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Chinese Admiral Xi Jinping Admiral Trump appear a acceptable commemoration at the Great Hall of the People in Beijing aftermost year. (AFP / Nicolas Asfouri)  

The Chinese government is getting artistic as it hunts for agency to accumulate clip with the Trump administering in an ascent barter fight. 

Beijing is abbreviating the screws on adopted companies gluttonous stakes in listed Chinese companies. The government published proposed rules Monday that would accountable added ambitious investors to a academic civic aegis review. Admitting the measures would affect all countries, it wouldn’t be hasty if they are acclimated to mainly absolute American beforehand in Chinese firms.

That move followed China’s decision aftermost anniversary to annihilate Qualcomm’s $44 billion acquirement of Dutch chipmaker NXP — a move assemblage declared backfire for U.S. tariffs, admitting Chinese claims that it was based alone on antitrust concerns. Chinese regulators advised the accord because Qualcomm is a above amateur in the country’s semiconductor market, acquisition about two-thirds of its acquirement there aftermost year.

And at atomic one iconic American casting operating in China blames the astriction for a declivity there: McDonald’s CEO Steve Easterbrook said on the company’s second-quarter balance alarm aftermost anniversary that the “uncertainty of the barter discussions” has had a “big appulse aural that market.” Easterbrook said the barter action “has acutely hit the markets, which in about-face has hit customer confidence. So, we are befitting a abutting eye on that and adjusting our affairs so that we can be competitive.”

William Zarit, who chairs the American Alcove of Commerce in China, tells me both the alcove and the U.S. embassy in Beijing are attractive out for letters of agnate experiences. Neither has acclaimed an uptick in complaints. “It doesn’t assume to be starting in force,” he said. “Having said that, it absolutely could, and I wouldn’t be absolutely afraid if it does.”

Beijing could accelerate an alike louder arresting by demography aim at a brace of high-profile mergers. Walt Disney Co.’s $71.3 billion bid for 21st Century Fox’s ball assets needs Chinese authoritative approval. Investors are already nervous. “Some investors are anxious that China adeptness use this accord to retaliate adjoin as abundant as $500 billion in acceptation tariffs threatened by [Trump], who declared Fox co-chairman Rupert Murdoch to congratulate him aback the transaction was apparent in December,” Bloomberg News appear Friday. “That’s one acumen why Fox shares are trading as admitting there’s about a 20 percent adventitious the accord will fail.”

Along those lines, aegis behemothic United Technologies has accustomed its $30 billion buyout of aerospace aggregation Rockwell Collins could face peril. The company’s arch beforehand administrator said at a June beforehand appointment that the Chinese could block the deal. “That is commodity you consistently accept to anticipate about or anguish about,” he said. 

Zarit agreed that fretfulness about both deals are valid. “I anticipate it should be a concern,” he said.

A man walks accomplished a McDonald’s Corp. restaurant at night in Beijing. (Tomohiro Ohsumi/Bloomberg)

It comes bottomward to simple math. If the Trump administering continues ramping up tariffs, Beijing anon will lose its adeptness to bout the levies, dollar for dollar, because China alone imports $130 billion annual of American goods. Chinese leaders accept fabricated bright they will attending to added agency to accumulate up. Those could blot devaluing the yuan or affairs off U.S. debt — moves that observers handicap as unlikely. 

But the country has already approved a alertness to accomplish action difficult for adopted companies whose governments get angular with it. Aftermost year, aback South Korea deployed a U.S. missile aegis arrangement the Chinese government interpreted as a blackmail to its sovereignty, Beijing responded by administering a avoid of Korean goods, including cosmetics, electronics, and Hyundai and Kia cars. 

A analysis of mentions of China in second-quarter balance transcripts, accumulated by Hamilton Abode Strategies, turns up lots of mentions of tariffs but no agnate suggestions that companies are adverse what may be customer boycotts (besides McDonalds, maybe). Yet added anecdotal affirmation suggests American exporters are encountering new hurdles, as my aide Danielle Paquette appear beforehand this month: A addition of cherries was abandoned until it baby and was beatific back, for example; and pet-food makers and others accept appear added accurate anchorage inspections.

And as Beijing looks to coalesce ties to Europe as a abeyant bulwark, the government is handing European companies an bend over their American competition. Beforehand this month, aback Chinese barter admiral awash in Berlin with their German counterparts, German chemicals behemothic BASF becoming Chinese approval for a $10 billion bulb in southern China. “Requests for agnate wholly-owned projects from BASF’s U.S. competitors, however, so far accept been snubbed by Chinese authorities,” The Wall Street Journal acclaimed at the time. 

“There’s a punch in the halls of the administering compound, it’s labeled ‘retaliation,’ and it’s consistently on,” one adept Chinese barter aloof tells me, requesting anonymity to allege bluntly about the situation. “The catechism is, is it at akin 2 or 5 or 8 or 10?” Either way, some companies attractive to aggrandize in China are action to face alike tougher choices. “What you’re action to see is companies alignment deals and maybe alike divesting assets in China. It’s a new world, and companies are action to accept to booty agenda of that.”

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TRUMP TRACKER

TRADE FLY-AROUND:

Commerce Secretary Wilbur Ross at the White House in Washington on July 18. (Leah Millis/Reuters)

— Ross hopeful about NAFTA. Bloomberg News’s Reade Pickert, Jenny Leonard, and Andrew Mayeda: “Negotiations with Mexico on an amend to the North American Free Barter Acceding are action able-bodied and may be abutting to wrapping up, U.S. Commerce Secretary Wilbur Ross said. ‘Our immediate, best close-to-completion negotiations are with Nafta, decidedly with Mexico,’ Ross said Monday at a appointment in Washington, abacus that President-elect Andrés Manuel López Obrador has ‘wasted no time’ appointing a new barter team. ‘There’s a appealing acceptable adventitious that we could be on a appealing accelerated clue with the Mexican talks.’ ”

— Chinese beforehand dips. WSJ’s Josh Zumbrun: “The accumulative akin of Chinese beforehand in the U.S. beneath in 2017, according to a new Commerce Administration report, assuming Chinese investors’ action for American assets was crumbling alike afore barter tensions ramped up. China’s absolute absolute beforehand position fell to $39.5 billion in 2017 from $40.4 billion the year before, according to the report. China’s appetence for U.S. beforehand had best up in contempo years, about quadrupling from 2014 to 2016. Yet admitting some high-profile affairs and accelerated growth, China isn’t a ample broker in the U.S., authoritative up beneath than 1% of the added than $4 abundance of adopted absolute beforehand in the country aftermost year. Beijing maintains bound controls on basic that accept captivated bottomward apparent investments from China and anchored those controls aftermost year.”

Pompeo announces Indo-Pacific plans, knocks China. The Post: “Secretary of Accompaniment Mike Pompeo on Monday appear $113 million in new technology, action and basement initiatives in arising Asia at a time aback China is cloudburst billions of dollars in investments into the region. Amidst added U.S. barter frictions with China, Pompeo’s advertisement approved to body on Admiral Trump’s ‘Indo Pacific’ strategy that aims to casting the United States as a accurate accomplice in the region.

“Pompeo said the United States was gluttonous a ‘free and open’ Asia afterwards ascendancy by any one country, in what appeared to be a advertence to China’s growing bread-and-butter ascendancy and acute tensions in the acknowledged South China Sea. ‘Like so abounding of our Asian allies and friends, our country fought for its own adeptness from an authority that accepted deference,’ Pompeo told the U.S. Alcove of Commerce business group. ‘We appropriately accept never and will never seek ascendancy in the Indo-Pacific, and we will argue any country that does.'”

Ross says U.S. can bear barter pain. Bloomberg: “The U.S. can accord with the affliction of a barter altercation with China because of the backbone of the American economy, [Ross] said. It makes added faculty to booty an ‘aggressive stance’ with China aback the U.S. abridgement is accomplishing well, Ross said, citation an unemployment amount that’s aerial about its everyman akin aback 2000. ‘That’s the appropriate ambiance aural which to do it, because there’s added adeptness for the abridgement to blot whatever concise problems may come,’ he said. ‘I allegorize it a little bit to action on a diet: It’s no fun in the beginning, maybe a little bit painful, but at the end of the day you’re affectionate of blessed with the end result,’ Ross said Monday.”

— Doubts about acreage aid. The Washington Post’s Caitlin Dewey: “Trump has committed $12 billion to assure American farmers aching by his barter war, ambience off a political firestorm over barter policy. But growers of soybeans — the distinct better agronomical consign to China, annual $12.4 billion — accept abundantly able banking accident appropriately far, adopting questions about the purpose and timing of the bailout, say economists, commodity traders and farmers. While soybean prices accept plummeted in contempo months as China slapped tariffs on $45 billion of U.S. goods, the complication of the markets area they are awash has cloistral abounding growers from banking abuse in the short-term. ‘We apparently don’t charge [the aid] on our farm,’ said Anna Balvance, who raises soybeans and beasts in arctic Iowa and is assured able profits this season. ‘A lot of guys are agnostic of it. It’s not action to change the way we do business.’ ”

— Added barter war layoffs. The Post’s Heather Long: “Jane Hardy, the arch controlling of a aggregation that makes lawn-care equipment, says she had to lay off 75 advisers this summer because of [Trump’s] barter war. As she fights to accumulate her southern Indiana business going, Hardy is one of several manufacturers admonishing the White House that, unless they see abatement from the tariffs soon, job losses will arise and branch closures are likely. Trump has afresh said he would assure American farmers in the barter war, aftermost anniversary ambience abreast $12 billion to advice them, but he is adverse burden to extend aid to added industries if the tariffs abide in abode or get continued to added products. Extending those bailouts would be an big-ticket proposition. The U.S. Alcove of Commerce on Monday estimated the absolute amount tag could hit $39 billion if Trump compensated the losses beyond all industries.”

Caterpillar avoids barter fallout. Reuters’s Rajesh Kumar Singh: “Caterpillar Inc. on Monday gave a able angle for the all-around abridgement admitting advancing barter tensions and ascent amount concerns, and the heavy-equipment maker aerial its full-year balance anticipation afterwards annual profits about doubled. The Deerfield, Illinois-based aggregation now expects adapted accumulation per allotment to be in a ambit of $11 to $12 in 2018, compared with $10.25 to $11.25 projected earlier. The additional access to the accumulation angle in the accomplished two abode helped somewhat abate investors’ apropos that the automated aeon and alike broader bread-and-butter action are abutting their peak. . . . Caterpillar said it has not yet apparent the appulse of advancing barter tensions on its business, but said tariffs are estimated to aerate actual costs in the additional bisected of 2018 by up to $200 million.”

MELTDOWN WATCH:

MARKET MOVERS

Federal Reserve Lath Chair Jerome H. Powell on Capitol Hill in Washington on July 18. (Jacquelyn Martin/AP)

— No amount backpack expected. The Associated Press’s Martin Crutsinger: “The Federal Reserve will accommodated this anniversary to appraise an abridgement that has aloof enjoyed a advantageous access of beforehand but faces a flurry of barter fights pushed by [Trump] that could imperil that beforehand over time. If those apropos weren’t enough, Trump has aboveboard bidding his anger at the Fed’s absorption amount increases — commodity no admiral has done about in added than two decades. No one expects the Fed to advertise a amount access aback its latest action affair ends Wednesday. But the axial coffer is broadly accepted to set the date for abbreviating acclaim afresh in September for a third time this year and afresh acceptable accession ante already afresh by December. This year’s amount increases chase three hikes in 2017 and one anniversary in 2015 and 2016.”

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— Alteration looming? Bloomberg’s Dani Burger: “The market’s leaders accept gone missing this balance season. For Morgan Stanley, that’s a annoying assurance that the banal assemblage may accept beat itself. Admitting added than 85 percent of S&P 500 members beating analyst estimates, the blazon of pro-cyclical companies you’d apprehend to billow amidst banderole balance accept been falling behind. Not alike the better winners of the year are announcement reliable gains, as balance misses from the brand of Netflix Inc. and Facebook Inc. bassinet the drive trade. As such, risks to the July banal assemblage are building, and with peaking beforehand ante and continued positioning, the three-day accelerate that started Thursday will alone get worse, Morgan Stanley analysts said. ‘The affairs has aloof amorphous and this alteration will be the better aback the one we accomplished in February,’ Morgan Stanley disinterestedness strategists led by Mike Wilson wrote in a agenda Monday.”

POCKET CHANGE

Tesla arch executive Elon Musk in Chicago on June 14. (Kiichiro Sato/AP)

— Tesla eyes Europe. The Wall Street Journal’s William Boston and Tim Higgins: “Tesla Inc.’s all-embracing amplification is accepting momentum, with authorities in Germany and the Netherlands initiating talks with the aggregation to body its aboriginal above European factory. The Silicon Valley car maker, which this ages appear affairs to body its aboriginal beyond bulb in China, has had basic discussions with two German states allusive to host a declared Gigafactory in Europe to body electric cars and their batteries beneath one roof, admiral complex in the talks said. The talks are still in their aboriginal stages, and adeptness not crop an agreement, the admiral said. Tesla has additionally discussed an advantage to body the bulb in the Netherlands, said a Dutch government official, who beneath to say if that advantage is still actuality pursued.”

— Actor sues Facebook. The Post’s Hamza Shaban: “Days afterwards Facebook’s banal suffered the better bead in Wall Street history, a actor sued the company, accusing the amusing media arrangement of authoritative ambiguous statements about its user numbers and operations. The plaintiff, James Kacouris, filed the accusation Friday gluttonous class-action cachet and to balance damages. Kacouris declared that Facebook and its arch executive, Mark Zuckerberg, abandoned federal balance laws by ambiguous shareholders about the company’s cardinal of alive users and the slowing beforehand of its revenue. Kacouris additionally alleged Facebook arch banking administrator David Wehner in the lawsuit, filed in U.S. District Cloister for the Southern District of New York. Facebook said in its balance address aftermost anniversary that it advancing slower acquirement beforehand and slimmer margins in the future, in allotment to beforehand the assurance and aloofness of the platform.”

— CBS hires law close to handle Moonves allegations. WSJ’s Joe Flint and Keach Hagey: “CBC Corp. said its lath of admiral was in the action of selecting an alfresco law close to handle an absolute analysis into allegations Arch Controlling Leslie Moonves sexually addled women. No added accomplishments were taken on the amount at the Monday lath meeting. In beforehand of the meeting, which was continued appointed advanced of CBS’s second-quarter earnings, some admiral had discussed whether Mr. Moonves should footfall abreast during the probe… CBS’s annual Monday fabricated no acknowledgment of Mr. Moonves’s status. The analysis is in acknowledgment to a New Yorker commodity appear Friday, in which six women who had able affairs with Mr. Moonves amid the 1980s and backward 2000s claimed he sexually addled them.”

— T-Mobile and Nokia strike deal. Reuters’s Eric Auchard: “T-Mobile U.S. alleged Nokia to accumulation it with $3.5 billion in next-generation 5G arrangement gear, the firms said on Monday, appearance the world’s better 5G accord so far and accurate affirmation of a new wireless advancement aeon demography root. No. 3 U.S. adaptable carrier T-Mobile — which in April agreed to a alliance with Sprint to actualize a added appalling battling to U.S. telecom giants Verizon and AT&T — said the multiyear accumulation accord with Nokia will bear the aboriginal civic 5G services.”

The four-employee business of Travis Baldwin, who hasn’t lived in the U.S. for about a decade, is about to get formed by a brace of tax accoutrement that were aimed at accumulated behemoths like Microsoft Corp.

Bloomberg

MONEY ON THE HILL

Treasury Secretary Steven Mnuchin in Buenos Aires on July 21. (Victor R. Caivano/AP)

— Trump administering mulls cap-gains tax cut. NYT’s Alan Rappeport and Jim Tankersley: “The Trump administering is because bypassing Congress to admission a $100 billion tax cut mainly to the wealthy, a accurately aerial action that would cut basic assets taxation and accomplish a long-held appetence of abounding investors and conservatives. Steven Mnuchin, the Treasury secretary, said in an annual on the sidelines of the Accumulation of 20 acme affair in Argentina this ages that his administration was belief whether it could use its authoritative admiral to acquiesce Americans to annual for aggrandizement in free basic assets tax liabilities. The Treasury Administration could change the analogue of ‘cost’ for artful basic gains, acceptance taxpayers to acclimatize the antecedent amount of an asset, such as a home or a allotment of stock, for aggrandizement aback it sells… The move would face a near-certain cloister challenge.”

Democrats were quick to bang the proposal. Senate Minority Leader Chuck Schumer (D-N.Y.) declared it an “outrage” and said it showed “Republicans’ accurate colors.” Their midterm ads on this are already autograph themselves. 

— Steyer’s $110 actor plan. Politico’s Edward-Isaac Dovere: “Tom Steyer has set affairs to absorb at atomic $110 actor in 2018, authoritative the billionaire broker the better distinct antecedent of attack banknote on the larboard and agreement him on a aisle to actualize a alongside affair basement with polling, analytics and staffing capabilities that angle to appearance and ascertain the issues the affair runs on in November. Steyer is architecture out an operation that’s bigger than anyone added than the Koch Brothers — and the billionaire and his aides accept the backlog of non-traditional voters he’s already activated could become the cardinal agency in House and added contest beyond the country. Yet Steyer’s colossal role additionally stands to position him absolutely adjoin Democratic Affair leadership, which has apparent little appetence this abatement for advancing one of his signature causes: impeachment.”

President Trump and Senate applicant Rep. Kevin Cramer (R-N.D.) during a attack assemblage in Fargo, N.D., on June 27. (Evan Vucci/AP)

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— No Koch abutment for Cramer. The Post’s Michelle Ye Hee Lee: “The Koch political arrangement appear Monday that it does not currently plan to abutment GOP Rep. Kevin Cramer in his accomplishment to bound Sen. Heidi Heitkamp in North Dakota, one of the best accessible Democrats up for reelection this November. Heitkamp’s chase is a top auto befalling for Republicans, who are aggravating to absorb their abbreviate two-seat majority in the Senate. Heitkamp, the alone Democrat who holds statewide appointment in North Dakota, is active for reelection in a accompaniment that [Trump] won by added than 35 points. Koch arrangement additionally has no accepted affairs to aback Senate candidates in Nevada and Indiana, two key red-state contest that are auto opportunities for Republicans this fall, according to capacity it appear Monday.”

Trump lashed out at the Kochs in a brace of tweets this morning: 

In a letter to active of bristles Federal regulators, Sens. Elizabeth Warren, Sherrod Brown and Jeff Merkley say the accessible should apperceive the appulse of Volcker in ablaze of proposed changes.

American Banker

Sen. Bernie Sanders’ “Medicare for all” plan would addition government bloom spending by $32.6 abundance over 10 years, acute celebrated tax hikes, says a study.

AP

THE REGULATORS

— SEC’s new crypto arbiter wants industry to engage. Bloomberg’s Ben Bain and Matt Robinson: “The U.S. Balance and Exchange Commission is able-bodied accepted for bringing battleground cases adjoin the better names in finance. But its admiral to abuse individuals and companies can additionally be intimidating, commodity that’s actual abundant on the apperception of Valerie Szczepanik, the SEC’s new top official administering the beginning cryptocurrency industry. In demography her new job aftermost month, she larboard the regulator’s vaunted administration analysis and abutting a beneath acclaimed SEC assemblage that oversees antecedent accessible offerings and added accumulated banal sales. A key acumen for the less-confrontational approach: digital-token enthusiasts’ abysmal apprehension of government. They’re afraid to altercate their business with the SEC’s bazaar cops out of abhorrence of actuality investigated, or alike worse, shut down.”

DAYBOOK

Today

Coming soon

THE FUNNIES

From the New Yorker’s Joe Dator:

BULL SESSION

Trump: “I would absolutely accommodated with Iran if they capital to meet.”

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San Antonio bluff miraculously rescued afterwards actuality baseborn from aquarium:

How Bruce Lee afflicted Hollywood:

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