Apr 9, 2017

Axios Sneak Peek

By Jonathan Swan
Jonathan Swan

Welcome to Sneak Peek, our weekly lookahead for both ends of Pennsylvania Avenue. I'd love your tips and feedback: jonathan@axios.com. And please urge your friends and colleagues to join the conversation by signing up for Sneak Peek. See you all week in the Axios STREAM.

1 big thing: Trump's potentially explosive trade play

The Trump administration is working on an executive order that would initiate investigations into "unfair" product dumping from foreign companies — an action that could lead to tariffs on a wide range of products.

These plans are very fluid, and internal disagreements remain about how aggressive this order should be. Here's what I've learned from administration sources:

Steel and aluminum will be targeted. Other products, including household appliances, could be targeted as well. If the investigations result in new import duties — as some senior Trump officials believe should happen — it could make some consumer goods more expensive and could hurt the stock prices of American companies that rely on cheap steel imports. A good number of American manufacturing companies, however, could benefit from this hit to their low-cost competitors.

A White House official said this investigation is part of Trump's effort to protect American jobs and end unfair trade practices like dumping and foreign government subsidization.

"The administration will use the results of that investigation to determine the best path forward, which could potentially include everything from no action at all to the levying of supplemental duties," the White House official said. "But whichever action we take will be informed by the results of the investigation and not by predetermined conclusions."

  • Scope: This investigation could result in penalties that would be much broader than the anti-steel dumping measure the New York Times previewed last week.
  • Timing: Commerce Secretary Wilbur Ross is running point on this executive order, and an administration source tells me it could arrive as early as late April. But there's no point getting too wedded to that timeline, because Trump has slowed the pace of executive actions and this is an especially sensitive one: If it's clumsy, foreign trading partners could see this as the first shot in a trade war.
  • What Ross says, through a spokesman: "Trade negotiations and discussions should happen in the board room, not in the press room."
  • The narrative: If this investigation leads to penalties on foreign trading partners, it will be a big (and much-needed) win for Steve Bannon, Stephen Miller, Peter Navarro, and other economic nationalists in Trump's orbit. Given the Syria strikes and Bannon's demotion from the NSC, their clout has appeared to diminish. The Goldman wing, meanwhile, will likely oppose aggressive trade moves.
2. The fight over Trump's foreign policy

Nikki Haley and Rex Tillerson may need to talk. The Trump administration's two most prominent foreign-policy figures went on the Sunday shows to sell the President's Syria strikes — and made two opposite arguments. Haley, the UN ambassador, pushed for regime change in Syria, while Secretary of State Tillerson argued that could make things worse. The president hasn't publicly commented on the regime change question since the strikes.

Why this matters: The interventionist forces in the Trump administration won the first skirmish — Bannon argued against the Syrian strikes, and lost — but don't expect the America Firsters to back down easy. The fact that their divisions are so public suggests they aren't talking to each other. Which is unusual.

  • Haley told Jake Tapper on CNN's "State of the Union": "Regime change is something that we think is going to happen because all of the parties are going to see that Assad is not the leader that needs to be taking place for Syria ... There's not any sort of option where a political solution is going to happen with Assad at the head of the regime."
  • Tillerson, meanwhile, told George Stephanopoulos on ABC's "This Week": "When you undertake a violent regime change in Libya, and the situation in Libya continues to be very chaotic and I would argue that the life of the Libyan people has — is not all that well off today, so I think we have to learn the lessons of the past and learn the lessons of what went wrong in Libya when you choose that pathway of regime change."

Also important: Bloomberg's Jennifer Jacobs reports K.T. McFarland has been asked to step down as Deputy National Security Adviser. The former Fox News commentator is the third controversial figure to leave the NSC, following Gen. Mike Flynn and Steve Bannon. Count this another step in the mainstreaming of the NSC under new boss, Gen. H.R. McMaster.

3. The left's next Tea Party

Mark Saturday, April 15, as the next big moment for the progressive resistance against Trump.

A Democratic operative involved in the planning tells me a "who's-who of progressive power" will join a "Tax March" to demand Trump release his tax returns:

  • More than 60 groups will participate, including MoveOn.org, CREW, Communications Workers of America, American Federation of Teachers, Americans for Tax Fairness, Indivisible, the Sunlight Foundation, and Our Revolution (the group that spun off from Bernie Sanders' campaign.)
  • Organizers are planning more than 100 marches around the country. The Tax March in D.C. will begin with a rally outside the Capitol, before proceeding past the Trump International Hotel and the IRS building.

Why this matters:

The Trump tax-returns issue won't matter unless people start publicly organizing around it. That organization may be starting. Also, the marches will highlight a progressive alternative to Republicans' waiting-for-lift-off tax reform plan. The operative says it's no coincidence the march will come exactly eight years after the April, 15, 2009, rally that was seen as the big kick off of the Tea Party.

4. Hot papers

Around midweek, Mick Mulvaney's Office of Management and Budget will send a "guidance" letter to federal agencies ordering them to create plans to make themselves significantly smaller and less costly. It's part of Mulvaney's effort to make the federal government more efficient.

This could be a big deal, and it fits in with Bannon's plan to deconstruct — or, as Kushner would have it, reconstruct and reimagine — the "administrative state."

The guidance stems from Trump's March 13 executive order, which called for a "comprehensive plan" to reorganize the executive branch. Agencies will likely consider selling real estate, laying off personnel, and eliminating programs deemed redundant. It's possible some agencies or components could be closed down or folded into other agencies.

What's next: Expect updates throughout the year, culminating with a final proposal around 2019 budget time next April.

1 forgotten thing: conservatives

The Steve Bannon—Jared Kushner soap opera has reduced every White House "palace intrigue" story to the same reductive battle: the populist nationalists versus the New York liberals. If Trump fired Bannon, every newspaper would likely call it the death of the nationalists and dawn of the liberals.

But that would miss an important element of this White House: movement conservatives. They aren't as cable news-friendly as Kushner and Bannon — every cable bookers' dream duo — but they have quietly shaped much of the president's domestic agenda. Their priorities include substantial domestic budget cuts, the elimination of federal funding to Planned Parenthood, a sweeping executive order on religious liberty, repealing Obamacare, and gutting the EPA.

Most important, these people — with one or two exceptions — have avoided unforced errors and distracting drama. That's why they get so little coverage, and why they're poised to become the true counterweight to Kushner and co.

The most visible figures in this camp are Mike Pence, Kellyanne Conway, and Mick Mulvaney. But there are a host of others installed at the White House who movement conservatives trust:

  • Marc Short, director of Legislative Affairs
  • Rick Dearborn, deputy chief of staff
  • Paul Teller, who handles conservative outreach for Legislative Affairs
  • Russ Vought, deputy director of the Office of Management and Budget
  • Paul Winfree, deputy director of the Domestic Policy Council
  • Brian Blase, who handles healthcare on the National Economic Council
  • Mike Catanzaro, who handles domestic energy and environmental policy on the National Economic Council
  • Andy Koenig, policy special assistant on the Legislative Affairs team.
Jonathan Swan