball bearings and the web sites and the cell phones, but please, do us all a favor and stay the hell out of electoral politics."

Business
Trump’s “America First” trade policies are backfiring on business owners across the U.S. in ways that often go unseen.
David J. Lynch
Lobbyists for Walmart Inc. and other retailers are joining forces with companies that process payments in the latest battle over the $90 billion that U.S. merchants pay banks annually to process credit and debit-card charges.
Bloomberg
THE REGULATORS

— Mulvaney continues to remake the CFPB. The Post's Renae Merle: "Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, fired the agency’s 25-member advisory board Wednesday, days after some of its members criticized his leadership of the watchdog agency. The CFPB said it will revamp the Consumer Advisory Board, known as the CAB, in the fall with all new members ... On Monday, 11 CAB members held a news conference and criticized Mulvaney for, among other things, canceling legally required meetings with the group. On Wednesday, group members were notified that they were being replaced — and that they could not reapply for spots on the new board. In a statement, the agency’s spokesman, John Czwartacki, took a final swipe at the group. 'The outspoken members of the Consumer Advisory Board seem more concerned about protecting their taxpayer funded junkets to Washington, D.C., and being wined and dined by the Bureau than protecting consumers,' he said."

— The CFPB and PHH will end their battle. American Banker's Kate Berry: The CFPB "is poised to dismiss its case against PHH Corp., a nonbank mortgage lender and servicer whose appeal of a $109 million penalty led to a four-year legal battle over whether the agency's single-director structure was constitutional. The CFPB's enforcement director, Kristen Donoghue, and a team of CFPB attorneys filed a joint statement late Tuesday with PHH's lawyers recommending that ... Mulvaney dismiss the case outright. 'Enforcement Counsel and Respondents have conferred, and have agreed to recommend dismissal of this administrative proceeding,' the joint statement said. 'Accordingly, Enforcement Counsel and Respondents respectfully request that the Acting Director proceed to dismiss this matter.'"

— The SEC won't change rules to accommodate cryptocurrencies. CNBC's Kate Rooney: "The head of the Securities and Exchange Commission made it clear Wednesday that the agency won't bend the rules for cryptocurrency when it comes to defining what is or what isn't a security. 'We are not going to do any violence to the traditional definition of a security that has worked for a long time,' U.S. Securities and Exchange Commission Chairman Jay Clayton told CNBC Wednesday. 'We've been doing this a long time, there's no need to change the definition.'"

OPINIONS

Short-termism is hurting the economy, Jamie Dimon and Warren Buffett write in today's WSJ: "Every generation of Americans has a responsibility to leave behind a stronger, more prosperous society than the one it found. The nation’s greatest achievements have always derived from long-term investments. In both national policy and business, effective long-term strategy drives economic growth and job creation. For public companies, these same principles are true. That’s why today, together with Business Roundtable, an association of nearly 200 chief executive officers from major U.S. companies, we are encouraging all public companies to consider moving away from providing quarterly earnings-per-share guidance. In our experience, quarterly earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability."

CHART TOPPER

The Post's Andrew Van Dam explains why workers won't move to Nebraska even though wages there are growing fast:

DAYBOOK

Today

  • The House Foreign Affairs Western Hemisphere Subcommittee holds a hearing on business investment and trade.
  • The American Enterprise Institute holds a conversation with former Federal Reserve chairman Ben S. Bernanke.

Coming soon

  • The Bipartisan Policy Center holds an event with HUD Secretary Ben Carson on Friday.
  • The Brookings Institution holds an event on “Building a more dynamic an competitive economy” on June 13.
THE FUNNIES

From Post cartoonist Tom Toles: "Scott Pruitt works to protect endangered specious arguments:"

BULL SESSION

ICE arrests more than 100 workers in an immigration raid in Ohio:

Here's a look at Dennis Rodman's history with North Korea:

Will 2018 be a leap forward for women or just another small step?: