What to Know in Washington: China Hangs Over Trump, Aussie Talks

Australian Prime Minister Scott Morrison’s lavish visit to the White House today — including the second State Dinner of Donald Trump’s presidency — comes at a critical time as both nations seek to counter China’s growing influence in the South Pacific.

A day of meetings and the formal Rose Garden dinner — the first for an Australian leader since 2006 — give Morrison the opportunity to remind Trump that new challenges to regional security are emerging seven decades after their nations’ alliance was cemented in World War II.

While China’s growing economic might is the main catalyst of Trump’s trade war, diplomats in Washington and Canberra are increasingly concerned about Beijing’s geopolitical ambitions. There are signs China’s influence is spreading beyond the South China Sea to the Pacific Islands, a region traditionally under U.S. hegemony and on Australia’s doorstep.

“Both countries have taken a long time to recognize the gravity of the challenge China poses in Asia and must now make hard choices to place real resources behind new initiatives in the region,” said Ashley Townshend, director of the foreign policy and defense program at the University of Sydney’s United States Studies Centre.

China’s growing influence in the region was displayed in the past week, when the Solomon Islands broke off diplomatic ties with Taiwan in favor of Beijing.

Both Morrison and Trump are trying to counter China’s growing reach. Late last year, Australia unveiled a $1.4 billion infrastructure fund for the region, while the U.S. joined a group that includes Japan, the European Union and the Asian Development Bank to fund projects. Secretary of State Michael Pompeo last month visited Micronesia, where he held security talks with the Pacific Island leaders. Read more from Jason Scott and Justin Sink.

Photographer: Kazuhiro Nogi/Pool via Bloomberg
Morrison and Trump, center at the Group of 20 summit in Osaka, Japan in June.

Elections & Politics

Democrats Avoid UAW Strike: The Democrats running for president have tweeted support for striking General Motors workers. They’ve issued statements that unionized workers shouldn’t lose their health care coverage during a contract impasse. But with two exceptions, the 19 candidates haven’t visited the picket lines — even though the workers are the exact kind of voters they will need to defeat Trump in crucial swing states like Michigan in next year’s election. “Where are these people at?” said Daniel Rider, a 46-year-old worker at GM’s powertrain plant in Romulus, Mich., who gives $10 a month to a United Auto Workers political action committee.

“My guess is it’s early and maybe more of a scheduling thing. If it keeps going for five, six, seven, eight, nine days, it might be something to be concerned about,” said Eddie Vale, a Democratic strategist who works for labor unions. Read more from Gregory Korte and Gabrielle Coppola.

Steyer’s Inconsistent Investments: Billionaire Tom Steyer says he’s spending his own money to run for president to slow climate change and break the political power of corporations. But some of that money comes from banking, fossil fuel and other businesses that he presents as part of the problem. His portfolio and his politics align in green-friendly companies like Ample Inc., which aims to address the energy delivery challenge for electric vehicles, and Station A, an automated clean energy development company. But the financial disclosure that Steyer was required to file with the Federal Election Commission shows that he still invests his own money in the kinds of companies whose work he rails against. Read more from Bill Allison and Tom Maloney.

Sanders First to Reach 1 Million Donors: The presidential campaign of Sen. Bernie Sanders (I-Vt.) has 1 million individual donors, making him the first candidate seeking the Democratic nomination to reach the milestone in this cycle, his campaign said today. “Our strength is in numbers, and that is why Bernie Sanders is the only candidate who is able to say his campaign will rely only on grassroots funding in both the primary and against Donald Trump,” Campaign Manager Faiz Shakir said in a statement. Read more from Emma Kinery.

Iowa Democrats Propose ‘Satellite Caucuses’: The Iowa Democratic Party will propose instituting “satellite caucuses” to let voters participate even if they can’t get to an official caucus site, according to Democratic National Committee members who have been briefed on the plan. The proposal, which would take effect for the caucuses in February, will be proposed today during a DNC Rules and By-Laws meeting. It comes after the DNC vetoed the state party’s plan to let some people participate by telephone, citing cybersecurity concerns. Read more from Tyler Pager.

Koch-Linked Group Must Show Donors: A nonprofit linked to the conservative Koch organization that spent over $20 million to elect Republican congressional candidates must disclose its donors, according to a settlement with the Federal Election Commission. The now-defunct Americans for Job Security wrote in a settlement that it should’ve registered as a regulated political action committee beginning in 2010 because it spent most of its money to influence elections. Such PACS must disclose their contributors unlike nonprofits that s ay they are mainly interested in policy issues rather than political campaigns. Read more from Kenneth P. Doyle.

Also Happening on the Hill

Zuckerberg Meets With Lawmakers, Trump: Facebook CEO Mark Zuckerberg met with Trump yesterday as he tried to sway Congress and policy makers who have been critical of the practices of the social media platform. Earlier in the day, he clashed with Sen. Josh Hawley (R-Mo.) over his company’s record on privacy and safeguarding user data. “I said to him, ‘prove that you are serious about data, sell WhatsApp, and sell Instagram.’ That’s what they should do,” Hawley told reporters after meeting with Zuckerberg. “I think it’s safe to say he was not receptive to those suggestions.” Read more from Naomi Nix, Rebecca Kern and Steven T. Dennis.

Senate Clears Autism Programs Bill: The Senate yesterday passed legislation that would authorize about $370 million annually until fiscal 2024 for research, education and intervention programs for people with autism spectrum disorder, sending the bill to Trump for his signature. The measure would allow program participants to receive assistance throughout their lives, not just in childhood, Emily Wilkins reports. Read the BGOV Bill Summary by Danielle Parnass.

Supreme Court Security Bill Proposed: Bipartisan Senate legislation aimed at providing permanent additional security for U.S. Supreme Court justices was introduced against the backdrop of what a co-sponsor called the “volatile times” we live in. Senate Judiciary Chairman Lindsey Graham (R-S.C.) and Sen. Kyrsten Sinema (D-Ariz.) are championing the measure that covers security when justices are off Supreme Court grounds. Read more from Jordan S. Rubin.

Details Sought on States’ Use of Opioid Funds: A bipartisan group of House leaders is asking 16 states how they’re using federal funds to improve opioid use disorder treatment and recovery. Leaders of the Energy and Commerce Committee, including Chairman Frank Pallone Jr. (D-N.J.) and ranking Republican Greg Walden (R-Ore.), sent letters to find out how much states have received in total, the challenges they have faced in getting funds to local communities, and if they have the ability to focus funds on the hardest hit areas in their states. Read more from Shira Stein.

Extension Granted for Trump Tax Case: Lawyers for Treasury and the House Ways and Means Committee have received an extension for the panel to file its opposition in a case over Trump’s tax returns. The extra time is needed because the Treasury Department filed new information about previously undisclosed communication between Ways and Means Democratic staffers and an analyst in the IRS Office of Legislative Affairs. The additional information is tied to a June 10 briefing that the panel staffers received from the IRS employee. Read more from Colleen Murphy.

Defense & Foreign Affairs

DOD to Speed $2.5 Billion for Wall: All of the initial $2.5 billion the Defense Department pulled from its budget earlier this year to build walls along the southern border will be contracted out for construction by the end of this month, a spokesman said. Only about $3 million is yet to be obligated for projects and in total the construction contracts will cover 129 miles of border barriers across three states. The money comes from unspent defense funds that were transferred through a counter-drug account.

Trump is ramping up efforts to build the wall, a 2016 campaign promise, before he stands for re-election next year. The Pentagon is now moving to spend another $3.6 billion pulled from military construction projects worldwide on a second tranche of border wall projects despite strong opposition in Congress. Read more from Travis J. Tritten.

• Meanwhile, Washington’s attorney general sued Trump yesterday, claiming that the administration “illegally” shifted money that Congress appropriated to protect Trident ballistic missile submarines from terrorist attack to build his wall along the Southwest border. At issue in the state’s lawsuit are eight submarines carrying multiple nuclear weapons based at Naval Base Kitsap-Bangor in Puget Sound. Paul Shukovsky has more.

Esper Warns Allies of Relying on Chinese 5G: Secretary of Defense Mark Esper warned that NATO allies utilizing 5G telecommunications networks developed by China could put military and intelligence relationships at risk and essentially were providing Beijing some control over their own communications systems. “Every Chinese company has the potential to be an accomplice in Beijing’s state-sponsored campaign to steal technology,” Esper said in a speech yesterday. He was speaking at a conference hosted by the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency. Alyza Sebenius has more.

U.S.-China Talks Resume: Trade negotiators from the U.S. and China resumed face-to-face talks in Washington, as the Trump administration said a Chinese delegation will visit American farmlands next week. Talks between a Chinese delegation led by Liao Min, a vice minister for finance, and Deputy U.S. Trade Representative Jeffrey Gerrish began yesterday and are scheduled to continue today. The negotiations are expected to lay the ground-work for top-level negotiations between U.S. Trade Representative Robert Lighthizer, T reasury Secretary Steven Mnuchin and Vice Premier Liu He in October in Washington. Read more from Sarah McGregory and Jenny Leonard.

Movers & Shakeups

Byard Nomination for FEMA Withdrawn: A Senate panel will move quickly to approve the expected nomination of Peter Gaynor to permanently lead the Federal Emergency Management Agency, Homeland Security and Governmental Affairs Chairman Ron Johnson (R-Wis.) said in an interview yesterday, Michaela Ross reports. The White House pulled the nomination of Jeffrey Byard to be FEMA chief earlier yesterday after it stalled in the Senate amid allegations of his involvement in a personal altercation. Johnson said his committee looked into the issue after originally approving the nomination in June.

Gaynor, who has not yet been formally nominated for the roll, has served as acting administrator since March and was confirmed to be deputy administrator last October. “He’s doing a great job,” Johnson said.

Trump to Nominate Thornhill as Singapore Ambassador: Trump intends to nominate Barbera Hale Thornhill to be U.S. ambassador to Singapore, according to a White House statement, Ben Livesey reports. Thornhill is president of Impact Design, an interior design firm in Los Angeles and is a member of the Getty Research Institute Council, the Getty Paintings Council, the World Affairs Council and the Pacific Council on International Policy.

Kaplan Resigns From Trade Role: Gilbert Kaplan, a key figure in enforcing trade rules for the Trump administration as undersecretary for international trade at the U.S. Commerce Department, resigned yesterday, according to people familiar with the matter, Jenny Leonard reports. A spokesperson for the Commerce Department declined to comment, and Kaplan couldn’t be immediately reached. As undersecretary, Kaplan led the 2,100-strong International Trade Administration tasked with monitoring unfair global competition from dumping and subsidies, enforcing U.S. trade laws and boosting America’s trade competitiveness.

Around the Administration

Trump Shows Frustration in Biofuel Plan Talks: Trump yesterday expressed his rising frustration over trying to reach an accord between warring oil and biofuel interests by saying the negotiations were more difficult than dealing with the Taliban. Trump made the observation during a White House meeting with oil-state senators who were trying to discourage the president from advancing a slate of changes meant to bolster corn-based ethanol and soybean-based biodiesel, according to people familiar with the matter who asked not be named describing a private conversation.

The meeting came amid a flurry of negotiations over a plan for boosting biofuel — and quelling an intense backlash in politically important farm states over the administration’s decision to exempt more small oil refineries from requirements to use renewable fuels. Trump pressed senators from states with significant refining assets about a wave of ethanol plant closures the biofuel industry has blamed on the waivers. Read more from Jennifer Jacobs, Mario Parker and Jennifer A. Dlouhy.

Law That Spurred Renewables Gets Revamp: A 40-year-old law that’s been key to the growth of renewable energy in the U.S. is set for a major overhaul that could change the way small solar and wind projects are developed. U.S. regulators on Thursday proposed setting new limits on which energy projects fall under the Public Utility Regulatory Policies Act, a landmark law that helped spur an entire generation of solar and wind farms across the U.S. Read more from Stephen Cunningham.

FAA Chief Flies 737 Max Simulator: The newly installed leader at the Federal Aviation Administration tested Boeing’s 737 Max simulator yesterday as part of an attempt to get up to speed on the grounded jetliner and the controversies surrounding the agency’s approval of it two years ago. FAA Administrator Steve Dickson flew a series of routine maneuvers at a Boeing facility in Seattle and said he expected to conduct additional test runs related to its two accidents. Read more from Alan Levin.

Trump Vaccine Order Stresses National Security: National security appeared top of mind for the White House yesterday as it unveiled its highly anticipated executive order to develop better flu vaccines. The order, which doesn’t include any additional funding, directs the departments of Health and Human Services Department to create a task force to “modernize flu production so we can have more modern, reliable, rapid methods for vaccine production,” a White House official told reporters. The end goal is to be able to create powerful vaccines fast enough to fight off any potential flu pandemic while also setting infrastructure for better seasonal flu vaccine production. Read more from Jacquie Lee.

To contact the reporters on this story: Zachary Sherwood in Washington at zsherwood@bgov.com; Brandon Lee in Washington at blee@bgov.com

To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Loren Duggan at lduggan@bgov.com

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