Jun 29, 2018

Axios AM

By Mike Allen
Mike Allen

Situational awareness: TSA projects today may be the busiest screening day ever (2.7 million people) — the peak day for the July 4 holiday rush, breaking the record set in 2004, on the Sunday after Thanksgiving.

1 big thing ... Exclusive: Trump private threat to upend global trade

Photo illustration: Axios Visuals

President Trump has repeatedly told top White House officials he wants to withdraw the United States from the World Trade Organization, a move that would throw global trade into wild disarray, people involved in the talks tell Jonathan Swan:

  • “He’s done that 100 times. It would totally [screw] us as a country,” said a source who’s discussed the subject with Trump. 
  • The source added that Trump has frequently told advisers: "We always get fucked by them [the WTO]. I don’t know why we’re in it. The WTO is designed by the rest of the world to screw the United States."
  • During the campaign, Trump told NBC's Chuck Todd on "Meet the Press," in July 2016: "World Trade Organization is a disaster."

Some aides have tried to explain to Trump that in their view, the U.S. does well at the WTO, given the U.S. has an army of trade lawyers and created the system:

  • The “Economic Report of the Presidentfor 2018, which bears Trump’s signature on Page 11, states: “[T]he United States has won 85.7 percent of the cases it has initiated before the WTO since 1995, compared with a global average of 84.4 percent. In contrast, China’s success rate is just 66.7 percent.”

But Trump is unmoved by those arguments, according to sources with direct knowledge:

  • Trump’s economic advisers do push back in the moment when he raises the idea of withdrawal.
  • But they’ve never put in place a policy process to take the idea seriously, according to four sources with direct knowledge of his private comments.
  • That dismissive attitude in the face of Trump’s insistence could ultimately prove to be a mistake — as history has shown with other policy ideas of which aides do not approve.

Between the lines: Even if his advisers put a policy process in place and try to make sure he’s well-informed on what it would mean to try to withdraw from the WTO — there is no guarantee that Trump won’t do it. History shows he doesn't care about the process.

  • Remember when Trump upended his globalist trade advisers’ carefully constructed policy process and simply announced he’d be imposing massive tariffs on steel and aluminum imports? It’s not unimaginable that the same could eventually happen with his desire to try to withdraw from the WTO.

Why this matters: A U.S. withdrawal from the WTO would send global markets into a spiral and cast trillions of dollars of trade into doubt.

  • It would also blow up an institution that for 70-plus years has been a pillar of global economic and political stability.
  • The consequences of a U.S. withdrawal are so profound that, like Trump’s senior advisers, the trade community hasn’t seriously entertained the possibility that Trump would try to withdraw.
  • A top trade lawyer in Washington said: “We think he’s nuts, but not that nuts."

The safety valve: Should Trump defy his advisers and announce a withdrawal at some point in the future, he would run into significant legal hurdles.

  • As head of state, Trump under international law could make the notification at the WTO. But the U.S. law implementing the WTO agreements states quite plainly that withdrawal from the WTO requires an act of Congress.

What’s next? Probably nothing. This move seems too extreme, even for Trump.

  • Sources with knowledge of the situation say the Trump administration will continue to call attention to various ways in which the U.S. encounters what some Trump advisers perceive is unfair and unbalanced treatment within framework of the WTO.
  • The administration will likely continue to push the envelope on all its trade policies, fully expecting its actions will be challenged within the WTO. 

But if Trump continues to feel as if he’s being unfairly stymied by the international body, you’d be a fool to confidently declare that he won’t follow through on his desires at some point.

2. Stuff Trump says
Jesco Denzel/Bundesregierung via Getty Images

Jonathan Swan has new details from Trump's testy private conversations with heads of state at the G7 summit in Canada earlier this month — a reminder of why allies are on edge heading into next month's NATO summit.

  • An official read this Trump quote, looking ahead to the July 11-12 NATO summit in Brussels, from notes transcribed from a private meeting with G7 heads: "It will be an interesting summit. NATO is as bad as NAFTA. It's much too costly for the U.S."
3. Deadliest day for journalists in U.S. since 9/11
Capital Gazette photographer Joshua McKerrow (left) and reporter Chase Cook work on today's paper while awaiting news of their colleagues. (Ivan Couronne/AFP/Getty Images)

Workers at the Capital Gazette in Annapolis, Md., still published a paper this morning after a gunman, with a longstanding grudge against the paper, blasted into the newsroom yesterday afternoon, killing five colleagues:

  • "Journalists dived under their desks and pleaded for help on social media," writes the Baltimore Sun, which has the same owner.
  • "The victims were identified as Rob Hiaasen, 59, a former feature writer for The Baltimore Sun [and brother of novelist Carl Hiaasen] who joined the Capital Gazette in 2010 as an assistant editor and columnist; Wendi Winters, 65, a community correspondent who headed special publications; Gerald Fischman, 61, the editorial page editor; John McNamara, 56, a staff writer who had covered high school, college and professional sports for decades; and Rebecca Smith, 34, a sales assistant hired in November."
  • "In July 1776, the Gazette was one of the first newspapers to publish the Declaration of Independence, although it appeared on page 2; then, as now, local news took precedence."

Police identified the gunman as Jarrod W. Ramos, a 38-year-old Laurel man:

  • "Ramos’ dispute with the Capital Gazette began in July 2011 when a columnist wrote about a criminal harassment case against him. He brought a defamation suit against the columnist and the ... publisher. A court ruled in the Capital Gazette’s favor, and an appeals court upheld the ruling."
  • Neither the columnist nor the executive still work at the paper.

This loss of journalists inside U.S. borders is being mourned by political figures who often have divisive relationships with the news media, Axios media trends reporter Sara Fischer writes:

  • By the numbers: The Maryland deaths make the U.S. the second-most deadly country for journalists in the world this year — after only Afghanistan, which experienced its own tragic bombing event that killed dozens in April.
  • This was the deadliest attack on journalists in the U.S. since 9/11.
  • The bigger picture: At a time when the media is struggling to connect with many of the citizens it represents, it’s now facing a gun violence crisis that has become a personal issue for millions of Americans.
The NYPD announced increased security at major media companies in Manhattan after the shooting in Annapolis. (Drew Angerer/Getty Images)
4. Pics du jour: Behind the scenes of a photo opp

This was the scene as President Trump joined a Foxconn groundbreaking ceremony yesterday in Mount Pleasant, Wis., with Gov. Scott Walker (Trump's left), Foxconn Chair Terry Gou (Trump's right) and Speaker Paul Ryan (far right).

Brendan Smialowski/AFP/Getty Images

Here's what else there was to see:

Brendan Smialowski/AFP/Getty Images
Brendan Smialowski/AFP/Getty Images
5. "House of Cards": Supreme Court episode

President Trump singled out Justice Anthony Kennedy "for praise even while attacking other members of the Supreme Court. The White House nominated [his former law clerks] to important judicial posts," the N.Y. Times' Adam Liptak and Maggie Haberman write in "Inside the White House’s Quiet Campaign to Create a Supreme Court Opening":

  • "Their goal was to assure Justice Anthony M. Kennedy that his judicial legacy would be in good hands should he step down."
  • "[W]hen Justice Gorsuch took the judicial oath in April 2017 at a Rose Garden ceremony, Justice Kennedy administered it."
  • After Gorsuch was nominated, a White House official "singled out two candidates for the next Supreme Court vacancy," each of whom had clerked for Justice Kennedy: Judge Brett M. Kavanaugh of the U.S. Court of Appeals for the District of Columbia and Judge Raymond M. Kethledge of the 6th U.S. Court of Appeals, in Cincinnati.
  • "Trump nominated three of [his former clerks] to federal appeals courts."
  • "Justice Kennedy’s son, Justin.[,] ... spent more than a decade at Deutsche Bank, [where] he worked closely with Mr. Trump when he was a real estate developer ... During Mr. Kennedy’s tenure, Deutsche Bank became Mr. Trump’s most important lender."
6. Chief Justice Roberts is the new swing vote

The Roberts Court ... "With the retirement of Justice Anthony M. Kennedy and the likelihood that President Trump will choose a more conservative replacement, Chief Justice John G. Roberts Jr. [nominated 13 years ago by President George W. Bush]... will have the ability to supply the deciding fifth vote and dictate the terms of the deal," the WashPost's Bob Barnes writes:

  • "Roberts has been content to play the long game, moving the court to the right with incremental steps."
  • "[N]ow [he has] more conservative colleagues on one side and liberals on the other."
  • Why it matters: This makes him "one of the most powerful chief justices in recent history.”
7. Women candidates tackle taboos in ads

"As female candidates run in record numbers for elective office in this year’s midterm elections, they are changing the traditional campaign scripts — taking on once-taboo topics and pushing gender to the forefront of their political campaigns and advertising," USA Today's Fredreka Schouten writes:

  • What's new: "In one ad, a House contender from Illinois recalls trying to fight off a molester who crept into her childhood bedroom at night. In another, a gubernatorial candidate in Nevada speaks about sex abuse she endured as an 8-year-old. Women running for governor in Maryland and Wisconsin decided to breastfeed their infant daughters while the cameras rolled."
  • Why it matters: "They have altered the way campaigns operate day-to-day. This month, for instance, ethics commissions in Alabama and Wisconsin followed the lead of the Federal Election Commission and approved requests made by female candidates to use their campaign funds for child care expenses."
8. "Frothy" Netflix
Courtesy The Economist

Netflix's entertainment output this year "will far exceed that of any TV network; its production of over 80 feature films is far larger than any Hollywood studio’s," The Economist writes in its cover story:

  • "Netflix will spend $12bn-13bn on content this year, $3bn-4bn more than last year."
  • "The 125m households the company serves, twice as many as it had in 2014, watch Netflix for more than two hours a day on average, eating up a fifth of the world’s downstream internet bandwidth."
  • "Uniquely among tech upstarts that have reshaped industries in recent years, Netflix has wrought its transformation without triggering a public or regulatory backlash. With a share price that has more than doubled since the start of the year, it is as popular with investors as it is with consumers."

"The short-term danger is financial":

  • "Frothy valuations are commonplace at the moment, but Netflix still stands out. To justify its current valuation, Netflix’s gross operating profits in a decade’s time would have to be equivalent to about half of all the profits made by American entertainment firms this year."
  • "There are plenty of reasons to doubt. The company has amassed $8.5bn of debt."

Be smart ... A lesson that applies to Netflix, and all tech firms: "To keep consumers, regulators and politicians happy over the long term, there is no substitute for competition."

9. Former top editor: NYT needs "course correction"

Jill Abramson, former N.Y. Times executive editor, slams her alma mater for "narcissism," its "crucifying" Ali Watkins profile, and "missing" the rise of Alexandria Ocasio-Cortez, per Daily Beast's Lloyd Grove:

  • "I fear sounding like a jealous old-timer. I’ve resisted critiquing the place publicly, but this shit is bad."
  • Abramson had tweeted: "Kind of pisses me off that @ nytimes is still asking Who Is Ocasio-Cortez? when it should have covered her campaign. ... Missing her rise [is] akin to not seeing Trump’s win coming in 2016."
  • Abramson in an email to Lloyd: "[N]ew TV show plan to focus on personal feelings and experiences of NYT journalists covering news. More narcissism: It’s always about us. Yikes. Distance is part of journalism’s discipline. They need a course correction."
  • "Times spokeswoman Eileen Murphy told The Daily Beast: 'We have enormous respect for Jill and deeply appreciate her passion. Criticism and feedback helps us do better work and we’re always open to it. On these specifics though, we just disagree with Jill.'"
  • "A few hours after Abramson’s tweet, the headline phrase that pissed her off, 'Who is Alexandria Ocasia-Cortez?' was changed online to 'Alexandria Ocasio-Cortez: A 28-Year-Old Democratic Giant Slayer.'"
10. 1 fun thing: Smart homes get loud

"The sounds from gadgets inside modern smart homes — from Amazon’s Echo to internet-enabled refrigerators — create a state-of-the-art racket. Homeowners are hiring acoustical consultants to damp the din," The Wall Street Journal's Alina Dizik writes (subscription):

  • "[T]alking and beeping devices, combined with other noise-emitting items like TVs, phones and iPads, [produce] the opposite of the peaceful retreat many homeowners strive to create."
  • "Among the less expensive, simpler options: buying sound-absorbing panels for walls or ceilings, or sound-absorbing curtains or rug pads."
  • "At the higher end, homeowners can hire an 'acoustical consultant.' ... Such work can cost up to $20,000 per room and include tactics such as special sound-absorbing ceiling plaster, vinyl noise barriers built into walls or ceilings, or noise-reducing ceiling tiles."
  • "Other options include adding extra insulation around mechanicals or purchasing furniture with plusher upholstery."
Mike Allen

Thanks for reading. See you all weekend on Axios.com.