Farm Journal Midwest Crop Tour | Central bankers meet | Icahn resigns as Trump adviser | Section 301 probe of China | U.S.-S. Korea trade talks
Congress continues on its summer recess with attention this week focused on a central banker confab and the Farm Journal Midwest Crop Tour.
President Donald Trump will deliver a speech this evening about the U.S. engagement in Afghanistan and South Asia. The White House announced Sunday that the president will travel to Fort Myer in Arlington, Va., and address U.S. troops gathered there “to provide an update on the path forward for America’s engagement in Afghanistan and South Asia.”
Billionaire investor Carl Icahn resigned Friday as a special adviser to President Donald Trump, saying he didn’t want “partisan bickering” to cloud the work of the administration. The activist investor said he had resigned with Trump’s blessing, and cited the naming of Neomi Rao as administrator of the Office of Information and Regulatory Affairs (OIRA) as a reason for easing the need for his unofficial role.
Icahn defended his own advisory role, which had drawn criticism for the perception he had conflicts of interest. Icahn in the letter said he “never had access to nonpublic information or profited from my position, nor do I believe that my role presented conflicts of interest,” a critique levied by Democrats and others in and outside Washington.
Icahn has an 82% stake in CVR Energy and had been pushing for a change to federal biofuel policy that the Trump administration is set to turn down. EPA is expected to nix a proposal that would let oil refiners off the hook for complying with the federal ethanol mandate via RINs.
Icahn’s resignation followed news Friday that Stephen Bannon is leaving his role as Trump’s chief strategist — the departure follows similar exits by former White House chief of staff Reince Priebus, former press secretary Sean Spicer and former communications director Anthony Scaramucci. Bannon, 63, the chief executive of Trump’s presidential campaign and an architect of his election victory, was the leading champion of conservative populism within the administration.
Meanwhile, the New Yorker published a long article on Icahn’s efforts to change a policy that hurt CVR Energy. The story said that Icahn could be in “legal jeopardy.” “He’s walking right into possible criminal charges,” Richard Painter, a Bush administration ethics lawyer, told Keefe. Painter cited a federal statute that “makes it illegal for executive-branch employees to work on any matter in which they may have a direct financial interest.” Icahn’s lawyer told Keefe the rule doesn’t apply to Icahn. Link to full article. According to Icahn’s lawyer, Icahn only expressed “hope” that Trump would agree with his view on RINs. A spokeswoman for the White House eventually denied that there was any plan to shift the point of obligation via executive order. Icahn’s lawyer denied that Icahn had prepared any executive order. According to Painter, Icahn is “walking right into possible criminal charges,” because of “a federal statute that makes it illegal for executive-branch employees to work on any matter in which they may have a direct financial interest.” Icahn had the title “special adviser to the president.” Icahn’s lawyer told Keefe the relevant law does not apply to Icahn: “Unlike a government employee, Mr. Icahn has no official role or duties and he is not in a position to set policy.”
USTR launches Section 301 investigation of China’s IP practices. It took just a few days after President Donald Trump signed an executive memo ordering U.S. Trade Representative Robert Lighthizer to find ways to confront China over its forced technology transfers and the theft of U.S. intellectual property. The likely response was officially announced: a Section 301 investigation. “After consulting with stakeholders and other government agencies, I have determined that these critical issues merit a thorough investigation,” Lighthizer said in a statement. “I notified the president that... I am beginning an investigation under Section 301 of the Trade Act of 1974.”
The probe could take a while, some say one year. Officials will target Chinese policies that force U.S. companies to hand over valuable technology in order to do business in the country, which critics argue stifles innovation and harms American firms.
USTR will hold a public hearing on the subject on Oct. 10 at the U.S. International Trade Commission, where members of the public are invited to testify. Public comments and requests to appear at the hearing must be submitted by Sept. 28.
Beijing has responded to Friday’s announcement, expressing “strong dissatisfaction” with the “unilateral, protectionist action.” The Commerce Ministry will also adopt “all appropriate measures to resolutely defend China’s interests.”
U.S., South Korea to talk trade policy update. South Korea’s trade negotiators will meet with their U.S. counterparts in a special joint committee session on the Korea-U.S. Free Trade Agreement (KORUS) Aug. 22, in Seoul.
Video conference. Trade Minister Kim Hyun-chong and U.S. Trade Representative Robert Lighthizer will hold a video conference, followed by a high-level meeting that will include including USTR Chief of Staff Jamieson Greer and Assistant USTR Michael Beeman, the Ministry of Trade, Industry, and Energy (MOTIE) said. Yoo Myung-hee, director-general for free trade agreement (FTA) negotiations, will lead the Korean side.
Background. Lighthizer in July formally notified South Korea that the U.S. was calling a special joint committee meeting within the next 30 days to start the KORUS renegotiation process. The U.S. wants to amend the deal, which the Trump administration has said is responsible for the $27.7 billion U.S. trade in goods deficit with South Korea.
Meeting agenda. “The two sides will discuss the best ways to conduct joint investigation, research, and evaluation on the effects of the KORUS FTA” since its implementation, the ministry said. The meeting also will consider possible “amendments and modifications” to resolve market access problems for U.S. exporters and address the trade imbalance, the ministry said. The Korean government is approaching the talks using the legally correct terms of “amendment and modification,” not a renegotiation of the deal.
Central bankers in focus this week. European Central Bank President Mario Draghi joins U.S. officials at the Jackson Hole economic symposium. Yellen will speak on the topic of financial stability at 9 a.m. CT on Friday at the Kansas City Fed’s annual symposium. The confab comes as the U.S. central bank prepares to start unwinding its $4.5 trillion balance sheet and the ECB weighs when to slow down its own large-scale asset purchases.
The U.S., Mexico, and Canada completed the opening round of NAFTA 2.0 talks Sunday to renegotiate the North American Free Trade Agreement (NAFTA), but tensions over certain areas, including the automotive industry, signaled tough bargaining ahead.
The trilateral statement released at the conclusion of Round 1 talks emphasized a renewed commitment to produce a quick deal so the talks don’t become hostage to the July 2018 Mexican presidential election and the November 2018 U.S. congressional midterms. “While a great deal of effort and negotiation will be required in the coming months, Canada, Mexico and the United States are committed to an accelerated and comprehensive negotiation process that will upgrade our agreement and establish 21st century standards to the benefit of our citizens,” the statement said. During the initial rounds of talks in Washington last week which ended Sunday, private-sector advisers received twice daily briefings for industry representatives cleared to view U.S. proposals as participants in the various Industry Trade Advisory Committees. Reports note that officials have requested that all proposals be put on the table by the end of September — in line with the conclusion of the third round, which Canada is slated to host from Sept. 23-27. That will give all three countries enough time to review each other’s positions and advance toward a final agreement. Round 2 is slated for Sept. 1-5 in Mexico City. A total of seven NAFTA 2.0 rounds is expected.
On the agriculture front, the Farm Journal Midwest Crop Tour kicks off Monday. “The crop tour’s primary goal is to provide the industry with accurate, late-season information about the likely corn and soybean yields,” said Chip Flory, editorial director for Farm Journal’s Pro Farmer newsletter. “There is not a year I can find with a similar combination of replanting issues, weather and crop conditions. We are going to see a wide variation in crop development.”
China is scheduled to release July agricultural trade data on Wednesday and the International Grains Council’s monthly market outlook is due on Thursday.
A total solar eclipse will sweep across the continental U.S. today, which can be followed on NASA’s time and location chart here.
Many (organized) people planned their solar eclipse day a year ago, or longer. But if you’re not one of them, here’s what you need via USA Today.
