Irma update | North Korea | Trump signs aid, funding, debt ceiling package | Ross on trade policy | Ross on other issues
— Irma update.
Irma is now a Category 2 hurricane, with maximum sustained winds of 110 mph. The western part of Florida is getting the worst of Irma. Expected to be even more dangerous than the powerful winds are the storm surges that threaten Florida’s coastal cities. “The threat of catastrophic storm surge flooding is highest along the southwest coast of Florida, where 10 to 15 feet of inundation above ground level is expected,” the hurricane center said. “This is a life-threatening situation.”
Florida officials ordered more than 6.5 million residents to leave their homes, one of the largest emergency evacuations in American history. Gov. Rick Scott warned on Saturday night that the state could get as much as 18 inches of rain, with the Keys getting up to 25 inches. Irma prevlously devastated parts of the Caribbean with at least 25 deaths.
The Trump administration waived restrictions to allow non-American flagged ships to deliver refined gasoline to Florida for vehicles and generators. With the storm closing in on the state, officials doubt conditions will allow much more gas to reach filling stations there.
FEMA in touch with Alabama and Georgia officials as Hurricane Irma track shifts west. FEMA Administrator Brock Long said as Hurricane Irma’s predicted track moves further west, the agency continues to stay in touch with local officials in Georgia and Alabama, noting especially that storm surge in the Gulf waters will be a key concern. “Storm surge has the highest potential to kill the most amount of people and cause the most money damage,” Long said on Fox News Sunday “My biggest concern is when people fail to heed a warning early from local government officials and then they make a last-minute ditch to try to get to a shelter or into a facility to withstand the winds and in some cases the water starts to rise and they get trapped because they didn’t heed the warning early and that’s my greatest concern.”
— Major potential impacts for Florida citrus growers, production. Florida accounts for 56% of U.S. citrus production and is the No. 1 state for oranges, according to the Florida Department of Agriculture and Consumer Services. The state’s total production value for oranges in 2015 was $1.17 billion. Other crops threatened by Irma are tomatoes, green beans, cotton and peanuts. Wind damage is key, growers and other agree, with wind levels hitting projected levels, if realized, likely meaning severe crop loss. Growers were hoping to rebound from a bad year of citrus greening, a disease spread by the Asian citrus psyllid, a small insect that feeds on leaves and stems of citrus trees.
Insurance provisions. Growers in some counties are covered under the federal Florida Citrus Fruit Crop Insurance Provisions, which includes protection from hurricane damage to crops but doesn’t insure against production loss from damage to blossoms or trees. Growers not within the eligible counties are covered through the Noninsured Crop Disaster Program under the 2014 farm bill. The program’s payments are limited to $125,000 per crop year and the crops must be commercially produced commodities for which crop insurance isn’t available.
— North Korea update. The U.S. is pressing for a U.N. Security Council vote by Monday on tough, sweeping measures against North Korea, including an oil embargo, the authorization to board its ships, and a freeze on the assets of the leader, Kim Jong-un. Russia and China are expected to block the resolution.
A U.S.-drafted resolution originally calling for an oil embargo on the North, a halt to its key exports of textiles and subjecting leader Kim Jong Un to a financial and travel ban appears to have been watered down to placate Russia and China, which both have veto powers, diplomats said. It no longer proposes blacklisting Kim and relaxes sanctions earlier proposed on oil and gas, a draft reviewed by Reuters shows. It still proposes a ban on textile exports.
John McCain: Kim Jong Un needs to know the price of aggression “will be extinction.” Sen. John McCain (R-Ariz.) said in an interview that aired Sunday the U.S. does not have to accept a nuclear North Korea, encouraging investment in missile defense so Kim Jong Un knows the price of bellicose behavior “will be extinction.” McCain, chairman of the Senate Armed Services Committee, said, “We have really two choices,” regarding accepting a nuclearized Korean peninsula and working with China to “put the brakes on” the rogue nation’s leader, Kim Jong Un. “The third option is — that we’ve got to do along with it [working with China] — is missile defense, capabilities to defend Korea. In other words, make sure that Kim Jong Un knows that if he acts in an aggressive fashion, the price will be extinction.
— President signs disaster aid, CR, debt ceiling bill. President Donald Trump signed on Friday the hurricane emergency aid package that also addresses the debt ceiling and government funding through Dec. 8, Press Secretary Sarah Huckabee Sanders tweeted. The action came after House lawmakers cleared the bill (HR 601) by a 316-90 vote earlier in the day, with all 90 nay votes being Republican, in part because it bundled up the funding and debt ceiling suspension provisions with hurricane aid. The Senate passed the bill Thursday.
Besides $15.25 billion in emergency funding for victims of Hurricane Harvey and other major disasters, the legislation (HR 601) contained a continuing resolution (CR) to fund the government and debt limit suspension through Dec. 8. The 2018 fiscal year begins Oct. 1.
The Harvey relief package includes a provision to cover an estimated $300 million shortfall in the U.S. Forest Service’s wildfire suppression efforts for fiscal 2017 as the service battles blazes in nine western states. As of last Thursday, communities in the West face 76 active, large wildfires, affecting nearly 1.5 million acres of land, according to the National Interagency Fire Center. So far this year, the Forest Service has spent an estimated $1.7 billion to combat wildfires — about the total that Congress appropriated for suppression activities in fiscal 2017. The spending level was based on 10-year spending averages.
Trump’s deal with Democratic leaders was not a one-off, and he intends to continue trying to pass bipartisan legislation, Press Secretary Sarah Huckabee Sanders said. The president will work with whichever members “want to move the ball forward,” she said.
— Ross is latest Trump official to warn on trade policy. Commerce Secretary Wilbur Ross said Friday that if talks to renegotiate NAFTA don’t benefit the United States, President Donald Trump will withdraw from the trade pact. “That shouldn’t be a shock to anyone,” Ross said at a Washington Post event.
Regarding ongoing NAFTA 2.0 negotiations, Ross said negotiators from the U.S., Canada and Mexico tackled the easiest issues in recent rounds, adding the strategy “is to try to build some momentum, a feeling of togetherness as you move into the harder issues.” Ross said it is “too early to really tell” whether Canada and Mexico are bargaining in good faith, noting that only 10 days of talks have been held so far, over two sessions. “That’s not a lot. It took them eight years to do an average trade treaty, so we’re trying to get done more or less by the end of the year, a whole re-vamp, so this is an unprecedented thing,” Ross added.
NAFTA 2.0 talks “can’t drag on too long because of the political calendar,” Ross stressed. Even though the renegotiation is in its early stages, the Trump administration still views the end of the year as the deadline for talks to wrap up, Ross said. He argued that the process can’t “drag on too long” beyond that, because if it did, negotiators would run into delays amid elections in all three countries and the expiration of Trade Promotion Authority (fast track) in the U.S. “You have the Mexican presidential elections in mid-summer next year, you have Canadian provincial elections around the same time... and then obviously in November next year we have the mid-term (U.S.) elections... As you get closer to all of those political dates, the ability to get anything done will go down,” Ross added. “So, there’s no fine line, magic tape, but more or less by the end of the year is probably where we’re going to need to know where we are.”
The next round of negotiations will take place in Ottawa, Sept. 23-27.
Ross again noted the U.S. cumulative trade deficit with Mexico exceeds $1 trillion over two decades of NAFTA and cannot be allowed to continue.
Low wages and living standards in Mexico are also evidence that NAFTA isn’t working as it should be, Ross added. “You can argue that anything that makes for more trade is useful, but I don’t think that’s the point,” Ross said. “The point is, is it an appropriate agreement? Did it fairly distribute the benefits? And we don’t think that it did.”
Mexican Economy Secretary Ildefonso Guajardo said on Thursday that the three countries have yet to address rules of origin, the trade deficit and the dispute settlement chapter — three of the topics that will likely prove hardest to negotiate — according to a report in Mexican media (link).
As for Canada, provincial elections in the country are part of the reason NAFTA 2.0 talks must move at “record-breaking” speed, Ross said during a question and answer session covering a range of financial issues. But trade experts are questioning Ross’s claim, since the federal government handles trade issues and only three provinces have elections scheduled for 2018. It’s a comment that displays a surprising lack of understanding of the Canadian political context,” said Gordon Ritchie a member of the original Canadian NAFTA negotiating team. “First of all, the file is a federal responsibility. Second, the provinces are all on the same page,” Ritchie said. “I don’t see any impact of any provincial election on any of this stuff,” Ritchie added.
Ross also said that key U.S. exports to South Korea have declined over the life of KORUS while Korea’s auto exports to the U.S. have risen. “I don’t think it’s inherent in having someone as an important national defense partner that you have to run a trade deficit with them,” he said. The possibility of withdrawing from the trade agreement, particularly at a time when the United States is relying on South Korea as an ally against North Korea as a growing nuclear threat in the region, has worried business groups and some lawmakers. President Trump and others on his team initially said last week that they were mulling withdrawing from the 2012 U.S.-Korea trade agreement because of an annual trade deficit of more than $20 billion.
China also could face action from the U.S., Ross suggested. Treasury Secretary Steven Mnuchin said he is preparing a sanctions package to target countries that trade with North Korea. He said the U.S. trade deficit with China helps the Asian nation offset its net global trade deficit with other counties. “You have the singular problem of the Chinese being 90% of the trade with North Korea. In order to make sanctions really effective, you can’t have them being as generous as they have been in terms of trade,” Ross observed.
Asked if he planned to remain Commerce secretary the four years of Trump’s term, Ross turned the question around. “Four years? The president is counting on eight years,” Ross replied.
— Ross on other key policy issues via his appearance at a Washington Post event:
Raising the debt ceiling. Ross said Trump made the agreement with Democrats “to get over these sorts of procedural hurdles and on to the real event, which is tax reform and the big-ticket items.” Both chambers will be in session for less than 20 days in September so time is limited for major actions. The Senate approved a combined hurricane emergency spending, stopgap federal funding and debt-ceiling bill (HR 601) on Thursday with the House giving final approval Friday. Link to Washington Post video.
Future of DACA. Trump in phasing out the deferred action for childhood arrivals program and has given Congress six months to address the future of 800,000 undocumented immigrants brought to the U.S. illegally by their parents. Predecessor Barack Obama exceeded his legal authority in creating the temporary program and Trump followed the rule of law in ending it, Ross said. DACA “will be legitimized by whatever Congress passes. Exactly what form it will take is a little bit hard to tell at this early stage,” Ross said, adding the legislation will have to deal with adult DACA participants whom he said are on average are 23 years old. “This is not a bunch of little children.” Link to Washington Post video.
Business leaders’ resignation from presidential advisory panels. Ross said the business community’s general mood is good because of the administration’s efforts to scale back regulations and deliver a tax overhaul that reduces taxes for businesses. Business executives left advisory councils after Trump’s withdrawal from the Paris Climate Accord in June and after his comments in August equivocating violent white supremacist groups with counter protesters. Ross said the departures do not reflect general business sentiment about the Trump administration. “Remember, most of these people in the business community included on those councils didn’t vote for the president to begin with. They were mostly supporters of the other candidate,” Ross said at a Washington Post event Friday. “I think what’s sad is for business leaders to give up an opportunity to influence policy over some singular issue with which they disagree. I don’t think that’s very well considered.” By example: “Elon Musk is not exactly a right-wing person” while doing a good job at Tesla, Ross said. All told, morale in the business community is “really good,” he said. He questioned the wisdom of business executives giving up an opportunity to influence presidential policy over “some singular issue with which they disagree. I don’t think that’s very well considered.” Link to Washington Post article.
