The Hill’s Morning Report – Presented by Pass USMCA Coalition – Major fallout from China trade talks collapse

The Hill’s Morning Report – Presented by Pass USMCA Coalition – Major fallout from China trade talks collapse

Welcome to The Hill’s Morning Report. Happy Tuesday! Our newsletter gets you up to speed on the most important developments in politics and policy, plus trends to watch. Co-creators are Alexis Simendinger and Al Weaver (CLICK HERE to subscribe!). On Twitter, find us at @asimendinger and @alweaver22.

The two largest world economies escalated a trade war on Monday that threatens the livelihoods of some U.S. farmers, will raise prices for American consumers and could slow U.S. economic growth.

If wielding tariffs as weaponry continues into 2020, President TrumpDonald John TrumpLawsuit alleges Trump campaign paid women less than men Graham encourages Donald Trump Jr. to plead the 5th Crunch time for Senate disaster aid talks MORE will be pressed to explain the wisdom of his trade strategy in red states he needs to win if he wants a second term.

“I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries. Too expensive to buy in China. You had a great deal, almost completed, & you back out!” he tweeted.

Hours after Trump warned China on Monday not to retaliate against his decision to levy 25 percent tariffs on $200 billion in Chinese imported goods, Beijing did just that. China announced steep tariffs on $60 billion in U.S. goods beginning on June 1, prompting a stock market slide (The Associated Press).

The president said he’ll meet with Chinese President Xi Jinping and other heads of state in Osaka, Japan, at the G-20 summit next month, where Trump hopes he can revive trade talks, which fell apart when he accused China of backtracking and then hiked tariffs on Friday.

Trump insists a continuing tit-for-tat battle, which has not yet affected automobiles in either country, is more painful for Beijing than for the United States.

The president, who just days ago spoke optimistically about concluding a significant trade deal with China this spring, instead adopted a combative stance while threatening to apply levies to all $540 billion in Chinese imports, which would be a blow to U.S. consumers and businesses of all kinds.

“There will be price hikes at Target, Costco, Home Depot and Walmart,” Nelson Dong, a partner with Dorsey & Whitney in Seattle, told The Washington Post. “The importers are going to pass on some or all of the tariff to the consumer and that will become much more readily apparent and harder to mask.”

The Office of the United States Trade Representative released a list on Monday of the roughly $300 billion worth of products that could yet face up to a 25 percent tariff and requested public comment, which will begin the formal process for enacting those duties. The list includes almost every consumer product, from coffee makers to sneakers to telescopic sights for rifles (The New York Times).

A sign of the president’s concern, however, emerged with his sudden, new assurances to U.S. farmers on Monday that the administration will make another $15 billion in taxpayer-backed subsidies available to offset revenue losses as U.S. sales to China of soybeans, wheat and other agricultural products evaporated. An earlier round of subsidies totaled $12 billion.

“The retaliatory tariffs will have a significant consequence to Kansans in agriculture, in particular, but manufacturing as well,” said Sen. Jerry MoranGerald (Jerry) MoranFacebook COO Sheryl Sandberg meets with senators on privacy FBI director says he wouldn’t use ‘spying’ to describe investigations Live coverage: Barr faces Senate panel as he prepares release of Mueller report MORE (R-Kan.). “Commodity prices are low, the weather’s not been our friend, and times are really tough in agriculture, so this is a development that will be very hard for some farmers to survive unless this gets resolved quickly.”

Lawmakers in Washington said in interviews that the ongoing trade battle with China needs to succeed — and soon.

Sen. John CornynJohn CornynTrump Jr. subpoena spotlights GOP split over Russia probes The Hill’s Morning Report — Trump escalates trade war with China as talks continue Trump Jr. subpoena sparks internal GOP battle MORE (R-Texas), who is running for reelection next year, said he backs the president’s China strategy as long as it ends quickly and well.

I think tariffs are a useful negotiating tool, but there are consequences, as we see in the stock market. Obviously, Americans end up paying increased cost,” Cornyn said Monday.

The Associated Press: U.S. farmers who sell to China feel the pain of the trade tariffs.

The New York Times: Investor reaction — what if the trade war continues indefinitely?

The Hill: Republican lawmakers are nervous that trade battles will cost them seats next year in rural America.

The Hill: Trump’s repeated assertion that China will pay for tariffs imposed by the United States is incorrect.

NBC News: Trump’s China gamble.

CNBC: Trump’s overall trade and tariffs policies reduced U.S. income by $6.9 billion over 11 months last year, according to new research by the Federal Reserve Bank of New York, Princeton University and Columbia University.

POLITICS & CAMPAIGNS: The Democratic field is growing once more.

Montana Gov. Steve Bullock made it official Tuesday morning, announcing he has tossed his hat into the 2020 ring and become candidate No. 23 in the ever-expanding Democratic field.

Bullock, a two-term Democrat from Big Sky Country, made the announcement after teasing a bid for multiple weeks, which included promotional videos and the hiring of key staff for his campaign, including in Iowa. Reid Wilson also reports that Bullock has made a slew of high-profile hires just ahead of the launch.

In a three-minute video, Bullock pitched himself as red-state governor (having won reelection in 2016 by five points while Trump won by 20 points) who was able to bridge the divide and work with Republicans on myriad issues. He also promoted his push for liberal causes, including a multi-year fight against Citizens United as attorney general and governor to make sure the “corrupt system” doesn’t “drown out the people’s voice” and gives them a “fair shot” — the title of his video.

“I believe in an America where every child has a fair shot to do better than their parents,” Bullock says, narrating the ad. “This is the fight of our time. It’s been the fight of my career.

“I’m Steve Bullock, and I’m running for president,” he continued. “With your help, we will take our democracy back.”

The Montana governor’s entrance adds to the small number of former or current state executive to the race, along with Washington Gov. Jay InsleeJay Robert InsleeOvernight Health Care — Presented by Campaign for Accountability — Measles outbreak tops 830 cases in US | Inslee signs nation’s first public option insurance bill | Maryland raises tobacco buying age to 21 Inslee signs nation’s first public-option insurance bill Liberal think tank executive says climate-change policy shouldn’t be ‘middle ground’ MORE and former Colorado Gov. John HickenlooperJohn Wright HickenlooperHealth care, climate change top issues for Iowans ahead of caucuses: analysis Michael Bennet must find a way to stand out in the crowd Author Marianne Williamson qualifies for Democratic primary debates MORE.

The clock will be ticking for Bullock, who must make a move early to qualify for the debate stage in a few weeks. He must reach the Democratic National Committee’s polling threshold by June 12 and lock up the requisite number of donors — a challenge for some candidates to date.

Bullock is also banking that he’ll be able to make a dent in Iowa, where he has already hired staff. He will make his first early primary state appearance in Iowa on Thursday, where he will campaign through Saturday, according to a source with knowledge of the plans.

The Atlantic: Democrat Steve Bullock Won a Red State in 2016. Can He Beat Trump in 2020?

The Associated Press: Democrats in 2020 face challenge in Wisconsin: the economy.

Politico: Trump campaign says ‘female forward’ approach boosts donations from women.

> Former Vice President Joe BidenJoseph (Joe) Robinette BidenSanders and Ocasio-Cortez join up to preach Green New Deal, take jabs at Biden Biden says he’d be open to breaking up Facebook MSNBC to host Harris town hall this month MORE is surging ahead of his 2020 Democratic rivals in digital ad spending, according to The Hill’s analysis of the latest data from Facebook and Google.

As Niall Stanage reports, Biden’s campaign spent $238,560 on Facebook advertising between May 5 and May 11, according to figures released on Sunday. This far outstripped the second-place advertiser, Sen. Elizabeth WarrenElizabeth Ann WarrenBiden says he’d be open to breaking up Facebook Press: Who will be the first conservative to take on Trump? Democrats seeking nanny state policies voters rejected in 2016 MORE (D-Mass.) with $88,048.

In the most recent figures from Google, Biden’s ad spending at the search giant— $123,400 for the week of April 28 — is almost twice as large as that of his nearest rival among the major candidates. South Bend, Ind., Mayor Pete ButtigiegPeter (Pete) Paul ButtigiegMSNBC to host Harris town hall this month Poll: Buttigieg has 0 percent support among South Carolina black voters Poll: Most Americans say Trump’s trade talks with China won’t improve US economy MORE spent $63,400 with Google the same week.

The vast spending by Biden on digital advertising is at odds with his image as an old-school politician more comfortable with stump speeches, union halls and retail politics than the brave new digital world.

WMUR: Biden hits Giuliani for near-Ukraine trip, addresses age, trade war, reparations and gun violence in wide-ranging interview.

The New York Times: Biden defends record on climate and calls for ‘environmental revolution.

The Wall Street Journal: Sen. Bernie SandersBernard (Bernie) SandersSanders and Ocasio-Cortez join up to preach Green New Deal, take jabs at Biden Press: Who will be the first conservative to take on Trump? Overnight Health Care — Presented by Campaign for Accountability — Measles outbreak tops 830 cases in US | Inslee signs nation’s first public option insurance bill | Maryland raises tobacco buying age to 21 MORE (I-Vt.) railed against the campaign-finance system. Now, he’s benefiting from it.

Politico: Sanders, Warren in hot pursuit of endorsement from Rep. Alexandria Ocasio-CortezAlexandria Ocasio-CortezSanders and Ocasio-Cortez join up to preach Green New Deal, take jabs at Biden Press: Who will be the first conservative to take on Trump? Coast Guard lieutenant accused of plotting terror attack will not be released pending trial: Report MORE (D-N.Y.).

> Buttigieg’s remarks over the weekend criticizing identity politics have ignited a debate within the Democratic Party over race and identity at a critical juncture in the primary.

As Jonathan Easley reports, Buttigieg, who is gay and has spoken openly about his own struggles with identity, warned an LGBT gala that an obsession with identity politics is a dead end for Democrats that will divide voters and further a “crisis of belonging this country.”

The speech is a gamble for Buttigieg, whose policies as South Bend mayor are under scrutiny for their impact on people of color. Buttigieg has risen in the polls, but he’ll have to be able to attract support from communities of color to be a factor in the primary, which he’s struggled to do so far. According to a new Post and Courier-Change Research Poll, Buttigieg has zero percent support from African-American voters in South Carolina.

Al Sharpton, who was impressed by Buttigieg after the two met in Harlem last month, pushed back on Buttigieg’s remarks.

Elsewhere on the 2020 circuit … The president will appear in Louisiana for an official event today and a high-dollar fundraiser for his reelection campaign (The Advocate) …  Former Housing and Urban Development Secretary Julián Castro unveiled his education plan Monday, which included a focus on universal pre-K and the elimination of tuition at public universities and community colleges (The New York Times) …

More politics … Former Rep. Beto O’Rourke (D-Texas) admitted Monday night that he “can do a better job” of talking to a national audience as he struggles to make a dent in the 2020 race (The New York Times) … Two controversial topics to North Carolina Republicans — the “bathroom bill” and the recent election scandal — are set to take center stage in the GOP primary for North Carolina’s 9th Congressional District on Tuesday night (Politico).

INTERNATIONAL: Secretary of State Mike PompeoMichael (Mike) Richard PompeoSchumer: Pompeo must give ‘shot across the bow’ to Putin on election meddling Overnight Defense: Pentagon dipping into missile, spy plane funds for border wall | Pompeo briefs European allies on Iran | Preps for meeting with Putin | B-52s conduct first mission to deter Iran | Lawmakers set for clash on nuke policy Russia exploits climate change in the Arctic, ignoring threat to infrastructure MORE is expected to meet with Russian President Vladimir PutinVladimir Vladimirovich PutinSchumer: Pompeo must give ‘shot across the bow’ to Putin on election meddling Overnight Defense: Pentagon dipping into missile, spy plane funds for border wall | Pompeo briefs European allies on Iran | Preps for meeting with Putin | B-52s conduct first mission to deter Iran | Lawmakers set for clash on nuke policy Trump to meet Chinese leader as trade tensions escalate MORE and Kremlin officials today in Sochi, Russia, to discuss arms control and other issues.

The secretary is not expected to raise the subject of Russia’s interference in U.S. elections with Putin and Foreign Minister Sergey Lavrov because the Trump administration will “not let domestic issues interfere with foreign policy” (Fox News).

As Pompeo told The Hill in April, the administration believes Russia will be an election threat for decades.

The secretary’s first meeting with Putin as the U.S. top diplomat comes a day after he canceled a stop in Moscow and on Monday crashed a Brussels meeting among European allies to make a show of trying to persuade allies about what the Trump administration maintains is Iran’s “recent threatening actions and statements” (The Washington Post).

Pompeo did not appear to win converts among leaders who fear the United States and Iran are inching toward war.

The United States says it has intelligence that Iran is considering an unspecified attack on U.S. interests, which Tehran denies. Trump warned on Monday that Iran would “suffer greatly” if it made such a move. The administration deployed an aircraft carrier and more jet fighters to the Middle East last week in a show of force (Reuters).

The New York Times: White House last week reviewed a military plan to send 120,000 troops to the Middle East should Iran attack U.S. forces or accelerate work on nuclear weapons.

Foreign Policy: Analysts warn the United States and Iran may be headed for military confrontation.

In Brussels, Pompeo described to his counterparts the threat from Iran that the United States perceives, pointing to claims by Saudi Arabia that its oil tankers were attacked near the Persian Gulf. Iran condemned the attacks and said its enemies could be attempting to engineer a conflict as cover for U.S. aggression. But the State Department used broad hints rather than an accusation to suggest that Iran was behind the reported sabotage (Reuters). The Associated Press reports that satellite images show no major visible damage to four oil tankers in question.

Iran, squeezed by intensifying U.S. sanctions, announced last week that it would pull out of parts of the multilateral 2015 nuclear deal from which Trump withdrew the United States in 2017. Tehran says it will resume uranium enrichment, sparking concerns among the accord’s remaining signatories — especially Great Britain, France and Germany — that the nuclear deal is on the verge of collapse.

The other two signatories to the nuclear deal are Russia, where Pompeo is today, and China, with which the United States is feuding over trade.

White House national security adviser John BoltonJohn Robert BoltonOil tanker headed for US sabotaged Pompeo heading to Brussels before Russia trip Juan Williams: Trump’s scorecard is rife with losses MORE, at the time an outside adviser to Trump, said in 2017 that “the declared policy of the United States should be the overthrow of the mullahs’ regime in Tehran.”

Bolton added, “The behavior and the objectives of the regime are not going to change and, therefore, the only solution is to change the regime itself.”

Trump has stopped short of describing regime change in Iran as U.S. policy.

> Russia: Meanwhile, Moscow is attempting to influence European elections, much as it did in the United States in 2016.  Less than two weeks before voters cast ballots for the European Parliament, websites and social media accounts linked to Russia or far-right groups are spreading disinformation, encouraging discord and amplifying distrust in the centrist parties that have governed for decades. European Union investigators, academics and advocacy groups say the new disinformation efforts share many of the same digital fingerprints or tactics used in previous Russian attacks, including the Kremlin’s interference in the United States (The New York Times).

In mid-February, a group of hackers associated with Russian intelligence targeted civil society groups across Europe leading up to this month’s elections. The attacks, disclosed by Microsoft in a blog post, demonstrated an online campaign aimed at disrupting real and potential political opponents of Putin. The company said it had found that hackers targeted more than 100 email accounts at think tanks and nongovernmental organizations that work on issues including election security, nuclear policy and foreign relations (The New York Times).

> Violent extremism: On Wednesday at a meeting in Paris, the leaders of France and New Zealand will make a joint push to eliminate acts of violent extremism from being shown online. Expected to attend the meeting are representatives of Great Britain, Canada, Ireland, European Union, Senegal, Indonesia and Jordan (The Associated Press).

***

CONGRESS & INVESTIGATIONS: The fight between Republicans and Democrats over anti-Semitism has erupted once again.

Democrats came to the defense of one of their own, Rep. Rashida TlaibRashida Harbi TlaibOmar accuses Cheney of ‘deep seeded hate and Islamophobia’ Sanders defends Tlaib from Trump: ‘Stop dividing the American people up by their religion’ Hoyer defends Tlaib Holocaust remarks after criticism from GOP MORE (D-Mich.), after House GOP leadership, spearheaded by Rep. Liz CheneyElizabeth (Liz) Lynn CheneyOmar accuses Cheney of ‘deep seeded hate and Islamophobia’ Sanders defends Tlaib from Trump: ‘Stop dividing the American people up by their religion’ Hoyer defends Tlaib Holocaust remarks after criticism from GOP MORE (R-Wyo.) and amplified by Trump, took aim at remarks she made to a Yahoo! News podcast about the Holocaust and Israel.

Between tweets on the ongoing dispute with China over trade, Trump wielded his megaphone in Tlaib’s direction, saying she has “tremendous hatred” of Israel and wondering what would happen if he made the remarks she did.

Speaker Nancy PelosiNancy Patricia D’Alesandro PelosiOn The Money: Stocks plummet as Trump’s trade war with China escalates | China retaliates with tariffs on US crops | Trump eyes 0B in new tariffs | Trump, Xi to meet | Kavanaugh breaks with conservative justices in Apple case Omar accuses Cheney of ‘deep seeded hate and Islamophobia’ Hillicon Valley: Justices deal blow to Apple over App Store lawsuit | Twitter apologizes for sharing users’ location data | Dems turn focus to rural broadband | Activists protest Palantir’s work with ICE MORE (D-Calif.) called the “attempts to smear” Tlaib “outrageous,” adding that they should apologize for their “gross misrepresentations” of her comments. House Majority Leader Steny HoyerSteny Hamilton HoyerOvernight Health Care — Presented by Campaign for Accountability — Measles outbreak tops 830 cases in US | Inslee signs nation’s first public option insurance bill | Maryland raises tobacco buying age to 21 Sanders defends Tlaib from Trump: ‘Stop dividing the American people up by their religion’ Top Finance Dem offers bill to help those repaying student loans save for retirement MORE (D-Md.) echoed the speaker, saying it was “clear” the remarks were taken out of context.

> CNN: How Donald Trump Jr.Donald (Don) John Trump Graham encourages Donald Trump Jr. to plead the 5th The Hill’s Morning Report – Presented by Pass USMCA Coalition – Deadline approaches for 2020 Dems Trump weighs in on blowback to Trump Jr. subpoena: ‘Really sad’ MORE and Senate Intelligence Committee Chairman Richard BurrRichard Mauze Burr Graham encourages Donald Trump Jr. to plead the 5th Trump weighs in on blowback to Trump Jr. subpoena: ‘Really sad’ Rand Paul: Trump Jr. subpoena a ‘real travesty of justice’ MORE (R-N.C.) hit an impasse:

“Donald Trump Jr. is balking at answering more questions about the June 2016 Trump Tower meeting and the pursuit of a Trump Tower Moscow project, two sources familiar with the matter told CNN, setting the stage for a clash with the Republican-led committee amid pressure from both parties over the subpoena to President Donald Trump’s eldest son.”

The Associated Press: Judge to hear suit over Trump financial records demand.

> When he left the U.S. attorney’s office in Manhattan in 2017, Daniel Goldman didn’t envision a future career on Capitol Hill, back in the city where he grew up.

But now, as Morgan Chalfant reports, Goldman is leveraging the very skills he honed investigating and prosecuting white collar and organized crime cases in the Southern District of New York to guide the House Intelligence Committee’s sweeping investigation into President Trump’s foreign dealings and finances.

House Intelligence Committee Chairman Adam SchiffAdam Bennett SchiffDems warn of ‘constitutional crisis’ but wary of impeachment Schiff: Trump ‘has to be defeated’ in 2020 Schiff dismisses Trump’s threat to investigate Biden MORE (D-Calif.) tapped Goldman, 43, to be the panel’s senior adviser and director of investigations in February, the same month he unveiled a probe into the possibility Trump or members of his inner circle are subject to foreign compromise — an outgrowth of the panel’s original Russia investigation.

The Morning Report is created by journalists Alexis Simendinger and Al Weaver. We want to hear from you! Email: asimendinger@thehill.com and aweaver@thehill.com. We invite you to share The Hill’s reporting and newsletters, and encourage others to SUBSCRIBE!

Trump’s tweets on China spotlight enforcement flaws in trade deals, by Riley Walters, opinion contributor, The Hill. https://bit.ly/2JDMzEg

Beijing hasn’t earned our trust, by Liz Peek, opinion contributor, The Hill. https://bit.ly/2Hn3xnS

Hill.TV’s “Rising” program, starting at 8 a.m., features Cecil Roberts, president of the United Mine Workers of America, who talks about preserving miners’ pensions and health care, and rapper Wale on gentrification in Washington, D.C. http://thehill.com/hilltv

The House convenes at noon.

The Senate meets at 10 a.m. The Senate Judiciary Committee holds a hearing at 10 a.m. focused on national security and competitiveness issues tied to 5G technology and intellectual property.

The president will travel this afternoon to Louisiana to tour the Cameron liquid natural gas export facility in Hackberry and to speak about energy infrastructure and the state of the economy. In New Orleans, Trump will meet with campaign contributors and speak to a joint fundraising committee dinner in Metairie.

Pompeo is in Sochi, Russia, where he’ll meet with Lavrov at 3 p.m., followed by a working lunch with the foreign minister. At 6 p.m., the secretary meets with Putin, then holds a joint news conference with Lavrov at 7: 30 p.m. local time.  

Blue Star Families and Blue Star Neighbors honor select Americans who support military families at an event at 6 p.m. in Washington. The Walt Disney Company, Craigslist founder Craig Newmark and civilian Susan Masser will receive awards. The 2019 celebration is hosted in partnership with a congressional, celebrity and military leadership spouses committee. Find information HERE.

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Former President Carter: On his way for some turkey hunting on Monday, the 94-year-old former president fell and broke a hip, resulting in surgery at a hospital in Americus, Ga. Carter, who underwent treatment for cancer in 2015, was described as resting and in good spirits, accompanied by former first lady Rosalyn Carter (The Washington Post).   

Justice Department: Attorney General William BarrWilliam Pelham BarrBarr names Connecticut prosecutor to investigate Russia probe’s origins: report Rubio asks Barr to investigate Kerry over Iran meetings Rosenstein quotes Mueller in commencement address MORE named John Durham, a U.S. attorney in Connecticut, to examine the origins of the FBI investigation into Russian election interference in 2016, an effort long sought by Trump. Dunham’s inquiry is the third known investigation focused on the launch of an FBI counterintelligence investigation into possible ties between Russia’s election interference and Trump associates (The New York Times).

Courts: Associate Justice Brett KavanaughBrett Michael KavanaughOn The Money: Stocks plummet as Trump’s trade war with China escalates | China retaliates with tariffs on US crops | Trump eyes 0B in new tariffs | Trump, Xi to meet | Kavanaugh breaks with conservative justices in Apple case Hillicon Valley: Justices deal blow to Apple over App Store lawsuit | Twitter apologizes for sharing users’ location data | Dems turn focus to rural broadband | Activists protest Palantir’s work with ICE Kavanaugh breaks with conservative Trump court in Apple decision MORE sided with the liberal wing of the Supreme Court in a Monday ruling that found iPhone users can sue Apple over AppStore prices, a significant and surprising decision that suggested the Trump nominee isn’t afraid to buck the court’s conservative majority (The Hill). … A California jury on Monday awarded more than $2 billion to a couple who claimed Bayer AG’s glyphosate-based Roundup weed killer caused their cancer (Reuters).

Measles: The U.S. measles outbreak is now 839 cases across 23 states, according to the Centers for Disease Control and Prevention. Sixty-six of 75 new cases last week occurred in New York (CNBC).

In the Know: Prosecutors recommended on Monday that actress Felicity Huffman, 56, receive a four-month prison sentence and pay a fine for her role in a college bribery scandal. The former “Desperate Housewives” star pleaded guilty in federal court in Boston to a conspiracy charge (The Hill).

And finally … Sixty-five years ago this week, the Supreme Court ruled in Brown v. Board of Education “that separate but equal” is not equal in education or other services. The court ruled unanimously that racial segregation of children in public schools was unconstitutional, a decision that became a foundation for the civil rights movement that followed the court’s 1954 decision.

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