Early Warning for 6 July 2018

Good morning. Here’s your Early Warning for 8 July 2018. (All times Eastern.)

Advanced Early Warning: President Trump’s tariffs on $34 billion worth of Chinese goods kicked in this morning amid an escalating war of words between the world’s two largest economies. Washington’s 25 percent duties went into effect at midnight EDT and affected products such as water boilers, X-ray machine components, airplane tires and various other industrial parts. China retaliated immediately with tariffs on $34 billion worth of U.S. goods including soybeans, pork and electric vehicles. Beijing is calling this “the biggest trade war in history.”

ALSO: Joblessness rose slightly last month from 3.8 percent to 4 percent, although the economy added 214,000 additional jobs and employers are having difficulty finding enough workers. Another factoid: The number of Americans 85 and older who are still working is at a record high — 4.4 percent, up from 2.6 percent in 2006 before the Great Recession. They are filling all sorts of jobs including truck driving, an industry that is critically short of workers.


White House

The president’s schedule is light today. POTUS Trump and the first lady will dine with Vice President Mike Pence and second lady Karen Pence at 7:30 p.m. at Trump National Golf Club in Bedminster, N.J.

Earlier, VP Pence will hold talks with President-elect of Colombia Ivan Duque at the White House.


State Department

Secretary Pompeo is traveling. He first visits Pyongyang, North Korea, for talks with leader Kim Jong-un regarding denuclearization, the heads to Tokyo, Hanoi, Abu Dhabi, and Brussels from July 5-12.


Defense Department

Secretary of Defense James N. Mattis, 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.

The Carl Vinson (CVN-70) is on a port call to Joint Base Pearl Harbor/Hickam Airfield following its participation in RIMPAC 2018.

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 of Representatives is in recess.

Senate:

The Senate is in recess.

Significant political/congressional reporting:

  • A new survey from Reuters/Ipsos finds that immigration has become the top issue for voters heading into the 2018 midterm elections. Overall, 15 percent say immigration is the most important issue ahead of the economy and healthcare, in that order. A quick analysis of the findings reveals that Republican voters appear to be more energized. Twenty-six percent of GOP voters cited immigration as the most important issue likely to determine their vote, up 14 percentage points from a similar poll conducted at the beginning of June. Only 7 percent of Democrats say immigration is their top issue.
  • Scott Pruitt has resigned as head of the EPA, citing increased pressure on him and his family. Pruitt had become a target of several ethics complains and investigations. He is likely to be replaced by acting administrator Andrew Wheeler, who was Pruitt’s deputy. The attacks against him from environmental groups have already begun. He is being characterized by those groups as no different that Pruitt, who is a climate change skeptic like the president.
  • Trump is expected to announce his nominee to replace retiring Supreme Court Justice Anthony Kennedy any day now, but no later than 9 July. Reports this morning claim that Coney Barrett, a 46-year old appeals court judge, is the odds-on favorite to get the nod. She is a favorite among conservatives for many reasons. Notes The Hill: “Her age will allow her to influence the court for decades, she’s unabashedly conservative and deeply religious, and her gender, conservatives hope, will make it harder for critics to paint her as extreme on women’s rights and healthcare.”
  • House Intelligence Committee Chairman Devin Nunes, R-Calif., sent another letter to Republican colleagues who head up various committees in which he recommended 15 additional names of people they should call to provide testimony regarding various alleged scandals including the FBI’s investigation into Hillary Clinton’s mishandling of classified emails. It’s his third letter in a week. One of the names being recommended in this latest letter is long-time Clinton ally, Sydney Blumenthal. Many of the names in this current referral are tied to the so-called “Russia dossier” that contains salacious, but as-yet-unverified, claims regarding Trump and Russia.

Economy/Finance

(1) As the U.S. and China trade tariffs, Russia has also joined the fray. Russian Prime Minister Dmitry Medvedev signed a decree this morning imposing higher tariffs on U.S. products in retaliation for U.S. duties on metals imports, according to Economy Ministry statement. Reuters reports that Russia’s additional duties will apply to imports of fiber optics, equipment for road construction, oil and gas industry, metal processing and mining. Russia will impose duties on goods which have Russian-made substitutes, Economy Minister Maxim Oreshkin is quoted as saying in the statement.

(2) We may be headed for a massive spike in oil, say around the $150/barrel range. Bloomberg reports: “Companies have been compelled to focus on boosting returns and shareholder distributions at the expense of capital expenditures aimed at finding new supplies, analysts including Neil Beveridge wrote in a note Friday. That’s causing reserves at major producers to fall and the industry’s reinvestment ratio to plunge to the lowest in a generation, paving the way for oil prices to surpass records reached last decade, according to Sanford C. Bernstein & Co. [ADMIN NOTE: I’ll have more on this later today in the National Intelligence Bulletin — JD]

(3) Are Trump’s trade policies working? Perhaps. AP reports this morning that our global trade deficit fell sharply in May to the lowest level in 19 months: “The Commerce Department says the May trade deficit — the difference between what America sells and what it buys in foreign markets — fell 6.6 percent to $43.1 billion. It was the smallest imbalance since October 2016. Exports climbed 1.9 percent to a record $215.3 billion. Imports were up a smaller 0.4 percent to $258.4 billion.”


Weather

It’s hurricane season already.

(1) Showers and thunderstorms are increasing in association with a well-defined low-pressure system located a few hundred miles southeast of the North Carolina coast. Environmental conditions are expected to be conducive for additional development of this system, and a tropical depression is likely to form over the next couple of days while the system moves slowly northwestward and stalls or meanders near the coast of North Carolina over the weekend. Interests along the North Carolina and South Carolina coasts should monitor the progress of this system during the next several days.

Formation chance through 48 hours…high…70 percent.

Formation chance through 5 days...high…80 percent.

(2) In less than a day, Beryl went from an area of interest to the first hurricane of the 2018 Atlantic hurricane season. It may strengthen a bit more into early Saturday. It will then encounter wind shear this weekend, causing it to weaken rapidly. It should reach the Lesser Antilles by late Sunday or Monday. An increase in showers and gusty winds is expected in the Lesser Antilles.


Yesterday’s Significant Reporting

China’s military reforms to ‘WIN A WAR’ and overtake the US revealed in leaked memo

Teen attacked at Whataburger for wearing ‘Make America Great Again’ hat

Judge largely rejects Trump bid to block California sanctuary laws


Notable Quotable

Refusing to help is not the same as impeding. Federal objectives will always be furthered if states offer to assist federal efforts. A state’s decision not to assist in those activities will always make the federal object more difficult to attain than it would be otherwise. Standing aside does not equate to standing in the way.” — U.S. District Court Judge John Mendez, in rejecting most of the Trump administration’s suit to block three California laws aimed at countering enforcement of all immigration laws.

Jon E. Dougherty is a political, foreign policy and national security analyst and reporter with nearly 30 years of experience in both fields. A U.S. Army veteran of Operation Enduring Freedom, he holds BA in Political Science from Ashford University and an MA in National Security Studies/Intelligence Analysis from American Military University.

Leave a Reply

Your email address will not be published. Required fields are marked *

Name *