The Hill’s Morning Report — Trump escalates trade war with China as talks continue

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The United States and China today will continue what one market analyst called “reality TV” trade discussions in Washington, after President Trump ratcheted up tensions by imposing higher levies on Chinese goods early this morning. 

The tariff increase to 25 percent on $200 billion in Chinese imports was ordered by the president because he asserts that China backed away from pledges made during months of negotiations with U.S. officials, a charge Beijing denies. China says it will retaliate.

{mosads}Trump, in comments on Thursday, veered between hope that a deal was still possible and enthusiasm for what he called a U.S. “alternative,” amounting to a period of tit-for-tat trade levies. The president said he might speak by phone with Chinese President Xi Jinping, after receiving what he called “a beautiful letter” from him.

China’s Ministry of Commerce, in a statement today, said the government “deeply regrets that it will have to take necessary countermeasures.” It was not specific about what actions Beijing may take. “It is hoped that the U.S. and Chinese sides will meet each other halfway and work together” to resolve their dispute, the statement added. 

Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin are expected to resume negotiations today in a last-ditch effort to make some progress.

As Sylvan Lane reports, the long-running battle over tariffs has roiled financial markets, tossed U.S. business decisions into limbo and prompted economists to project slower U.S. growth this year. The results pose risks for the president and came to a head after months of optimism from Trump about his administration’s ability to deliver a significant agreement with the Chinese on trade and intellectual property.

With no agreement in hand between the world’s two largest economies, U.S. Customs and Border Protection at 12:01 a.m. today imposed Trump’s new 25 percent duty on more than 5,700 categories of products leaving China. The Office of the U.S. Trade Representative separately added a grace period, saying seaborne cargoes shipped from China before midnight were not subject to the new tax as long as they arrive in the United States prior to June 1. Those cargoes will be charged the pre-existing 10 percent tariff rate imposed by Trump last year, according to Reuters.

The New York Times: Trump increases China tariffs as trade deal hangs in the balance.

Reuters: Investors pull more than $20 billion from stocks on “trade deal trauma,” piling money into bonds. 

Bloomberg: U.S. tariffs on imported Chinese goods to slam U.S. growth.

Reuters: China denied backtracking on provisional agreements during negotiations with U.S.

Wendy S. Cutler: If trade talks fall apart, serious problems for the global economy are expected.

The Washington Post editorial board: Trump’s biggest mistake in the trade war with China.

LEADING THE DAY

CONGRESS & INVESTIGATIONS: Senate Republicans struck a similar chord on Thursday after news emerged that Donald Trump Jr. had been subpoenaed by the Senate Intelligence Committee: What is Sen. Richard Burr (R-N.C.) doing?

As Alexander Bolton reports, while the vast majority of the Senate GOP had moved on after special counsel Robert Mueller’s report, including Senate Majority Leader Mitch McConnell (R-Ky.), who declared “case closed,” Burr fanned the flames with the subpoena — which is the first directed at any of Trump’s children — and surprised his colleagues in the process.

Within hours, it was criticized by House Minority Leader Kevin McCarthy (R-Calif.) and Sen. Rand Paul (R-Ky.), two allies of the president, before more came out against Burr’s decision on Thursday. Sen. John Cornyn (R-Texas), a committee member, told reporters that the subpoena “smacks of politics,” adding that the Intelligence Committee needs to be a politics-free zone. The president also weighed in, saying he was “very surprised” by the decision.

According to The New York Times, Burr received support from McConnell during lunch earlier Thursday for his handling of the committee despite his comments earlier in the week. He also received backing from multiple committee members, including Sens. Susan Collins (R-Maine) and Marco Rubio (R-Fla.), who argued the committee’s mission is not the same as Mueller’s.

As for Burr, he stayed quiet on Thursday when asked about the subpoena.

“I told you I’m not going to chat right now. I’m in the middle of something,” Burr told reporters while en route to lunch in the Senate dining room.

Burr has perhaps more freedom than most on the GOP side to do this given he is not running for reelection in 2022.

 

 

> Speaker Nancy Pelosi (D-Calif.) kept up her lines of attack against the Trump administration Thursday as tensions remain high between House Democrats and the Justice Department.

When asked Thursday whether she agrees with House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) that the country is in a “constitutional crisis,” she said she does due to the president’s continued shunning of congressional investigators (The Washington Post). 

“Yes. I do agree with Chairman Nadler, because the administration has decided that they are not going to honor their oath of office,” Pelosi told reporters at her weekly news conference.

Pelosi’s remarks came a day after the House Judiciary Committee voted to hold Attorney General William Barr in contempt of Congress, further escalating matters between the two sides after they tried to head off the Wednesday vote. Nadler and House Democrats had subpoenaed the full, unredacted report and its underlying evidence, which Barr balked at. The White House announced that it plans to invoke executive privilege over the redacted portions of the report.

The New York Times: A strategy emerges to counter House Democrats: Dare them to impeach.

The Washington Post: Democrats launch healthcare law rescue in face of Trump’s threat of repeal. 

> Trump threw his weight against the disaster aid bill coming to the House floor today, urging in a tweet for House Republicans to vote against it. The bill includes $17 billion in aid, including monies directed to the Midwest after severe flooding hit the region.

“House Republicans should not vote for the BAD DEMOCRAT Disaster Supplemental Bill which hurts our States, Farmers & Border Security. Up for vote tomorrow. We want to do much better than this. All sides keep working and send a good BILL for immediate signing!” he wrote.

Perspectives and Analysis: 

The Wall Street Journal: A ‘Constitutional crisis.’

Eugene Robinson: The war in Washington isn’t between Trump and Democrats. It’s between Trump and Congress.

David French: Against the persecution of Bill Barr.

The New York Times editorial board: Constitutional collision course: Is President Trump daring the Democrats to impeach him?

IN FOCUS/SHARP TAKES

WHITE HOUSE & ADMINISTRATION: Trump has placed large bets through his foreign policy, but it’s unclear where he can claim outright success. In addition to the trade war with China he sparked a year ago, North Korea has returned to weapons tests and provocations; Iran’s response to U.S. sanctions remains ominous while Trump says he can’t rule out military action against Iran; and Nicolás Maduro is still in power in Venezuela, despite muscular U.S. efforts to topple him from the presidency.

David Ignatius: Iran and U.S. mobilizations could lead to conflict if there’s a miscalculation.

North Korea: Pyongyang fired what appeared to be two short-range missiles on Thursday in its second such test in less than a week, and the United States seized a North Korean cargo ship as tensions again rose between the two countries. Trump said “nobody is happy” about the missile launches, but appeared hopeful there will be future talks with North Korea and its leader Kim Jong Un (Reuters). The ship seized by the United States is used by North Korea to transport coal in violation of sanctions, according to the administration. The cargo ship’s name? “Wise Honest” (NBC News).

Defense Department: Trump on Thursday nominated Patrick Shanahan, who has been leading the Pentagon in an acting capacity, to be his second Defense secretary.  The former Boeing executive’s confirmation process will likely be bruising (The Hill).

CEA: The president appointed Tyler Beck Goodspeed to be a member of the White House Council of Economic Advisers. A Harvard-educated economist and former Oxford professor, Goodspeed has been on the senior staff of the council, which provides economic advice and analysis to the president.

Immigration: The names of at least 13,000 asylum-seekers are on border wait lists in the United States, according to research conducted by The Associated Press in eight border cities. Asylum-seekers wait for their cases to be heard while exposed to confusing, haphazard conditions and temporary living arrangements.

Bureau of Land Management: The Trump administration, through the Bureau of Land Management’s central coast office in California, moved ahead on Thursday with a plan to allow more oil and gas drilling, including fracking, on some federal land in the state (Sacramento Bee).

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POLITICS & CAMPAIGNS: Sen. Bernie Sanders’s (I-Vt.) 2020 bid needed a shot in the arm, so he’s turned to perhaps one of the only other lawmakers as popular with progressive voters.

Sanders announced Thursday that he was teaming up with Rep. Alexandria Ocasio-Cortez (D-N.Y.) on a proposal to take on credit card companies and banks. As Niall Stanage writes, by enlisting Ocasio-Cortez, who has remained neutral in the 2020 race, Sanders is looking for a B-12 shot after he took a tumble in polling since former Vice President Joe Biden entered the race and solidified himself as the front-runner for the party’s nomination.

While looking up at Biden, Sanders also finds himself trying to fend off the next tier of candidates, including Sen. Elizabeth Warren (D-Mass.), who has seen her star rise and could challenge Sanders for progressive support. 

The proposal also has an indirect political component as Delaware, Biden’s home state, has long been known as favorable corporate turf for credit card companies.

According to a new Monmouth poll, Sanders trails Biden by 18 points in New Hampshire, while leading South Bend, Ind., Mayor Pete Buttigieg by 9 points.

 

 

Philip Wegmann: Biden echoes libertarians’s call on occupational licensing 

NBC News: ‘Magic moment’: Climate rises to the top for Democrats and gets a big new push.

The Associated Press: Buttigieg sells out fundraiser at iconic Hollywood gay bar.

Politico Magazine: Beto O’Rourke’s long history of failing upward. 

> Speaking of Warren’s star turn, she graced the cover of the new issue of Time magazine, thanks in part to her dedication to her constant stream of policy proposals.

“’I have a plan for that.’ Elizabeth Warren is betting that Americans are ready for her big ideas,” reads the cover.

“As we spoke, Warren danced in her seat, talked effusively about her family and offered a series of funny extended political metaphors borrowed from HBO’s Game of Thrones. At one point, as I struggled to formulate a question, she intuited what I was trying to ask and, conveying her readiness, extended her hands, locked her elbows and began gently flapping her arms like a bird preparing to take off in high winds. 

‘O.K., O.K., I can answer this,’ she said.  

Which might as well be a motto for Warren’s presidential campaign. She has set herself apart in a Democratic field of more than 20 candidates by offering more than a dozen complex policy proposals designed to address an array of problems, from unaffordable housing and child care to the overwhelming burden of student debt. Her anticorruption initiative would target the Washington swamp, and her anti­trust measures would transform Silicon Valley. On May 8 she unveiled a $100 billion plan to fight the opioid crisis. This flurry of white papers, often rendered in fine detail, appears to suggest a technocratic approach to governing. But in fact, her ­vision, taken as a whole, is closer to a populist political revolution.”

Elsewhere on the political scene … Stacey Abrams, despite declining a Senate run in Georgia, maintains that she is still considering a 2020 run for the Democratic nomination (Reuters) …  Wealthy author and Oprah adviser Marianne Williamson, a progressive presidential candidate, announced Thursday she qualified for Democratic primary debates in June after she reached the requisite number of donors (The Hill).

The Morning Report is created by journalists Alexis Simendinger and Al Weaver. We want to hear from you! Email: asimendinger@digital-stage.thehill.com and aweaver@digital-stage.thehill.com. We invite you to share The Hill’s reporting and newsletters, and encourage others to SUBSCRIBE!

 

OPINION

Let’s talk about how to end sexual violence, by Anita Hill, opinion contributor, The New York Times. https://nyti.ms/301Ges6

Will must-pass legislation pass? By Joseph J. Minarik, former Office of Management and Budget chief economist, opinion contributor, The Hill. https://bit.ly/2E0GvCl

U.S., Iran must both tread lightly with tensions running so high, by Ariane M. Tabatabai and Becca Wasser, opinion contributors, The Hill. https://bit.ly/2vQE94C

WHERE AND WHEN

Hill.TV’s “Rising” program, starting at 8 a.m., features 2020 presidential candidate Mike Gravel, a former Democratic senator from Alaska, talking about his campaign. http://digital-stage.thehill.com/hilltv

The House meets at 9 a.m. 

The Senate meets Monday at 3 p.m. to resume consideration of Michael J. Truncale to be a U.S. district judge for the Eastern District of Texas.

The president and first lady Melania Trump will host a White House Celebration of Military Mothers at 4:15 p.m. 

Axios’s Mike Allen interviews from 8-9 a.m. Rep. Steve Scalise (R-La.), House minority whip; Rep. Adam Schiff (D-Calif.), chairman of the House Intelligence Committee; and Cecile Richards, co-founder of Supermajority and formerly the president of Planned Parenthood Action Fund. Information is HERE.

The Bureau of Labor Statistics releases the U.S. consumer price index as well as the real earnings report, both for April, at 8:30 a.m.

The White House Historical Association begins ticket sales at 8 a.m. for its 13^th Annual Summer Concert Series, “Jazz on Jackson Place,” showcasing live musical performances on select Thursdays in June, July and August at the historic Decatur House one block from the White House. Admission includes open bar, light hors d’oeuvres and tours, plus a raffle with prizes. Information is HERE.

ELSEWHERE

➔ Facebook: Chris Hughes, the co-inventor of the tech behemoth, joined those who believe Facebook should be broken up, using a New York Times op-ed to explain his thinking. Hughes, who was CEO Mark Zuckerberg’s college roommate, joins U.S. lawmakers who have also urged antitrust action to reduce the size and influence of big tech companies, along with federal regulations to protect social media users’ privacy (Reuters). 

➔ Battling superbugs: Researchers are turning to old drugs, plants and viruses in a race to find new ways to kill disease-causing microbes before they become resistant to all existing antibiotics. But experts warn that unless the government provides incentives to profit-focused drug companies to tackle the problem, researchers’ urgent efforts will founder (Bara Vaida, Association of Health Care Journalists).

➔ Export-Import Bank: Business groups are hailing the return of the Export-Import Bank to full strength after a contentious four-year battle, even as they prepare for the next fight over the future of the credit export agency (The Hill).

➔ Stone riddle: France asks, can you decode a rock? A village in western France is offering a €2,000 euro ($2,224) prize to anyone who can decipher a 230-year-old inscription found on a rock on a remote beach. To date, the meaning of the 20 lines of writing, discovered a few years ago, is a mystery (BBC).

➔ Vatican: Pope Francis issued a new Catholic Church law on Thursday requiring priests and nuns around the world to report clergy sex abuse and cover-up allegations to church authorities without also requiring reporting to local law enforcement. Abuse victims and their advocates said it was a step forward, but essentially tasks Catholic bishops, who have been discredited for mishandling abuse for decades, with policing their own (The Associated Press).

 

THE CLOSER

And finally … Kudos to this week’s Morning Report quiz winners, who are keeping up with the British royal family and news about the birth this week of Archie Harrison Mountbatten-Windsor to Prince Harry and the former Meghan Markle, the Duchess of Sussex

This week’s quiz masters include Lorraine Lindberg, Barbara White, Dave Horsman, Linda Tillery, Patrick Kavanagh, Paula Hassinger, Elizabeth Murphy, Randall S. Patrick, David Straney, Candi Cee, Jamie Danesi, Carol Katz, Cheryl Gibson, Rose DeMarco, Rosemarie M. Soriano, Luther Berg, Connie Cacioppo, Marilyn Leland, Laura Silver, Allyson Foster and Noel St. Pre.

These winners knew or guessed that Prince Harry is sixth in the line of succession to the throne.

Queen Elizabeth II has reigned as Britain’s monarch for 67 years.

Elton John, a friend of Prince Diana’s, sang a special version of “Candle in the Wind” during her 1997 funeral.

The second-longest reigning British monarch after Queen Elizabeth II was Queen Victoria.

Queen Elizabeth II and Prince Philip now have eight great-grandchildren.