Good morning. Here’s your Early Warning for 11 July 2018. (All times Eastern.)
Advanced Early Warning: The two-day NATO Summit got off to a prickly start as President Trump criticized Germany for inking an oil-and-gas pipeline deal with Russia. Chancellor Angela Merkel responded by noting that Germany is an independent country and can act in its own interests. Other countries, including Poland, agreed with Trump. We’ll have much more on the NATO summit and the current state of the alliance as it pertains to Russian aggression and potential for conflict in this week’s Strategic Intelligence Summary.
ALSO: The U.S. is set to become the world’s top oil producer in the coming year, which should help ease oil and gasoline prices domestically and give Washington more leverage with the world’s leading producers. The biggest impediment the U.S. currently faces is a logistics logjam — getting the oil from the fields to refineries.
White House
President Trump will be in Brussels today and tomorrow for the NATO summit.
Vice President Pence is traveling through the Midwest attending political rallies aimed at supporting Republican congressional candidates.
State Department
Secretary Pompeo is also in Brussels at the NATO summit.
Deputy Secretary Sullivan is in Washington attending functions on behalf of the State Department.
Defense Department
Secretary Mattis is in Brussels with the president attending the NATO summit. Deputy Secretary of Defense Patrick M. Shanahan and Chairman of the Joint Chiefs of Staff Marine Gen. Joseph F. Dunford Jr. have no public or media events on their schedules.
Principal Deputy Assistant Secretary of Defense for Special Operations/Low-Intensity Conflict Mark E. Mitchell testifies before the House Armed Services Subcommittee on Emerging Threats and Capabilities at 10 a.m. He will discuss the Pentagon’s role in providing foreign assistance.
Following the summit, Mattis is scheduled to travel to Zagreb, Croatia, where he will meet with defense ministers of the U.S.-Adriatic Charter to reinforce U.S. support to southeast Europe. From there, he will travel to Oslo, Norway, where he will meet with Norwegian Defense Minister Frank Bakke-Jensen and Foreign Minister Ine Eriksen Soreide.
Aircraft carrier activity:
The Carl Vinson (CVN-70) left Joint Base Pearl Harbor/Hickam Airfield in Hawaii and is now operating in the region.
The Harry S. Truman (CVN-75) is on patrol in the Atlantic.
The Ronald Reagan (CVN-76) is transiting the Philippine Sea on patrol.
All other carriers are in homeport.
No conflicts requiring a Carrier Strike Group appear imminent.
Congress
House:
The House has a heavy committee hearing schedule today. We will cover significant developments in this space as they happen. Of note: The Committee on Foreign Affairs Subcommittee on Terrorism, Nonproliferation, and Trade is holding a hearing on “China’s Predatory Trade and Investment Strategy.” This comes as POTUS Trump is reportedly digging in regarding our trade issues with China.
Senate:
The Senate has a moderate committee hearing schedule today. We’ll cover significant developments in this space as they occur.
Significant political/congressional reporting:
- Democrats have begun to launch attacks against President Trump’s latest Supreme Court nominee, Brett Kavanaugh, but are aware they do not have the votes to stop what appears to be his eventual confirmation. One of the GOP’s questionable votes, moderate Sen. Susan Collins, R-Maine, has signaled her support, saying there is nothing in Kavanaugh’s past that makes her lack of support for his nomination justifiable. As for Democrats, “We have to lower the expectations of our base. We can’t defeat the nominee on our own.” – a Democratic senator who requested anonymity.
- Democrats’ line of attack: They are focused on a 2009 piece that Kavanaugh wrote in which he argued that it would “cripple” the federal government to pursue an indictment against a sitting president. Their reasoning: Trump chose Kavanaugh specifically to keep him from being successfully indicted by special counsel Robert Mueller over alleged obstruction of justice regarding Mueller’s Russian collusion investigation.
- The Trump administration on Tuesday threatened to ramp up tariffs on another $200 billion in goods imported from China; Beijing threatened equal retaliation. Also, Chinese officials are encouraging businesses to wean themselves from reliance on American goods by shifting orders for products such as soybeans and automobiles to suppliers in China and other countries.
- On immigration, the administration missed a federal judge-imposed deadline on Tuesday to reunite approximately 75 children under the age of 5 with their parents after the families had been separated by Immigration and Customs Enforcement for trying to cross into the country illegally. Administration officials said they were having trouble tracking parents down and running criminal background checks.
- Former FBI lawyer Lisa Page, who exchanged anti-Trump text messages with her lover, FBI agent Peter Strzok, leading up to the 2016 election, is refusing to comply with a subpoena from Congress compelling her to testify behind closed doors today.
Economy/Finance
(1) The Saudis have responded to President Trump’s request to increase oil production so as to lower prices. The kingdom has increased production by 500,000 bpd beginning in June, as OPEC, overall, has bolstered production by about 173,000 bpd. Crude prices recently rose to 3 1/2-year highs. Oil prices fell as well on news that Libyan exports were set to begin again.
(2) Following Trump’s threat to impose new tariffs on China, the Dow opened down triple digits and other market indices fell as well.
(3) The jobs glut has more Americans quitting their current employers and taking jobs with firms offering better pay. As the “employee crisis” deepens, wages are expected to continue climbing.
Weather
(1) The National Hurricane Center is issuing advisories on Hurricane Chris, located more than 300 miles east of the North Carolina Outer Banks. The U.S. mainland, however, is not currently in Chris’ track.
(2) A large area of cloudiness and disorganized thunderstorms associated with the remnants of Beryl is located over much of the Bahamas and extends northwestward over the western Atlantic for a few hundred miles. Little or no development is expected today, but conditions could become a little more favorable later in the week while the disturbance moves slowly northward over the western Atlantic. The previously scheduled Air Force Reserve reconnaissance flight to investigate the disturbance this afternoon has been canceled. Additional information on this system can be found in High Seas Forecasts issued by the National Weather Service.
Yesterday’s Significant Reporting
Trade deficit with China hits new record
The coming ‘labor shortage’ in America is great news for workers
Stealth Killer? Russia’s Sixth-Generation Fighter Might Have a “Radio-Photonic Radar”
Notable Quotable:
“It’s very sad when Germany makes a massive oil and gas deal with Russia where we’re supposed to be guarding against Russia and Germany goes out and pays billions and billions of dollars a year to Russia.” — President Trump ahead of meeting with NATO Secretary General Jens Stoltenberg Wednesday morning.
