The daily business briefing: August 2, 2019

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1. Trump says he'll impose new tariffs on Chinese goods in September
2. Labor Department reports economy gained 164,000 jobs in July
3. Senate approves $320 billion budget deal lifting debt ceiling
4. Stock futures fall, extending losses after Trump tariff announcement
5. Defense secretary reviews cloud-computing contract Amazon seeks

published 2 August 2019

1. Trump says he'll impose new tariffs on Chinese goods in September

President Trump said Thursday that he would impose 10 percent tariffs on another $300 billion worth of goods imported from China next month, scrapping a trade-war truce he had struck with Chinese President Xi Jinping in June. Stocks had been up sharply, but the news sent them plunging. Trump said he was going ahead with the new tariffs starting Sept. 1 partly because China had not fulfilled a promise to buy more U.S. agricultural products. Trump had already hit China with 25 percent levies on $250 billion worth of its exports to the U.S. Nearly all Chinese imports will now be affected by new tariffs. China threatened countermeasures. "We won't accept any maximum pressure, intimidation or blackmail," Chinese Foreign Ministry spokeswoman Hua Chunying said.

The Labor Department reported Friday that U.S. employers added 164,000 non-farm jobs in July, just below the 171,000 jobs forecast by economists surveyed by MarketWatch, and in line with the expectations of those polled by Reuters. The gains marked a slowdown from June's surge, although that month's growth was revised down from 224,000 jobs to 193,000 jobs. The strong but lower gains were not expected to affect the rising likelihood that the Federal Reserve will cut interest rates again in September to boost the economy, as President Trump's escalating trade war with China threatens to slow economic growth. The yearly pace of hourly wage gains edged up to 3.2 percent from 3.1 percent. The unemployment rate remained unchanged at 3.7 percent, near a 50-year low.

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The Senate on Thursday passed a $320 billion budget deal that increases spending caps and raises the debt ceiling over the next two years. The 67-28 vote came after many fiscal conservatives expressed concerns about the deal struck between House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steve Mnuchin, noting that it could add up to $1.7 trillion to the deficit over a decade. Senate Majority Leader Mitch McConnell (R-Ky.) reportedly struggled to wrangle support from Senate Republicans. Just 65 Republicans voted for the measure when it passed in the House last week. Ahead of the vote, President Trump tweeted his support for the "phenomenal" deal, urging Republicans to "go for it," saying "there is always plenty of time to CUT!" Trump is expected to sign the deal.

U.S. stock index futures fell further early Friday in ongoing fallout over President Trump's announcement that he would impose a 10 percent tariff on another $300 billion in Chinese imports starting next month. The losses deepened after the release of the July jobs report. Futures for the Dow Jones Industrial Average were down by 0.4 percent. Those of the S&P 500 and the Nasdaq fell 0.4 percent and 0.8 percent, respectively. The Dow had been up by as much as 311 points on Thursday before Trump said he would hit China with the new levies, breaking a truce in the trade war between the world's two biggest economies. The Dow then made a U-turn, closing down by 281 points, or nearly 1.1 percent.

Newly installed Defense Secretary Mark Esper is reviewing a cloud-computing contract process at the direction of the White House after President Trump said it unfairly favored Amazon, according to Thursday news reports. The Joint Enterprise Defense Infrastructure (JEDI) deal is expected to be awarded to Amazon or Microsoft. It will be worth as much as $10 billion over a decade. "Secretary Esper is committed to ensuring our warfighters have the best capabilities, including Artificial Intelligence, to remain the most lethal force in the world, while safeguarding taxpayer dollars," Defense spokeswoman Elissa Smith said. "No decision will be made on the program until he has completed his examination."

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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.