What to Know in Washington: Democrats Hold Out on New NAFTA Deal

President Donald Trump’s decision not to impose tariffs on Mexico removed one obstacle for Congress to approve his North American trade deal, but his administration has more work to do to smooth the final stages of the accord’s ratification.

Trump accepted Mexico’s offer of tougher immigration enforcement as sufficient to dissuade him from levying a 5% charge on all Mexican imports. The move late Friday deflated tensions with Mexico and, as far as Canada is concerned, clears a path for the U.S.-Mexico-Canada trade agreement to move forward, Canadian Finance Minister Bill Morneau said Sunday on Bloomberg TV.

That leaves House Democrats as the last major stakeholders still to get on board. Speaker Nancy Pelosi’s (D-Calif.) decision on when (and whether) the deal will get a vote depends on talks with the Trump administration to address Democrats’ concerns, according to a senior Democratic aide.

“We’re not ready,’’ Rep. Debbie Dingell (D-Mich.) said yesterday on Fox News. “The votes in the House are not there yet until these changes take place.’’

During last week’s uncertainty over trade with Mexico, most Democrats publicly separated USMCA deliberations from Trump’s tariff plan, which means that removing the tariff threat doesn’t necessarily clear the way for a new deal to replace the North American Free Trade Agreement. Dingell said she wants changes to the agreement’s labor, environmental and enforcement provisions that would satisfy her skeptical colleagues.

Pelosi has repeatedly said that her members “want to get to yes,” but only if the agreement resolves their doubts. Democrats have pushed Mexico to pass and swiftly implement labor reforms that would, among other things, allow workers there to vote for union representation with a closed ballot. Anna Edgerton has the latest.

Photographer: Anna Moneymaker/Bloomberg
Speaker Pelosi

Trump’s Threat: “We have fully signed and documented another very important part of the Immigration and Security deal with Mexico, one that the U.S. has been asking about getting for many years,” Trump tweeted this morning. “It will be revealed in the not too distant future and will need a vote by Mexico’s Legislative body!”

“We do not anticipate a problem with the vote but, if for any reason the approval is not forthcoming, Tariffs will be reinstated,” he continued.

Senators’ Sigh of Relief: Still, Senate Republicans who faced the unwelcome prospect of attempting to overturn Trump’s use of tariffs on Mexico this weekend praised his deal to avert them, even if they’re still wary of the duties. Republicans who appeared on yesterday’s talk shows, including some who may have been prepared to formally oppose the duties, praised the president’s ability to get a deal. Mark Niquette has more.

Farm Conflict After Mexico Deal: Trump this weekend hinted at additional measures between the U.S. and Mexico, and promised that Mexico would soon make “large” agricultural purchases from the U.S. as part of the deal on border security and illegal immigration that allowed Mexico to avoid U.S. tariffs.

“Some things not mentioned in yesterday’s press release, one in particular, were agreed on. That will be announced at the appropriate time,” Trump said yesterday in a series of four tweets about Mexico, the media and other matters.

Three Mexican officials said Saturday they were not aware of any side accord in the works, and that agricultural trade hadn’t been discussed during three days of negotiations in Washington that culminated in a joint communique late Friday. Mexico’s ambassador to the U.S. predicted yesterday that trade in agricultural goods “could increase dramatically” now that tariffs aren’t going ahead and if the USMCA is ratified — but didn’t cite a specific deal with Washington on farm purchases. Read more form Nacha Cattan and Eric Martin.

Happening on the Hill

Defense Policy: The Pentagon could buy 90 Lockheed Martin F-35 Joint Strike Fighters and eight Boeing F-15EX aircraft, under the House Armed Services Committee’s draft proposal for the fiscal 2020 defense authorization bill. The Pentagon would be authorized to buy 12 more F-35s than it requested and can start buying the F-15EX with some caveats: The draft measurewould fence authorization for six aircraft and would allow the Air Force to buy two prototype aircraft until it provides Congress details on its formal plans for acquisition, test and evaluation, and operations.

The committee will mark up the bill on Wednesday. Read more from Roxana Tiron and Travis J. Tritten.

Big Tech Scrutiny: Legislation and more regulation of technology companies such as Google and Facebook is possible, but lawmakers are approaching scrutiny with an open mind, the federal lawmaker leading an antitrust investigation of the industry said. “This is an investigation to collect the best data and best information,” Rep. David Cicilline (D-R.I.), who leads the House Judiciary Antitrust, Commercial & Administrative Law Subcommittee, said on “Fox News Sunday.”

Cicilline’s committee is set to hold its first hearing tomorrow on the dominance of Big Tech, part of a wider probe of the industry that the lawmaker said may lead to legislation. The goal, he said, is to “bring more competition to the space.” Read more from Tom Schoenberg and Susan Decker.

Politics & Policy

SCOTUS Term Winds Down: The U.S. Supreme Court enters the homestretch of its term with looming decisions that could affect the 2020 election and thrust the court even deeper into the nation’s political wars. Between now and the end of June, the nine justices will rule on two intensely political issues — whether Trump’s administration can put a citizenship question on the 2020 census and whether federal courts can strike down voting maps as excessively partisan.

The court will also be making pivotal decisions about what cases to add for the term that starts in October and ends the following June, during the heat of the presidential campaign. The possibilities include a set of Trump appeals that would open hundreds of thousands of young immigrants to deportation.

The court will kick off its final three weeks with orders and opinions this morning in Washington. Greg Stohr takes a look at what will be atop the court’s agenda this month.

Court Shakeup Touted on Trail: Expanding and making the U.S. Supreme Court less political, as some Democratic presidential candidates suggest, may be too complex as a campaign theme to motivate their base and may actually wind up helping Trump get re-elected. Law and political science experts raised those points on Friday in a discussion on political strategy and the concept of courts as a mechanism for progressive change at the American Constitution Society’s annual convention in Washington. While Republicans have done so successfully, Democrats historically haven’t made courts a campaign issue nationally. But some are testing the waters with these themes in early caucus and primary states with party politics shifting left. Read more from Kimberly Strawbridge Robinson.

Biden Leads Among Iowa Voters: Former Vice President Joe Biden and Sen. Bernie Sanders(I-Vt.) led the field of 2020 Democratic presidential candidates in a poll of Iowa voters likely to participate in the first nominating contest, still almost eight months away. Biden has the support of 24% of likely participants in the Iowa caucuses. He’s followed by Sanders at 16%. In March, before he formally entered the race, Biden had the support of 27% of likely caucus participants, while Sanders had 25%. Read more from Ros Krasny.

Meanwhile, The Democrats’ 2020 dilemma was on display this weekend at the first major event of the Iowa calendar, as the man who wasn’t there, Joe Biden, was once again the subject of veiled attacks by a pack of challengers who have so far been unable to dislodge him as the front-runner.

Sanders took the most pointed swipe at Biden, but each of the 19 candidates gathered last night for the Iowa Democratic Hall of Fame dinner tried to show they were the one to lead the party against Trump.

Biden missed the dinner to attend his granddaughter’s graduation, but he’ll be in Iowa for campaign stops tomorrow and Wednesday. He also skipped last weekend’s California Democratic Convention, where 14 candidates spoke. He’ll join up with the crowd for the first time at a weekend of events in South Carolina in two weeks. At the end of the month, the first debate among the Democratic candidates will be held in Miami. Read more from Tyler Pager and Misyrlena Egkolfopoulou.

What Else to Know Today

China Talks: Treasury Secretary Steven Mnuchin tweeted that he had a “candid” and “constructive” talk on trade issues with People’s Bank of China Governor Yi Gang. Mnuchin had earlier played down expectations for the meeting with Yi, which took place on the sidelines of a gathering of Group of 20 finance ministers and central bankers in Fukuoka, Japan. He had foreshadowed that no big announcement was expected and that the “main progress” would occur at a meeting between presidents Trump and Xi Jinping at the G-20 leaders’ summit in Osaka at the end of the month. Read more from Saleha Mohsin.

Mnuchin Sees No Recession: Mnuchin sees no signs the U.S. economy is heading into a recession, he said in an interview with CNBC yesterday. Growth in the U.S. is “quite strong,” Mnuchin told CNBC, forecasting a strong quarter for the world’s biggest economy. He also expressed concern about a slowdown in Europe, China and other areas and he declined to comment on any future Federal Reserve interest-rate moves.

United Technologies, Raytheon to Combine: United Technologies agreed to buy Raytheon in an all-stock deal, forming an aerospace and defense giant with $74 billion in sales in one of the industry’s biggest transactions ever. The new entity will be called Raytheon Technologies when the deal closes in the first half of 2020, after United Technologies completes the separation of its Otis elevator and Carrier air-conditioner businesses, the companies said in a statement yesterday. While billed as a merger of equals, current United Technologies shareholders will own most of the company. Read more from Richard Clough.

Iran Says Sanctions Show Call for Talks Is Empty: Iran’s foreign ministry said new sanctions announced by the U.S. government show Trump’s calls for negotiations with the Islamic Republic are hollow, the semi-official Iranian Students’ News Agency reported. “It only took one week for the emptiness of the U.S. president’s claim of wanting negotiations with Iran to be shown,” said Abbas Mousavi, the spokesman for Iran’s Ministry of Foreign Affairs, according to ISNA. “The American policy of maximum pressure is a failed one.”

The U.S. on Friday sanctioned Persian Gulf Petrochemical Industries Company, Iran’s largest and most profitable petrochemical holding group, over what it said was the company’s support of the country’s revolutionary guard. U.S. Treasury Secretary Steven Mnuchin said the move was a “warning” to show the U.S. will continue to sanction companies that “provide financial lifelines” to Iran’s revolutionary guard, Golnar Motevalli reports.

Turkey, U.S. Defense Chiefs to Talk Missiles: The Turkish and U.S. defense chiefs may discuss Ankara’s planned purchase of a Russian missile system during a meeting of NATO defense ministers this month, according to a Turkish security official. The NATO meeting is scheduled for June 26-27 in Brussels. The U.S. has warned of sanctions should Turkey move ahead with the acquisition. Read more from Selcan Hacaoglu.

Huawei Law Delay: A senior White House official is seeking to delay putting in place portions of a law that limits the U.S. government’s business with China’s Huawei Technologies, according to a person familiar with the matter. In a letter to Vice President Mike Pence, White House acting budget chief Russell Vought asked to delay a provision of the 2019 National Defense Authorization Act that bars any executive agency, government contractor or company that receives a government loan or grant from using Huawei equipment.

Vought warned that the law will place burdens on U.S. companies that use Huawei technology, according to the person. The Wall Street Journal, which reported Vought’s letter earlier yesterday, said he warned that the law could dramatically reduce the number of companies that would be able to supply the U.S. government. Read more from Shannon Pettypiece.

Trump’s Plan for Finding Oil in Alaska: Concern that heavy machinery rolling across an Alaskan wilderness in search of oil would crush some polar bears to death stopped the Interior Department from approving a seismic survey in the area earlier this year. But the alternative — a low-flying plane making frequent passes over the Arctic National Wildlife Refuge — could still disturb polar bears, seals and calving caribou, according to conservationists and the Interior Department’s own experts.

Despite the risks, the Trump administration has no plans to vet the environmental impacts of the planned aerial survey, designed to arm oil companies with geophysical data to help them figure out the most promising locations to drill, and how much they should bid. The Interior Department’s hands-off approach is described in newly obtained documents and by people briefed on the matter who asked not to be named amid private deliberations. Read more from Jennifer A. Dlouhy.

Comey-Trump Memos: A federal judge ordered the FBI to make public some blacked-out portions of memos written by James Comey, the agency’s former director, about his dealings with Trump. U.S. District Judge James Boasberg in Washington refused a request by CNN to remove redactions from the parts of the memos that the FBI said reveal its investigative methods and practices. But the judge rejected most of the redactions that the FBI made on the grounds of national security. Read more from Robert Burnson.

To contact the reporter on this story: Zachary Sherwood in Washington at zsherwood@bgov.com

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

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