What to Know in Washington: Trump to Talk With China Trade Chief

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President Donald Trump plans to meet with China’s top trade negotiator this afternoon as the U.S. tries to forge a preliminary deal with its biggest economic rival before tariffs on some Chinese imports more than double next month.

The meeting with Chinese Vice Premier Liu He was listed on the White House’s daily schedule for 2:30 p.m. and would cap the latest round of talks in Washington. Plans for a meeting between Trump and Liu signal optimism that talks are making sufficient progress to warrant another face-to-face meeting between the two men.

Liu and Trump met in late January when Liu was in Washington for a previous round of talks. Since then, he has been named as Xi’s special envoy, prompting speculation that he has greater authority to make a deal.

As the discussions continued yesterday, reports emerged that negotiators are working on memorandums of understanding that would form the basis of a final deal. The MoUs would cover areas including agriculture, non-tariff barriers, services, technology transfer and intellectual property, according to a person briefed on the talks.

The U.S. and China have set a March 1 deadline to negotiate an agreement before American tariffs on $200 billion in Chinese imports rise to 25 percent from 10 percent. In a Twitter post on Sunday, after a week-long round of talks in Beijing, Trump said “big progress being made on soooo many different fronts!”

China is proposing that it could buy an additional $30 billion a year of U.S. agricultural products including soybeans, corn and wheat as part of a possible trade deal, according to people with knowledge of the plan. Read more from Jenny Leonard and Jennifer Jacobs.

Photo: MANDEL NGAN/AFP/Getty Images
National Economic Council Director Larry Kudlow, Treasury Secretary Steven Mnuchin, and U.S. Trade Representative Robert Lighthizer take part in U.S.-China trade talks with China’s Vice Premier Liu He (5th on the right) in the Eisenhower Executive Office Building on Thursday.

Economists Predictions: China will be able to delay an increase of Trump’s tariffs, but will not escape that hit permanently, according to economists surveyed by Bloomberg News. None of the 29 China-watching analysts surveyed in the past week expect the U.S. to increase tariffs on Chinese goods on March 1. That said, 18 of the analysts assume that tariffs will ultimately rise, signaling low confidence that China and the U.S. will be able to come to a permanent accommodation over their differences on trade and industrial policy. Read more from Bloomberg News.

EU Trade Talks: Meanwhile, European Union Trade Commissioner Cecilia Malmstrom said a trans-Atlantic trade deal could be achieved before year’s end, stressing a readiness to work speedily as the bloc tries to keep at bay the threat of U.S. automotive tariffs. Malmstrom said she expects EU governments to give her the go-ahead in March to start negotiations with the U.S. to cut tariffs on industrial goods. A final agreement with Trump’s administration could be reached before the European Commission’s term ends on Oct. 31, she said.

“I think it can be done during this mandate,” Malmstrom told reporters today in Bucharest before a meeting of trade ministers from the 28-nation EU. “We’re not delaying anything.” Read more from Jonathan Stearns and Andra Timu.

Politics & Policy

Klobuchar Banks on Middle Road: Sen. Amy Klobuchar (D-Minn.) is pushing back against some policy ideas favored by the party’s ascendant progressive wing and championed by several of her competitors in the race for the 2020 Democratic presidential nomination. She’s thrown cold water on the idea of free college and called the “Green New Deal” and “Medicare for All” more aspirations than realistic goals in meeting the challenges of climate change and health care.

Klobuchar is betting that bucking the emerging party orthodoxy will pay dividends in a field already crowded with a dozen candidates that’s almost certain to grow in the coming weeks. Virtually all of those in the race so far are positioning themselves to the left of Klobuchar.

The middle of the road could give her traction in Iowa, which will host the first nominating contest in about 11 months. Iowa’s Democrats have a history of giving an early boost to populist progressive candidates before ultimately landing on more centrist ones when they get to the caucuses. Read more from John McCormick and Emma Kinery.

2020 Resource: Bloomberg Government provides the latest news and announcements about the 2020 elections by highlighting some key races and dates to watch. This BGOV OnPoint also provides maps of Senate and gubernatorial races and does the math for winning the House, Senate and presidency. Read it here.

North Carolina Orders New Election: The North Carolina elections board ordered a new vote in a U.S House district because of evidence that the results in November were tainted by fraud. The ruling came on the fourth day of the board’s hearing to investigate allegations of absentee voter fraud orchestrated by a political operative on GOP candidate Mark Harris’s payroll during last year’s midterm election. Harris held a lead over Democrat Dan McCready by 905 votes in the unofficial tally that a previous election board declined to certify. Harris yesterday abruptly reversed his previous request that the November result be certified, instead urging a new election be conducted. Read more from Anna Edgerton and Kim Chipman.

Anti Emergency Declaration Effort: House Democrats plan to file a resolution today seeking to block Trump’s emergency declaration to build a wall on the southern U.S. border. The measure would block the president’s declaration under the National Emergencies Act. BGOV legislative analyst Michael Smallberg explains what’s in the resolution here.

There’s also been a flurry of lawsuits filed in federal courts from Washington D.C. to California to block the declaration. The primary argument in the suits is that the president circumvented Congress’s constitutionally protected authority to determine how taxpayer money is spent. Kartikay Mehrotra takes a closer look at the legal fight against the declaration.

Republican Net Neutrality Push: House Republicans are doubling down on their calls for Democrats to work with them on net neutrality legislation. Energy and Commerce ranking member Greg Walden (R-Ore.) and two subcommittee ranking members are urging Democrats to back three Republican measures they say would restore net neutrality principles.

“We all agree on the need to legislate baseline protections for net neutrality, open internet, or whatever new term may be coined for the consumer protection principles that are supported by Republicans and Democrats alike,” Walden wrote in a letter yesterday to Chairman Frank Pallone, Jr. (D-N.J.) and Rep. Mike Doyle (D-Pa.), who chairs the panel’s Communications and Technology Subcommittee, obtained by Bloomberg Law. Read more from Jon Reid.

Around the Agencies

Rules Rollback Withers: Agency task forces announced with great fanfare two years ago as the slayers of unnecessary government regulations have almost entirely disappeared, even as Trump has claimed credit for cutting more rules than any president in history. Few existing regulations have been rolled back since the initial months of the task force efforts, when 14 Obama-era rules were rescinded by May 2017 using the Congressional Review Act and dozens more changes were made to reduce compliance burdens.

Agencies seeking to delay effective dates of rules over the last two years have lost in court at an unprecedented rate, and recent proposed cuts to a core group of major environmental regulations are likely to be challenged as well.

“I think there was a real sense of exhaustion from the private sector of just never knowing what rules they’re going to face when they’re making investments in long-term plans,” said Jeffrey Harris, who served as associate administrator of the Office of Information and Regulatory Affairs during the first year of the Trump administration. Read more from Cheryl Bolen.

The Physicist Behind Trump’s Climate Push: The man behind a White House proposal to re-evaluate the national security risks of climate change is a physicist who once compared the maligning of carbon dioxide to the “demonization of the poor Jews under Hitler.”

William Happer is a National Security Council technology adviser spearheading an initiative to create a presidential committee on climate. He has long drawn scrutiny for insisting that rising carbon dioxide emissions are a boon for the planet, not a danger. Scientists see his proposal as part of a disturbing trend in which the Trump administration elevates ideological opponents of established scientific views. Read more from Jennifer A. Dlouhy and Ari Natter.

Rosenstein Prepares to Depart DOJ: Deputy Attorney General Rod Rosenstein, who appointed Special Counsel Robert Mueller, said in something of a valedictory speech that “I took more than my fair share of criticism.”

“But I kept the faith, I followed the rules and I left my office in good hands,” he said yesterday in an address at the Wharton School at the University of Pennsylvania that he described as one of his last while in the Justice Department’s second-ranking position.

Rosenstein is departing as new Attorney General William Barr takes charge of the Justice Department — including the power to decide how much to make public when Mueller submits his final report on the investigation into Russian interference in the 2016 election and whether anyone around Trump conspired in the meddling. Mueller may issue the report as soon as next week. Trump plans to nominate Jeffrey Rosen as the new deputy attorney general, the White House said on Tuesday night. Read more from Chris Strohm and Catherine Dodge.

FERC Approves LNG Plant: The top U.S. energy regulator gave the first authorization in two years for a new liquefied natural gas export terminal, breaking an impasse that had threatened to bring approvals to a standstill. The Federal Energy Regulatory Commission cleared Venture Global LNG’s proposed $5 billion Calcasieu Pass LNG terminal in Louisiana in an order late yesterday, according to a statement from the agency. The project is one of several competing to be part of a second wave of LNG terminals sending U.S. shale gas overseas. Read more from Stephen Cunningham and Rebecca Kern.

California Reacts to Canceled Auto Mileage Talks: California officials responded with defiance to the Trump administration’s decision to cut off talks over future fuel economy standards for cars, the latest turn in an escalating series of policy clashes between Washington and Sacramento. In a tweet, Gavin Newsom, California’s Democratic governor, called the Trump administration’s decision “another targeted attack ” on the state and a “reckless political stunt” that would jeopardize the health of families and children. Sen. Kamala Harris, one of the state’s two Democratic senators and a candidate for president, said it “follows a troubling pattern of targeting the state of California for political purposes.” Ryan Beene has more.

Skepticism of Trump Meeting Ethanol Timeline: Trump told the heartland back in October a boost to ethanol use may come this summer. Nebraska’s governor isn’t sure he’ll make that timeline. Trump has pledged to have policy in place that would allow higher sales of corn-based ethanol before the summer begins. Nebraska Gov. Pete Ricketts (R) doesn’t think that’s going to happen by Memorial Day, the kickoff to the summer driving season. Read more from Shruti Date Singh.

Trump’s Immigration Backlog Strategy Backfired, Critics Say: Trump administration efforts to speed up hundreds of thousands of immigration court cases have actually increased the backlog and sometimes eroded migrants’ due process rights, immigration advocacy groups and legal specialists said. A report yesterday from the groups spotlights how the Trump administration’s immigration crackdown has yet to effectively streamline an inefficient court system that has also been lamented by Trump for keeping migrants in the U.S. for years as they await trial. Read more from Michaela Ross.

Judge Wants Accounting of Thousands More Migrant Kids: A federal judge indicated he’ll probably require the Trump administration to account for what happened to potentially thousands of immigrant children separated from their families at the Mexican border as early as July 2017, before the widely renounced “zero tolerance” sweep last year. U.S. District Judge Dana Sabraw, who last year ordered the U.S. to end family separations and reunify the children with their parents, said at a hearing yesterday in San Diego that it would be arbitrary to exclude the families whose children were released to sponsors in the U.S. before his June 26 order. Read more from Edvard Pettersson.

What Else to Know Today

Governors Assemble: The National Governors Association convenes in Washington today for an annual winter meeting that lasts through Monday. The meetings will feature appearances by JPMorgan Chase CEO Jamie Dimon and CNN’s Van Jones. Meanwhile, Trump will deliver remarks at a Republican Governors Association event at the Andrew W. Mellon Auditorium tonight at 7:30 p.m. and will host all governors for dinner this weekend at the White House.

Trump to Keep 200 Troops in Syria: The U.S. plans to leave a contingent of “peacekeeping” troops in Syria even after the withdrawal ordered by Trump, the White House said yesterday. “A small peacekeeping group of about 200 will remain in Syria for a period of time,” press secretary Sarah Huckabee Sanders said in a statement.

Neither Sanders nor a spokesman for the National Security Council detailed where the American forces would be stationed or how long they expected to remain in Syria, which has been devastated by eight years of civil war. The announcement came hours after Trump spoke by telephone with Turkish President Recep Tayyip Erdogan. Immediately after the call, the White House said in a statement that the two leaders had “agreed to continue coordinating on the creation of a potential safe zone.” Read more from Justin Sink.

Kim Prepares for Summit With Trump: Ever since he met Kim Jong Un in Singapore last year, Trump has shown a tendency the North Korean leader is sure to try to exploit: making unexpected concessions in one-on-one meetings. There was the December phone call with Turkey’s president, when Trump surprised his own aides — and prompted Defense Secretary Jim Mattis’s resignation — by suddenly agreeing to pull troops out of Syria. And last year’s joint press conference with Russian President Vladimir Putin, when Trump all but dismissed his own intelligence community’s findings on Russian hacking of the 2016 election.

Heading into next week’s summit with Kim in Hanoi, the president’s top advisers will seek to ensure no last-minute giveaways happen this time around. But for North Korea, the president’s habit of making concessions on the fly presents an opportunity that’s likely to lead negotiators from Pyongyang to disregard the president’s staff to focus on what he might offer. Read more from Nick Wadhams.

Acosta Broke Law in Epstein Sex Case, Judge Says: Labor Secretary Alexander Acosta and other prosecutors violated the law in hatching a plea deal with Miami hedge fund manager Jeffrey Epstein on teen sex trafficking charges, a federal judge ruled today. Acosta and other prosecutors in South Florida in 2008 improperly “concealed” the agreement from Epstein’s alleged victims, District Judge Kenneth Marra ruled. That kept the alleged victims from having the opportunity to oppose the agreement before it was signed, Marra said. The ruling is likely to ramp up public criticism of Acosta, who was the lead federal prosecutor for South Florida when he and state prosecutors reached a deal with Epstein’s lawyers. Read more from Chris Opfer.

Stone Judge Tightens Gag Order After Incendiary Post: Political provocateur Roger Stone was harshly reprimanded by a federal judge for his inflammatory Instagram post that included her photo alongside what appeared to be rifle-scope crosshairs. U.S. District Judge Amy Berman Jackson scolded the adviser to Trump for his social media post and ordered him not to publicly comment on the case, but she stopped short of ordering the self-anointed political dirty-trickster to jail. The image, which he deleted shortly after posting it on Monday, was accomp anied by text critical of Jackson and Special Counsel Mueller. Read more from Andrew Harris and Tom Schoenberg.

IRS Analyst Charged for Leaking Cohen Records to Avenatti: The U.S. charged an analyst for the IRS with illegally disclosing suspicious activity reports related to the private banking information of Michael Cohen, the former personal lawyer of Trump. John C. Fry was an analyst with the IRS’s law enforcement arm in San Francisco, according to the U.S. Attorney’s Office. After searching for activity reports related to Cohen and Essential Consultants, Fry shared the information with attorney Michael Avenatti, an agent for the Treasury Department said yest erday in a federal court filing. Read more from Joel Rosenblatt.

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; Brandon Lee at blee@bgov.com

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