Axios Sneak Peek

The back of a propped up cardboard cut-out of the U.S. Capitol.
June 09, 2019

Welcome to Sneak Peek, our weekly lookahead at both ends of Pennsylvania Avenue, plus our best scoops.

  • 📷 The second episode of this season's "Axios on HBO" aired at 6pm ET/PT. You can catch up later on HBO GO. Ina Fried interviewed Google CEO Sundar Pichai, and I traveled to Italy to check Steve Bannon's high-profile claims about his right-wing populist campaign in Europe.
  • Smart Brevity word count: 1,707 words, ~6 minutes

1 big thing: Business "freak out" spurs plans to tame Trump on trade

Illustration of President Trump looking down at a lion tamer in a business suit holding a stool and a whip.
Illustration: Aïda Amer/Axios

President Trump has threatened and bludgeoned his way into an unwanted confrontation with the U.S. business community that could have far-reaching implications for the future of presidential power over trade.

  • Trump's blunt use of presidential leverage to force the Mexican government to harden its immigration enforcement appears to have caused an unintended side effect: U.S. business leaders have begun urgently discussing strategies to claw back the virtually unchecked trade powers that Congress has handed over to presidents during the past 80 years.

The big picture: Even though the business community is now breathing a sigh of relief that Trump won't be hitting Mexico with new tariffs, the last week of Trump's threats may have a longer lasting effect, according to industry sources who have met with corporate representatives in Washington, leaders of business associations, administration officials, members of Congress and their senior staff.

  • Trump's threat to impose rising tariffs on all Mexican goods to punish the Mexican government for soft immigration enforcement sparked a widespread panic in the U.S. business community and turned their conversations in an unprecedented direction, these sources said.
  • John Murphy, who runs international policy at the Chamber of Commerce, tweeted, "In the space of a few hours ... more than 140 business and agricultural associations signed this statement opposing tariffs on goods from Mexico."
  • "Maybe folks in the White House don't know this, but they freaked out a lot of people," a trade lawyer involved in these conversations told me.

"This is a real turning point because this is threatening tariffs using an emergency power," said another top industry source involved. "That's never been done before. Part of the resources that we want to direct our advocacy to ... is for Congress to take back authority over tariffs."

  • "We can get back on USMCA and try to pass the thing and we can all be hunky-dory, but I think you're going to see a longer term business community effort to help Congress reassert its authority on tariffs."
  • Legislation could go so far as requiring congressional approval of most presidential trade actions. (We're already seeing some efforts along these lines, led by Republican Sens. Chuck Grassley and Pat Toomey.)

Behind the scenes: Before Trump called off his tariffs on Friday night, a loose coalition of organizations supporting Trump's renegotiated NAFTA, the United States–Mexico–Canada Agreement, were discussing halting a multimillion-dollar campaign to support the passage of USMCA.

  • Instead, these business lobby groups and leaders of large corporations were discussing redirecting their money toward opposing Trump's tariffs and potentially to support efforts to claw back the president's trade powers, according to sources familiar with their internal discussions.
  • They will now return to funding a USMCA campaign, but the past week has shown them that they need to finally get serious about stopping this president — and future presidents — from unilaterally raising tariffs.

Why it matters: Trump can only credibly threaten foreign countries with abrupt tariffs because Congress has gradually given away its trade powers. Opponents of this trend say it's unconstitutional because taxing and commerce authority lies with Congress (as expressed in Article 1 of the Constitution).

  • Until fairly recently, only a wonky fringe in Washington cared about this issue. Few paid attention when Republican Sen. Mike Lee introduced legislation in early 2017 to "subject all executive branch trade actions (including raising tariffs) to congressional approval."

The bottom line: Over the past week, these previously fringy conversations entered the mainstream. Watch for a long-term, well-funded campaign to peel trade powers away from the president.

2. Inside Steve Bannon’s bizarre, exaggerated populism boot camp

Swan talking to Bannon in Italy
Jonathan Swan talking with Steve Bannon. Photo: "Axios on HBO"

Driving the news: "Axios on HBO" got the first televised look inside Steve Bannon's Italian monastery — a breathtaking monument in a grand, cinematic setting outside of Rome — but in so doing we found that many of Bannon's other claims about his populist "movement" to roil Europe were overblown or false.

Why this matters: Over the past year, Bannon has received an extraordinary amount of international and U.S. media coverage for his European exploits. Bannon joined a group called "The Movement" — which the New York Times reported last year had enlisted Italy's most powerful politician Matteo Salvini.

  • Bannon also told the Times he would offer European populist parties the "fundamental building blocks for winning" in May's parliamentary elections, including, the Times reported, "expertise in polling, data analytics, messaging and get-out-the-vote efforts, along with the development of media surrogates and campaign war rooms with rapid response."
  • In his most dramatic move, Bannon leased a medieval monastery about two hours from Rome and announced he would use it to train up fearsome hordes of right-wing politicians who will eradicate globalism from Europe.

Between the lines: Our reporting showed that only one of these claims turned out to be true — the existence of the monastery. (Though the Italian government now says it will evict Bannon from the monastery.)

  • Bannon's relationship with Salvini is not what he sold it to be. "Axios on HBO" asked Salvini for an interview and he declined, so we drove six hours out of Rome to see if we could grab him at one of his rallies.
  • After the rally, I stood in the rope line with people who were waiting to take a photo with Salvini. I asked Salvini, on camera, whether he'd spent much time with Bannon and whether Bannon had been helpful. Salvini replied that he'd only spoken to Bannon twice in his life and that while Bannon had "interesting ideas" he had not used him as an adviser.
  • When I asked Bannon about this, he said he'd spoken to Salvini "maybe three or four times." He also admitted that because of European election laws he hadn't done anything like what he promised he would do for these European parties. (The Guardian first reported the legal problems with Bannon's European plans.)

Here are a couple of clips from the Bannon segment, but please watch the whole thing on HBO:

3. Bernie Sanders concedes "serious problem" at border but not crisis

temporary holding facility for migrants
A temporary holding facility for migrants that has been in use since early May to hold the record numbers of migrants entering the El Paso border sector, in El Paso, Texas, May 31. Photo: Paul Ratje/AFP/Getty Images

Bernie Sanders, who's running second to Joe Biden in the 2020 Democratic primary polls, acknowledged that the inundation of migrants at the southern border was "a serious problem" but would not go as far as President Trump in describing it as a "crisis."

  • "It is a serious problem, but it is not the kind of crisis that requires demonization of desperate people who in some cases have walked 1,000 miles with their children," Sanders told Dana Bash on CNN's "State of the Union." 
  • "It is an issue we have to deal with," Sanders added. "But the issue of climate change, the issue of tens of millions of Americans not having health insurance, the fact that half of our people are living paycheck to paycheck, those are more serious crises."

Between the lines: The influx of migrants arriving from Mexico, and the overcrowded detention facilities, have caused even critics of Trump, such as President Obama's former Homeland Security Secretary Jeh Johnson, to say there is a crisis at the southern border that needs urgent attention from congress.

  • Mike Pence's chief of staff, Marc Short, reflected the White House's frustration about congressional critics of Trump's tactics in comments to reporters on Friday: "As opposed to bellyaching about the actions that the president is taking to actually secure our border, it'd be nice if they put as much energy into actually fixing the problem legislatively."

4. New "Axios on HBO" poll: 55% of American women prefer socialism

alexandria ocasio-cortez
Rep. Alexandria Ocasio-Cortez is bringing new life and meaning to the term "socialism." Photo: Drew Angerer/Getty Images

A Harris poll for "Axios on HBO" finds that socialism is gaining popularity: 4 in 10 Americans say they would prefer living in a socialist country over a capitalist one.

  • 55% of women 18–54 would prefer to live in a socialist country than a capitalist country.
  • But a majority of men prefer to live in a capitalist country.

Why it matters: Socialism is losing its Soviet-era stigma, especially among women. Popular Democratic socialists like Alexandria Ocasio-Cortez and Bernie Sanders are bringing new life and meaning to the term, Axios' Alexi McCammond and Felix Salmon write.

The big picture: "It's been a truth of American politics for decades that women are to the left of men, and I think that's playing out in this poll," Salmon noted on tonight's episode of "Axios on HBO."

Between the lines: As the Harris poll results below show, the American public has varying levels of agreement on what constitutes a socialist political system:

  1. Universal health care: 76%
  2. Tuition free education: 72%
  3. Living wage: 68%
  4. State-controlled economy: 66%
  5. State control and regulation of private property: 61%
  6. High taxes for the rich: 60%
  7. State-controlled media and communication: 57%
  8. Strong environmental regulations: 56%
  9. High public spending: 55%
  10. Government "democratizes" private businesses — that is, gives workers control over them — to the greatest extent possible: 52%
  11. System dependent on dictatorship: 49%
  12. Workers own and control their places of employment: 48%
  13. Democratically elected government: 46%

5. Sneak Peek diary

the Capitol building
Photo: Bill Chizek/Getty Images

The House expects to vote on Tuesday to hold Attorney General William Barr and Trump's former White House counsel Don McGahn in contempt for refusing to comply with congressional subpoenas, per a senior Democratic aide. (A long court fight will likely ensue.)

  • House Democrats also plan to put a $1 trillion package of five spending bills on the floor on Wednesday, which will include "the two largest of the 12 annual appropriations bills: the defense bill and the labor, health and human services, and education bill. It will also include legislation covering energy and water, the State Department and foreign operations spending bills and funding for the legislative branch," per The Hill.

The Senate will confirm the following nominees, per a Republican leadership aide:

  • Sarah Daggett Morrison as judge for the Southern District of Ohio.
  • Pamela Barker as judge for the Northern District of Ohio.
  • Corey Landon Maze as judge for the Northern District of Alabama.
  • Rodney Smith as judge for the Southern District of Florida.
  • Thomas Barber as judge for the Middle District of Florida.
  • Jean-Paul Boulee as judge for the Northern District of Georgia.
  • David Stilwell as assistant secretary of State (East Asian and Pacific Affairs).
  • Edward Crawford as ambassador to Ireland.

President Trump's schedule, per a White House official:

  • Monday: Trump will have lunch with Mike Pence, join a meeting on Major League Baseball's efforts to fight human trafficking, and meet with the 103rd Indianapolis 500 Champions: Team Penske.
  • Tuesday: Trump will travel to Iowa. He'll tour Southwest Iowa Renewable Energy in Council Bluffs and will give remarks about renewable energy. He'll also, per the Des Moines Register, "attend a fundraiser for the Republican Party of Iowa."
  • Wednesday: The president and first lady will meet with the Polish president and first lady. Trump will then have "an expanded working lunch" with the Polish president; two leaders will hold a joint press conference.
  • Friday: Trump will have lunch with Secretary of State Mike Pompeo.