Publications

The New York Times reports that the EU’s top trade official today said that the EU would be willing to remove all tariffs on cars and other industrial products as part of a trade deal with the U.S. The EU would require the U.S. to zero out all tariffs on foreign vehicles as well, though it is unclear if a narrow deal between the two trading partners would breach WTO rules. NYT

The Wall Street Journal reports that the U.S. International Trade Commission has blocked the Trump administration from implementing tariffs on Canadian newsprint. The ITC ruled unanimously that Canadian newsprint imports did not cause “material injury” to U.S. paper producers, meaning that the tariffs will no longer be a headwind for U.S. newspapers, many of which had cut jobs in response to the tariffs. WSJ

The Wall Street Journal reports that Federal Reserve officials at their most recent meeting signaled that they are likely to raise interest rates in September. Most Fed officials see four rate hikes this year, though they also highlighted the risk from escalating trade disputes, which could be a headwind to growth and require slower rate increases. WSJ

Christopher Matthews of the Wall Street Journal writes that the hottest new area for investment in the oil industry is companies that handle drilling wastewater. Fracking in the Permian Basin alone produces over 600 million gallons of wastewater per day, and companies now are building new pipelines to transport the water, as opposed to trucking the water away as in the past. WSJ

The Wall Street Journal reports that Dallas Fed President Robert Kaplan says that the Fed should move ahead with gradual rate increases due to a very strong job market and firming inflation. Kaplan also noted that bond market developments may be signaling that the current expansion is getting long in the tooth. WSJ

The Wall Street Journal reports that the Trump administration is delaying its investigation into whether to impose auto tariffs due to ongoing negotiations with the EU, Canada, and Mexico. Commerce Secretary Wilbur Ross has said that the possibility of negotiating better trade deals with key trading partners has reduced the urgency of the automobile investigation, though automobile tariffs have received widespread opposition. WSJ

Former chair of the Council of Economic Advisers Jason Furman writes in a Wall Street Journal op-ed that the Federal Reserve should raise “countercyclical capital-buffer rates,” which dictate the amount of extra equity and cash banks must hold. Furman points out that banking regulation is naturally pro-cyclical, meaning that the Fed should implement policies now that help banks avoid sharply tightening credit standards during the next downturn. WSJ