Congressional Republicans have proved flexible in accommodating themselves to President Trump’s leadership. But on one key issue — trade — a significant chunk of the party is still resisting.
The latest: Half of the Senate GOP is urging Trump to reconsider his year-old decision to yank the United States from the Trans Pacific Partnership. In a Friday letter, 25 of them encouraged him to “work aggressively” to renegotiate terms and rejoin the sweeping pact with 11 other Pacific Rim nations that the Obama administration originally organized. The push comes as the final version of the deal was released Wednesday.
Trump himself cracked the door open for this particular appeal when he dangled the possibility of reviving U.S. participation in the agreement during a CNBC interview at the World Economic Forum in Davos. “I would do TPP if we were able to make a substantially better deal,” the president said. “The deal was terrible, the way it was structured was terrible. If we did a substantially better deal, I would be open to TPP.”
But Trump has repeatedly taken steps indicating he’s itching for confrontations with trading partners that will make good on his protectionist campaign talk. Consider: The administration slapped tariffs on imports of washing machines and solar panels last month; is engaged in a tense renegotiation with Canada over the North American Free Trade Agreement; and is eyeing stiff penalties on imported steel and aluminum and a broadside against China for alleged intellectual property theft.
Republicans on the Hill, backed by big business groups representing multinational companies that benefit from free trade, have raised alarms. Trump’s trade feints dominated the conversation at the Senate Republican strategy session last month, Politico reported at the time. Then, hours before Trump delivered his first State of the Union address, 36 of them sent him a letter urging him not to withdraw from NAFTA.
This week, Sen. Chuck Grassley (R-Iowa) said such a move would set off an “agricultural depression.” And as the Washington Post’s Heather Long points out, many of the signatories to the Friday letter on the TPP hail from states dependent on farming.
While Trump’s Davos chatter about dusting off TPP participation may not come to much, it is worth noting that besides the NAFTA talks, all of the other recent trade moves by the Trump administration in one way or another touch China. Among the president’s hawkish trade whisperers, U.S. Trade Representative Bob Lighthizer, a China specialist, is “a first among equals,” Chris Krueger of Cowen Washington Research wrote clients in a recent note, adding Lighthizer is making the case internally that “China is really all that matters and if we do not do something now, we never will. This is not about starting a trade war - we are IN a trade war and losing badly.”
So the lawmakers behind the TPP letter employ China to make their case, arguing as the Obama administration did quietly that participating in the agreement would help the United States check China’s rising influence in its own sphere.
It's a long shot — and only one front in the fight Republican free-traders will wage if the administration continues pressing a protectionist agenda this year.
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— Dow sheds 254. CNBC's Fred Imbert: "The Dow Jones industrial average fell sharply on Tuesday, pressured by a steep decline in Walmart shares and a rise in interest rates. The 30-stock index closed 254.63 points lower at 24,964.75 — snapping a six-day winning streak — with shares of Walmart shedding 10.2 percent. The retail giant's stock posted its biggest decline since January 1988. The S&P 500 pulled back 0.6 percent to 2,716.26, with consumer staples declining more than 2 percent. The broad index also closed lower for the first time in seven sessions. Walmart was the biggest decliner in the S&P 500. Kroger and Kraft Heinz, which are also in the staples sector, were among the worst-performing stocks in the index."
Money managers think worst is yet to come. Bloomberg's Lu Wang: "If you think the tremors that struck equities this month have yet to play themselves out, you’re not alone. About 57 percent of investors surveyed by Strategas Research Partners expect the S&P 500 Index to break the intraday low of 2,533 reached on Feb. 9, while the rest say the market has bottomed for the year after a two-week selloff sent the index to its first 10 percent correction since 2016... The survey highlights elevated levels of doubt among professionals even as a weeklong advance helped the S&P 500 claw back half of its losses. That may make sense given one catalyst that triggered the selloff, rising bond yields, hasn’t gone away. Strategists from Bank of America and Morgan Stanley are now warning that too much growth will set the stage for future deceleration."
— Fed to solve "further" mystery. Bloomberg's Steve Matthews: "Federal Reserve officials added the word 'further' twice to their January statement. On Wednesday, investors may find out why. At Chair Janet Yellen’s last meeting Jan. 30-31, the central bank pledged twice to make 'further gradual adjustments' in interest rates as opposed to just 'gradual adjustments' at the prior gathering. While the language was consistent with adding more emphasis to the plan for rate hikes, the minutes of the closed-door meeting, due Wednesday, will probably give details on what message officials wanted to send with the wording tweak."
— Treasury issues OLA report. The department is finally rolling out its findings on Dodd-Frank's "orderly liquidation authority," the power that the law handed the FDIC to wind down failing financial institutions. The biggest banks favor keeping the provision in place — Citi, for example, has argued to Treasury that substantially weakening it could invite retaliatory action from European regulators — but conservative Republicans say it enshrines in law the notion that Wall Street's most powerful firms are too big to fail.
— Cotton's argument for fewer legal immigrants: Robots. The Post's Heather Long: "Sen. Tom Cotton (R-Ark.) last week helped kill the bipartisan immigration deal in Congress. He didn't think the bill went far enough in transforming the U.S. immigration system. Like President Trump, Cotton thinks the United States should cut legal immigration. The senator's reasoning? Well, part of it seems to be that robots are coming for our jobs. 'It can't simultaneously be true that robots will take all the jobs & that the West needs millions of new immigrants to do the grunt work,' tweeted Cotton in late January, quoting a Wall Street Journal op-ed from a conservative commentator. The senator repeated that argument last week when a reporter at Vox asked him why he is so adamant about cutting legal immigration, a big shift from the GOP's traditional stance of accepting legal immigrants and fighting only illegal immigration."
— Rs and Ds urge Ex-Im action. The Hill's Vicki Needham: "A bipartisan group of 68 House lawmakers are urging Senate leaders to get the Export-Import Bank running at full speed again. Reps. Denny Heck (D-Wash.) and Chris Collins (R-N.Y.) on Tuesday sent a letter with 66 of their colleagues to Senate Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Charles Schumer (D-N.Y.) urging the upper chamber to quickly confirm four nominees to the Ex-Im Bank’s board of directors. 'We believe the Senate should move forward expediently in approving these nominees so that Ex-Im can continue to play the important role it has in past years, supporting U.S. exports and creating and maintaining U.S. jobs,' the letter said."
— Kushner vs. Kelly for access. NYT's Julie Hirschfeld Davis and Maggie Haberman: "Jared Kushner, President Trump’s son-in-law and senior adviser, is resisting giving up his access to highly classified information, prompting an internal struggle with John F. Kelly, the White House chief of staff, over who should be allowed to see some of the nation’s most sensitive secrets, according to White House officials and others briefed on the matter. Mr. Kushner is one of dozens of White House officials operating under interim security clearances because of issues raised by the F.B.I. during their background checks, according to the officials, who spoke on the condition of anonymity to discuss the clearances. The practice has drawn added scrutiny because of Rob Porter, the former staff secretary who resigned under pressure this month after domestic abuse allegations against him became public."
— Administration eyes student debt relief. WSJ's Josh Mitchell and Katy Stech Ferek: "The Trump administration indicated Tuesday it is considering allowing more Americans to erase student debt in bankruptcy. A decades-old federal law prevents Americans from discharging student debt in bankruptcy court unless they prove to a judge’s satisfaction that they face an “undue hardship,” such a stringent standard that few borrowers even try. The Trump administration can’t change the law without congressional approval. But it can decide how aggressively to fight a borrower’s request to cancel loans in court."
— Don Jr. defends Trump businesses. AP's Muneeza Naqvi: "Donald Trump Jr. said that any talk of his family profiting from his father’s presidency is 'nonsense' as he embarked on a trip to India that has raised ethical concerns about using the name of the American president to promote international business ventures. The eldest son of President Donald Trump, who is in India to meet the promoters and buyers of Trump brand luxury homes in the country, said his family is actually missing out on business opportunities because his father pledged to conduct no new foreign business while he was in office."
— Russian oligarch's son-in-law pleads guilty. The Post's Spencer Hsu and Roz Helderman: "The Dutch son-in-law of one of Russia’s wealthiest men pleaded guilty Tuesday in federal court in Washington to making false statements in special counsel Robert S. Mueller III’s probe of Russian interference in the 2016 U.S. presidential election. Alex van der Zwaan was charged with lying to the FBI about his contacts with Rick Gates, who served as a top official on President Trump’s campaign and a longtime business partner of former campaign chairman Paul Manafort. Based in London, van der Zwaan worked for the law firm Skadden, Arps, Slate, Meagher & Flom, which worked with Manafort and Gates when they served as political consultants in Ukraine. Van der Zwaan is the son-in-law of German Khan, a billionaire and an owner of Alfa Group, Russia’s largest financial and industrial investment group."
— SCOTUS stiff-arms Fannie, Freddie investors. Reuters's Lawrence Hurley: "The U.S. Supreme Court on Tuesday declined to revive litigation in which shareholders accused the federal government of overstepping its authority when it restructured mortgage finance firms Fannie Mae and Freddie Mac following the 2008 housing crisis. The justices left in place a lower court’s 2017 ruling that the investors, led by hedge fund Perry Capital, could not pursue legal claims accusing the government of unlawfully channeling profits from Fannie Mae and Freddie Mac to the U.S. Treasury Department."
— Judge rejects AT&T request for DOJ docs. The Post's Brian Fung: "A federal judge has ruled against AT&T in its effort to force the Justice Department to reveal whether President Trump inappropriately interfered with a regulatory review of the telecom giant's $85 billion Time Warner merger. The ruling on Tuesday from Judge Richard Leon rejects AT&T's argument that the government has singled out the company for special scrutiny. The move blocks an attempt by AT&T to draw Trump into the legal battle by raising questions as to what, if any, pressure he may have placed on antitrust regulators to stop the acquisition.
AT&T had requested that Leon compel the Justice Department to provide a log of any communications that may have transpired between the White House and Attorney General Jeff Sessions, as well as communications that could have taken place between Sessions and the department's antitrust team."
— Puerto Rican debt fight rages on. The Post's Steven Mufson: "The $16 billion aid package that Congress approved for Puerto Rico as part of the spending deal this month came as a relief to the territory’s government. It also came as a relief to its bondholders. The price of Puerto Rican commonwealth bonds has soared since Congress passed the rescue package. Though the bankrupt territory has halted interest payments on its bonds, investors — including hedge funds — drove up the price of the general obligation bond due in 2035 by 11 percent on Feb. 14. The average price of the bond Friday was 32.01 cents on the dollar, up 26 percent for the week.
The source of investors’ hopes is a new Puerto Rican fiscal plan issued Feb. 12 that sharply raised the forecasts for cash flow and long-range sustainable debt that the territory had made before Congress acted. By fiscal 2023, the government will accumulate a $2.8 billion surplus, the plan predicts."
— Maybe banks shouldn't regulate gun purchases. American Banker's Rob Blackwell: "If Congress won’t ban assault weapons, banks should do so on their own. That was the argument made by The New York Times’ Andrew Ross Sorkin, who suggested credit card companies, processors and big banks including JPMorgan Chase and Citigroup, should 'effectively set new rules for the sales of guns in America.' Sorkin’s aim would be for banks to significantly restrict the sale of assault weapons. It’s an intriguing notion, one that immediately appealed to many gun control advocates who are frustrated by congressional inaction. Unfortunately, it’s also dangerous.
In essence, Sorkin’s proposal would be using banks to circumvent the political process, asking them to effectively ban the purchase of something that is legal. In doing so, it would elevate banks’ role to adjudicate a political dispute — and set a worrying precedent that could be employed in other cultural flash points."
Women make up only about a fifth of employees in the oil and gas industries, reports Bloomberg Gadfly's Liam Denning. Here's a chart shared via Bloomberg Gadfly editor Beth Williams Liou:
The Peterson Institute for International Economics holds an event on rebuilding macroeconomic theory.
- The Center for Strategic and International Studies holds an event on the economic impact of cybercrime.
- The Council on Foreign Relations’s World Economic Update is scheduled.
- The Securities and Exchange Commission holds a meeting.
- The Washington International Trade Association holds an event on tax, trade and investment on Thursday.
- The Council on Foreign Relations holds an event on “Human Capital and the Future of Economic Growth and Security” on Friday.
- The Brookings Institution holds an event with former Fed chairs Janet Yellen and Ben Bernanke on Feb. 27.
- The Senate, Health, Education, Labor and Pensions committee holds a hearing on the nomination of John F. Ring to be a member of the National Labor Relations Board on March 1.
The Post's Samantha Schmidt writes on this heartbreaking cartoon about school shootings by Vancouver-based artist Pia Guerra:
President Trump says he wants a ban on bump stocks:
Donald Trump Jr. arrived in India Tuesday for a week-long trip to promote his family's real-estate projects:
Students from Marjory Stoneman Douglas High School in Florida traveled to the state capital to advocate for tighter gun control laws: