Kirstjen Nielsen Quits as Homeland Security Secretary; Others Say Forced Out

Posted on 04/08/2019 6:13 AM

China says remaining trade issues with U.S. are 'hard nuts to crack'


President Trump's ever-changing Cabinet is changing again. Trump named U.S. Customs and Border Protection Commissioner Kevin McAleenan as acting homeland security secretary. Kirstjen Nielsen's resignation is yet another challenge for the administration as it deals with its immigration agenda while facing a surge of migrants at the southern border. McAleenan has acted as an enforcer, though not an architect, of Trump’s often hardline approach to illegal immigration, the Wall Street Journal reported, including last year’s controversial but short-lived policy of separating immigrant parents and children at the border.
     Meanwhile, the White House withdrew the nomination of Ron Vitiello to lead the Immigration and Customs Enforcement. "Ron is a good man, but we're going in a tougher direction," President Trump said on Friday.
     U.S./China trade talks will continue this week via teleconferences. China's Xinhua in a commentary noted “the remaining issues are all hard nuts to crack.” Chinese media are reporting that China President Xi Jinping has called for an early conclusion to the negotiations, while citing progress made during Vice Premier Liu He’s visit to Washington last week. Chinese state media said on Saturday that the two sides had made "new progress" in the talks and future discussions will be conducted in "various ways."
     This just in... Why do so many couples look alike? A Time magazine article (link) provides the psychology behind the weird phenomenon. Despite the old notion that opposites attract, experts say people naturally gravitate toward partners who are familiar. Now let's see if the magazine talks about how a person's dog looks like their owner.

 

Nielsen announces resignation. President Donald Trump announced Sunday that Homeland Security Secretary Kirstjen Nielsen resigned from her position. Kevin McAleenan, the Customs and Border Protection commissioner, will take over as acting secretary. Link to Nielsen resignation letter.

Nielsen had several run-ins with the White House during her tenure, and Trump’s recent threats to close the southern border had spurred warnings from her department that such a move could have a serious economic impact on the U.S., according to several government officials. She supported Trump’s hardline immigration policies even as he blamed her for the increased number of migrants illegally entering the U.S.

On Sunday, following Nielsen’s resignation, Trump said that he “Will Close Southern Border If necessary......Mexico must apprehend all illegals and not let them make the long march up to the United States, or we will have no other choice than to Close the Border and/or institute Tariffs,” he said. “Our Country is FULL!”

At one point last week, Trump threatened to close the border to all traffic, alarming both Democrats and Republicans with what many believe would be an economically devastating move. He later backed off on that threat, saying he would give Mexico a year to stem the tide of drugs and migrants flowing into the United States.

On Friday, Trump surprised members of Congress by withdrawing from consideration his nominee to lead the department’s Immigration and Customs Enforcement (ICE) agency, Ronald Vitiello, telling reporters, “We’re going in a tougher direction.” Under Trump, ICE has not had a permanent leader, while Homeland Security will soon have its third leader in less than three years. (Retired Marine Gen. John Kelly served as Trump’s first Homeland Security secretary before becoming White House chief of staff. He departed the administration in December.)

Impact: Trump’s hard line stance on immigration and concerns that he might order a closure of the southern border is leading to huge traffic snarl-ups at the crossing as Mexican companies try to ship as much produce into the U.S. while the border is still open.

U.S./China trade policy update:

  • The remaining issues are all hard nuts to crack,” China's Xinhua said in a commentary on Friday. Chinese state media said significant progress had been made during the different rounds of talks, but a deal could not be rushed through. A China National Radio commentary said negotiations were expected to get tougher as the talks approached the final stage.
  • Kudlow continues to be optimistic regarding eventual U.S./China trade accord. “We’ve made great progress on the IP theft. We’ve made good progress on the forced transfer of technology,” Kudlow said. The Chinese have acknowledged their problems, which was a very big hurdle, and “what wasn’t on the table, is on the table,” Kudlow said Sunday on CBS' Face the Nation. The U.S. and China are “closer and closer” to a trade deal, and top-tier officials would be talking again this week via “a lot of teleconferencing,” Kudlow added.
  • The White House released a statement Friday evening saying that “significant work remains, and the principals, deputy ministers, and delegation members will be in continuous contact to resolve outstanding issues.” In a statement, White House spokeswoman Sarah Sanders said the two sides had discussed intellectual property, forced technology transfers, non-tariff barriers, agriculture, services, purchases and enforcement.
  • Washington could extend an olive branch to Beijing by delaying the sale of F-16V fighter jets to Taiwan after a trade deal is agreed, Time magazine reported, citing unidentified U.S. officials. But Taiwan’s foreign affairs and defense ministries denied there was any plan to delay the sale.

Kudlow comments on USMCA, says timeline is up to House Speaker Pelosi. National Economic Council Director Larry Kudlow was reluctant to predict whether Congress would vote on the U.S.-Mexico-Canada Agreement (USMCA/NAFTA 2.0) before 2020, noting that the decision is up to House Speaker Nancy Pelosi (D-Calif.). But “we believe we’ll get a vote,” he said. “And if we get a vote, we’ll win. I don’t want to put timing on it. It’s completely up to her, but she’s been quite cooperative so far.”

While Pelosi has hosted a meeting for U.S. Trade Representative Bob Lighthizer to make his case to House Democrats, she’s also refused to bring up the agreement until Mexico completes an overhaul of its workers’ rights regulations.

Indonesia, Malaysia protest EU move on palm oil in biofuels. Indonesian President Joko Widodo and Malaysian Prime Minister Mahatir Mohamad signed a joint letter to the European Union (EU) objecting to the bloc's plan to phase out palm oil in renewable fuel, according to an Indonesian official.

This comes as an Indonesia delegation arrived in Brussels for an official visit this week to address the "EU's discriminatory policy," according to a statement from the Indonesian Coordinating Economic Ministry. Indonesia is part of the Council of Palm Oil Producing Countries which is leading the mission. "The main purpose of the joint mission is to convey disappointment and to fight the delegated act that has been adopted by the European Commission," the statement said.

Some European makers of spirits were indicating they were having difficulty exporting their products to Indonesia in the wake of the palm oil conflict, Reuters reported.

Other items of note:

  • Mulvaney: Democrats will 'never' see Trump's tax returns. Acting White House chief of staff Mick Mulvaney said Sunday that Democrats will "never" see President Trump's tax returns. "Nor should they. That’s an issue that was already litigated during the election. Voters knew the president could have given his tax returns. They knew that he didn’t, and they elected him anyway," Mulvaney said during an appearance on Fox News Sunday. He added that Democrats "know they're not going to" get the tax returns. Mulvaney described congressional requests issued directly to the tax agency as a “political stunt.” Trump has reportedly told advisers he would take the fight over his returns all the way to the Supreme Court.

  • White House defends Herman Cain. Officials backed Cain for a seat on the Federal Reserve’s board of governors even after the onetime GOP presidential candidate warned that he expects renewed scrutiny of sexual-harassment allegations against him.

  • Glyphosate assessment released. A toxicological profile of glyphosate herbicide was released today by an arm of the Centers for Disease Control and Prevention. The Agency for Toxic Substances and Disease Registry published the assessment via a notice making the tox profile available for public comment. Link to Federal Register notice.

  • Justin Trudeau threatened to sue the opposition. Conservative Party leader Andrew Scheer released a letter he had received from the Canadian prime minister’s lawyer over critical comments made in relation to the SNC-Lavalin affair engulfing Trudeau’s government. Trudeau is facing accusations of interfering in a corruption case against the Quebec engineering company.

  • April showers could boost wheat’s pricing powers. The latest Barron's has an article that says, “The waterlogged U.S. Midwest is forecast to get more rain in coming weeks, which should reduce and weaken this year’s wheat crop. That would mean higher prices. Here are a number of ways for investors to profit.” Link to article (subscription may be needed).

  • Has the U.S. reached ‘peak meat’? A columnist for the Washington Post argues we’re at a tipping point where plant-based and other meat alternatives are going to start truly eating away market share. Link to commentary.

  • Brazil bridge collapse could affect grain shipments in north. Part of a bridge over the Moju River in Brazil's Para state collapsed early on Saturday, potentially affecting shipment of grains such as soybeans and corn through northern ports, local authorities and an agribusiness consultant said, according to Reuters. The bridge fell after it was hit by a boat, Governor Helder Barbalho said on Twitter, where he also posted videos of a large section of the bridge in the water. He said this was not the first time such an accident had occurred.

Markets. The Dow on Friday finished up 40.36 points, 0.15%, at 26,424.99. The Nasdaq moved up 46.91 points, 0.59%, at 7,938.69. The S&P 500 gained 13.35 points, 0.46%, at 2,892.74. The S&P 500 index is still 1.3% off its all-time high of 2,930.75, despite gaining 2.1% this past week.

The Atlanta Fed’s GDPNow model predicts 2.2% growth during the first quarter of 2019, near the annual average of 2.3% since 2010.

Consumer credit expansion continues moderate. U.S. consumers added $15.2 billion to their use of credit in February, under expectations for a rise of $17 billion. Revolving credit, where credit and store cards are categorized, increased $3.0 billion in February, up slightly from the January pace, but still only a moderate increase reflecting a tepid growth in consumer spending to open 2019.

Fed considers changes to foreign bank rules. The U.S. Federal Reserve Board will hold an open meeting today to discuss changes to rules for foreign banks and resolution plans submitted by domestic and foreign firms. The modifications would direct the Fed to ease requirements in several areas for lenders with less than $250 billion in assets and are a follow-up to rules proposed in October on easing capital and liquidity requirements for larger domestic firms.

The federal budget deficit was $693 billion for the first half of fiscal 2019, an increase of $94 billion in the deficit from the same period last year, the Congressional Budget Office said in a report issued Friday. While revenue rose by 1%, spending rose by 5%, compared to the same period last year. Link to report.

Oil prices continue to advance, with Brent and WTI hitting fresh 2019 highs overnight ($70.62/bbl and 63.45/bbl, respectively) amid an escalation of violence in Libya, OPEC's ongoing supply cuts, and U.S. sanctions against Iran and Venezuela.

Midwest floods hammer U.S. ethanol industry, push some gasoline prices toward 5-year high: Reuters. The March floods that punished the U.S. Midwest have roiled the ethanol industry, hammering prices and trapping barrels in the country's interior while the U.S. coasts suffer from shortages of the biofuel. Link for details.

China’s foreign-exchange reserves grew for the fifth straight month in March to a seven-month high of $3.099 trillion, according to central bank data Sunday. March’s $8.58 billion month-on-month increase in the reserves was better than economists had expected.

Saudi Aramco, the world’s largest oil company, is drawing interest in its debut bond sale. The firm has attracted $30 billion worth of demand for issuance of $10 billion, according to the Financial Times. The Saudi Arabian state-owned firm, which earned $111 billion in net income last year, wants to issue its bonds at yields similar to those of the government’s debt.

Another Brexit deadline. Britain’s two main political parties are pushing to reach a new deal this week ahead of a European Union summit that will consider a request from British Prime Minister Theresa May to further postpone Brexit. The U.K. is formally scheduled to leave the bloc on April 12, having been postponed once from March 29. "The choice that lies ahead of us is either leaving the European Union with a deal, or not leaving at all," May said in a video posted on Sunday. She's already under heavy pressure to present a new plan on Wednesday night — when she meets with EU leaders in Brussels — and before then, she needs to make progress in talks with the opposition Labour Party.


 

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