Full agenda when lawmakers return | U.S.-N. Korea | Trump briefing | NAFTA 2.0 talks | Trade action on China | FOMC minutes | Deere earnings
Congress remains on its long summer recess but a big workload awaits them on their return after Labor Day. The House has only 12 working days before the end of September and a new fiscal year begins; the Senate has 16 days.
U.S.-North Korea anxiety continues, but the focus will be on whether the situation eases somewhat after President Donald Trump late Friday talked with China’s leader. Chinese President Xi Jinping urged Trump to exercise restraint over tensions with North Korea, Chinese state media reported. The two leaders vowed to remain in close tough over the situation, state media said. The Associated Press reported that Joseph Yun, the U.S. envoy for North Korea policy, has been in regular contact with Pak Song Il, a senior North Korean diplomat at the country’s mission at the United Nations. The AP report indicated that the discussions had not eased fears of a military confrontation, but could prove a foundation for negotiations going forward. In television interviews over the weekend, National Security Adviser H. R. McMaster said “we’re not closer to war than a week ago,” while Central Intelligence Agency Director Mike Pompeo said he’d seen “no intelligence” to indicate the U.S. was on the cusp of being attacked.
Trump holds a rare press conference Monday.
Japanese and U.S. defense and foreign ministers will meet in Washington on Aug. 17 to discuss how to strengthen their missile defense capabilities following North Korea’s firing of two intercontinental ballistic missiles in July.
The legislative agenda when lawmakers return includes (1) a bill raising the debt ceiling; (2) spending bills to keep the government open; (3) Extensions for expiring programs on Sept. 30, including the Children’s Health Insurance Program, the coast Guard, and others; and (4) a budget resolution setting overall spending levels for fiscal year 2018 and one which will allow the Senate to use a filibuster-busting mechanism that could allow a tax bill to pass with just 51 votes. Senate Majority Leader Mitch McConnell (R-Ky.) tried that same approach in the unsuccessful effort to repeal ObamaCare.
An investigation into China over allegations it violated U.S. intellectual property rights and forced technology transfers will be unveiled Monday, Politico first reported, citing an unidentified administration official. Officials expect U.S. Trade Representative Robert Lighthizer to open an investigation against China under Section 301 of the Trade Act of 1974. Trump administration officials said overall an estimated $600 billion a year in U.S. intellectual property is stolen with China accounting for a major part of the theft.
Of note, there will be no immediate action against China following the president’s signing of the memorandum, but the steps will authorize U.S. Trade Representative Robert Lighthizer to determine if an investigation of Beijing’s laws, practices or actions is warranted. CNN Politics on Saturday cited an unnamed Trump official who confirmed that Trump told China’s Xi about the memorandum.
Senior administration officials denied that the memorandum is part of a coordinated effort by the Trump administration to pressure its largest trading partner to be more aggressive in getting North Korea to curb its threats of ballistic missile action against allies in the region and the U.S. territory of Guam. “Trade is trade. National security is national security,” an official said. “This is simply business between two countries. We have issues related to the theft and forced transfer of our technology. This will be negotiated under international law. There’s no need for increased conflict (between the United States and China),” the official said, noting that talks with China during the first 100 days of the administration on this issue had not yielded results.
However, Trump last Thursday indicated that China’s posture on North Korea could be affected by U.S. pressure on trade issues. “I think China can do a lot more, yes. China can. And I think China will do a lot more. Look, we have trade with China. We lose hundreds of billions of dollars a year on trade with China. They know how I feel. It’s not going to continue like that. But if China helps us, I feel a lot differently toward trade.’'
The coming new China investigation marks a significant change in the trade policy process of the Trump administration, with observers noting it suggests that a newly more organized and measured way to proceed with those complaints may be emerging.
A Chinese state newspaper warned Monday that President Trump “could trigger a trade war” if he goes ahead with plans to launch an investigation of whether China is stealing U.S. technology. In a commentary by a researcher at a Commerce Ministry think tank, the China Daily said President Donald Trump’s possible decision to launch an investigation, which as noted he is expected to announce today, could “intensify tensions,” especially over intellectual property, and “poison the overall China-U.S. relationship.”
NAFTA 2.0 negotiations begin. North American Free Trade Agreement (NAFTA) talks will be held in Washington Aug. 16-20. Canada, Mexico and U.S. officials and lobby groups will step up their comments on what they see is needed in renegotiations.
“NAFTA needs to be reformed to help protect American workers and create more jobs at home. We should keep the parts that work, especially for much of American agriculture, but fix the parts that don’t,” White House chief economic adviser Gary Cohn said in a statement over the weekend. “Working together, we will modernize this agreement to meet the needs of today’s economy, just as the president promised.”
The focus for U.S. stakeholders. Some 32 freshman House Republicans in a recent letter to U.S. Trade Representative Robert Lighthizer made their NAFTA 2.0 views known. Twenty-seven of those new members come from parts of the country that Trump won last year, including states like Pennsylvania and Michigan where his anti-NAFTA message helped him win election. “We recognize that a 23-year-old agreement needs updating, and commend your desire to make improvements and ensure strict enforcement,” the lawmakers wrote. “We are also keenly aware of the potential for damage to U.S. farmers, businesses, manufacturers, service providers and workers if long-standing agreements are suddenly vacated.”
Alabama and Utah will hold special election primaries on Tuesday.
In Alabama, Senate primary elections will be held to fill the remainder of the term for a seat vacated when Sen. Jeff Sessions became attorney general. Incumbent Sen. Luther Strange, Roy Moore and Rep. Mo Brooks lead the Republican field; Trump and Senate Majority Leader McConnell have endorsed Strange — McConnell has spent millions of dollars via his political action committee to attack Brooks and Moore, both of whom have gained some traction by blasting the Senate leader. Democratic leaders largely are backing former U.S. Attorney Doug Jones, though Robert Kennedy Jr, unrelated to the famous Kennedy political family, has led in limited polls. If no one gets majority of vote in the primaries, the top two go on to a runoff.
In Utah, the Republican primary election holds a race to replace Rep. Jason Chaffetz. Candidates: Provo Mayor John Curtis, former state legislator Chris Herrod, and Tanner Ainge, a businessman whose campaign has been boosted by donations from his family; Ainge’s dad is Boston Celtics GM Danny Ainge. The GOP primary winner will be a solid favorite in the heavily Republican district where Chaffetz won 73% of the vote in 2016; the winner will face Democrat Kathie Allen, a physician, in the Nov. 7 special election.
Vice President Mike Pence will be in Buenos Aires, Argentina, as part of a week-long trip through Latin America, with other stops including Cartagena and Bogota, Colombia; Santiago, Chile; and Panama City, Panama.
Tax reform field session. On Wednesday, Republican members of the tax-writing House Ways and Means Committee will gather in Santa Barbara, Calif., at the Reagan Ranch. Chairman Kevin Brady (R-Texas) will speak on why the U.S. should overhaul its tax code.
The White House plans to release a three-to-five-page document in early to mid-September outlining a framework for overhauling the tax code, Reuters reports, citing three sources familiar. The document won’t be accompanied by tax legislation.
On the economic report front, the U.S. Census Bureau on Tuesday reports retail sales for July.
The Fed’s monetary policy-making committee on Wednesday releases minutes from its July meeting.
Regarding agribusiness earnings, John Deere on Friday will release its latest results.
On the agriculture report front, the USDA supply and demand reports released last Thursday will be analyzed and talked about, with weather events able to impact key crops. The usual Monday (Grain Inspections) and Thursday (Weekly Export Sales) reports will be monitored for any demand news that will temper growing carryover stocks of corn and soybeans. USDA on Friday releases a report farm computer usage and ownership.
