Morning Read 4/5: Trump Middle East policy surprises

Senior Trump Adviser Jared Kushner, Gen. Joseph Dunford, and Homeland Security Adviser Tom Bossert meet with Iraq Kurdish President Masoud Barzani [Joint Chiefs of Staff]
Senior Trump Adviser Jared Kushner, Gen. Joseph Dunford, and Homeland Security Adviser Tom Bossert meet with Iraq Kurdish President Masoud Barzani [Joint Chiefs of Staff]

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Russia denies Assad to blame for chemical attack, on course for collision with Trump

Russia suggested on Wednesday it would publicly stand by Syrian President Bashar al-Assad despite outrage over a chemical weapons attack, setting Donald Trump’s new U.S. administration on course for a head-on diplomatic collision with Moscow.

Western countries including the United States blamed Assad’s armed forces for the chemical attack, which choked scores of people to death in the town of Khan Sheikhoun in a rebel-held area of northern Syria hit by government air strikes.

Washington said it believed the deaths were caused by sarin nerve gas dropped by Syrian aircraft. But Moscow offered an alternative explanation that could shield Assad: it said it believed poison gas had leaked from a rebel chemical weapons depot struck by Syrian bombs.

Hasan Haj Ali, commander of the Free Idlib Army rebel group, called the Russian statement a “lie”.

“Everyone saw the plane while it was bombing with gas,” he told Reuters from northwestern Syria.

“Likewise, all the civilians in the area know that there are no military positions there, or places for the manufacture (of weapons). The various factions of the opposition are not capable of producing these substances.”

The incident is the first time Washington has accused Assad of using sarin since 2013, when hundreds of people died in an attack on a Damascus suburb. At that time, Washington said Assad had crossed a “red line” set by then-President Barack Obama. [REUTERS]


SEOUL, South Korea (AP) — North Korea fired a newly developed powerful ballistic missile into its eastern waters Wednesday, U.S. and South Korean officials said, amid worries the North might conduct nuclear or long-range rocket tests ahead of the first summit between President Donald Trump and his Chinese counterpart Xi Jinping this week.

The initial U.S. and South Korean assessments indicated it was a KN-15 medium-range missile, whose first publicly known test in February was considered by many foreign experts as a potentially worrying development. It uses solid fuel already loaded inside the missile, which would shorten launch preparation times, boost the weapon’s mobility and make it harder for outsiders to detect the signs of its liftoff.

North Korean leader Kim Jong Un had said after the February launch that the missile, called “Pukguksong-2” in North Korea, provided another nuclear attack capability against the United States and South Korea. Most of North Korea’s missiles use liquid propellant, which usually must be added on the launch pad before the weapon is fired.

The missile fired from land in the area of the eastern coastal city of Sinpo on Wednesday morning flew about 60 kilometers (37 miles), according to a South Korean military statement. The missile launched in February flew about 500 kilometers (310 miles), but it wasn’t immediately clear if the shorter distance meant Wednesday’s launch was a failure.

North Korea is pushing hard to upgrade its weapons systems to cope with what it calls U.S. hostility. Many weapons experts say the North could have a functioning nuclear-tipped missile capable of reaching the continental U.S. within a few years. North Korea carried out two nuclear tests last year.

The North’s latest missile launch also came as it is responding annual military drills between the United States and South Korea with weapons tests and harsh rhetoric. North Korea sees the drills as an invasion rehearsal.

Two weeks ago, the South Korean and U.S. militaries said they had detected a failed North Korean ballistic missile launch. Earlier in March, North Korea fired four ballistic missiles that flew about 1,000 kilometers (620 miles), with three of them landing in waters that Japan claims as its exclusive economic zone. [AP]

Trump and China: Ahead of Summit, Both Sides Try to Reset Volatile Relationship

A month after tough talk on China helped win Donald Trump the presidency, Beijing’s top diplomat visited Trump Tower and delivered a lecture on the need to respect Chinese interests.

It didn’t go over well. A day later, Mr. Trump challenged Beijing with a veiled threat to bolster U.S. ties to the democratic island of Taiwan.

Since then, both sides have maneuvered, largely behind the scenes, to lower the temperature, setting the stage for Mr. Trump’s first meeting with China’s leader, President Xi Jinping, later this week.

The summit now offers a test of that strategy and a chance for the two leaders, if they choose to take it, to recalibrate relations and reduce the risk of flare-ups over trade, North Korea or the South China Sea. With both presidents deeply invested in projecting strength and the promise of national rejuvenation, a disappointing summit could plunge ties back into turmoil.

Mr. Trump’s administration in recent weeks has dropped talk of blocking Chinese access to its South China Sea outposts and toned down its attacks on China’s currency policy. It didn’t join the United Kingdom, Germany and other allies criticizing China over the alleged torture of human-rights lawyers.

After challenging China on its most sensitive issue—U.S. ties with Taiwan, which Beijing considers a rebel province—Mr. Trump reversed course in February, clearing the way for the two-day gathering at Mar-a-Lago, the president’s private club in Palm Beach, Fla., which starts Thursday.

The tone has been set in part by a charm offensive by China’s U.S. ambassador, Cui Tiankai, toward Jared Kushner, Mr. Trump’s son-in-law and a senior adviser, according to officials and government advisers in the two countries.

The White House declined to comment on Mr. Kushner’s contacts with Mr. Cui but said he had worked with Mr. Tillerson on persuading Mr. Trump to reverse course on Taiwan after other officials failed. China’s foreign ministry declined to comment. [WSJ]

New U.S. sanctions bill delayed by concern over Iran election

A bill to slap new sanctions on Iran has been delayed in the U.S. Senate due to concerns about Iran’s May presidential election, in which conservative hardliners hope to defeat moderate President Hassan Rouhani, U.S. lawmakers said on Tuesday.

A group of Democratic and Republican senators introduced the bill in March seeking to impose tighter U.S. sanctions on Iran over ballistic missile launches and other non-nuclear activities, echoing a harder line on Tehran espoused by Republican President Donald Trump.

But on Tuesday, the Republican chairman of the Senate Foreign Relations Committee, Bob Corker, said the bill would not move forward for now.

“We’ve got a Iran sanctions bill that has a number of co-sponsors that wasn’t able to markup at present because of concerns about how the European Union might react and (Iranian) elections that are coming up,” Corker said during a hearing on the EU as a U.S. partner in dealings with Russia.

A markup is when a committee meets to debate legislation and to consider amendments.

As he has campaigned, Rouhani has called for greater individual freedoms and highlighted as a signature achievement the 2015 diplomatic breakthrough reached with the United States and other world powers, in which Iran curbed its nuclear program in exchange for relief from international sanctions.

The lawmakers who wrote the bill said it had been written specifically not to interfere with the nuclear accord. [REUTERS]

UK’s Labour suspends Livingstone for year over Hitler-Zionism comments

LONDON — The UK Labour Party on Tuesday suspended former London mayor and senior party official Ken Livingstone for one year for comments about Hitler supporting Zionism that a disciplinary committee found “grossly detrimental” to the party.

Jewish groups, who had been calling for Livingston to be expelled, called the move “deeply disappointing” and said it would erode the fractured trust between the party and its Jewish members.

“Given that Ken Livingstone has been found guilty, we are deeply disappointed at the decision not to expel him from the Labour Party. A temporary suspension is no more than a slap on the wrist,” the Jewish Leadership Council said in a statement.

“Livingstone’s antagonistic attitude towards the Jewish community has been longstanding and has had a huge impact on Jewish people,” the group said. “This decision makes us question if the Labour Party wanted to repair its historic and long-standing relationship with the Jewish community.”

The Labour Party panel that decided Livingstone’s fate technically leveled him with a two-year suspension, one year of which has already been served, according to the Guardian.

He was charged with “engaging in conduct that in the opinion of the National Executive Committee was prejudicial and/or grossly detrimental to the Labour Party.”

A year ago, as the Labour Party was grappling with a series of gaffes deemed anti-Zionist and even anti-Semitic, veteran leftist Livingstone, a member of Labour’s National Executive, claimed that Adolf Hitler was initially a supporter of Zionism “before he went mad and ended up killing 6 million Jews.”

Livingstone also charged that for decades in the UK there had been a “well-orchestrated campaign by the Israel lobby to smear anybody who criticizes Israel policy as anti-Semitic.”

Last week, he caused fresh uproar by claiming that German Zionists received assistance from the SS and were close collaborators of the Nazi regime. [ToI]


US coal companies reportedly ask White House to remain in Paris climate pact

Two of the top U.S. coal companies reportedly asked the White House to back down on President Trump’s vow to pull out of the landmark Paris climate pact, arguing that the deal could protect its global interests.

Cloud Peak Energy and Peabody Energy executives told White House officials over the last few weeks that staying in the climate deal may give U.S. negotiators a change to advocate for coal in the future, Reuters reported Tuesday.

“The future is foreign markets, so the last thing you want to do if you are a coal company is to give up a U.S. seat in the international climate discussions and let the Europeans control the agenda,” a U.S. official familiar with the talks told Reuters. “They can’t afford for the most powerful advocate for fossil fuels to be away from the table.”

Richard Reavey, Cloud Peak’s vice president of government affairs, said staying in the accord and trying to create a “reasonable path forward” on fossil fuel technologies is a reasonable stance.

Officials said the coal industry wants to ensure the Paris deal provides a financial role for storage technology as well as role for low-emission coal-powered plants. The industry also hopes the agreement would protect multilateral funding for global coal projects through international bodies like the World Bank, Reuters reported. [FOXNEWS]

More talks but no decisions on Republican push to overhaul healthcare

A U.S. House of Representatives vote to overhaul Obamacare before lawmakers leave Washington for a two-week break looked unlikely late on Tuesday as top White House deputies and key Republican groups said more discussions were needed.

Vice President Mike Pence and administration officials met on Capitol Hill for two hours with lawmakers from the moderate “Tuesday Group,” the conservative Republican Study Committee, and the House Freedom Caucus, the rebel group of conservative lawmakers that derailed the first administration-backed healthcare bill last month.

While progress had been made, the officials and House lawmakers said no bill text had been agreed on and no decisions had been made by the various Republican factions.

The lack of a resolution complicates a White House push for a House vote on a healthcare proposal before Friday, when lawmakers return to their districts for two weeks.

“Good talk, good progress,” Pence told reporters without providing details.

Freedom Caucus leader Mark Meadows said the meeting had focused on an amendment to create a “backstop” to ensure individuals with chronic illnesses in high-risk pools do not see spikes in insurance premium costs if other aspects of Obamacare, also known as the 2010 Affordable Care Act, are repealed.

“No decisions were made. We’re going to get back together tomorrow at a time to be determined,” Meadows told reporters. [REUTERS]

Most Americans unwilling to give up privacy to thwart attacks

A majority of Americans are unwilling to share their personal emails, text messages, phone calls and records of online activity with U.S. counter-terrorism investigators – even to help foil terror plots, according to a Reuters/Ipsos opinion poll released on Tuesday.

The poll showed Americans were more reluctant to share personal information than when the poll last asked the question four years ago.

For instance, 75 percent of adults said they would not let investigators tap into their Internet activity to help the U.S. combat domestic terrorism. That’s up from 67 percent who answered the same way in June 2013.

Congress is due to address questions about surveillance later this year when it opens debate over whether to limit the government’s ability to conduct warrantless searches of American data.

According to the March 11-20 survey, 32 percent said intelligence agencies such as the FBI and National Security Agency are conducting “as much surveillance as is necessary” and 7 percent said they wanted more surveillance. Another 37 percent of adults said agencies are “conducting too much surveillance on American citizens.” The remaining 24 percent said they did not know.

Later this year Congress must decide whether to reauthorize a key section of the Foreign Intelligence Surveillance Act that expires on December 31. The section allows U.S. intelligence agencies to collect vast amounts of communications from foreigners, but often incidentally scoops up the communications of Americans.

Democrats and Republicans in Congress have expressed interest in limiting warrantless searches of such U.S. data, but a White House official told Reuters last month the Trump administration did not support changes.

The Reuters/Ipsos poll was conducted online in English in all 50 states. It surveyed 3,307 people, including 1,209 Republicans and 1,355 Democrats. The poll has a credibility interval, a measure of accuracy, of 2 percentage points for the entire group and 3 percentage points each for the Republicans and Democrats. [REUTERS]


New York State Budget Deal Remains Elusive; Emergency Legislation Passes

ALBANY — The financially-beleaguered New York City Housing Authority is in line to receive $200 million as part of the new state budget.

The NYCHA funds are for roof repairs, new boilers, and other projects the agency deems necessary, said Assembly spokesman Michael Whyland.

The money is part of $2.5 billion in affordable housing funds approved in 2015 but never released.
Another $100 million of those funds will go to affordable housing projects in areas like Brooklyn and $1 billion for new supportive housing units statewide.

The budget also includes a $1.5 billion appropriation toward the state’s $8.3 billion commitment to the five-year MTA capital plan.

And in a move sure to make the de Blasio administration happy, the Legislature rejected Gov. Cuomo’s proposal to require $27 million in federal block grant funding be used exclusively on child care programs, a move the city says would have forced the closure of 65 senior day care centers.

After days of contentiousness, the state Senate began passing some of the nine budget bills Tuesday night into early Wednesday morning.

The state Assembly, which left the Capitol before 5 p.m. without passing any budget bills, is expected to work through the day to give final passage to a $162 billion budget that is now five days late.

The new budget includes a compromise deal to raise the age from 16 to 18 that a teen can be criminally charged as an adult. New York and North Carolina are the only two states that treat 16- and 17-year olds who commit crimes as adults.

Haggling over the details was one of the main reasons the budget was late.

Adoption of the budget will also mean that lawmakers can get paid again. Under state law, legislators don’t get paid until a new spending plan is adopted. [DN]

Ex-Cuomo aide facing mountain of evidence in corruption trial

There is so much evidence piling up in the Manhattan federal case against a man who was once one of Gov. Cuomo’s most trusted aides that his lawyers don’t think they’ll be ready for trial, according to court papers.

Evidence in the bribery case against Joe Percoco — including 11 million pages of material and images from 22 electronic devices — has been so voluminous that reviewing it has proven to be a “Herculean task,” his lawyer complained in a filing Tuesday.

“We estimate that even laying eyes on a third of the 11 million pages would take a five-person team well into 2018,” lawyer Barry A. Bohrer wrote on behalf of Percoco and three other defendants in the nine-defendant case.

As a result, Percoco doesn’t see setting a trial for anytime soon — unless the government agrees to share the specific evidence it plans to use at trial, Bohrer wrote in the letter to Manhattan federal Judge Valerie Caproni.

The judge could rule on the issue at a hearing on Thursday.

The Gov. has said he could be called to testify at the trial — if one is ever scheduled.

“I could be. I haven’t envisioned it,” Cuomo told reporters in December. “No one has suggested that. I think the question would be more it’s up to the nine defendants who they call in their defense, so you don’t really know.” [NYP]

NYC Council proposes millions for discount MetroCards for poor, Citi Bike expansion

The City Council is proposing millions of dollars for discount transit fares and expanding Citi Bike.

The latest budget proposal calls for a $50 million pilot of the “Fair Fares” proposal for half-priced MetroCards for low-income New Yorkers that’s been gaining support among lawmakers and transit advocates. Pols want to help CUNY students or veterans who live at the poverty line.

The budget proposal also features the first public funding for Citi Bike — $12 million — to bring the bike-share service to parts of the Bronx, Upper Manhattan and Staten Island. Citi Bike, operated by Motivate, is privately funded.

Mayor de Blasio has said cutting fares for struggling New Yorkers — costing more than $200 million, according to its supporters — is simply too expensive for the city. He said the state should pick up the tab because the governor controls the Metropolitan Transportation Authority.

“I agree with the mayor — this should be a state investment — but we cannot wait for the state or the MTA to bring the discount,” said Councilman Ydanis Rodriguez (D-Manhattan), chair of the Transportation Committee.

If the measure passes, New York would join cities like Seattle and San Francisco in giving people at the poverty line a break on transit costs.

The Riders Alliance and the anti-poverty Community Service Society have been building political support for half-priced MetroCards.

The groups say about 800,000 New Yorkers would be eligible for the transit benefit under the full plan. [DN]

Citi Bike competitors ready to roll into NYC

At least five rogue companies are muscling in on Citi Bike’s turf with service that eliminates the use of docking stations — and there are no laws on the books to regulate them, The Post has learned.

Spin, Noa, BlueGoGo, Mobike, and Ofo each plan to dump thousands of bicycles on the Big Apple streets starting over the next few weeks in some of the busiest neighborhoods, source said.

The companies use GPS-equipped bikes with a mechanism that locks the back tire. They can be rented using an app, which then unlocks the two-wheeled rides.

The companies charge a dollar or less for 30 minutes and the riders can leave the bike on the sidewalk when they get to their destination.

Officials and transit advocates worry bikes will be left haphazardly on sidewalks, streets, and in parks.

“New York City must proceed carefully to avoid the pitfalls seen in China, where piles of low-quality bicycles have been discarded in heaps on streets and sidewalks,” said Paul Steely White executive director of Transportation Alternatives.

Spin plans to launch above 116th Street in Manhattan — north of Citi Bike’s range — and in Staten Island, said CEO Derrick Ko.

Ko said he is meeting with the city later this week, but DOT officials denied that they are working with him. [NYP]


House Intel Panel Wants Susan Rice to Testify in Russia Probe

The House Intelligence Committee wants Susan Rice, a top aide in the Obama administration, to testify in a probe of alleged Russian election interference, as the investigation widens to include allegations that Obama officials improperly used intelligence information involving President Donald Trump or his associates.

Two officials familiar with the matter said that Ms. Rice, who served as national security adviser under former President Barack Obama, is on a list of witnesses drawn up by the committee as part of its probe.

The White House and Rep. Devin Nunes (R., Calif.) the House panel’s chairman, have accused the Obama administration of improperly using surveillance information, including “unmasking” the redacted names of Mr. Trump’s transition team members for political gain.

On Tuesday, in an interview on MSNBC, Ms. Rice said the Obama administration didn’t use intelligence about Mr. Trump or his associates for political purposes.

Democrats said the allegations are an attempt by Mr. Trump to distract investigators from pursuing whether associates of Mr. Trump colluded with the Russian government to influence the 2016 presidential election. U.S. intelligence agencies, including the Federal Bureau of Investigation, are pursuing an investigation into the alleged election meddling.

Russian officials have denied meddling in the U.S. presidential election, and Mr. Trump has denied colluding with the Russian government. [WSJ]

Former Trump Adviser Acknowledges Involvement in Russian Spy Case

WASHINGTON — Former Trump presidential campaign adviser Carter Page confirmed he was the unnamed American consultant targeted for recruitment by Russian intelligence officers operating under diplomatic cover in a high-profile 2015 New York spy case.

Mr. Page said in a statement released Monday that he helped U.S. federal investigators during the case, which led prosecutors to charge three Russians in connection with spying.

Interactions between former Trump associates and Russia are the focus of congressional and federal investigations looking into allegations that Russia interfered with the U.S. election. Russia has denied the allegations. Mr. Page’s statement marked the first acknowledgment of an interaction between Russian intelligence operatives and an associate of the Trump presidential campaign. The encounter, though, took place before President Donald Trump’s campaign.

Two of the three Russians charged in the 2015 case were operating under diplomatic cover and evaded prosecution. The third, a New York-based Russian employee of the Russian state development bank, Vnesheconombank, or VEB, pleaded guilty to conspiring to act as an agent for the Russian Federation. He received 30 months in prison but recently received early release. He remains in U.S. custody pending deportation to Russia, according to a U.S. Immigration and Customs Enforcement spokesman. [WSJ]

House Democrats expect to see intelligence documents soon

Congressional intelligence committee Democrats said on Tuesday they would soon be allowed to view documents at the center of a political firestorm surrounding the investigation of possible links between President Donald Trump’s campaign and Russia.

Representative Adam Schiff, the House of Representatives Intelligence Committee’s ranking Democrat, said documents that officials at the White House provided to the panel’s chairman, Republican Devin Nunes, would be made available to all the members of his committee and their Senate counterparts.

“This action is long overdue and follows an inexplicable series of events in which the White House played a role in selectively and surreptitiously providing the documents to our chairman,” Schiff said in a statement.

“If the White House had any concerns over these documents, or any other documents, they should have provided them to our committee weeks ago,” he said.

Congressional committees and the Federal Bureau of Investigation are investigating what U.S. intelligence has concluded were attempts by Moscow to influence the U.S. election in Trump’s favor. They are also looking at links between Russia and Trump. Russia denies such allegations.

Trump and his allies have mounted an aggressive defense. Most recently, they have focused on unsubstantiated reports that Susan Rice, former President Barack Obama’s national security adviser, disclosed the names of Trump aides swept up by surveillance of foreign targets. [REUTERS]

Senate Republican leader starts clock ticking to Gorsuch showdown

The U.S. Senate moved on Tuesday toward ramming through approval of President Donald Trump’s Supreme Court nominee this week, as its top Republican said he had the votes to wipe away Democratic roadblocks but vowed to preserve the minority party’s ability to hold up legislation.

Majority Leader Mitch McConnell plans to change the Senate’s long-standing rules in order to eliminate the ability to use a procedural hurdle called a filibuster against Supreme Court nominees like Trump’s pick, Neil Gorsuch, if a Democratic filibuster succeeds as expected in blocking a confirmation vote.

Senate confirmation of Gorsuch, 49, to the lifetime post would restore the court’s conservative majority and enable Trump to leave a lasting imprint on America’s highest judicial body even as he regularly criticizes the federal judiciary.

McConnell said he had the necessary votes to approve the rule change with a simple majority vote, expected on Thursday. Republicans control the Senate 52-48. The rule change has been dubbed the “nuclear option,” and Trump has encouraged McConnell to “go nuclear.”

Such a step would threaten to further erode trust between the parties in Congress.

“There’s a reason they call it the nuclear option, and that is because there’s fallout. And this fallout will be dangerously and perhaps disastrously radioactive for the Senate for years to come,” Democratic Senator Richard Blumenthal told reporters.

Republicans were so confident they could use their muscle to pass the rule change that Senate Judiciary Committee Chairman Chuck Grassley said flatly that Gorsuch “will be on the Supreme Court Friday night.” [REUTERS]

Trump promises to rebuild country in speech to construction workers

President Trump on Tuesday vowed to repair the country using American products and construction workers in a speech to builders.

“Together, we are going to rebuild our nation,” Trump said at the North America’s Building Trades Union (NABTU) legislative conference. “America’s labor leaders will always find an open door with Donald Trump.”

Trump opened up his remarks at the Washington Hilton by shouting out different construction-related jobs, from pipe fitters and plumbers to electricians and cement masons.

“You’re the backbone of America,” Trump said to cheers. “With the talent in this room, we can build any city, any time, and better than anyone.”

Trump, whose business career revolved around real estate and building projects, also joked that he knew how much concrete and rebar could be laid down in a day.

Trump promised to bring back the 750,000 construction jobs that have been lost, in part by streamlining regulations that can bog down the time it takes for permits to get approved — a process Trump said can take up to 10 years.

To highlight his point, Trump whipped out a giant chart to show all the regulations that must be complied with to build highways, which he said are getting in the way of his $1 trillion infrastructure plan. [THEHILL]

Trump hits Obama after Syrian gas attack

President Trump on Tuesday said a deadly gas attack in Syria carried out by forces loyal to Syrian leader Bashar Assad is a “consequence” of former President Obama’s approach to the country’s civil war.

“Today’s chemical attack in Syria against innocent people, including women and children, is reprehensible and cannot be ignored by the civilized world,” Trump said in a statement.

The president faulted his predecessor for helping create the conditions for the attack when he backed away from his 2012 “red line” on Assad’s use of chemical weapons.

“These heinous actions by the Bashar al-Assad regime are a consequence of the past administration’s weakness and irresolution,” Trump said.

Trump criticized Obama’s approach, even though he personally urged his predecessor not to intervene in the Syrian civil war on numerous occasions.



Trump’s surprisingly functional Israel policy

Israeli Prime Minister Benjamin Netanyahu’s mantra, throughout his career, has been never to give an inch without getting an inch in return.

But last week he announced that Israel would voluntarily impose some limits on future construction in the West Bank — and, according to Israeli news reports, he cited as the reason the imperative of getting along with President Donald Trump.

Pressure to slow settlement growth was not what some on the Israeli right anticipated under Trump. “The era of the Palestinian state is over,” declared Naftali Bennett, Netanyahu’s hard-right education minister, after the Nov. 8 election.

Instead, Trump has taken a surprisingly nuanced approach when it comes to the Middle East: The same administration that threatened members of Congress who didn’t support the doomed health care bill, in this case, is reaching out to both sides and appears to be making a serious effort at brokering Trump’s “ultimate deal” — peace in the Middle East. Many are still skeptical that he can achieve a deal that has bedeviled ambitious American presidents for decades.

But for now, the early steps have been something of a coup for the struggling Trump administration. Crippled by major policy setbacks at home, it appears to have the Israeli government on a tighter leash — and heeling in a way that President Barack Obama, for the most part, never managed.

“The Israeli government has made clear that going forward, its intent is to adopt a policy regarding settlement activity that takes the president’s concerns into consideration,” said one White House official. “The United States welcomes this. The president is a renowned negotiator.”

Foreign policy experts said Trump’s approach in the Middle East has been surprisingly conventional.

“You wouldn’t have a fundamentally different approach under a President Hillary Clinton, who would also be looking for a reset,” said Ilan Goldenberg, director of the Middle East security program at the Center for a New American Security, who worked under former Secretary of State John Kerry on Middle East issues. “In an administration where every day is a new shock, and there is so much breaking of china, this is totally normal,” with the added bonus that the Israelis are treading lightly, for now, careful not to get on the wrong side of Trump.

Trump’s lead adviser on Israel, Jason Greenblatt, a former lawyer for the Trump Organization with no foreign policy experience, impressed Israelis and Palestinians alike with the seriousness of his listening tour across the region, where he visited Palestinian residents of the Jalazun refugee camp, near Ramallah, as well as Palestinian students and business leaders.

The visit, which he documented extensively on Twitter, was welcomed by the left. “He took all of the meetings we would have wanted him to take,” said Jessica Rosenblum, a spokeswoman for the liberal American Jewish lobbying group J Street.

At the White House, Greenblatt is considered a valued adviser, with an office on the first floor of the Old Executive Office Building, looking into the White House. [POLITICO]


Trump’s meeting with China’s Xi could have a lasting impact on the dollar

The leaders of the world’s two largest economies will meet for the first time later this week. And the outcome of their talks could have longstanding ramifications for two of the world’s most important currencies.

Investors will be watching the headlines, scanning for clues as to how President Donald Trump will proceed with China after repeatedly attacking it during his campaign. Candidate Trump regularly accused the country of stealing American jobs, and pledged to label China a currency manipulator on his first day in office.

Though he didn’t follow through with this promise, he has continued to talk tough. In an interview with the Financial Times published earlier this week, Trump said China was a “world champion” at currency manipulation. CNBC recently reported that the Trump administration is studying ways to penalize countries whose currencies it believes are undervalued, even if they don’t meet the official Treasury Department criteria for being labeled a currency manipulator.

But at the same time, some members of Trump’s cabinet — Treasury Secretary Steven Mnuchin, for example — have advocated a path forward that would largely preserve the trading relationship between the two countries.

With these divisions in mind, the big question market strategists are asking is: Who will be going with Trump to Florida (Trump will host his Chinese counterpart Xi Jinping at his Mar-a-Lago estate). Because whoever is sitting in Trump’s living room when he finishes his meeting with Xi could help shape the administration’s policy for years to come, which in turn could have important repercussions for the dollar, the yuan and financial markets more broadly.

“If the trade pressures that come out of the meeting still seem to be acute, then we’re likely to see continued worries about [the dollar-yuan],” said Greg Anderson, global head of currency strategy at BMO Capital Markets.

On the other hand, “if it looks like the U.S. and China are going to try really hard to maintain the strong trading relationship they have right now, then probably the dollar-yuan will stabilize right where it is,” Anderson said. [MW]

U.S. Trade Gap Shrinks as Exports Rise

WASHINGTON — The U.S. trade gap with China shrank in the first two months of the year but remains far higher than a decade ago, part of a mixed trade outlook that sets the stage for potentially tense talks between President Donald Trump and Chinese President Xi Jinping this week.

The overall U.S. trade gap with other countries narrowed nearly 10% in February from a month earlier to $43.6 billion, the Commerce Department said Tuesday. That is in part due to a smaller trade deficit with China, its top trading partner. Imports from China fell by a record amount in February, and in the first two months of the year the deficit with the Asian nation shrank nearly 5% compared with the same period in 2016.

Economists cautioned trade figures are volatile and February’s data may have been distorted by the timing of the Lunar New Year. The broader outlook remain unchanged: The deficit with China—$23 billion February—is more than double the gap the U.S. has with any other country. China now accounts for almost half of the overall U.S. trade gap, up from about 30% a decade ago. [WSJ]
Payless Shoes files for bankruptcy; 400 stores closing immediately
Payless ShoeSource has become the most recent retailer to file for bankruptcy in the face of hard times.

The discount shoe store filed for Chapter 11 bankruptcy protection on Tuesday, saying it needed to shore up its balance sheet in order to position itself for long-term survival in an increasingly tough retail landscape.

“This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify,” said Payless’ CEO W. Paul Jones in a statement.

Payless plans to immediately close 400 stores in the U.S. and Puerto Rico and will also “aggressively manage” the rest of its real estate portfolio. That will mean closing additional stores and seeking to modify existing lease terms. The retailer currently has 4,400 stores in more than 30 countries.

Payless was founded in the 1950s as a no-frills destination for fashionable shoes at affordable prices. However, in recent years it has suffered from flat and declining sales and a staggering amount of debt, as shoppers shun malls and instead opt for online or other discount stores. In 2012, Payless was purchased by several private equity companies as part of a $2 billion buyout of its parent company.

The retailer said it has entered into an agreement to reduce its existing debt load by almost 50%. It has also negotiated up to $385 million of debtor-in-possession financing from existing lenders to help it keep the business running and successfully emerge from bankruptcy. [FORBES]

04/05/2017 10:26 AM by David Kinzer
Tags: Morning Read

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