The Hill’s Morning Report — Markets on edge over Trump, Xi trade negotiations

Hill.TV’s “Rising” program, starting at 8 a.m., features interviews with Rep. Pramila Jayapal (D-Wash.) and Trump ally and Roger Stone associate Jerome Corsi. http://digital-release.thehill.com/hilltv

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President Trump and Chinese President Xi Jinping will meet this weekend at the Group of 20 (G-20) summit in Argentina for high-stakes negotiations over trade, as investors, companies and economists wonder if the leaders will call a cease-fire and end the volley of retaliatory tariffs that have contributed to global economic turmoil.

The stock market has been extraordinarily sensitive to remarks coming out of the White House. Depending on the day, Trump and his advisers have spoken optimistically about the possibility of a deal or said an agreement seems unlikely.

In his final remarks to reporters before jetting off to Buenos Aires, Argentina, on Thursday, the president said he was unsure if he even wants an end to the impasse with China.

“I think we’re very close to doing something with China, but I don’t know that I want to do it. Because what we have right now is billions and billions of dollars coming into the United States in the form of tariffs or taxes. So, I really don’t know. But I will tell you that I think China wants to make a deal. I’m open to making a deal. But frankly, I like the deal that we have right now.” — Trump

That was not what the markets wanted to hear.

Still, Trump follows the daily fluctuations in the stock market and has been alarmed by the recent volatility, which he has blamed on Federal Reserve Chairman Jerome Powell, whose remarks last month about raising interest rates sent stocks lower.

This week, Powell softened his tone, forecasting sustained growth and low unemployment and signaling that the Fed might not be as aggressive in tightening rates as was previously believed.

That removed some of the gloom that hung over the markets, sending stocks higher.

But Powell also warned that “trade tensions” between the U.S. and its allies could lead to a “particularly large” drop in the markets. The trade war with China now takes over as the biggest question mark hanging over the economy in the near term. 

> In Buenos Aires this morning, Trump began his day with what he believes is a trade pact success, joining his counterparts from Canada and Mexico to formally sign the newly negotiated successor to the 1994 North American Free Trade Agreement (Bloomberg). 

> Trump initially said he would meet with Russian President Vladimir Putin in Buenos Aires, but changed his mind Thursday. The president told reporters a meeting was on as he boarded Air Force One for the trip – and then tweeted mid-flight that he’d canceled it over Russia’s latest aggression against Ukraine. Trump did not give the Kremlin a heads-up that the meeting was off (The Associated Press).

Secretary of State Mike Pompeo was on the plane with Trump when the decision was made. State Department spokesman Robert Palladino said the administration had one thing in mind: Russia’s “isolation.”

The Hill: Trump confronts new Russia test with Ukraine crisis.
The Associated Press: Trump barrels into G-20 meeting after nixing Putin meeting.

LEADING THE DAY

INVESTIGATIONS: Some pundits suggested the president had more on his mind on Thursday than Russia’s aggression against Ukraine’s ships when he canceled the meeting with Putin.

Shortly before Trump pulled out of a sit-down with Putin, the president’s former attorney and self-described “fixer,” Michael Cohen, pleaded guilty to lying to Congress about a Moscow real estate deal he was negotiating on Trump’s behalf during the 2016 presidential campaign.

Cohen admitted that he discussed construction of a Trump Tower in Moscow with Russian officials as late as June 2016, after Trump had secured the GOP presidential nomination. Cohen previously testified that the last time he discussed the project with Russia was in January of that year. 

In a court filing Thursday, Cohen admitted he lied to lawmakers to stay in line with Trump’s “political messaging.”

The president has already submitted answers to questions from special counsel Robert Mueller about Russian interference in the 2016 election. Trump’s attorney, Rudy Giuliani, said the president informed the special counsel that Trump Tower negotiations with Moscow were ongoing until June 2016 (The New York Times).

The New York Times: How a lawyer, a felon and a Russian general chased a Moscow Trump Tower deal.

But the plea deal is the first public sign that Cohen is working closely with the special counsel.

The court filings indicate that Cohen, who had previously pleaded guilty to financial fraud charges and one campaign finance violation related to a payment made to a woman who claims to have had an affair with Trump, has met at least seven times with members of Mueller’s team.

Some context from The Associated Press:

“Cohen is the first person charged by Mueller with lying to Congress, an indication the special counsel is prepared to treat that offense as seriously as lying to federal agents and a warning shot to dozens of others who have appeared before Congress.”

“There is no clear link in the court filings between Cohen’s lies and Mueller’s central question of whether the Trump campaign colluded with Russia. And nothing said in court, or in associated court filings, addressed whether Trump or his aides had directed Cohen to mislead Congress.”

In remarks to reporters, Trump said he didn’t break any laws by pursuing his business interests during the campaign and noted that he didn’t follow through with the project.

“I wasn’t trying to hide anything.” — Trump

The president tweeted early Friday morning from the G-20 summit:

The president also described Cohen, now a registered Democrat and increasingly critical of Trump, as “a weak person and not a very smart person.” Trump said he only hired Cohen, who represented him for a dozen years, because “a long time ago he did me a favor.”

While Cohen is the first person in the Russia probe orbit to plead guilty for misleading Congress, he is only the latest in a growing line of individuals who Mueller has nailed for lying to investigators.

> Former Trump campaign adviser George Papadopoulos is in jail for lying to the FBI.

> Trump’s former campaign chairman, Paul Manafort, was cooperating with the special counsel, but this week Mueller’s team abruptly ended the agreement and requested the court move immediately to sentence Manafort, accusing him of repeatedly lying to investigators.

> Jerome Corsi, an associate of former Trump confidant Roger Stone, told NBC News on Thursday that he lied to Congress about the investigation: “I lied and I’m ready to die in jail.” Corsi has claimed that Mueller’s team has been leaning on him to cut a deal with prosecutors, but Corsi says he has refused to work with the special counsel.

Perspectives:

Roger Stone’s ‘Time in the Barrel’: Campaign dirty tricks, political sabotage and the law, by former White House Counsel Bob Bauer, professor of practice, New York University School of Law (Lawfare).

What Cohen’s deal means for Trump, by Barry Berke, Noah Bookbinder and Norm Eisen (The New York Times).

Your guide to understanding the Trump-Russia saga, by Laurence Arnold (Bloomberg for The Washington Post).

> Also on Thursday … Former FBI Director James Comey asked a federal judge to quash a congressional subpoena from House Judiciary Committee Republicans who want him to testify behind closed doors about his decision-making ahead of the 2016 presidential election. Comey has said he wants to respond to questions in public (Reuters).

IN FOCUS/SHARP TAKES

CONGRESS & POLITICS: Nancy Pelosi thinks “present” may be a gift. Eager to line up enough support before Jan. 3 to be elected Speaker for the second time, the House Democrats’ minority leader and her allies are urging fellow Democrats to vote “present” in January if they can’t see their way to voting for the veteran California representative.

If every member votes for a person and no member votes present, Pelosi needs 218 votes to become Speaker. If some Democrats vote present, that number goes down.

And Pelosi is known as a skilled vote counter. No other Democrat has stepped up to formally challenge her, despite the grousing among younger lawmakers who say they yearn for fresh-thinking among the leadership (The Hill).

Getting ahead: No House Democrat who has expressed misgivings about Pelosi wants to be left behind if she locks in enough votes to leap from semi-vulnerable to victorious. Rep. Stephen Lynch (D-Mass.) backed Pelosi on Thursday in a surprise about-face (The Hill). And Rep. Cheri Bustos (D-Ill.) will lead the Democratic Congressional Campaign Committee, responsible for maintaining or expanding the House Democratic majority in two years, when Democrats expect to vote for a successor to Pelosi (The Hill).

The Associated Press: Trump and Pelosi know one another. Can they deliver the necessary votes to collaborate?

Shutdown watch: Senate Minority Leader Charles Schumer (D-N.Y.) floated the idea of a short-term spending bill to buy some time in the midst of a funding battle over a border wall. Congress faces a deadline in a little more than a week to reach an agreement (The Hill). On Thursday, Trump again suggested that without $5 billion for a border wall, he would shut down parts of the government as a way to bring Democrats to heel.

> The urgency of a must-pass spending accord has inspired some Senate Republicans to propose something many conservatives oppose but Democrats may want: protection for recipients of the Deferred Action for Childhood Arrivals (DACA) program. But Democrats are backing away from a potential floor fight over “Dreamers” (The Hill).

> Climate change: How aggressive are House Democrats willing to be next year to curb greenhouse gases tied to climate change? It’s one of many unanswered questions for 2019 (The Hill). … And how assertive will Democrats be while making a case for Trump-Russia collusion leading up to the 2016 election? “Very,” is the answer (Politico).

> Senate GOP: Meanwhile, newly elected GOP senators are the most pro-Trump group yet, according to USA Today’s introduction to newcomers, who will be sworn in come January. … But Trump failed to gain the support of the sole African-American GOP senator, Tim Scott of South Carolina, to clear a judicial nominee, Thomas Farr, on Thursday (McClatchy).

> Election question: The North Carolina board of elections has yet to decide what to do about the lone outstanding race in the country still without an official winner. House members are still wondering about North Carolina’s 9^th Congressional District after the board voted 9-0 on Tuesday not to certify an outcome in a contest in which Republican Mark Harris appeared to defeat Democrat Dan McCready by 905 votes. Allegations of voting irregularities in and around one county continued on Thursday, with the North Carolina Democratic Party calling for an official hearing and a flurry of affidavits surfacing involving absentee ballots. The board is set to meet today (The Charlotte Observer) but has no apparent plans to certify a victor (The New York Times).

More politics … Sen. Elizabeth Warren (D-Mass.) edged closer to a likely presidential campaign with a detailed foreign policy address on Thursday (The New York Times).

The Morning Report is created by journalists Jonathan Easley jeasley@digital-release.thehill.com & Alexis Simendinger asimendinger@digital-release.thehill.com. Suggestions? Tips? We want to hear from you! Share The Hill’s reporting and newsletters, and encourage others to SUBSCRIBE!

OPINION

How to keep the National Climate Assessment warnings from coming true,  by Collin O’Mara, opinion contributor, The Hill. http://bit.ly/2PahxmJ 

Federal Reserve must double down on promise of steady interest rates, by Alfredo Ortiz, opinion contributor, The Hill. http://bit.ly/2E7fm2r

WHERE AND WHEN

The House meets at 9 a.m.; any votes to occur between 10-11 a.m. Pelosi holds a press conference at 11 a.m.

The Senate is out until Monday. 

The president is in Argentina for the Group of 20 summit, which concludes on Saturday.

Vice President Pence will travel to Hollywood, Fla., to speak this afternoon to the Israeli-American Council National Conference. Pence and second lady Karen Pence then fly to Houston, Texas, where they remain overnight. On Saturday, the vice president leads the U.S. delegation to the inauguration of Andrés Manuel López Obrador, Mexico’s new president. The delegation includes Ivanka Trump, Department of Homeland Security Secretary Kirstjen Nielsen and Energy Secretary Rick Perry.

ELSEWHERE

> Genetics: China halted work by a scientific team on gene-edited babies (The Associated Press). … Some scientists worry the field of medicine to address diseases in individuals could be set back for decades (The Associated Press).

> Espionage: The Trump administration is weighing new restrictions on Chinese foreign national students enrolled in the United States because of mounting concerns about spying and cyber theft (Reuters). 

> Cuisine: California’s Bay Area, as of Thursday, boasts eight restaurants that have each earned three Michelin stars, more than any other metropolitan area in the world outside Paris and Tokyo. Chef Dominique Crenn of San Francisco’s modernist restaurant Atelier Crenn became the first woman in the United States to receive three stars from the Michelin Guide, its highest rating (The New York Times). 

> Political cinema: “Vice,” a satirical portrait of former Vice President Dick Cheney, is the project of Academy-Award-winning filmmaker and former “Saturday Night Live” writer Adam McKay. “Cheney and [former President George W.] Bush did kill, conservatively, half a million civilians in Iraq. Some estimates have it at more than a million. So he’s pretty bad.” But, McKay said, “I think you have to humanize him, because unless we see how a regular human being can go down these roads, it’s useless” (The New York Times Magazine). (“Vice” hits theaters on Dec. 25.)

THE CLOSER

And finally … Congrats to Morning Report quiz winners, who knew a lot about Mars! Readers who nailed all five questions this week: Milt Mungo, Dara Umberger, Carol Katz, John Smith, Denise Scovel, Sandy Sycafoose and Michael Reed.

They knew (or guessed) that Olympus Mons on Mars is the tallest known planetary mountain in the solar system, and that a Martian year is about 687 Earth days long.

NASA’s InSight lander, which wowed everyone by needing just six minutes to stick a precision Mars landing on Monday, was sent to the Red Planet to probe its core and measure seismic activity.

The orbit of Mars around the sun causes fierce dust storms that can last for months.

When NASA talks about the planetary kinship between Mars and Earth, it explains that Mars long ago stopped changing, while Earth continues to evolve. Why? Scientists would like to answer that question. One theory is that Earth benefits because of its tectonic plates, which Mars doesn’t have (NASA Mars Exploration Program).