Scoop: "I want tariffs. Bring me some tariffs."
The following is a rare account of President Trump in a small Oval Office meeting, venting at senior staff for sometimes resisting his hawkish trade agenda.
This account — confirmed by sources with knowledge of the meeting and undisputed by the White House — hints at where Trump may be heading with his trade agenda. And it shows he believes some of his top economic advisors are resisting his agenda because they are "globalists."
The scene: The Oval Office, during Gen. Kelly's first week as Chief of Staff. Kelly convened a meeting to discuss the administration's plans to investigate China for stealing American intellectual property and technology. Kelly stood beside Trump, behind the Resolute desk. In front of the desk were U.S. Trade Representative Robert Lighthizer, senior trade adviser Peter Navarro, top economic adviser Gary Cohn, and Trump's former chief strategist Steve Bannon.
Trump, addressing Kelly, said, "John, you haven't been in a trade discussion before, so I want to share with you my views. For the last six months, this same group of geniuses comes in here all the time and I tell them, 'Tariffs. I want tariffs.' And what do they do? They bring me IP. I can't put a tariff on IP." (Most in the room understood that the president can, in fact, use tariffs to combat Chinese IP theft.)
"China is laughing at us," Trump added. "Laughing."
Kelly responded: "Yes sir, I understand, you want tariffs."
Gary Cohn, who opposes tariffs and the protectionist trade measures pushed by the Bannonites, had his shoulders slumped and was clearly appalled by the situation.
Staff secretary Rob Porter, who is a key mediator in such meetings, said to the president: "Sir, do you not want to sign this?" He was referring to Trump's memo prodding Lighthizer to investigate China — which may lead to tariffs against Beijing.
Trump replied: "No, I'll sign it, but it's not what I've asked for the last six months." He turned to Kelly: "So, John, I want you to know, this is my view. I want tariffs. And I want someone to bring me some tariffs."
Kelly replied: "Yes sir, understood sir, I have it."
At one point in the meeting, Navarro pulled out a foam board chart. Trump didn't pay attention to it, saying "I don't even know what I'm looking at here."
Trump made sure the meeting ended with no confusion as to what he wanted.
"John, let me tell you why they didn't bring me any tariffs," he said. "I know there are some people in the room right now that are upset. I know there are some globalists in the room right now. And they don't want them, John, they don't want the tariffs. But I'm telling you, I want tariffs."
Kelly broke up the meeting and said the group would work things out and reconvene at the appropriate time.
A White House official responded to the above account by telling Axios: "The president has been very clear about his agenda as it relates to trade. Discussions pertaining to specific tariffs and trade deals are ongoing and have already resulted in many positive developments."
Be smart: The nationalists in the White House took public credit for the China IP policy, arguing at the time that it would lead to a much-needed crackdown on Beijing. But now that he's outside of the White House, you should expect Bannon and his allies to argue that what's been done so far isn't enough, and that Trump needs to treat China as an adversary in an economic war.
2. The Tillerson time bomb
There's a ticking problem with Rex Tillerson, and it's growing louder by the day, according to officials inside and close to the White House. President Trump has been growing increasingly frustrated with his Secretary of State. One time recently, after Trump had returned from a meeting on Afghanistan, a source recalled Trump saying, "Rex just doesn't get it, he's totally establishment in his thinking."
Tillerson's jaw-dropping comments on TV today will likely only worsen their relationship.
Fox News Sunday moderator Chris Wallace asked Tillerson about Trump's response to the racist carnage in Charlottesville.
Tillerson replied: "I don't believe anyone doubts the American people's values or the commitment of the American government, or the government's agencies to advancing those values and defending those values."
Wallace asked the obvious follow-up question: "And the president's values?"
"The president speaks for himself," Tillerson said.
Wallace looked stunned.
Why this matters: We've been hearing for weeks, from sources who've spoken to the president, that Trump is getting more and more fed up with Tillerson, who has still yet to staff his agency.
The Tillerson criticisms we keep hearing:
- Trump administration officials can't get their heads around why he still doesn't have political appointees in the top roles at the State Department. They know he's reorganizing the agency, but can't fathom why he's allowed these crucial jobs to remain in the hands of staff whose diplomatic stature is diminished because they're "acting" in the roles. Tillerson's spokesman R.C. Hammond told Axios it's because "the system is busted. The Secretary sends over recommendations and they sit on the dock."
- Tillerson hasn't put in the time to build goodwill with Washington's foreign policy community or with the media.
- Numerous reports that Tillerson has destroyed morale at State, empowering only the tiniest inner circle.
- Tillerson contradicted the president's response to the recent tensions over Qatar. Trump attacked Qatar for funding terrorism "at a very high level", and supported the Saudi-led blockade. Tillerson muddied Trump's message, urging Qatar's neighbors to ease up on the blockade and engage in "calm and thoughtful dialogue."Hammond's response: "On Qatar, progress will be measured in months and we are seeing it."
- Tillerson argued against the White House's financial sanctions against the dictatorial regime in Venezuela, according to sources close to the White House. These sources pointed to the influence on Tillerson of Tom Shannon, a top State careerist who is an expert on Latin America. Sources close to the president view Shannon as a rogue force who, in their view, naively puts too much faith in diplomacy at the expense of hardline actions like sanctions. Shannon's recent meeting with Venezuela's then-foreign minister — at the same time the WH was contemplating tough action against Venezuela — raised eyebrows among Republican hawks.Hammond's response: "Yes, diplomats do prefer diplomacy."
- Tillerson keeps recommending to Trump that he re-certify Iran's compliance with the nuclear deal; whereas Trump has made clear he wants to cancel it. Hammond's response: "This admin inherited a lousy deal. It's taking the circumstances created by the Deal and trying to build around it a policy that addresses all of the threats Iran offers the world."
- White House officials frequently vent about Tillerson's Chief of Staff Margaret Peterlin. They say she's difficult to work with and isolates the secretary from the information and contacts he needs to do his job well. Hammond's response: "It is Washington, you have to have your knives out for someone."
A White House official said, "Tillerson is a great representative for the administration and has confronted many diplomatic challenges well."
3. Trump to launch tax reform sales pitch
President Trump begins his tax reform roadshow this week. He'll give a speech in Springfield, Missouri, on Wednesday, pitching the need to overhaul the tax code and bring down rates for middle America.
It's Trump's first outing of what his staff expects will be a tax reform sales tour covering the Rust Belt and other legislatively important states.
The reason Trump starts in Missouri: It has symbolic resonance and legislative importance. A White House official told me Trump is likely to mention in his speech that Springfield is the birthplace of Route 66 — crucial to the American economy and a symbol of "America's Main Street."
- Trump is also very popular in Missouri and the White House views the state's Democratic Sen. Claire McCaskill, who's up for re-election in 2018, as a senator worth pressuring to support the GOP-led tax reform efforts.
Between the lines: The White House and Republican leaders on the Hill plan to pass tax reform using a budget bill that would require 50 votes in the Senate rather than the 60 needed to pass normal legislation and avoid the filibuster. It means they'll rely almost exclusively on Republicans, but expect them to try pick off a few Democrats, too.
A senior administration official, referring to the recent failure to repeal the Affordable Care Act, told me, sarcastically: "It seems that relying on a strict party line vote has worked really well for us so far."
4. "The Secret Six"
Freedom Caucus members say it's way harder than it should be to get a meeting with the two Trump officials steering tax reform: Gary Cohn and Treasury Secretary Steven Mnuchin.
Sources with direct knowledge tell me that in front of a meeting of the Freedom Caucus in mid-July, the group's leader Mark Meadows asked White House legislative affairs representative Paul Teller to arrange a meeting with Cohn and Mnuchin, so they could share some of the details of the closely-held tax reform discussions.
- The White House told the Freedom Caucus that scheduling issues were preventing the meeting from happening, but sources familiar with the discussions say Cohn and Mnuchin agreed with Republican leaders that it didn't make sense to share too much information at this stage in the process.
- White House spokeswoman Natalie Strom didn't dispute the details of the Freedom Caucus request, but insisted it was purely a scheduling issue and that Cohn and Mnuchin were of course willing to meet with the Freedom Caucus.
- Strom confirmed that the White House's legislative affairs director Marc Short is trying to schedule a meeting with the Freedom Caucus for the first week back in September.
Why this matters: These tensions could easily blow out into bigger problems for the White House and Republican leadership, as many conservatives feel cut out of the process.
- Meadows asked for this meeting because some conservative members are frustrated they have no visibility into what the Big Six have been doing. (The "Big Six" is the group of top lawmakers and officials — Paul Ryan, Kevin Brady, Mitch McConnell, Orrin Hatch, Mnuchin, and Cohn — that's working through the details of GOP tax reform, behind closed doors.)
- A prominent House Republican member told me, "we conservatives have renamed them the Secret Six."
5. Harvey's havoc
President Trump plans to head to Texas on Tuesday, an administration official confirmed, as the first natural disaster of his presidency wreaks havoc.
What you need to know, per Axios's Dave Lawler:
- Tropical storm Harvey has lingered over SE Texas, pulling in moisture from the Gulf and pouring historic levels of rain over Houston and surrounding areas.
- Some towns and cities are expected to get 60 inches of rain by Wednesday, and there are widespread reports of families trapped in their homes or wading through feet of water to get to higher ground. Authorities said thousands of people have already been rescued, and five people have been killed in the flooding. More than 300,000 are without power.
- National Weather Service: "This event is unprecedented & all impacts are unknown & beyond anything experienced. Follow orders from officials to ensure safety."
- Texas Storm Chasers: "We could very well be watching the most disastrous flood event in US history unfold."
- President Trump tweets: "Wow - Now experts are calling #Harvey a once in 500 year flood! We have an all out effort going, and going well! ... I will be going to Texas as soon as that trip can be made without causing disruption. The focus must be life and safety."