| Happy Wednesday and welcome back to On The Money. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line. See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N. Write us with tips, suggestions and news: slane@thehill.com, vneedham@thehill.com, njagoda@thehill.com and nelis@thehill.com. Follow us on Twitter: @SylvanLane, @VickofTheHill, @NJagoda and @NivElis. THE BIG DEAL--Trump floats more tariffs on China: The Trump administration said Wednesday that it is considering sharply increasing the level of tariffs that could hit Chinese imports into the United States -- a move that could further fuel a trade war. President Trump has asked his top trade official, U.S. Trade Representative Robert Lighthizer, to more than double planned tariffs on $200 billion of Chinese imports to 25 percent from the initially proposed 10 percent. Senior administration officials said the decision by Trump to consider a higher level of tariffs comes after China's continued refusals to change its trade behavior and treat U.S. companies in a more market-based manner. "We have been very clear about the specific changes China should undertake," Lighthizer said in a statement. "Regrettably, instead of changing its harmful behavior, China has illegally retaliated against U.S. workers, farmers, ranchers and businesses," he said. Instead, the officials said, China has retaliated against U.S. tariffs that Trump says are necessary to counter Beijing's unfair trade practices. The Hill's Vicki Needham breaks it down here. - Hearings are scheduled for later this month on what $200 billion in Chinese products the U.S. could target, where there will be a chance to comment on the proposed 25 percent tariffs, the officials said.
- The president also has warned about a third round of $200 billion in tariffs.
- Trump has already hit China with tariffs of $34 billion -- a move that China matched -- with another round of tariffs worth $16 billion in the pipeline.
- China said earlier Wednesday that "blackmail" from the U.S. won't work and warned it would retaliate if President Trump moves forward with his plan to impose 25 percent tariffs, Reuters reported.
More from the frontlines of the trade war: - A bipartisan group of senators introduced legislation on Wednesday that would overhaul the Section 232 process that President Trump is using to impose steep tariffs on imports from U.S. allies.
- AFL-CIO chief Richard Trumka said Wednesday that President Trump's tariffs are a step in the right direction and believes they can lead to rewriting the rules of global trade. But he Trump's tariffs should be more targeted.
LEADING THE DAY Senate GOP battles for leverage with House on spending: The Senate is taking significant steps to lower the odds of either a government shutdown or massive omnibus spending package --all while giving itself more leverage in negotiations with the House. Senate Majority Leader Mitch McConnell (R-Ky.) on Tuesday said he had an agreement with Senate Democrats to pass a big domestic spending bill covering appropriations for the departments of Labor, Education, and Health and Human Services. Senate Republicans believe that passing their bills early will put pressure on House Republicans to agree to their versions of the spending bills. That would mean dropping so-called policy riders on such issues as cutting off federal funding to Planned Parenthood -- a thorny issue in House GOP politics. Yet asking conservative Republicans to drop battles over policy riders will be challenging. It's also a challenge for retiring Speaker Paul Ryan (R-Wis.), who will be seeking to hold his caucus together ahead of the midterms. The Hill's Niv Elis and Alexander Bolton walk us through it here. The Senate also cleared a second appropriations measure funding four federal departments on Wednesday as it works to meet a Sept. 30 deadline for keeping the government open. In a 92-6 vote, the Senate approved a "minibus" funding the Agriculture, Transportation, Housing and Urban Development (HUD) and Interior Departments. The $154.2 billion measure also provides funding for financial services and general government. Niv and Jordain Carney tell us more about it here.
US businesses hire 219,000 in July: U.S. businesses added 219,000 jobs in July, a positive sign amid tightening labor market, according to a private survey released on Wednesday. Hiring hit the fastest pace since February and was higher than the 181,000 jobs posted in June, on a boost from the Republican tax package and increases in government spending, according to payroll processor ADP. So far this year, employers have added 1.4 million jobs for an average of nearly 206,000 jobs a month. "The labor market is on a roll with no signs of a slowdown in sight," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. "Nearly every industry posted strong gains and small business hiring picked up," Yildirmaz said. Vicki Needham breaks down the data here. MARKET CHECK: Reuters: "The S&P 500 and Dow slipped on Wednesday as gains in Apple shares were offset by a drop in energy and industrial companies, while the U.S. Federal Reserve remained on course for an expected interest rate hike in September. "The Dow Jones Industrial Average fell 81.37 points, or 0.32 percent, to 25,333.82, the S&P 500 lost 2.93 points, or 0.10 percent, to 2,813.36 and the Nasdaq Composite added 35.50 points, or 0.46 percent, to 7,707.29. Of the 11 major sectors of the S&P 500, eight ended the session in negative territory." GOOD TO KNOW
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