Trump: USMCA votes in House if Pelosi brings to floor | Trudeau wins second term
In today's updates:
* Trump says China has indicated that trade negotiations are advancing
Markets: Stocks across Europe edged lower as Brexit uncertainty weighed on investor appetite ahead of another day of voting by U.K. lawmakers on the terms of the nation’s exit from the European Union.
— U.S./China trade policy update:
- Chinese vice foreign minister says progress made in trade talks with U.S. China and the United States have achieved some progress in their trade talks, Vice Foreign Minister Le Yucheng said today, and any problem could be resolved as long as both sides respected each other. No country can prosper without working with other nations, Le said at the Xiangshan Forum in Beijing. However, Le also warned that China would never trade away its core interests or allow other countries to undermine its security. “No one should expect China to swallow the bitter consequences of undermining its interests, whether on the land or at sea, whether it’s Taiwan, Hong Kong, Xinjiang or Tibet,” he said.
- President Donald Trump on Monday said efforts to end a U.S. trade war with China were going well. “The deal with China’s coming along very well. They want to make a deal,” Trump told reporters before a Cabinet meeting, stressing the toll that U.S. tariffs have taken on the Chinese economy. “They sort of have to make a deal ... because their supply chain is going down the tubes.” “They have started the buying,” Trump said Monday, referring to Chinese purchases of U.S. agriculture products that the president has pushed for as part of a deal. “I want more,” he added.
- Timeline of talks this week. U.S. Trade Representative Bob Lighthizer told reporters the administration still aimed to finalize a deal on the first phase of the deal in time for the Asia-Pacific Economic Cooperation meetings in Chile on Nov. 16 and 17, but said there were still outstanding issues to resolve. He said deputy-level meetings took place on Monday, and he and Treasury Secretary Steven Mnuchin would speak with their counterparts on Friday. Commerce Secretary Wilbur Ross told Fox Business Network that timing was less important than making “the right deal.” Ross said that it was more important to get details of the agreement right than it was for Trump to sign it next month. He said that the “actual meat” of the agreement would come in two additional phases yet to be completed. White House economic adviser Larry Kudlow told FBN that 15% U.S. tariffs on many consumer goods imported from China slated to commence Dec. 15 could be withdrawn if negotiations continue to go well.
- In a Financial Times opinion item written by Simon J. Evenett, the author wrote: “Combined with having to defend during a U.S. presidential election any deal from inevitable attacks by Democrats, Chinese policymakers may have concluded the U.S. would pull out of any accord concluded before November 2020. In which case, Beijing might surmise, why sign a deal in the first place?” Link for details (pay wall).
— USMCA update:
- President Trump said Monday that the U.S.-Mexico-Canada Agreement (USMCA) already has the votes if House Speaker Nancy Pelosi (D-Calif.) will just put it on the floor. “It’s up to Nancy Pelosi to put it up (for a vote). If she puts it up, it’s going to pass,” Trump said.
- House Democrats met Monday with U.S. Trade Representative Bob Lighthizer and are expected to hold at least one if not more additional sessions this week after three meetings last week. A tentative meeting is slated for Wednesday.
- Commerce Secretary Wilbur Ross indicated Monday that the administration was losing patience with congressional Democrats over the slow pace of efforts to get USMCA a ratification vote. "There's really no substance — reason to not go for USMCA. There are only political reasons. It's just them not being willing, apparently, to give the president yet another victory," Ross said Monday on Fox Business Network. "Remember, there are only something like 20 congressional days between now and Christmas. So, they better get going pretty fast if they're going to do it." Ross said at the current time, “we're not focused on negative alternatives. Right now, we're focused on trying to make clear, through the American public, to Nancy Pelosi, she should put it on the floor," he said. "If Democrats really don't like it, let them vote it down. We believe there's no question that if it gets to the floor, it will be voted very strongly, both in the House and the Senate."
— EPA administrator tries to temper RFS proposal backlash. EPA Administrator Andrew Wheeler on Monday tried to reassure furious biofuel groups and others that they will get their full allotment of ethanol blending next year. Wheeler claims it will all work out: “I think a lot of people who had a knee jerk reaction, [the rule] wasn’t exactly what they were expecting,” he said on Monday during an interview with Nexstar Media Group (link). “If they look at it and they read it carefully, they will see it will get us to the 15 billion gallons of ethanol that the president promised and that’s in the statute.”
President Trump during Monday's Cabinet meeting touted the new proposal, claiming it was “fully approved” and that he spoke with Iowa GOP Sens. Chuck Grassley and Joni Ernst about it. However, Grassley’s office said the senator had not spoken with Trump or Wheeler since the new rule’s release last week. Ernst spoke with Wheeler on Thursday, but her office did not respond to a question about whether she had spoken to Trump.
During the Cabinet meeting, USDA Secretary Sonny Perdue suggested that the ag industry was simply confused about the details of the new blending rule. “Once they fully understand what you’ve done here, they’ll be fine as they see it implemented,” Perdue said to Trump. Ethanol proponents said if Perdue thinks the industry is confused, he should detail how the 15-billion-gallon commitment will be realized. Said one industry contact, “Ever since Perdue said he did not like the word reallocation, I knew something was up.” Link for details. Link to transcript of Cabinet meeting.
— Farmers and ranchers are taking out fewer loans from ag banks, and asking for smaller amounts of money when cash is needed, the Federal Reserve said in its quarterly Agricultural Finance Databook (link). “Weaknesses in the sector persisted, continuing to pressure farm cash flows and agricultural credit conditions,” the report noted.
Decline in average size of farm operating loans. “The primary contributor for the slowdown from sharp increases a year ago was a decline in the average size of farm operating loans,” according to the document.
The state of the U.S. ag sector economy is the topic of a Farm Foundation session on today.
— Other items of note:
Trudeau to return as 'weakened' PM and lead minority government. Justin Trudeau’s Liberal party survived a challenge from both the left and right in Canada’s general election on Monday, but he will return to power as the head of a minority government. Short of the numbers needed for a majority, according to Election Canada, the most likely partner for Trudeau would be the pro-labor New Democratic Party. Trudeau’s Liberals won or were leading in 155 electoral districts, falling 15 seats short of winning a majority in the House of Commons. In the 2015 poll, the Liberals won a majority with 184 seats. The prime minister’s chief rival, the Conservative party led by Andrew Scheer, won 122 seats, below expectations.
EPA today will publish its final repeal of the Waters of the U.S. (WOTUS) rule, setting off what is expected to be a series of lawsuits from environmental groups and states aiming to halt the agency’s efforts to overturn the Obama administration’s landmark water regulation. Link to Federal Register document.
The Commerce Department is reactivating an anti-dumping case against tomato imports from Mexico, just one month after signing a deal to resolve the dispute. The suspension agreement reached remains in effect, Commerce said Monday. The investigation was continued at the request of Red Sun Farms and the Florida Tomato Exchange (FTE). The antidumping investigation by Commerce’s US International Trade Commission (USITC) had been nearly complete when it was shelved after a new suspension agreement was reached Aug. 20 and finalized Sept. 19. FTE said it was requesting the investigation be reopened amid evidence the Mexican tomato industry was looking to launch legal challenges to the new agreement and could even seek to withdraw from it. Commerce is required under the Tariff Act of 1930 to resume the antidumping investigation upon the request of interested parties when there is a suspension agreement in place.
U.S. Energy Secretary Perry to step down Dec. 1. U.S. Energy Secretary Rick Perry, who told President Donald Trump last week he would resign late in the year, intends to step down on Dec. 1, the energy department said on Monday.
Congress will need to pass at least one more temporary funding bill beyond the current Nov. 21 deadline, according to Senate Appropriations Chairman Richard Shelby (R-Ala.), who said the measure's length will likely be determined, in part, by the impeachment inquiry. "Looming over all of it is what the House might do on impeachment... and when they do it," Shelby said.
Senate Democrats plan to force a vote next week on a Congressional Review Act resolution that would overturn the Trump administration's health insurance guidance allowing state to offer lower-cost insurance plans. Only a simple majority is required for the resolution to get through the Senate.
Insider trading by gov't officials? Sen. Angus King (I-Maine) has asked the chairman of the Securities and Exchange Commission to probe potentially suspicious futures trades that he's worried could be the "result of insider trading by government officials."
Pompeo to make another Kansas visit as GOP courts him for Senate, says a WSJ article (link). Pompeo will join Ivanka Trump, the president's eldest daughter and senior adviser, on a visit to Wichita, which he represented in Congress before joining the Trump administration. "The official visit — the secretary of state's third official appearance in the state this year — is seen by Kansas Republicans as the latest sign that Pompeo hasn't fully ruled out a 2020 run to succeed retiring GOP Sen. Pat Roberts.”
U.K. Parliament set for more Brexit votes. Prime Minister Boris Johnson faces two further votes today that will decide whether he can deliver on his pledge for the U.K. to exit the European Union by Oct. 31.
— Markets. The Dow on Monday rose 57.44 points, 0.21%, at 26,827.64. The Nasdaq gained 73.44 points, 0.91%, at 8,162.99. The S&P 500 was up 20.52 points, 0.68%, at 3,006.72.
Total global renewable power is set to more than double in the next five years, the International Energy Agency (IEA) said in a new report out Monday (link). IEA projects an increase of 1,200 gigawatts by 2024, an amount equal to all the power capacity in the U.S. currently. Renewables’ doubling will be driven largely by increasing solar power — with China set to take over with the world’s largest solar PV capacity. Overall costs for solar and wind will continue to tumble, too, the IEA detailed. But a doubling in global renewable capacity isn’t as ambitious as it sounds. According to the IEA, the huge growth it projects in solar PV through 2024 represents just 6% of the technology’s total potential worldwide.