President Trump’s drive to overhaul the North American Free Trade Agreement just hit a big skid. The renegotiation of the pact is set to blow through a key deadline today as trade emissaries remain stuck on major issues.

The missed deadline means the Trump administration is unlikely to deliver a reworked agreement by the end of the year. And with control of Congress next year and beyond up for grabs, the extended timeline sheds serious doubt on whether a new NAFTA pact can be struck, jeopardizing one of Trump's central campaign themes.

What happens next is hardly clear. Representatives from the United States, Mexico and Canada to varying degrees all say a deal is still possible. But the top negotiators for all three aren’t scheduled to meet again for another two weeks — at an Organization for Economic Cooperation and Development session in Paris. 

In the meantime, even the meaning of today’s deadline remains disputed among those close to the process. Speaker Paul Ryan (R-Wis.) reiterated yesterday the administration needs to give him notice of a deal today to meet the procedural demands for an up-or-down vote in Congress this year. “There’s a timeline that has to be adhered to,” he told reporters. “We can’t work a bill unless we have an agreement that’s in writing that we can work, and that hasn’t occurred yet.” 

The administration evidently agrees. In a Wednesday meeting with the New Democrat Coalition, a group of pro-trade House Democrats, U.S. Trade Representative Robert Lighthizer said he deferred to Ryan’s timeline, a person familiar with the meeting says. 

Yet others pushing for a rewiring of the 24-year-old trade pact say that timing is arbitrary, and negotiators still have weeks to continue their work. “ ‘The calendar made me do it’ is not an excuse to quit on the American worker,” Rep. Rosa DeLauro (D-Conn.) said Wednesday in a conference call organized by Public Citizen and the AFL-CIO. 

Disputes over auto manufacturing remain front and center. Namely, American negotiators have been insisting on new standards for how much workers are paid and where auto parts originate. But there are other significant  rifts: on Canadian and Mexican access to U.S. government projects, on whether the deal will sunset, and the process for resolving disputes.  

Trump remains a wild card atop the negotiations. He has claimed the authority to withdraw from the pact unilaterally at any time. And, as we wrote here last week, the president has frequently tied the matter to his frustration with the U.S.-Mexican border — a linkage he made again on Wednesday. From the New York Times’s Julie Davis: 

Trump's failure to renegotiate a better deal for American workers, as he pledged to do on the campaign trail, also joins a pile of broken populist promises that Democrats are poised to highlight as the midterm season swings into higher gear.

Whether that compels the president to push negotiators to redouble their efforts — or to walk away entirely, to prove his point that NAFTA is at the “center of the catastrophe” that hollowed out American manufacturing might — could go a long way toward determining the future of the deal. 


Williams: About time for Fed to stop market hand-holding. Bloomberg's Jeanna Smialek: "That’s the message from John Williams, president of the Federal Reserve Bank of San Francisco, who takes the helm of the central bank’s powerful New York branch on June 18. In an interview on Tuesday, he said he thinks the time is approaching to phase out forward guidance -- the nearly decade-old practice of pledging continued easy monetary policy. The strategy was used to calm investors in the depths of the financial crisis, and the Fed continues to say rates will remain below levels likely to prevail over the longer run, even as it lifts borrowing costs to prevent overheating. 'We can’t keep talking about policy normalization once we’re around what we think of as a neutral interest rate,' Williams said in Minneapolis, referring to the level of interest rates that neither slows nor speeds up the economy. 'So I think this forward guidance, at some point, will be past its shelf life.'"

Reinhart: Emerging markets worse off than in the crisis. Bloomberg News's Ben Bartenstein: “While money managers from Goldman Sachs Group Inc. to UBS Wealth Management still tout investing opportunities in emerging markets, the asset class has one notable critic: Harvard professor Carmen Reinhart. The Cuban-born economist points to mounting debt loads, weakening terms of trade, rising global interest rates and stalling growth as reasons for concern. In fact, developing nations are worse off than during their two most recent moments of weakness: The 2008 global financial crisis and 2013 taper tantrum, when equities endured routs of 64 percent and 17 percent respectively. 'The overall shape they’re in has a lot more cracks now than it did five years ago and certainly at the time of the global financial crisis,' Reinhart said.”

Retail and technology stocks led Wall Street higher on Wednesday and the small-cap Russell 2000 hit a record peak, even as a rise in U.S. bond yields to an almost seven-year high suggested more competition for equities and investors fretted over geopolitics.
Institutional investors shed shares of Bank of America Corp, Citigroup Inc. and JPMorgan Chase & Co. last quarter just as the S&P 500 Index declined amid questions about the health of the Trump trade and the longevity of the bull market.


Mnuchin, Navarro got in screaming match in Beijing. The Post's Damian Paletta: "Two top trade advisers to President Trump had an expletive-packed shouting match during their trip to Beijing earlier this month, three people familiar with the exchange said, part of an ongoing turf war that is dividing the team negotiating new trade arrangements with China. The fight erupted when senior White House adviser Peter Navarro complained to Treasury Secretary Steven Mnuchin about being excluded from key meetings with Chinese leaders... The two argued about the team’s internal dynamic and whether it was functioning adequately... The unresolved feud has contributed to the White House’s uneven approach to its trade negotiations with China in recent days, as White House officials have given different, at times contradictory descriptions about the discussions’ aims and what is and what isn’t up for debate."

Navarro will participate in China talks. Bloomberg's Jennifer Jacobs: "Navarro will take part in talks this week with China’s top economic envoy aimed at defusing a brewing trade war with the U.S., a White House official said, indicating a shift from earlier plans. Navarro had initially been excluded from the negotiations with Chinese Vice Premier Liu He over concerns about his behavior on a trip to Beijing two weeks ago as part of the trade delegation, two administration officials said. It isn’t clear why the administration decided to reinstate him in the talks or what role he’ll play."

U.S., China consider breaking up. NYT's Keith Bradsher: "As a top Chinese economic policymaker meets with the Trump administration this week in hopes of heading off a potential trade war, some officials in both countries are planning for a time when the world’s two biggest economies do not need each other quite so much any more. They are seeking nothing less than a fundamental rethinking of a trade relationship that encompasses more than $700 billion in goods and services that flow between the countries every year. Full disengagement is impossible, leaders on both sides acknowledge. But the plans being developed in Beijing and Washington anticipate a time when the economic engines of China and the United States are not so closely linked, particularly in high-tech industries. 'In the next step of tackling technology, we must cast aside illusions and rely on ourselves,' President Xi Jinping of China said last month after visiting a new computer microchip factory in the country’s center."

Trump: No backing down on ZTE. WSJ's John McKinnon: "Trump sought to counter criticism of his administration’s efforts to ease tough U.S. penalties on Chinese telecommunications giant ZTE Corp. In a series of tweets Wednesday morning, Mr. Trump pushed back against critics who have accused him of going soft on China this week in the ZTE matter. 'There has been no folding as the media would love people to believe, the meetings [with Chinese officials] haven’t even started yet!' the president tweeted."

The Post's Damian Paletta notes the tweets undercut claims by administration officials that the ZTE issue would be dealt with separately from trade matters.

E.U. leader rips Trump. The Post's Michael Birnbaum: "Even by the stressed standards of relations between Europe and the United States in the Trump era, European Council President Donald Tusk’s Wednesday criticisms were unusually cutting. At the outset of a summit of European leaders whose agenda items, point by point, have to do with the flames of crises that many Europeans see as ignited by... Trump, Tusk ripped into what he called “the capricious assertiveness of the American administration” over issues including Iran, Gaza, trade tariffs and North Korea. In comments to reporters and a subsequent tweet, he suggested the White House had lost touch with reality." Tusk's tweet: 


Cohen solicited $1 million from Qatar. The Post's Karen DeYoung, Josh Dawsey and Roz. Helderman: Michael Cohen, President Trump’s personal attorney, solicited a payment of at least $1 million from the government of Qatar in late 2016, in exchange for access to and advice about the then-incoming administration, according to the recipient of the offer and several others with knowledge of the episode. The offer, which Qatar declined, came on the margins of a Dec. 12 meeting that year at Trump Tower between the Persian Gulf state’s foreign minister and Michael Flynn, who became Trump’s first national security adviser. Stephen K. Bannon, who became White House chief strategist, also attended."

Cohen leak motivated by missing financial records. New Yorker's Ronan Farrow writes that the official who last week leaked banking records detailing Cohen's recent moves "had grown alarmed after being unable to find two important reports on Cohen’s financial activity in a government database. The official, worried that the information was being withheld from law enforcement, released the remaining documents... [The missing reports] detail more than three million dollars in additional transactions—triple the amount in the report released last week. Which individuals or corporations were involved remains a mystery."

Meanwhile, the FBI is said to be probing Cohen's deal with a South Korean aerospace firm. 

Inside the Trump Tower meeting. The Post's Roz Helderman and Karoun Demirjian: "As Donald Trump Jr. greeted his Russian-speaking guests in a conference room high atop Trump Tower in June 2016, he cut straight to the chase. 'I believe you have some information for us,' Trump Jr. said to a Russian lawyer visiting from Moscow, according to one of the attendees. Trump Jr. had been expecting dirt on Hillary Clinton, provided as part of a Russian government effort to help his father’s presidential campaign — 'potential information about an opponent,' he told congressional investigators, according to documents released Wednesday by the Senate Judiciary Committee... The new details of the June 9, 2016, meeting in Trump Tower are drawn from 2,500 pages of congressional testimony and exhibits that paint a vivid picture of how Donald Trump’s erstwhile Russian business partners collided with his presidential campaign in a single 20-minute meeting."

Giuliani: Mueller said Trump can't be indicted. The Post's Bob Costa, Josh Dawsey and Carol D. Leonnig: "Special counsel Robert S. Mueller III’s team told President Trump’s lawyers recently that prosecutors do not believe they can charge a sitting president with a crime under Justice Department guidelines, Trump lawyer Rudolph W. Giuliani said Wednesday. The special counsel’s conclusion signals that it would be left to Congress to address any finding of wrongdoing by Trump in the investigation."

And on the first anniversary of the Mueller probe, don't miss this Post interactive on what the special counsel is investigating. 

The payment by Michael Cohen to actress Stormy Daniels was made in the last weeks before the 2016 presidential election, meant to ensure Daniels would not speak about the alleged affair publicly.
David A. Fahrenthold and Jonathan O'Connell

McConnell threatens August recess. Politico's Burgess Everett: "Senate Majority Leader Mitch McConnell is seriously considering scrapping some or all of the August recess this year, according to senators and aides. The GOP leader told Republican chairmen on Wednesday that he would speak to Senate Minority Leader Chuck Schumer (D-N.Y.) about whether Democrats are willing to cooperate at all on spending bills and... Trump’s nominations in order to avoid scuttling this year's four-week break. McConnell also said he needed to speak with Trump about the matter; the president said last week the Senate should “not go home” until it completes its work on spending bills and funding the border wall."

Teacher protests challenge the Koch vision. Bloomberg's Margaret Newkirk and Martin Braun: "On May 16, at least 29 North Carolina public school districts serving 865,000 students closed their doors as teachers walked out. The complaints have become familiar: overcrowded classrooms, teachers forced to hold down two jobs, and textbooks so old that they call the internet new... A crowd of 19,000 marched through Raleigh... The protest was the fifth large-scale demonstration in less than three months in states with Republican-led legislatures, most of them organized on the internet in places where unions are weak. They began in February in West Virginia and spread to Kentucky, Oklahoma, and Arizona; teachers in all those places have won raises or new funding... Many of the walkout states had spent the post-recession years pursuing the starve-the-beast policies advocated by Charles and David Koch, the Americans for Prosperity advocacy group they helped found, and the small-government Tea Party movement they funded."


The MBS guide to getting rich. WSJ's Justin Scheck and Bradley Hope: "Prince Mohammed bin Salman was a teenager when he realized his father, Prince Salman bin Abdulaziz, was, by Saudi royal standards, a pauper. While other sons of Saudi Arabia’s founder grew wealthy from government business, Salman, then the governor of this capital city, supported his family with handouts from his brother the king. Mohammed decided to change that, he later told associates. Nearly two decades later, Salman is king, and Mohammed bin Salman, known as MBS, is the crown prince who says he wants to crack down on corruption and remake the Saudi economy along more modern lines. Prince Mohammed is also fantastically wealthy... How the prince amassed his wealth exemplifies ways that the autocratic kingdom, essentially a family business, continues to intermingle commercial ventures and Saudi government connections to a degree far from Western norms."

Hedge fund managers shift billions over carried interest concern. Bloomberg's Lynnley Browning and Miles Weiss: "Late last year, some hedge fund managers raced to protect their personal fortunes from being carved up by the Republican tax law. David Tepper, who runs Appaloosa Management and may soon own the Carolina Panthers, and Ross Margolies, founder of Stelliam Investment Management, were among the managers who took action... They collectively shifted billions of dollars before Jan. 1, when a provision took effect requiring a longer holding period to qualify for the tax break on carried interest profits. Their concern? That the vague language of the new rule makes it possible that profits that had already been paid to them, taxed and reinvested back into the fund would be lumped in with other untaxed carried interest -- and all subject to the new three-year holding period."

Tysons Corner, Loudoun and Crystal City were among those proposed by the governor.
Jonathan O'Connell
The Switch
He will meet with key regulators as soon as next week amid scrutiny of his company’s privacy practices and previous entanglement with Cambridge Analytica.
Tony Romm
One month after Flight 1380, Southwest announced its summer sale and a rebooted marketing plan.
Rachel Siegel

New FTC head rep'd payday lenders. NYT's Glenn Thrush and Jack Nicas: "The new director of the Federal Trade Commission’s consumer protection unit, a watchdog with broad investigative powers over private companies, stands out even in an administration prone to turning over regulatory authority to pro-industry players. The director, Andrew M. Smith, has recently represented Facebook, Uber and Equifax — all companies with matters before the commission — and plans to recuse himself from dozens of cases now that he has been confirmed for the post. And in 2012, Mr. Smith was also part of the legal team that defended AMG Services, the payday lender founded by the convicted racketeer Scott Tucker, whose predatory practices against impoverished borrowers eventually led to a $1.3 billion court-ordered settlement, the biggest in the commission’s history."

Fed clashes with Deutsche Bank. Bloomberg's Sridhar Natarajan and Steven Arons: "A tense scene unfolded inside Deutsche Bank AG’s Manhattan tower just hours before news began leaking that the firm was looking for a new chief executive officer. U.S. regulators on that day in late March gave senior executives a stern warning that remains in effect: Europe’s biggest investment bank, they said, must act more urgently to fix lapses described in a series of settlements with the Federal Reserve over the past few years. Their patience was wearing thin. The uneasy encounter, which was followed by another meeting between the Federal Reserve Bank of New York and Chairman Paul Achleitner, underscores a daunting behind-the-scenes challenge facing new CEO Christian Sewing. He doesn’t only have to reshape the firm, revive profits and improve morale -- he has to get regulators off Deutsche Bank’s back."

SEC: No new law needed for digital tokens. Axios: "Securities and Exchange Commission Chairman Jay Clayton doesn't seem to think the U.S. needs additional securities laws to regulate digital tokens, according to his comments on Wednesday at the National Venture Capital Association's annual meeting in D.C.: 'If it’s a security, you gotta follow the law. We managed to create an $18 trillion economy following the law, I don't know why we should change the law now.'"

A hot new initial coin offering gives investors the chance of a lifetime to make money from sun-soaked beaches and crystal-clear waters. It also provides something even more valuable: advice on how to avoid getting ripped off by fraudulent ICOs.


  • The House Financial Services Committee holds a hearing on “Community Development Block Grant-Disaster Recovery Program – Stakeholder Perspectives."
  • The Business Roundtable holds an event on infrastructure. RSVP here
  • The Consumer Financial Protection Bureau holds the spring 2018 credit union advisory council meeting.
  • Politico’s Morning Money hosts a briefing with Rep. Jeb Hensarling (R-Tex.).

From the New Yorker: 

A cartoon by @jeremywins. #TNYcartoons

A post shared by The New Yorker Cartoons (@newyorkercartoons) on


President Trump compares illegal immigrants to "animals:"

The Senate voted 52 to 47 to reverse the Federal Communications Commission decision to repeal neutrality rules, but the measure faces opposition in the House:

Will the FCC’s net neutrality repeal grind the Internet to a halt?: