On The Money — Sponsored by Prudential — Trump blasts Europe on trade, defense spending before summit | White House to propose $200B more in China tariffs | BMW shifting some production out of US

Happy Tuesday and welcome back to On The Money, now peanut-free. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL: President Trump on Tuesday expressed new frustration with trade between the U.S. and the European Union (EU), using Europe’s trade surplus with the U.S. to question Washington’s spending on trans-Atlantic defense.

“The European Union makes it impossible for our farmers and workers and companies to do business in Europe (U.S. has a $151 Billion trade deficit), and then they want us to happily defend them through NATO, and nicely pay for it. Just doesn’t work!” he tweeted as he prepared to touch down in Brussels for the annual NATO summit.

Trump has leveled a series of attacks on NATO and the EU ahead of the summit, insisting that the Europeans have for years taken advantage of the U.S. on trade matters while failing to invest enough into their own defense.

The $151 billion trade deficit cited by Trump, however, is inaccurate. While Europe has a $153 billion trade surplus in goods, that surplus drops to $101 billion when trade in services is included. The Hill’s Max Greenwood has more here.

Meanwhile, Trump is poised to impose new tariffs on $200 billion in Chinese goods, Bloomberg reported Tuesday. The list could be released within hours or days, and the publication of the list starts a weeks-long process that includes a public-comment period and hearings, according to Bloomberg.

 ON TAP TOMORROW

• The American Enterprise Institute and Brookings Institution host an event entitled “Rethinking globalization: How do we rebuild support?,” 10 a.m.
• Senate Finance Committee: Hearing on paid family leave, 10 a.m
  House Foreign Affairs Committee: Hearing entitled “China’s Predatory Trade and Investment Strategy,” 2 p.m.

LEADING THE DAY

BMW to shift some SUV production overseas in response to tariffs: BMW said Monday that it would move production for some of its SUVs out of the U.S. as a result of new tariffs placed on the vehicles, according to The Post and Courier.

The German-based automobile manufacturer signed an agreement with its Chinese partner, Brilliance Automotive Group Holdings, to increase the number of vehicles produced in the country, according to the Charleston newspaper, with the total reaching 520,000 by 2019.

The company also said that it will raise prices for U.S.-produced SUVs sold in China because it is “not in a position to completely absorb the tariff increases” after China slapped a 40 percent tariff on U.S. car imports, according to the newspaper. The action was in response to tariffs on Chinese goods imposed by President Trump.

Record number of Americans quitting their jobs to seek better opportunities: A record number of Americans are quitting their jobs to seek better opportunities, according to Labor Department data.

The rate of U.S. employees quitting their jobs reached its highest rate in 17 years, rising from 2.3 percent in April to 2.4 percent in May, when 3.56 million Americans left their jobs.

Rising “quit rates” are considered positive because they often indicate employees are leaving their current positions for jobs with higher wages and better benefits. 

The Labor Department data show there were fewer job openings in May than there were in April, but considering April’s number of job openings was a record 6.84 million, the 6.64 million jobs available in May still indicates a strong economy

MARKET CHECK: From CNBC: “Stocks closed higher on Tuesday as the latest corporate earnings season got underway while worries of an ongoing trade war declined.

“The Dow Jones Industrial Average rose 143.07 points to 24,919.66 as DowDuPont and Procter & Gamble outperformed. The 30-stock index also posted its fourth straight day of gains. The S&P 500 gained 0.4 percent to 2,793.84 — its highest since Feb. 1 — with telecommunications and staples both rising at least 1 percent. The Nasdaq Composite closed just above breakeven at 7,759.20.”

GOOD TO KNOW

• China is raising “anti-dumping tariff rates” for some U.S. optical fiber products, Reuters reported Tuesday.
• A group of Senate Democrats is pressing President Trump’s pick to head the Consumer Financial Protection Bureau (CFPB) to explain her role in the administration’s response to Hurricane Maria.
• Global debt rose to a record $247 trillion in the first quarter, more than $29 trillion higher than the end of 2016, according to an analysis by the Institute of International Finance.
• European companies that export from China are changing the global flow of their goods to avoid higher American tariffs, a business group said Tuesday, as the impact of the U.S.-Chinese trade war spreads, according to the AP.
• Higher labor costs pose a risk to some U.S. companies already facing trade-related tensions and limited pricing power, according to The Wall Street Journal.

ODDS AND ENDS

• Tesla Inc. is planning to build a factory in China, marking a major effort by the company to expand production abroad.
• Op-Ed: Jason Furman, former White House Council of Economic Advisers Chairman, writes for The Hill “Is tax reform working? Not if you’re a worker in need of a raise.