US gains as Senate Passes Tax Relief

Tax Bill

President Trump has been pressing for a major legislative win before the end of the year, and it looks like he’ll get tax reform all wrapped up in time for Christmas. The Republicans have pushed tax legislation through the House and the Senate at breakneck speed. After a false start on Friday, the US Senate passed a tax reform bill on the weekend. The 51-49 margin was razor thin, with 51 Republicans voting yes, against 48 Democrats and 1 Republican. Republican lawmakers hope to have Trump sign a bill before the end of the year. The Senate and House must now reconcile their two bills, and the new uniform bill will then have be passed in both houses. Investors are pleased with the bill, and the US dollar has responded to the vote with broad gains.

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Are the bumpy Brexit talks back on track? Prime Minister May and European Commission President Jean-Claude Juckner are meeting in Brussels, hoping to move closer to wrapping up the first phase of the talks. Britain wants to move to talk trade with the Europeans, and has given in on EU demands of a divorce bill around EUR 50 billion. Still, two thorny non-trade issues have yet to be resolved:

  1.  One is the border between the UK (Northern Ireland) and Ireland, which is a member of the EU. The UK will clearly not remain in a customs union with the EU, but Ireland is insistent that there not be a hard border.
  2.  The second issue is whether the European Court of Justice will have a role protecting European citizens in the UK. The EU is in favor of a role for the court, while many British lawmakers feel that such a move would impinge on British sovereignty.