Trump overrules cabinet, plots global trade war

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Trump overrules cabinet, plots global trade war

Susan Walsh / AP

With the political world distracted by President Trump's media wars, one of the most consequential and contentious internal debates of his presidency unfolded during a tense meeting Monday in the Roosevelt Room of the White House, administration sources tell Axios.

The outcome, with a potentially profound effect on U.S. economic and foreign policy, will be decided in coming days.
With more than 20 top officials present, including Trump and Vice President Pence, the president and a small band of America First advisers made it clear they're hell-bent on imposing tariffs — potentially in the 20% range — on steel, and likely other imports.
The penalties could eventually extend to other imports. Among those that may be considered: aluminum, semiconductors, paper, and appliances like washing machines.

Keep reading ... words

One official estimated the sentiment in the room as 22 against and 3 in favor — but since one of the three is named Donald Trump, it was case closed.

No decision has been made, but the President is leaning towards imposing tariffs, despite opposition from nearly all his Cabinet.

In a plan pushed by Commerce Secretary Wilbur Ross, and backed by chief strategist Steve Bannon (not present at the meeting), trade policy director Peter Navarro and senior policy adviser Stephen Miller, the United States would impose tariffs on China and other big exporters of steel. Neither Mike Pence nor Jared Kushner weighed in either way.

Everyone else in the room, more than 75% of those present, were adamantly opposed, arguing it was bad economics and bad global politics. At one point, Trump was told his almost entire cabinet thought this was a bad idea. But everyone left the room believing the country is headed toward a major trade confrontation.

The reason, we're told: Trump's base — which drives more and more decisions, as his popularity sinks — likes the idea, and will love the fight.

The problem, according to top officials who argued strenuously that the move is ill-advised: The trade war wouldn't just affect China. The collateral damage would include a slew of allies, including Canada, Mexico, Japan, Germany and the United Kingdom.

Watch for: Trump was warned — and White House officials anticipate — that an affected industry like automakers is likely to seek a court injunction within hours of any tariffs on steel.

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Mike Allen
8 hrs ago

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Biggest threat to Trump’s America

This image, from a news bulletin aired today by North Korea's KRT, is said to show North Korea leader Kim Jong-un applauding after the launch of a Hwasong-14 (KRT via AP Video)

In their final conversations during the transition, Barack Obama issued a stark warning to Donald Trump: North Korea presents the most urgent, alarming, and bedeviling threat you will confront as head of the free world.

Today, North Korea showed why: The regime claims to have successfully tested a missile that could carry a nuclear bomb and hit Alaska (Update: U.S. officials now believe it may have been that type of missile.)
Trump's tweets: "North Korea has just launched another missile. Does this guy have anything better to do with his life? Hard to believe that South Korea ... and Japan will put up with this much longer. Perhaps China will put a heavy move on North Korea and end this nonsense once and for all!"
What North Korea said, via AP: "[T]he test of an ICBM — the Hwasong-14 — marked the 'final step' in creating a 'confident and powerful nuclear state that can strike anywhere on Earth.'"

This doesn't mean the United States faces an imminent threat, because intelligence suggests the regime is a ways from getting the technology right to shoot a missile with sufficient distance and nuclear capacity. But this is a huge deal and here's why, from the N.Y. Times:

"The missile looked like the longest-range missile that North Korea had ever tested, and its long flight time was 'more consistent with an ICBM that can target Alaska and perhaps Hawaii,' said Jeffrey Lewis, director of the East Asia Nonproliferation Program at the Middlebury Institute of International Studies."

"'Even if this is a 7,000-km-range missile, a 10,000-km-range missile that can hit New York isn't far off.'"

The path of the rocket, via an AP graphic:

Go deeper: Axios Expert Voices charts five courses of action for the U.S. confrontation with North Korea.

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David Nather
1 hr ago

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Indiana GOP request for health care "horror stories" backfires

Indiana GOP Facebook page

The Indiana Republican Party's quest for Affordable Care Act "horror stories" didn't really go according to plan, the Indianapolis Star reports. When the party in Vice President Mike Pence's home state put out a Facebook request for stories about bad things — rising premiums, fleeing insurers, burdensome regulations — it instead got flooded with stories about good things, like people getting health insurance.

Why it matters: The outcome was predictable, given how the Internet works — you're never, ever just reaching like-minded people. But it's also a good measure of where the energy is in the ACA debate right now. Sure, the Indiana GOP will find people who suffered premium hikes or lost their insurers, because that is part of what's happening. But there are also a lot of people who were personally helped by the ACA — and that's the side that is now fighting back.

Axios
2 hrs ago

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U.S. believes North Korea tested an ICBM

This photo distributed by the North Korean government shows what was said to be the launch of a Hwasong-14 intercontinental ballistic missile, ICBM, in North Korea's northwest, Tuesday, July 4, 2017. Independent journalists were not given access to cover the event depicted in this photo. (Korean Central News Agency/Korea News Service via AP)

The missile test carried out by North Korea was of an intercontinental ballistic missile that could possibly reach Alaska, unidentified U.S. officials are telling Fox News, CNN and NBC News. CNN reported earlier that should it be determined to have been an ICBM test, any response to would be "measured" and could include sending more troops or aircraft to the region or imposing more sanctions.

Why this matters: A missile that could travel as many as 4,000 miles and hit Alaska represents continued progress by the North Koreans on their missile program and the achievement of a goal that President Trump had said in January "won't happen."

Go deeper: Axios Expert Voices on dealing with North Korea

Sara Fischer
3 hrs ago

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The future is live

Data: Magid; Chart: Chris Canipe / Axios

Live boom: Facebook launched its live platform last year and now says 1 in 5 videos on its platform are live and daily time spent watching Facebook Live broadcasts has grown by more than 4x.

Why it matters: The video duopoly of Facebook and YouTube is killing it in the arms race for live-streaming dominance, which should have traditional TV companies worried. Nearly half of online users watch live-streaming every week and nearly a quarter say they watch live-streaming every day, per Magid's latest social broadcasting study.

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Facebook also announced earlier this year it's finally matching YouTube in giving publishers a 55 percent cut of ad dollars to seed its real-time offerings.

Both platforms have launched a ton of live-streaming partnerships around sports in particular. Why? Look at the type of programming watched live versus on DVR, via comScore:

Sports: 90% - 10%
News: 90% - 10%
Comedy: 85% - 15%
Movies: 85% - 15%
Reality: 75% - 25%
Drama: 71% - 29%

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Mike Allen
8 hrs ago

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Trump reins in tariff temptation

Carolyn Kaster / AP

President Trump, who has expressed enthusiasm behind closed doors for harsh trade tariffs aimed at China, is headed — for now — toward a more moderate course.

Trump originally favored a hard line, but was told in a heated meeting that most of his staff and Cabinet were opposed. Economic adviser Gary Cohn and Treasury Secretary Steve Mnuchin argued privately that tough tariffs were bad economics at a time when the market and job rates are strong.
Trump left staff with the impression he would proceed with tariffs, but has tempered his views amid the internal pressure.
Before heading off to Europe tomorrow on the second international trip of his presidency, Trump tweeted: "Really great numbers on jobs & the economy! Things are starting to kick in now, and we have just begun! Don't like steel & aluminum dumping!"

Keep reading ... words

The backstory: Indeed, steel and aluminum have been on Trump's mind for months. But it turns out that the U.S. imports little steel from China, and most of the steel we import isn't dumped (sold below cost).

The players: The most muscular internal enthusiasm for across-the-board tariffs comes from Steve Bannon and trade-policy director Peter Navarro. Commerce Secretary Wilbur Ross, a longtime friend of the president's, is seen as sharing Bannon's view but is cooler to outright tariffs.

The likely solution: With the caveat that Trump can always make unexpected decisions, the administration is headed toward a more tailored approach that targets China and countries through which it trans-ships steel — Vietnam, for example. That could include possible tariffs, based on unfair trade practices, like dumping.

What's next: The U.S. will need help from other countries to deal with China. A White House readout of a Trump call yesterday with German Chancellor Angela Merkel, ahead of this week's G-20 summit in Hamburg, said they discussed "global steel overcapacity" — a.k.a., the problem of Chinese dumping on the worldwide market.

Be smart: Read that as a signal that Trump plans a G-20 discussion of more collective action.

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Mike Allen
8 hrs ago

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Exclusive: Astonishing poll about Trump and media

A stark poll by Survey Monkey finds that 89% of Republicans view President Trump as more trustworthy than CNN, and 91% of Democrats think the opposite. Among all adults, trust for CNN is 7 points ahead of Trump. Among independents, CNN wins by 15 points.

Why it matters, from SurveyMonkey's Jon Cohen: "The fight ... between the White House and major media outlets has made the question of truthfulness just as partisan-tinged as health care or other policies."

Data: SurveyMonkey; Chart: Lazaro Gamio / Axios

Keep reading ... words

Asked whether they trust Trump or the WashPost/NYT more, the newspapers won by 9 points among all adults. Asked about Trump vs. ABC/CBS/NBC, the networks were judged more trustworthy by an 11-point margin. Republicans had a similar disproportionate trust in Trump.

The online poll of 4,965 adults, taken June 29 to July 3 (error estimate: +/- 2.5 points), found:

33% of Republicans say they get their news only from Fox.
64% of all adults disapprove of Trump's use of Twitter (89% Dems, 38% Republicans).
Describing his tweets (all adults): undignified 47% ... mean 34% ... entertaining 26% ... presidential 7%.

Jon Cohen, Survey Monkey's SVP, survey research, emails me his takeaways:

"A red flag for Democrats continues to be a perception that Trump is isolating himself from the GOP base with his tweets. Not only do most Republicans approve of his use of Twitter, but asked to describe those tweets, the No. 1 mention among the GOP is 'truthful,' with 'entertaining' in second place."
"[T]he biggest danger for Republicans is that they grow content with firing up the base: Fully three-quarters of pure independents (those that don't lean one way or the other) disapprove of Trump's tweeting, and their top three descriptors for it are 'undignified,' 'mean,' and 'dishonest.'"

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Sara Fischer
11 hrs ago

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A media wake-up call

AP Photo/Mark Schiefelbein, File

Forget President Trump's Twitter terrorism against big media companies. The real and urgent web-world threats that could truly bring down a New York Times or CNN are the escalating cyberattacks targeting media and the companies they rely on.

Why it matters: The entire digital ecosystem is far more vulnerable to cyberattacks -and far more ill-prepared to respond - than we realize. "A large part of this too comes from the fact that media companies are not at all prepared for these threats and the impact isn't always obvious until it's too late," says Asaf Cidon, CEO of cybersecurity firm Barracuda networks.

The examples

Last week, WPP, the global ad agency, and its subsidiary agencies were forced to shut down after a ransomware attack made their systems completely inoperable.
The day after the attack, Fastly, a content distribution network that acts as a backup for several mainstream media sites, like Reddit, The New York Times and Axios, went down due to an unrelated technical malfunction, leaving client websites vulnerable as a global ransomware attack was in motion.
In April, Google and Facebook, the two biggest tech giants globally, announced that they were the subject of a phishing scam worth over $100 million. And they have way better tech and security than conventional media companies.
Last October, a DDOS (bot-based) attack shut down half of the internet, including major media companies, like the Guardian, CNN and Twitter.

Even more pressing: As media organizations become more centralized through consolidation, security experts and safeguards get moved up the chain from the local level to far-flung city headquarters, leaving local outlets more vulnerable.

Be smart: Bone up on phishing attacks (a common and effective cyber-scam used to gain access to sensitive data through harmless click-here emails). Google sent journalists precautionary warnings of state-sponsored phishing attacks earlier this year.

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Naema Ahmed
12 hrs ago

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Where veterans live in the United States

This map shows which counties in the United States have the highest concentration of veterans as a rate per 10 thousand people. Veteran population densities are higher in the Northwest, along the east coast from Florida up into the Chesapeake Bay and in counties near military installations.

Data: U.S. Department of Veterans Affairs, U.S. Census Bureau; Map: Lazaro Gamio / Axios

The details ... words

The data: The veteran population data used in the map are 2015 estimates published the Department of Veteran Affairs, which we compared to 2015 census population estimates to calculate the rate.

A caveat: You'll notice that many cities on this map show a very low rate, but that doesn't mean that they have low veteran populations. For example, Los Angeles is home to over 300 thousand veterans but has a population of over 10 million, bringing its rate to about 303 per 10 thousand. Another thing you'll notice is that rural counties show very high rates, but that's because things get tricky when populations are small.

Top 5 counties in veterans per 10 thousand people:

Liberty County, Georgia — 2,007 per 10k (12,536 vets, 62,467 people)
Okaloosa County, Florida — 1,792 per 10k (35,609 vets, 198,664 people)
Geary County, Kansas — 1,754 per 10k (6,495 vets, 37,030 people)
Cumberland County, North Carolina — 1,752 per 10k (5,6746 vets, 323,838 people)
Sierra County, New Mexico — 1,706 per 10k (1,950 vets, 11,282 people)

Top 5 counties in total veteran population:

Los Angeles County, California — 304 per 10k (308,834 vets, 10,170,282 people)
Maricopa County (Phoenix), Arizona — 661 per 10k (275,494 vets, 4,167,947 people)
San Diego County, California — 749 per 10k (246,972 vets, 3,299,521 people)
Cook County (Chicago), Illinois — 364 per 10k (190,873 vets, 5,238,216 people)
Harris County (Houston), Texas — 408 per 10k (185,085 vets, 4,538,028 people)

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Kia Kokalitcheva
22 hrs ago

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500 Startups partner Elizabeth Yin resigns over McClure situation

Elizabeth Yin has resigned as a partner with 500 Startups, where she also led the venture firm's Mountain View accelerator program, Axios has learned. Her departure follows the resignation of 500 Startups founder Dave McClure, who has been accused of sexual harassment.

Yin joined 500 Startups in late 2014, according to LinkedIn, and took over the accelerator in early 2015.
Each new revelation of sexual harassment within the Silicon Valley startup ecosystem seems to engender another. This is not the end — perhaps not even for McClure, with word that at least one more female founder is preparing to tell a troubling story about his behavior. [Update: Here is that new accusation, which Yin alleges 500 Startups was anticipating and prompted the McClure's resignation.]
According to Yin's resignation email, a 500 Startups employee reported "unwanted forced physical contact" by McClure in April of this year and, after an internal investigation, Yin was told in mid-May that he would be stepping away from his management role. However, Yin claims this was never communicated to the broader organization.

Excerpt's from Yin's email ... words

Per her resignation email:

This started with the letter we all received on May 25, which cited company growth reasons for changes in management roles and did not even say that Dave was stepping down off the management team. This did not sit well with me, but I was assured that eventually the team would known that he was no longer on the management team or in day-to-day operations.

However, as time progressed, it became clear that he was still involved with 500 Startups on a day-to-day basis. He continued to be vocal and active in all 500 Startups Slack channels, influencing key business decisions. Despite having no official management power, it was obvious that 500 staff weren't completely aware of the gravity of the situation and continued to be deferential and event supportive of him. the business development powerpoint deck that we were showing to potential partners still had Dave's face on it, suggesting that he was still an integral part of 500 Startup's day-to-day operations -- and even was still operating day-to-day.

Denial: According to Yin's email, the organization also initially denied to those within 500 Startups that McClure's resignation was related to his alleged actions toward the employee, instead pinning his resignation to the allegations in a New York Times story published on Friday. An entrepreneur, Sarah Kunst, told the NY Times about unwanted advances from McClure when she was discussing a potential job at 500 Startups:

After my prodding, it took nearly 40 minutes for the management team to reveal that Dave had initiated "unwanted physical contact" on our colleague and that was the incident which brought about supposed changes to the 500 Startups management structure and organization and not Sarah.

Update: 500 Startups' statement to Axios:

In April our management team learned of allegations related to inappropriate behavior by Dave McClure. We took the matter seriously and immediately initiated an internal investigation which resulted in the replacement of Mr. McClure by Christine Tsai as CEO. In May we held a company-wide all hands call and sent an email afterwards that same day notifying the team that Dave had stepped down from day-to-day management of 500. Throughout the CEO transition Mr. McClure remained at 500 to fulfill his legal responsibilities to the funds as a General Partner. Due to the sensitivity of personnel issues and the privacy of all involved, the investigation was kept confidential.

The story has been updated with a link to a newly published account from a female founder as well as 500 Startups' statement on the matter.

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Jonathan Swan
23 hrs ago

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Trump signals action on steel and aluminum tariffs

Alex Brandon / AP

President Trump is signaling imminent action on steel and aluminum dumping, tweeting today: "Really great numbers on jobs & the economy! Things are starting to kick in now, and we have just begun! Don't like steel & aluminum dumping!"

As Axios reported last week, Trump is poised to side with the hardcore nationalists on favoring tariffs for steel and aluminum imports. In his cabinet, only Commerce Secretary Wilbur Ross favors the move.
Trump hasn't made a final decision, but has shown inclination to tariffs in the 20% range for steel imports. There is still plenty of room for Trump to take a more moderate action with more targeted options — such as country-by-country, different types of steel, or setting baselines to target countries that ramp up exports.
Steel is first, with aluminum to follow, as Ross is finalizing a report on aluminum dumping. The White House is also talking about an investigation into semi-conductors.