THE TICKER

President Trump is over-promising to farmers as his administration looks primed to under-deliver. 

The expectations mismanagement sets up a reckoning with a key voting bloc that is already divided on the president's push to rip up trade alliances in search of better terms.  

Trump is heralding the trade truce he struck last week with European Commission President Jean-Claude Juncker as a “breakthrough,” telling an Iowa rally last Thursday that he “just opened up Europe for you farmers.” 

Not so, European officials say. “On agriculture, I think we’ve been very clear on that — that agriculture is out of the scope of these discussions,” a European Commission representative said Friday, per the Wall Street Journal

In fact, the world’s two largest economies are engaging on a pair of agricultural issues. But European moves on both fronts predate last week’s summit. The two sides are continuing ongoing negotiations toward lifting European barriers to high-end American beef. And the Europeans are talking up their intent to buy more American soybeans, although they already needed more of the product and likely won’t make up for orders the Chinese have canceled as part of their trade fight with the Trump administration. 

More from the Journal:

“Agriculture is one of the most sensitive and difficult trade questions for Europe, especially for France, and the U.S. and Europe have fought for years over everything from European tariffs to U.S. use of hormones and genetically modified products. They say that when Trump aides tried to broaden the talks from industrial products to agriculture, they threatened to demand the U.S. drop its 'Buy American' provisions for government procurement, a non-starter for the Trump administration.

The U.S. side 'heavily insisted to insert the whole field of agricultural products,' Mr. Juncker told reporters right after the meeting. 'We refused that because I don’t have a mandate and that’s a very sensitive issue in Europe.'”

Meanwhile, the administration’s $12 billion plan to bail out farmers caught in the tariff crossfire won’t fully compensate them for the damage they suffer, Agriculture Secretary Sonny Perdue said over the weekend. “Obviously this is not going to make farmers whole,” Perdue told Reuters on Saturday from a G-20 meeting in Buenos Aires. But he said up to $8 billion in direct cash payments to farmers will go out “in late September or October” — so growers will see some relief before Election Day.

Of course, Trump's confrontation with Europe only represents one battle in a multi-front war. The administration is poised to continue escalating its fight with China by imposing another $16 billion in tariffs on Chinese imports, and Beijing has pledged to respond in kind. And it remains in scrapes with Japan, Canada, Mexico and Turkey. 

Farmers views on the matter are mixed. A slim majority expect short-term pain from Trump’s tariffs, a new CBS poll shows — but by the same margin as all Americans. Farmers are more optimistic than the broader electorate that the duties will lead to better deals long-term, though they are divided on the question, with 41 percent expecting better deals and 42 percent expecting worse ones. 

Some aren’t giving the president the benefit of the doubt. “I am a farmer and a Trump supporter. I agree that China needs to be punished for stealing patented U.S. technology. But opening a new front in this trade war, while trying to reduce the blowback on farmers with a Great Depression-era transfer program, is not the right approach,” Kalena Bruce, a fifth-generation rancher, wrote in The Washington Post last week. “It is the economic equivalent of treating a hangnail by cutting off your finger.”

Brian Duncan, an Illinois hog farmer, told Fox Business that the president’s promises leave too much uncertainty. “There’s just so many unknowns, and just like with the aid package the president announced on Tuesday, you know, we don’t know enough of the details yet to say how that’s going to benefit” farmers, he said.

Other Trump officials haven’t gone as far as the president in proclaiming the administration has already delivered a win to farmers. But they aren’t tamping down Trump's boast, either. 

Top White House trade adviser Peter Navarro said last week’s meeting yielded “a great victory for this country.” And he urged Americans to put the trade fight with Europe in the context of its confrontation with China. “What we would ask as an administration is people to see the chessboard, that China is trying to hold us hostage. They rob our house, and we try to stop them, and now they're bullying our farmers,” Navarro told NPR

Vice President Pence is waiving off concerns from Republican lawmakers that farmers and others are bearing the cost of the trade war. “We respect members of Congress; we respect them standing up for interest in their district; but we’re grateful for the support they provided for the President’s agenda,” he told Fox News's Maria Bartiromo. “And we remain confident that as we reset the balance in those trading relationships, that it’s going to win for their districts and win for America.”

TRUMP TRACKER

TRADE FLY-AROUND:

China open to talks. Bloomberg: "Wang Yi may be China’s top diplomat, but on Monday he sounded more like the country’s chief lecturer of economics. The Chinese foreign minister took advantage of a visit by his U.K. counterpart to give the U.S. a mocking economics lesson, saying American policies were to blame for the country’s trade deficit and the collapse of talks... Wang’s defiant remarks underscored deep divisions between the two sides with just a month before the public comment ends on [Trump’s] proposal to levy tariffs on $200 billion of Chinese goods. While American and Chinese officials have hinted at the possibility of restarting talks, it’s been almost two months they last held high-level negotiations... Still, he said that China was willing to resume talks with the U.S. if the conditions were right. 'China’s door of dialogue and negotiation remains open, but any dialogue must be based on equality and mutual respect,' Wang said.”

Kudlow blames China. Politico's David Beavers: Kudlow "on Sunday staunchly defended [Trump's] use of targeted tariffs against China, while insisting the president ultimately 'wants to have no tariffs' on the European Union. 'You know, if they're targeted for good purpose, as per China, I think the answer is absolutely yes,' Larry Kudlow said of imposing trade duties during an interview on CNN's 'State of the Union.' 'That's always been my view. Most free traders agree. China has not played by the rules. And the trading system is broken, largely because of them.' ”

— Steel tariffs spawn backlash. The Associated Press's Richard Lardner: “U.S. companies seeking to be exempted from [Trump’s] tariff on imported steel are accusing American steel manufacturers of spreading inaccurate and misleading information, and they fear it may torpedo their requests. Robert Miller, president and CEO of NLMK USA, said objections raised by U.S. Steel and Nucor to his bid for a waiver are 'literal untruths.' He said his company, which imports huge slabs of steel from Russia, has already paid $80 million in duties and will be forced out of business if it isn’t excused from the 25 percent tariff. U.S. Steel and Nucor are two of the country’s largest steel producers. 'They ought to be ashamed of themselves,' said Miller, who employs more than 1,100 people at mills in Pennsylvania and Indiana. Miller’s resentment, echoed by several other executives, is evidence of the backlash over how the Commerce Department is evaluating their requests to avoid the duty on steel imports. They fear the agency will be swayed by opposition from U.S. Steel, Nucor and other domestic steel suppliers that say they’ve been unfairly hurt by a glut of imports and back Trump’s tariff.”

Tariffs hit consumers. The Wall Street Journal's Patrick McGroarty and Bob Tita: “Consumers are paying more for products from recreational vehicles to soda as tariffs on metals and parts put pressure on U.S. manufacturers. U.S. steel and aluminum prices are up 33% and 11% respectively since the start of the year, as producers and their customers began to price in the tariffs that the Trump administration first applied on foreign-made metal in March. Tariffs on a host of additional imported products from China this month have added costs for companies that use those components to assemble their products in the U.S.”

BMW will raise prices. Reuters's Norihiko Shirouzu: “German carmaker BMW said it will raise the prices of two U.S.-made crossover sport-utility vehicles in China to cope with the additional cost of tariffs on U.S. car imports into the world’s biggest auto market. In a move due to take effect on Monday, BMW said in a statement to Reuters over the weekend that it will increase maker-suggested retail prices of the popular, relatively high-margin X5 and X6 SUV models by 4 percent to 7 percent. The rates of increase suggest that BMW is willing to absorb much of the higher costs stemming from bringing the SUVs to China from its factory in South Carolina, underscoring the fierce competition among luxury car brands in China.”

— Koch group chides White House. The Washington Post's Michelle Ye Hee Lee: “Top officials with the donor network affiliated with billionaire industrialist Charles Koch this weekend sought to distance the network from the Republican Party and [Trump], citing tariff and immigration policies and 'divisive' rhetoric out of Washington. At a gathering of hundreds of donors at the Broadmoor resort here, officials reiterated their plans to spend as much as $400 million on policy issues and political campaigns during the 2018 cycle. Earlier this year, they announced heavy spending on helping Republicans hold the Senate. But in a warning shot to Trump and the GOP, network co-chair Brian Hooks lamented 'tremendous lack of leadership' in Trump’s Washington and the 'deterioration of the core institutions of society.' He called out the White House and Trump-allied GOP lawmakers, particularly over trade policy and increased federal spending, and added that 'the divisiveness of this White House is causing long-term damage.'”

MELTDOWN WATCH:

MARKET MOVERS

— Fed considers next steps. WSJ's Nick Timiraos: “Most Federal Reserve officials agree on the path for interest rates over roughly the next year: proceed with gradual increases until borrowing costs reach a level that neither slows nor spurs growth. The big question, however, is what to do after getting to that so-called neutral setting. The answer will largely depend on how inflation behaves as unemployment falls, and they are poring over recent research for clues. The studies suggest prices might climb faster, but not too much, if unemployment falls a bit more. And inflation might become worrisome if joblessness falls a lot more. The policy makers are likely to leave their benchmark rate unchanged when their two-day policy meeting concludes Wednesday and wait until September for their next increase.”

Will Trump respond? Compass Point's Isaac Boltansky says maybe: "If the FOMC holds, which is the market expectation as evidenced by futures market activity, then the president could conceivably choose to take a public victory lap. We continue to believe that the president’s monetary policy jawboning will not alter the FOMC’s normalization trajectory, but the continued chatter could drive headline volatility and possibly bolster calls for additional central bank transparency."

Beacon Policy Advisors says no: "We do not expect this type of hectoring to become a regular occurrence or a focal point of his Twitter agenda unless and until the economy heads into a downturn, at which point he is highly likely to return to this criticism and seek to deflect blame onto the Fed for snuffing out economic growth with its interest rate hikes, while he was attempting to pump up the economy with fiscal stimulus and a deregulatory agenda."

Mnuchin endorses rate hikes. Bloomberg News's Rich Miller: “Treasury Secretary Steven Mnuchin suggested on Sunday it was fine for the Federal Reserve to be raising interest rates, after his boss... recently criticized the central bank for doing just that. Mnuchin agreed in response to a question that it was responsible for Fed Chair Jerome Powell and his colleagues to be increasing rates as the economy grows faster and inflation picks up. 'The Fed has been targeting 2 percent inflation,' Mnuchin said on 'Fox News Sunday.' 'Obviously, with 2 percent inflation we have to have at least slightly higher interest rates to manage through that.' ”

And is optimistic about GDP. Reuters: “Mnuchin said on Sunday that he believes the quickening pace of growth in the nation’s economy in the second quarter will persist for the next few years. 'I don’t think this is a one- or two-year phenomenon. I think we definitely are in a period of four or five years of sustained 3 percent growth at least,' Mnuchin said in an interview with 'Fox News Sunday.' ”

— Stock market holds on. WSJ's Akane Otani: “The broad U.S. stock market is within 2% of a new high despite big drops by some of the technology giants that have powered recent gains, reassuring investors that the nine-year rally remains on firm footing to continue its run. For months, analysts and investors have been debating whether a stock market whose gains have largely been driven by a handful of technology companies may be subject to a sudden reversal. They have already witnessed several big selloffs in recent days: Facebook Inc. wiped out more than $100 billion in market capitalization Thursday after warning its growth was slowing, while Netflix Inc. tumbled earlier this month after missing its own forecasts for user growth by more than a million subscribers. Twitter Inc. and Intel Corp. slid Friday after posting disappointing earnings. Yet through much of those shock waves, the broader stock market has remained resilient.”

POCKET CHANGE

CEOs see huge tax-cut payday. Politico's Patrick Temple-West and Victoria Guida. "Some of the biggest winners from President Donald Trump’s new tax law are corporate executives who have reaped gains as their companies buy back a record amount of stock, a practice that rewards shareholders by boosting the value of existing shares. A Politico review of data disclosed in SEC filings shows the executives, who often receive most of their compensation in stock, have been profiting handsomely by selling shares since Trump signed the law on Dec. 22 and slashed corporate tax rates to 21 percent. That trend is likely to increase as Wall Street analysts expect buyback activity to accelerate in the coming weeks...

"Since the tax cuts were enacted, Oracle Corp. CEO Safra Catz sold $250 million worth of shares in her company — the largest executive payday this year. Product development head Thomas Kurian sold $85 million. The sales came after the company announced a $12 billion share repurchase. Mastercard CEO Ajay Banga sold $44.4 million of stock in May, the largest single cash-out by an executive of the company in at least 10 years, months after the company announced a $4 billion buyback of its own stock. Two days after Eastman Chemical announced it would purchase $2 billion of its own stock, CEO Mark Costa sold 55,000 shares for $5.4 million."

— CBS to launch investigation. WSJ's Keach Hagey and Joe Flint: “Some CBS Corp. directors discussed over the weekend whether Chief Executive Leslie Moonves should step aside from the company pending its investigation into allegations he sexually harassed women . . . The board of CBS, which is scheduled to meet via conference call Monday in advance of its second-quarter earnings announcement Thursday, is expected to select a special committee to oversee the investigation . . . The board intends to make a broad inquiry into CBS’s workplace culture, not just the alleged behavior of Mr. Moonves . . . The investigation is in response to a New Yorker article published Friday, in which six women who had professional dealings with Mr. Moonves between the 1980s and late 2000s claimed he sexually harassed them. The story carried accusations that CBS tolerates systemic harassment against women.”

AmEx raised prices without warning. WSJ's AnnaMarie Andriotis: "For more than a decade, American Express Co.’s foreign-exchange unit recruited business clients with offers of low currency-conversion rates before quietly raising their prices, according to people familiar with the matter. AmEx’s foreign-exchange international payments department routinely increased conversion rates without notifying customers in a bid to boost revenue and employee commissions, the people said. The practice, widespread within the forex department, was occurring until early this year and dates back to at least 2004, the people said. The practice targeted mostly small and midsize businesses, the people said, a group of customers that accounts for about a quarter of the company’s credit-card revenue. AmEx, one of the largest small-business card issuers in the U.S., earlier this year said it hoped to become the leading payments and working-capital provider for small and middle-market companies."

— Walmart struggles against Amazon. Reuters's Nandita Bose: “Standing before an audience of 14,000 people last year, Walmart Inc executives described a radical plan to help it fend off Amazon.com Inc and other online delivery services from stealing its customers. Walmart’s own store employees would bring online orders directly to shoppers’ homes after completing their usual shifts of up to nine hours on the sales floors. Aiming to lower the retailer’s shipping costs by tapping its massive workforce, the program was part of a multi-pronged strategy to boost its $11.5 billion U.S. ecommerce business and tackle one of the biggest challenges in retail: the so-called 'last mile' of delivering goods to online customers. ... But months later, Walmart quietly retreated from its original vision for the pilot program - launched in New Jersey and Arkansas - and ended it altogether in January, according to company documents obtained by Reuters and interviews with more than two dozen Walmart employees.” (Amazon.com founder and chief executive Jeffrey P. Bezos owns The Post.)

MONEY ON THE HILL

— Trump threatens shutdown. The Post's Philip Rucker, Robert Costa and Damian Paletta: “Trump threatened Sunday to shut down the federal government this fall if Congress does not pass sweeping changes to immigration laws, including appropriating more public money to build his long-promised border wall. 'I would be willing to “shut down” government if the Democrats do not give us the votes for Border Security, which includes the Wall!' Trump tweeted. 'Must get rid of Lottery, Catch & Release etc. and finally go to system of Immigration based on MERIT! We need great people coming into our Country!' Trump’s shutdown warning — which he has made before — escalates the stakes ahead of a Sept. 30 government funding deadline, raising the possibility of a political showdown before the Nov. 6 midterm elections that Republican congressional leaders had hoped to avoid. A funding fight also could prove a distraction from Republican efforts in the Senate to confirm Trump Supreme Court nominee Brett M. Kavanaugh by Oct. 1.”

DAYBOOK

Coming soon

THE FUNNIES

A 2014 New Yorker cartoon from Barbara Smaller:

A cartoon by Barbara Smaller, from 2014. #TNYcartoons

A post shared by The New Yorker Cartoons (@newyorkercartoons) on

BULL SESSION

An oral history of Sen. John McCain's “thumbs down” vote against repealing Obamacare:

Russians rally against pension reform:

Deadly California fire continues to blaze: