What to Know in Washington: Trump Trade Patience Hangs on Mexico

President Donald Trump’s patience for his deal averting tariffs on Mexico depends on a quick drop in migration across the U.S. border — something his own administration and political allies see as an unrealistic expectation.

This raises the prospect that Trump’s frustration over immigration will soon reignite, possibly prompting renewed tariff threats against Mexico.

Under the deal, announced late Friday after Trump threatened to impose tariffs on imports from its southern neighbor, Mexico agreed to deploy troops to interdict migrants headed for the U.S. and also keep more of them on its side of the border while their asylum cases are adjudicated. Mexican Foreign Minister Marcelo Ebrard said his country has 45 days to show the U.S. that additional measures aren’t needed.

Acting Homeland Security Secretary Kevin McAleenan and Sen. Lindsey Graham (R-S.C.), a key Trump ally, both sought to temper expectations for the accord during a hearing yesterday — echoing Trump’s own statements that Congress must act to substantially slow the flow of migrants.

“The bottom line is: until we change our laws in two areas, this never stops,” said Graham, who has proposed extending the length of time migrant families can be held in detention and pushing asylum seekers to file claims at a U.S. embassy or in Mexico, instead of the U.S.-Mexico border.

“So Mexico cannot solve this problem by itself,” Graham said while questioning McAleenan, who replied: “Right.”

Neither side has said how they’ll measure success, but a likely indicator is a monthly U.S. report on migrants apprehended after crossing the southern border, a number that has spiked since January but typically falls in summer.

The situation is ripe for another showdown. Read more from Josh Wingrove.

Photographer: Al Drago/Bloomberg
Sen. Lindsey Graham during Tuesday’s hearing with Acting DHS Secretary Kevin McAleenan.

Happening on the Hill

Fiscal 2020 Spending: The House today will begin consideration of the four-bill spending package and related amendments. Lawmakers will debate Trump administration health-care rules, global family planning funds, and more when they start considering amendments to the package (H.R. 2740). The House Rules Committee made in order 115 amendments for floor votes. Danielle Parnass and Naoreen Chowdhury highlight some amendments to watch.

The White House Office of Management and Budget said yesterday that advisers would recommend Trump veto the package if the House passes the measure.

Meanwhile, Senate Appropriations Chairman Richard Shelby (R-Ala.) said a meeting on top-line fiscal 2020 funding levels originally set for yesterday afternoon will take place today at 4 p.m., with McConnell, Shelby, acting White House budget chief Russ Vought and Treasury Secretary Steven Mnuchin attending, according to Shelby. Read more from Erik Wasson.

Pelosi Vows to Review Hong Kong Trade Ties: Speaker Nancy Pelosi (D-Calif.) threatened to review Hong Kong’s special trading privileges if lawmakers pass a controversial extradition bill, lending support to protesters who have blocked streets over concerns of Chinese encroachment. Pelosi issued a statement today calling for legislative action to “reassess” whether Hong Kong is “sufficiently autonomous” under the One Country, Two Systems framework that guides its relations with Beijing. She said she looked forward to the introduction of legislation in coming days that she referred to as the Hong Kong Human Rights and Democracy Act.

“The extradition bill imperils the strong U.S.-Hong Kong relationship that has flourished for two decades,” Pelosi said. “If it passes, the Congress has no choice but to reassess whether Hong Kong is ‘sufficiently autonomous.’” Read more from Jodi Schneider.

House Authorizes Suits Against Barr, McGahn: The House yesterday voted to authorize lawsuits against Attorney General William Barr and former White House Counsel Don McGahn as Democrats try to enforce subpoenas for documents and testimony in its investigations into Trump and his White House. The resolution was approved 229-191 along party lines.

The measure stops short of holding Barr and McGahn in contempt of Congress. Instead, its focus on civil legal action reflects the middle-ground approach taken by Pelosi, who’s trying to finesse pressure by her party to launch impeachment proceedings against Trump that she’s warned could backfire politically.

Immediately afterward, House Judiciary Chairman Jerrold Nadler (D-N.Y.) said his committee will “move as quickly as possible to go to court” against McGahn and will do the same if other witnesses—including former White House aides Hope Hicks and Annie Donaldson—do not respond to subpoenas. Nadler said he won’t go to court against Barr if the Justice Department fulfills its recent agreement to begin making documents available. Read more from Billy House and Chris Strohm.

Defense Policy Bill: Defense contracting abuses the Pentagon says are “gouging” U.S. taxpayers are being targeted in proposed amendments to the $733 billion defense bill working its way through Congress. The amendments, sponsored by Reps. Ro Khanna (D-Calif.) and Jackie Speier (D-Calif.), would give military and civilian contracting officers more authority to demand disclosure of pricing data from sole-source parts providers. That would help them determine if markups are reasonable or inflated. The amendments will be introduced by the two Democrats during consideration today of the House Armed Services committee’s fiscal 2020 defense policy bill.

The move comes in response to markups of as much as 4,451% for 46 parts sold from 2015 through 2017 by Cleveland-based TransDigm Group Inc. and disclosed in a February report by the Pentagon’s inspector general. That report and a subsequent congressional hearing highlighted that the Pentagon could end up paying TransDigm $91 million in coming years for parts valued at $28 million. Read more from Tony Capaccio.

Senate to Vote on Saudi Arms Sale Disapproval: The Republican Senate will vote on measures that could prevent the Trump administration from pushing through arms sales to Saudi Arabia over congressional objections, according to Senate Majority Leader Mitch McConnell (R-Ky.), potentially tying up floor time and putting some of the president’s closest allies at odds with part of his foreign policy.

Some Republicans have criticized Trump’s decision to push ahead with $8 billion in arms sales to Saudi Arabia and other Mideast countries despite congressional opposition. They have also urged stronger consequences for the kingdom’s role in the killing of columnist Jamal Khashoggi. McConnell said he is “as offended as everyone is by the behavior of the Saudis on the Khashoggi case” but he warned against “fracturing the relationship we have with the Saudis.”

With Senate Republicans Mike Lee (Utah), Lindsey Graham (S.C.), Rand Paul (Ky.) and Todd Young (Ind.) cosponsoring 22 resolutions to disapprove of the sales, McConnell acknowledged that a vote will go ahead. Read more from Daniel Flatley and Laura Litvan.

Cornyn Gets in Pharma’s Crosshairs: A prominent Republican senator has broken with his party to push for aggressive drug patent reforms as he faces constituents during his re-election campaign. Sen. John Cornyn (R-Texas) has been active in trying to reform the patent system since 2007, but observers have been surprised at how bold his legislation (S. 1416), co-sponsored by Sen. Richard Blumenthal (D-Conn.) is.

The legislation would give the Federal Trade Commission more ability to go after pharmaceutical companies that file many patents on a drug or shift consumers onto slightly different, separately patented brand-name medications when older patents run out, keeping prices and profits high. Shira Stein has more.

Elections and Politics

Biden, Trump Escalate in Preview of 2020 Iowa Battle: Former Vice President Joe Biden (D) cast Trump as an “existential threat” to the U.S. who has weakened alliances and harmed American workers with needless trade conflicts, delivering a preview of how Biden would wage a general election battle.

Biden spoke in southeastern Iowa yesterday, hours before the president was set to arrive in the state. Meanwhile, Trump launched schoolyard taunts against the Democratic front runner before even leaving Washington, calling him a “dummy” and “weak mentally.” Trump continued the attack at an event at a Council Bluffs renewable energy facility later yesterday, criticizing the former vice president as “sleepy” and failing farmers during the Obama administration. Read more from Jennifer Epstein.

  • When Trump landed in Iowa, he expected a celebration of ethanol. But U.S. farmers also used the rally to take their complaints with the administration over oil-refinery waivers publicly and directly to the president. Kevin Ross, a farmer and a National Corn Growers Association official, pleaded to Trump to curb waivers that exempt refineries from complying with the Renewable Fuel Standard. Read more from Mario Parker and Jennifer A. Dlouhy.

Sanders Defends ‘Socialism’ Amid Republican Attacks: Sen. Bernie Sanders (I-Vt.) is venturing into territory avoided by all other 2020 Democratic presidential hopefuls by embracing a “socialist” label that Trump is trying to tag on the entire field of candidates. In a speech in Washington yesterday, Sanders defended democratic socialism and made a case that it’s the only path to ending “authoritarianism” and oligarchy. Read more from Laura Litvan.

Movers and Shakeups

Trump Judicial Pick Withdraws Amid Pressure From GOP: Trump sustained a rare judicial appointment setback when Michael Bogren, his choice for a district court seat in Michigan, pulled his nomination yesterday over a religious freedom controversy, a source close to the confirmation process said. Picked for the U.S. District Court for the Western District of Michigan, Bogren reportedly fell under pressure from certain Senate Republicans and outside conservative groups who questioned his work representing East Lansing in an LGBT discrimination case. Read more from Patrick L. Gregory and John Crawley.

Morrison Confirmed as District Judge in Ohio: The Senate easily confirmed longtime Republican Sarah Morrison to a federal district court yesterday. Her nomination to the U.S. District Court for the Southern District of Ohio cleared the chamber 89 to 7. The administrator and chief executive of the Ohio Bureau of Workers’ Compensation is Trump’s 71st district court appointee. Read more from Patrick L. Gregory.

What Else to Know

Trump’s Base Stays Loyal: Rural Americans are showing no signs they’re ready to abandon Trump even as dissatisfaction grows among farmers over his trade policies. In May, even as Trump escalated his trade war with China by announcing a new round of tariffs, 54% of self-described rural residents said they approved of Trump’s job performance, versus 41% of all Americans, according to a Gallup survey. The May reading dropped 4 percentage points from April but that mirrored the same 4-point drop among Americans overall from a month in which Trump’s popularity had been boosted by Special Counsel Robert Mueller’s report finding that the president’s campaign hadn’t colluded with Russia’s interference in the 2016 election, along with a stronger-than-expected jobs report.

“Rural Americans support for him has been pretty consistent throughout his presidency,” said Jeff Jones, senior editor of the Gallup Poll. Read more from Mike Dorning.

Trump to Sign Order Easing GMO Approval: Trump plans to sign an executive order directing federal agencies to ease approvals of genetically modified crops and other agricultural biotechnology, said two people familiar with the directive. It would instruct the Agriculture Department, Food and Drug Administration and Environmental Protection Agency—all of which have jurisdiction over genetically engineered agricultural products—to review their biotechnology regulations to streamline the approval processes. Read more from Mike Dorning and Jennifer A. Dlouhy.

Trump Plans Poland Troop Announcement: Trump plans to make an announcement Wednesday about U.S. troop commitments in Poland after months of discussions between both nations about establishing a military base in the country that its president has dubbed “Fort Trump.” The announcement will come as Poland’s President Andrzej Duda meets with Trump at the White House, according to administration officials. The officials, who briefed reporters on Tuesday on condition of anonymity, wouldn’t say whether there would be an announcement about the base or preview any details about the troop commitment. But they said it would enhance the U.S. commitment to NATO. Read more from Margaret Talev.

Ross Gets Extension to Disclose Assets: Commerce Secretary Wilbur Ross received a 45-day extension to file his annual financial disclosure report, originally due on May 15, according to an official in the department’s ethics office, who responded to a request for the document. Ross’s disclosed holdings are worth $320 million to $660 million or more in January 2017, and he’s vowed to divest 80 assets that could potentially pose a conflict of interest. The federal Office of Governments Ethics in February declined to certify the financial disclosure Ross filed in 2018, citing his failure to divest all the assets he’d promised. BIll Allison has more.

Final Blow to SALT Deduction Workarounds: The Treasury Department dealt the final blow to programs in states such as New York and New Jersey designed to help residents circumvent the new $10,000 limit on deductions for state and local taxes. The regulations, issued yesterday, prohibit workarounds that would allow residents to start charitable funds for a variety of programs where donors could get a state tax credit in exchange, effectively removing limits on state and local taxes. Read more from Laura Davison.

Reagan’s Chief Economic Adviser Dies: Martin Feldstein, the former head of the Council of Economic Advisers who successfully persuaded President Ronald Reagan to cut budget deficits by breaking his campaign vow not to raise taxes, has died at 79. Feldstein died yesterday morning, his assistant Norma McEvoy said. Almost two years into Reagan’s first term, Feldstein became head of the CEA and the president’s top economic adviser, at a time when the Reagan administration’s economic policies faced attacks from deficit hawks. Read more from Patrick Oster on Feldstein’s career.

Trump’s Net Worth Rises: Trump’s net worth rose to $3 billion, a 5% gain over the past year, thanks to a jump in the value of an office-building deal he once sued to prevent. The increase in Trump’s wealth reverses two years of declines and brings his net worth back to 2016 levels, according to figures compiled by the Bloomberg Billionaires Index from lenders, property records, securities filings, market data and a May 16 financial disclosure. It comes despite setbacks at his family company, including the cancellation of two new hotel chains and reduced business at his Mar-a-Lago resort in Florida and seven golf courses. Read more from Shahien Nasiripour and Caleb Melby.

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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