Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

Since the 2016 presidential campaign, Donald Trump’s aides and advisers have tried to convince him of the importance of tackling the national debt.

Sources close to the president say he has repeatedly shrugged it off, implying that he doesn’t have to worry about the money owed to America’s creditors—currently about $21 trillion—because he won’t be around to shoulder the blame when it becomes even more untenable.

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the national debt in the not-too-distant future. In response, Trump noted that the data suggested the debt would reach a critical mass only after his possible second term in office.

“Yeah, but I won’t be here,” the president bluntly said, according to a source who was in the room when Trump made this comment during discussions on the debt.

The episode illustrates the extent of the president’s ambivalence toward tackling an issue that has previously animated the Republican Party from the days of Ronald Reagan to the presidency of Barack Obama.

But for those who have worked with Trump, it was par for the course. Several people close to the president, both within and outside his administration, confirmed that the national debt has never bothered him in a truly meaningful way, despite his public lip service. “I never once heard him talk about the debt,” one former senior White House official attested.

Marc Short, who until recently worked for Trump as his legislative affairs director, said he believed the president recognized “the threat that debt poses” and he pointed to Trump’s concern “about rising interest rates” as evidence of his concern for the matter.

“But there’s no doubt this administration and this Congress need to address spending because we have out-of-control entitlement programs,” Short said, adding, “it’s fair to say that… the president would be skeptical of anyone who claims that they would know exactly when a [debt] crisis really comes home to roost.”

Recent reports have suggested that Trump is determined, at least rhetorically, to address the issue. Hogan Gidley, a spokesman for the president, noted that the president and his team have proposed policies to achieve some deficit reduction, “including in his first budget that actually would’ve balanced in 10 years, a historic, common-sense rescissions proposal.”

[The Daily Beast]

Stock markets plunge after Trump’s ‘Tariff Man’ tweet

Stocks took a nosedive on Wall Street as investors worried that a US-China trade truce reached over the weekend wasn’t all it was cracked up to be.

The Dow Jones Industrial Average sank almost 800 points Tuesday.

Boeing and Caterpillar, two major exporters which would have much to lose if trade tensions don’t ease, weighed the most on the Dow.

Bond prices soared sharply, sending yields lower, as traders shoved money into lower-risk investments.

The sharp drop in yields hurt banks because it makes it harder to earn money from lending. JPMorgan Chase sank 4.5 percent.

The S&P 500 lost 90 points, or 3.2 percent, to 2,700.

The Dow dropped 799 points, or 3.1 percent, to 25,027. The Nasdaq fell 283 points, or 3.8 percent, to 7,158.

The markets plunged after President Donald Trump unleashed a threatening tweet Tuesday morning.

“President Xi and I want this deal to happen, and it probably will. But if not remember, I am a Tariff Man,” Trump tweeted.

[New York Post]

Trump says he will withdraw from NAFTA, pressuring Congress to approve new trade deal

President Donald Trump said he intends to formally notify Canada and Mexico of his intention to withdraw from the nearly 25-year-old NAFTA agreement in six months. The move would put pressure on Congress to approve his new trade deal with the two U.S. neighbors.

“I’ll be terminating it within a relatively short period of time. We get rid of NAFTA. It’s been a disaster for the United States,” Trump said on board Air Force One after departing Buenos Aires, where he signed the U.S.-Mexico-Canada Agreement with the leaders of those two countries.

“And so Congress will have a choice of the USMCA or pre-NAFTA, which worked very well,” Trump added.

Trump’s comments confirmed what many have long suspected — that he would use the act of withdrawing from NAFTA as a cudgel to force Congress into passing the new deal.

But it also could be seen as an admission that the new agreement is not popular enough to be approved on its own merits, so Trump has to use the threat of disrupting the entire North American economy to round up the votes in Congress to get the deal past the finish line.

While a number of business groups do support the new deal because it contains new provisions on digital trade and strengthens intellectual property rights protections, others are simply relieved that it would keep much of the original agreement in place.

House Democrats, who are likely to hold the key to whether the new agreement is approved, have complained that labor and environmental provisions are not strong enough and have signaled they would like those concerns addressed as part of the implementing legislation.

Trump’s untested move would send the administration and Congress into a legal wilderness. The NAFTA deal includes a provision that allows a withdrawal after providing a six-month notice, but opinions differ on whether the president can act on his own.

Lawmakers passed legislation to implement the original deal in 1993. It’s uncertain whether a withdrawal initiated by the president would repeal the law that put the deal into force.

The president needs to take a look at the Constitution — it gives Congress authority over trade,” Sen. Ron Wyden (D-Ore.) said in September. “The president cannot pull America out of NAFTA without Congress’s permission.”

A 2016 report from the Congressional Research Service seems to be back up that position.

“It could be argued that because international trade is an area of shared constitutional authority, Congress must have a role in any decision by the United States to terminate or withdraw from an FTA,” CRS said.

Others argue Congress ceded authority to the executive branch decades ago that would allow Trump to terminate trade deals. They say Section 125 of the Trade Act of 1974 provides the underlying legal basis for a president to terminate or withdraw from an agreement and revoke any tariff reductions.

[Politico]

Trump Organization planned to give $50 million penthouse to Putin amid Moscow deal

The Trump Organization planned to offer a $50 million penthouse suite to Russian President Vladimir Putin amid negotiations over a real estate deal to build a Trump Tower in Moscow, according to a report by BuzzFeed News. 

The bombshell report includes Felix Sater, a longtime Donald Trump associate accused of having Russian mafia ties, telling BuzzFeed News that he and Michael Cohen, the president’s former attorney and fixer, thought giving the suite to Putin could help sell other apartments.

“In Russia, the oligarchs would bend over backwards to live in the same building as Vladimir Putin,” Sater told BuzzFeed News. “My idea was to give a $50 million penthouse to Putin and charge $250 million more for the rest of the units. All the oligarchs would line up to live in the same building as Putin.”

BuzzFeed notes other unnamed officials confirmed the existence of the plan and the officials said Cohen discussed the idea with a representative of Dmitry Peskov, Putin’s press secretary.

It’s unclear whether Trump was aware of the plan, which never came to fruition due to the Trump Tower deal in Russia falling through.

Sater, a Russian immigrant who spent a year in prison for a 1991 stabbing, told the news organization that Cohen, at the time, remarked that it was a “great idea.”

Cohen’s attorney, Lanny Davis, declined to comment on the report when reached by USA TODAY. Rudy Giuliani, a lawyer for President Trump, said the story was “unknown to the president.”

Giuliani added the project was “too premature for anything like that” and called the idea to give Putin a suite “crazy.”

The revelations come at a time where the president’s Trump Tower deal in Moscow has come under intense scrutiny by special counsel Robert Mueller, who is examining Russian interference in the 2016 election.

On Thursday, Cohen pleaded guilty in federal court in New York to lying to Congress about the plan to build a Trump Tower in Russia all in the hope of shielding Trump from criticism.

Court documents filed as part of Cohen’s plea deal detailed Trump’s business dealings in Russia lasted longer during his campaign than previously acknowledged.

Federal prosecutors said Cohen lied when he submitted an Aug. 28, 2017, letter to the Senate and House intelligence committees. The letter said the project had ended by January 2016, when planning continued months longer during the presidential campaign.

Prosecutors said that Cohen lied to the committees to “minimize links between the Moscow Project and (Trump) and give the false impression that the Moscow Project ended before the Iowa caucus and the very first primary in hopes of limiting the ongoing Russia investigations.”

Sater, who had a large role in developing the Trump SoHo Hotel in New York, is also under scrutiny in Mueller’s investigation.

He wrote an email to Cohen in 2015 bragging about his ties to Putin, according to the New York Times. “Our boy can be president of the USA and we can engineer it,” Sater wrote in one of the emails. “I will get all of Putin’s team to buy in on this.”

The Times noted that Cohen never replied to the emails and viewed them as “puffery.” Sater, who spent a year in prison for stabbing a man and later scouted for Trump investments in Russia, said he was simply expressing “enthusiasm” for the Trump Organization.

[USA Today]

Trump Says Sears Was Mismanaged. Mnuchin Was on Its Board for Years

President Donald Trump said that Sears Holdings Corp. had been mismanaged for years before it declared bankruptcy. Among those responsible for its management: his Treasury secretary.

Steven Mnuchin was a member of Sears’s board from 2005 until December 2016, and before that was a director for K-Mart Corp., which was acquired by Sears in 2005.

“Sears has been dying for many years,” Trump told reporters as he departed the White House on Monday to inspect hurricane damage in Florida. “It’s been obviously improperly run for many years and it’s a shame.”

Treasury didn’t immediately respond to questions about Mnuchin’s service on the company’s board.

Mnuchin was a college roommate of Sears Chairman Eddie Lampert, who attended Mnuchin’s confirmation hearing for Treasury secretary in January 2017. Mnuchin cut his ties to Sears when he joined the Trump administration.

Mnuchin said during his Senate confirmation hearing in January 2017 that he had invested about $26 million in Lampert’s hedge fund, ESL Investments Inc. He defended Lampert’s management of Sears, which he said “was already a failing issue” before Lampert invested in the company.

As Treasury secretary, Mnuchin sits on the board of the Pension Benefit Guaranty Corporation, which considers applications from companies to terminate their pension plans. During the hearing, Mnuchin told Senator Bob Menendez, a New Jersey Democrat, that he would recuse himself if the PBGC receives an application from Sears. Menendez noted that would leave the PBGC board with just two voting members.

“I’m not sure that the remaining two can ultimately make a decision on such a case which involves 200,000 people’s pensions,” Menendez told Mnuchin.

The retailing icon filed for chapter 11 bankruptcy protection on Monday and said it will attempt to reorganize around a smaller number of profitable stores. Lampert resigned as CEO, but he is negotiating a financing deal with the company.

“Somebody that is of my generation, Sears Roebuck was a big deal,” Trump said. “So it’s very sad to see.”

[Bloomberg]

Trump On Trade Wars With China, U.S. Allies: ‘We’ve Been the Stupid Country for So Many Years’

During his broad-ranging interview with 60 Minutes, President Trump said America has been a “stupid country” in the past, while also defending his approach to international economics and foreign policy.

Lesley Stahl pressed Trump on his escalating trade wars with China and their retaliation across multiple markets. Trump disputed her “trade war” characterization and that eventually led to a chat on the Trump Administration’s tariffs against American allies.

“I mean, what’s an ally?” Trump said. “We have wonderful relationships with a lot of people. But nobody treats us much worse than the European Union.”

Stahl continued to ask about this “hostile” approach, and whether Trump would consider dissolving the western alliance under NATO.

“We’ve been the stupid country for so many years,” Trump said. “We shouldn’t be paying almost the entire cost of NATO to protect Europe, and then on top of that, they take advantage of us on trade.”

[Mediaite]

Trump Booted Foreign Startup Founders. Other Countries Embraced Them

A master’s degree from Yale and angel investments in his startup weren’t enough to protect Mezyad AlMasoud from Donald Trump. A little more than a year ago, Trump moved to kill a nascent visa program meant specifically for company founders with capital in hand, such as AlMasoud. The Kuwaiti’s immigration lawyer called his Wall Street office to tell him that without the startup visa, which could have been granted under a plan known as the International Entrepreneur Rule, he had two weeks to leave the U.S. That afternoon, AlMasoud spent hours sitting by the East River, looking out at the Brooklyn Bridge. The thought running through his mind: “How do I tell my 5-year-old daughter I failed?”

As it turned out, he didn’t have to. Flair Inc., his financial technology startup, incorporated in June and is starting to hire engineers who can develop its money-management web services for pro athletes. It’s just not in the U.S. Flair is hiring in Vancouver, where AlMasoud was one of the first people accepted to a startup visa program that looks a lot like the fast-track Obama plan Trump blew up. In the past 18 months, similar programs with a range of perks have sprung up in at least a dozen countries, including the U.K., China, Japan, Israel, Germany, Estonia, Australia, and New Zealand. As with many of his peers, the first choice was always America, says AlMasoud, whose startup is among 130 created by people admitted to Canada’s new visa program since February.

Immigrant founders and co-founders have a strong track record in Silicon Valley (see Google, Tesla, EBay, Stripe), as do the children of immigrants (Apple, Oracle, Amazon.com). But the Valley’s fabled Sand Hill Road is no longer the center of the venture capital world, and as the Trump administration continues to increase restrictions on most forms of immigration, other locales are even more eager than usual to frame themselves as the next great innovation hub. Startups are doing a lot more venue-shopping than they used to, says Merilin Lukk, who runs Estonia’s recruiting program and has brought at least 160 founders to the country since last year, creating about 440 jobs.

Countries have offered all kinds of perks to differentiate themselves. A new program in Israel throws in $20,000 relocation bonuses, a local accountant, Hebrew classes, yearly flights home, and paid cellphones. Other offers include low-interest loans, six-day visa processing, and, most important, the equivalent of a green card. “The fight over tech talent is not something that is coming in the future. It’s happening right now,” says Kate Mitchell, the founder of Scale Venture Partners in Foster City, Calif. “And we are losing.”

That’s a bit of an overstatement for the time being, but the U.S. certainly isn’t trying to match those offers. The Trump administration derailed the legacy Obama program a week before its planned rollout last year, and although a lawsuit by the National Venture Capital Association managed to force the feds to eyeball an initial handful of applications, a spokesman for U.S. Citizenship and Immigration Services says the program “does not adequately protect U.S. investors and U.S. workers” and that the agency intends to officially scrap the program as soon as it has finished reviewing public comments on the matter.

The move is part of a broader set of moves to restrict visa immigration, including the H-1B visas that have historically gone overwhelmingly to tech workers. Critics of the program, including labor advocates as well as Trump-style nationalists, say the visas have too often been abused by outsourcers and companies that simply want to pay workers less. There may be some truth to that: More than 50 percent of the country’s working science and engineering Ph.D.s are foreign-born. But another way to look at those numbers is that America needs immigrants.

Canada is one of many countries that seem less conflicted, says AlMasoud, who’s enjoying his weekend hikes in the Vancouver area without looking over his shoulder. The Canadian immigration agency says it has approved 200 applicants for permanent residency since February, and AlMasoud is hoping he’ll be on that list soon, too. For now, he’s trying to get Flair to a point where he can apply for approval from American financial regulators and start showing it off publicly. Only occasionally, as when he reminisces about NBA games or his bygone ’67 Pontiac GTO, does he grow wistful about the opportunities he left behind. “It had always been my dream to start a business in the U.S.,” he says. “Because of what Trump has done, now I have to hire Canadians.”

[Bloomberg]

Trump Reacts to Iran Snubbing His Offer to Meet: ‘It Doesn’t Matter – It is Up to Them’

On his way to a rally in Ohio on Saturday, President Donald Trump tweeted about Iran.

“Iran, and it’s economy, is going very bad, and fast!” Trump wrote. “I will meet, or not meet, it doesn’t matter – it is up to them!”

Trump’s tweet appeared to be in response to the news from earlier this week that Iran had rejected an offer to meet with Trump.

In addition, according to the Fox News report — which just so happened to air a segment on the topic shortly before Trump tweeted — Iranian officials snubbed an offer from Trump who “this week said he would sit down with the country’s leader without any preconditions.”

The report also featured National Review columnist John Fundinsisting Trump’s offer to meet with Iranian’s leader amounted to “shadowboxing” and was not actually going to happen anyhow.

“So Donald Trump is trying for a third [meeting] with the deplorables of the nations of the world,” Fund said. “He knows the Iranians are not going to meet because they have no incentive to meet…This is shadowboxing.”

The chyron underneath Fund also reinforced Iran’s snub, reading: “Iran rejects President Trump’s offer to meet without any pre-conditions.”

[Mediaite]

The EU reportedly used colorful flash cards to explain trade policy to Trump

European Commission President Jean-Claude Juncker reportedly used colorful cue cards to explain issues of global-trade policy to President Donald Trump during their meeting earlier this week.

According to a report from the Wall Street Journal on Thursday evening, Juncker and his team used the cards to simplify complex issues for the president as a means of getting their points across as effectively as possible.

The Journal’s report says Juncker “flipped through” more than a dozen cards, which had minimal information on them, and all focused on a single issue. These included the automotive trade, and regulatory standards for medicines, the report added, saying that there were a maximum of three figures per card.

“We knew this wasn’t an academic seminar,” a senior EU official who was at the meeting told the Wall Street Journal. “It had to be very simple.”

Trump and Juncker on Wednesday agreed to the beginnings of a deal that would end the previously growing trade tensions between the US and the EU.

During the meeting, the EU agreed to import more American soybeans and liquefied natural gas. Both sides agreed to work to decrease industrial tariffs and adjust regulations to allow US medical devices to be traded more easily in European markets.

“This was a very big day for free and fair trade,” Trump said at a press conference after the pair’s meeting.

The EU’s use of flash cards is not without precedent. Trump is well-known for his distaste for lengthy documents, and is said to prefer single-page memos when deciding on policy.

In May 2017, a report from Reuters said that Trump likes “single-page memos and visual aids like maps, charts, graphs and photos.” A source quoted by Reuters said aides also strategically put Trump’s name into “as many paragraphs as we can because he keeps reading if he’s mentioned.”

[Business Insider]

Trump-Created European Trade Crisis Averted by Fake Deal

Last night, the Trump administration announced with maximum fanfare that the trade war with the European Union was over. “This was a big day for free and fair trade!,” tweeted an excited President Trump. For all the hype and surprisingly credulous press the announcement attracted, it amounts to little more than a face-saving truce. If you’re looking for any details as to how this will work, too bad, they don’t exist.

The trade “deal” follows the script of the ballyhooed North Korean nuclear “deal” from last month. The cycle begins with bellicose Trumpian threats designed to increase American leverage. This leads to negotiations, which produce an impossibly ambitious and thoroughly vague “solution” that allows Trump to boast that he has averted a crisis of his own making.

In North Korea’s case, the “agreement” involves a nonverifiable promise to denuclearize the Korean peninsula at some future date. The trade “deal” is a promise to eliminate tariffs between the United States and the European Union. In theory, it would be possible to eliminate all tariffs between the E.U. and the U.S., but the process would take many years to complete — the European Union has 28 member states, all of which have internal political dynamics and constituent business interests to navigate.

In the meantime, the practical meaning of Trump’s deal is that both sides will halt the cycle of retaliatory tariffs. Despite Trump’s belief that his methods had produced valuable leverage for his own position, the spat had imposed acute pain on his own constituents — especially farmers, who have suffered dire costs from retaliatory tariffs. The president had taken to pleading with his supporters to stop complaining and let him sue for peace:

He was begging his allies to stop complaining about the tariffs. Like a dog!

Trump’s campaign adviser Stephen Moore told the Washington Post yesterday, “The one thing I do know about Trump is that he’s not going to back down.” Characteristically, the one thing Moore knows turned out to be completely false.

But it is easy to see how Trump plans to turn this shambolic retreat into another famous victory. Begin with the assumption that the European Union has been screwing the Great Companies of the United States with one-sided and very, very unfair tariffs for decades. (This is not true.) Then proceed to the assumption that Trump has produced a deal to eliminate all these tariffs. (Completely unrealistic.) By stacking the two fantasies atop each other, you arrive at a reality in which Trump has made a Great Deal to make Americans win again.

http://nymag.com/daily/intelligencer/2018/07/trump-created-european-trade-crisis-averted-by-fake-deal.html

1 2 3 6