What to Know in Washington: U.S., Mexico Extend Tariff Talks

U.S. and Mexican negotiators are set to resume talks today with time running short to avert President Donald Trump’s threat to impose tariffs next week.

Trump, who’s traveling overseas, said that “not nearly enough,” progress was made during a 90-minute meeting at the White House between Mexico’s foreign minister, Marcelo Ebrard, and top American officials.

The outcome raises the likelihood that the U.S. will follow through with tariffs on Monday. And it’s unclear how much progress on any deal can be made until Trump returns to Washington from a week-long trip to Europe to commemorate the 75th anniversary of D-Day.

“If no agreement is reached, Tariffs at the 5% level will begin on Monday, with monthly increases as per schedule,” Trump tweeted yesterday. “The higher the Tariffs go, the higher the number of companies that will move back to the USA!”

But Ebrard, after the meeting, said he was optimistic the two sides could reach a deal.

“We are optimistic because we had a good meeting with respectful positions from both parts,” Ebrard said during a press conference at the Mexican Embassy in Washington. “We had an opportunity to explain our point of view.”

Ebrard said they didn’t discuss the tariffs during the meeting with the U.S. delegation, which included Vice President Mike Pence, Secretary of State Michael Pompeo and Acting Homeland Security Secretary Kevin McAleenan. Read more from Josh Wingrove, Anna Edgerton and Nacha Cattan

Photographer: Andrew Harrer/Bloomberg
Marcelo Ebrard, Mexico’s foreign minister, during a news conference at the Embassy of Mexico in Washington on Tuesday.

Watching Jobs Report: Tomorrow’s U.S. jobs report will be especially scrutinized by economists, investors and Federal Reserve policy makers watching for signs of cracks in the labor market as trade tensions weigh on the economy and spur bets interest-rate cuts are coming.

The Labor Department figures are expected to show payroll gains cooled in May to a still-strong 180,000, while unemployment probably held at a 49-year low of 3.6% as wage gains held up. That would offer some comfort after retail sales, factory output and home purchases showed the economy struggling this quarter after better-than-expected growth in the first three months of the year. But even if the jobs numbers are solid, investors may still expect the situation to deteriorate as consumers feel pain from Trump’s intensifying trade war with China and threatened tariffs on Mexican goods. Read more from Reade Pickert.

Happening on the Hill

Lawmakers Watch VA Care Rollout: The Department of Veterans Affairs is launching a revamped private health care program Thursday that would expand opportunities for veterans to get care outside VA facilities, under a new system it’s characterized as “leading the future.” But as the VA launches its streamlined community care program, lawmakers are voicing more concern than optimism.

“As key provisions of the MISSION Act are rolled out, I am deeply concerned about VA’s preparedness for adequately providing the continuity of timely care for veterans across the country,” said Rep. Julia Brownley (D-Calif.), who heads the House Veterans Affairs Health Subcommittee. “It is absolutely critical that VA gets the new community care program right.” Read more from Megan Howard.

Congress Punts on $4.5 Billion for Migrants: Congress is poised to leave town for a long weekend with no clear plan to fill the coffers of immigration agencies running out of money as they grapple with a surge of migrants. Democrats met yesterday trying to work out next steps for negotiations on a $4.5 billion border supplemental, but emerged with no timeline for when parts or all of the funding bill may move forward.

More money is needed by the end of the month to pay for services that provide care for unaccompanied migrant children, as well as to cover a boost in border personnel and space for detentions, acting Homeland Security Secretary Kevin McAleenan has said. He’s warned that Customs and Border Protection and the Health and Human Services Department have struggled to offer adequate and timely care to the surge of children and families crossing the border, which hit historical highs this spring. Read more from Michaela Ross.

Senate Could Pass IRS Bill Next Week: The Senate could pass an amended IRS bill as soon as next week, Senate Finance Chairman Chuck Grassley (R-Iowa) said. House tax writers are expected to reintroduce legislation today, after their original bill passed the House unanimously in April but stalled in the Senate because of a controversial free-filing provision. The measure (H.R. 1957) carried language codifying the IRS’s Free File program. Senate Democrats raised doubts about the provision after ProPublica published articles about the program. Read more from Kaustuv Basu and Robert Lee.

Election Security Negotiations: Much anticipated election security legislation is still under discussion between parties, said Sen. James Lankford (R-Okla.) in a hallway interview. Lankford suggested to reporters last week the unveiling of the Secure Elections Act was imminent. Lankford said the measure has incorporated revisions from the White House and is now under revision by co-sponsor Amy Klobuchar (D-Minn.), he said, Michaela Ross reports. Still, Senate Majority Leader Mitch McConnell (R-Ky.) has been wary to bring up election security legislation after House Democrats passed a sweeping election security bill ( H.R. 1) he called a power grab.

Meanwhile, Sen. Roy Blunt (R-Mo.) said yesterday states don’t need more federal dollars to protect their election systems ahead of the 2020 campaign. “The $340-some million that states got about 18 months ago has not been spent by most states,” the Rules and Administration Committee chairman told reporters, Nancy Ognanovich reports.

Lifetime Ban on Becoming Lobbyists: Two House members want to impose a lifetime ban to prevent former members of Congress from becoming registered lobbyists. Reps. David Cicilline(D-R.I.) and Dave Loebsack (D-Iowa) yesterday reintroduced a proposal to bar post-Congress employment on K Street. It’s the same legislation they have proposed since 2011. Under the measure, violators of the ban would face fines of up to $50,000 or as much as a year in prison. Read more from Megan R. Wilson.

Graham Says He’s Open to Tech Antitrust Probes: Senate Judiciary Chairman Lindsey Graham (R-S.C.) said he’s “very open minded” about launching an antitrust investigation into large technology companies that would parallel a similar probe planned by House Democrats. The House Judiciary Committee on Monday announced plans to begin a broad investigation of whether the market shares of digital platform tech firms like Google and Facebook hurt competition. “I’m very open minded to that, I applaud what the House is doing,” Graham told reporters yesterday. “I just need to sort of see wher e the committee is at.” Read more from Rebecca Kern.

Meanwhile, the tech industry’s biggest companies have been preparing for their moment of reckoning for months. They’ve hired lawyers and built up their lobbying shops in response to antitrust investigations that have been well under way in the European Union, and which are just now getting started in Washington. Gerrit De Vynck and David McLaughlin have more on tech’s response to the scrutiny.

Movers and Shakeups

Judge Pick Noted for Creative Sentencing: Judge Rossie Alston, who’s received support from both Democrats and Republicans at differing points in a long legal career, could win confirmation as early as this week to one of the U.S.’s highest-profile federal courts as only the second black Trump judicial appointee. Alston is nominated to serve on the U.S. District Court for the sprawling Eastern District of Virginia. Its “Rocket Docket,” named for the speed at which it handles cases, is well known in legal and political circles. Its Alexandria base is where the Justice Department frequently prosecutes high-profile national security cases. Patrick L. Gregory has more.

Interior Pick Hesitates on Climate Change Question: Trump’s nominee to be the Interior Department’s assistant secretary for fish, wildlife, and parks sailed through his second straight day of confirmation hearings yesterday. The lack of pushback from the Senate Energy and Natural Resources Committee suggested Robert Wallace will be confirmed to the post. One of the few times he appeared to stumble was when Sen. Maria Cantwell (D-Wash.) asked if Wallace believed climate change is making forest fires more frequent and intense. After a long pause, Wallace said he believed climate change is caused by humans but didn’t agree with Cantwell’s premise. Stephen Lee has more.

Senators Advance Pick for VA’s No. 2: The Senate Veterans’ Affairs Committee advanced the nomination of James Byrne to be deputy secretary at the Veterans Affairs Department on a 13-4 vote. Byrne has served as acting deputy secretary since August 2018 as well as serving as general counsel, Megan Howard reports. “As the VA continues to implement transformative reforms over the next several months, it’s going to be crucial” for department leaders to make sure it operates effectively, Chairman Johnny Isakson (R-Ga.) said.

FAA Nominee Imperiled: Steve Dickson’s nomination to head the Federal Aviation Administration may not be sunk, said the top lawmaker on the committee to approve his confirmation. “Members are discussing this and beginning to formulate views and I’m sort of taking the pulse,” said Commerce, Science and Transportation Chairman Roger Wicker (R-Miss.), Shaun Courtney reports. “I think there’s maybe a way forward on Mr. Dickson,” Wicker said yesterday.

Emanuel to Join Centerview Partners: Former Chicago MayorRahm Emanuel is joining Centerview Partners, a person familiar with the matter said. Emanuel will open a Centerview office in Chicago, the person said. The investment bank, co-founded by Blair Effron and Robert Pruzan, has expanded in recent years as it hires bankers from larger rivals and scores advisory assignments on some of the biggest recent mergers. Read more from Hannah Levitt.

Chamber Says CEO to Stay Until 2022: The U.S. Chamber of Commerce board said Thomas Donohue has committed to remain the business lobby’s CEO until June 2022, and that Suzanne Clark has been promoted to president. The board will undertake a global search for the next chief executive in 2022, the Chamber said in a statement yesterday. Clark led a “cultural transformation” as its senior executive vice president in the last five years, the statement also noted, reports Kim Chipman.

What Else to Know

D-Day Anniversary: Trump is in Normandy today to commemorate the 75th anniversary of D-Day.

“To all of our friends and partners – our cherished alliance was forged in the heat of battle, tested in the trials of war, and proven in the blessings of peace,” Trump will say in a speech marking the anniversary, according to excerpts from the White House, Chelsea Mes reports. “The exceptional might came from an exceptional spirit. The abundance of courage came from an abundance of faith. The great deeds of our army came from the great depths of their love.”

Census Judge Defers to Supreme Court: With the Supreme Court preparing to decide this month whether the government can include a citizenship question in the 2020 census, a federal judge yesterday indicated that he won’t issue a ruling before then on a related claim that a Republican consultant influenced Trump’s decision to amend the survey. U.S. District Judge Jesse Furman, citing his desire “not to interfere with the Supreme Court’s decision-making process,” said that he won’t rule quickly on a request to punish the government for allegedly lying about its motivations for adding the question. Read more from Bob Van Voris.

Trump Plays Good Cop on Huawei: Trump adopted a conciliatory tone toward Europe’s approach to Huawei Technologies, the Chinese telecom giant the U.S. has demanded its allies abandon over security concerns. The White House has engaged in a combative global campaign for months to keep Huawei products out of future 5G broadband networks, including its threats to curb intelligence-sharing with allies if they don’t comply. Trump had the opportunity in meetings with British and Irish leaders this week to badger them about Huawei, bu t he’s instead taken a more cooperative approach. Read more from Alyza Sebenius.

White HousePreps $2 Billion Taiwan Arms Package: The Pentagon and State Department have informally notified Congress of a potential $2 billion deal with Taiwan that includes the first sale of the U.S. Army’s best tank, the M1A2, and a resupplying of anti-air and anti-armor weapons, according to an official familiar with the plan. The notification of the government-to-government sale does not include F-16 fighter jets, which are still under review at the State Department and Pentagon, the person said. Read more from Tony Capaccio.

Warren’s Plan to Rise in 2020 Pack: Sen. Elizabeth Warren (D-Mass.) has been climbing in the Democratic presidential contest by using a stream of policy blueprints and hours of selfies with voters to chip away at her immediate target: Sen. Bernie Sanders (I-Vt.). Warren’s path to directly challenging front-runner Joe Biden runs through Sanders, her main rival for progressive voters and the candidate who’s steadily held the No. 2 spot in most polls.

Warren is making inroads and attracting voters with a flood of detailed proposals on issues from taxing the ultra-wealthy and offering universal child care to breaking up big technology firms and investing in a green economy. She eschews high-dollar fundraisers as a way to bolster her anti-establishment credentials and free up time for virtually limitless conversations with voters at campaign events. Read more from Sahil Kapur.

Easing Genetically Engineered Crop Rules: The Trump administration would exempt many genetically engineered crops from regulation by the Agriculture Department under a broad overhaul of biotechnology rules unveiled yesterday. The overhaul, which USDA argued would cut the cost of developing genetically engineered plants, would exempt crops with traits that are “similar in kind” to modifications that could be produced through traditional breeding techniques. Read more from Mike Dorning.

Trump Puzzles Irish With Border Remark: Trump reassured Ireland that it has nothing to fear from Brexit, telling the country’s prime minister that the border with Northern Ireland will be “just fine.” Trump has encouraged the U.K. to split from the European Union with or without a deal to ease its exit. A “hard Brexit” could mean that checkpoints along the border between the north and south of Ireland have to return.

Sitting alongside Irish Prime Minister Leo Varadkar at Shannon Airport in Ireland yesterday, Trump said he anticipated that “probably you’ll ask me about Brexit.” It will “all work out very well,” Trump said. “And also for you, with your wall, your border.” Looking bemused, Varadkar jumped in to explain to Trump that Ireland is anxious to prevent a border after Brexit. “The main thing we want to avoid, of course, is a border or a wall between both sides,” he told Trump. Dara Doyle has more from Trump’s trip to Ireland.

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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