ROBERT COSTA: Hello. I’m Robert Costa. And this is the Washington Week Podcast.
Our guests are Andrea Mitchell, chief foreign affairs correspondent for NBC News; Philip Rucker, White House bureau chief for The Washington Post; Abby Phillip, White House correspondent for CNN; and Carl Hulse, chief Washington correspondent for The New York Times.
President Trump has been engaging in a trade war with China over the last few months in response to what he says are unfair practices. The administration has imposed some tariffs, but then, after last weekend’s G-20 meeting, he announced a preliminary deal with Chinese President Xi Jinping that would delay the next round of tariffs. Shortly after that President Trump threatened Beijing in a tweet, calling himself “Tariff Man.” The markets have not reacted positively to this ongoing dispute.
You were with President Trump on his trip, Phil. What’s he doing with trade? At one time easing the relationship with China, but still being defiant in his public rhetoric.
PHILIP RUCKER: He can’t seem to decide what he wants, and the problems began at that Saturday night dinner in Buenos Aires. There was a two-hour state dinner between President Trump and President Xi. After the dinner, on the way back on Air Force One, the White House sent out a statement claiming something of a victory, a deal to put a freeze on this trade war for 90 days. The Chinese disagreed. It seems like the substance just wasn’t there. And as soon as we started to see these differing accounts, the markets just tanked. There was a huge drop in confidence from investors here and around the world about whether this deal could be reached. We saw the “Tariff Man” tweet from President Trump, which just scattered things even more. And then just in the last couple of days we learned that a major Chinese executive from a telecom giant there was arrested in Vancouver, Canada, at the request of U.S. authorities, and that has alienated the Chinese even further.
ANDREA MITCHELL: And the arrest was done while they were at that dinner, and so the Chinese think that this was a deliberate affront. John Bolton was questioned about it and said, well, I didn’t tell him. So Bolton does not tell the president that while he’s having dinner –
MR. COSTA: What does your reporting tell you about this, Andrea? Was President Trump just not informed by his own national security adviser?
MS. MITCHELL: It’s possible. It really is possible because it was – the allegation is that this company had violated sanctions against Iran, and that is, you know, the holy grail for Bolton – and for the president as well, but for Bolton and others in the NSC, they are trying to prove how tough they are against Iran and they’re not thinking in – globally about the fact that this was a huge insult to President Xi.
ABBY PHILLIP: And it’s not a coincidence that – though, that it happened at the same time. There’s no way that something like that would go through without thinking about all the implications, including ongoing trade negotiations. You know, sources told CNN this week that the White – there were some people in the White House who thought this might be good leverage in the trade fight with China, which is an extraordinary thing to say. And it’s also something that I think continues to spook markets, who are worried that basically the White House and the people around the president basically don’t have a sense of the big picture here, that they don’t have what it takes to work this out, and that they’re playing a game of brinksmanship when they’re not prepared to really go up against China – which, frankly, while they are taking a bigger hit than the United States, they are willing to do that more so than the United States is, at least in the short term. The U.S. is very concerned and President Trump’s very concerned about the economy in the next year, and China is willing to really take a big blow if it means winning this trade war in the long term.
MR. COSTA: Are they rattled inside of the White House, Abby, about the markets going up and down, up and down?
MS. PHILLIP: They are. They really are. President Trump is rattled. His aides are concerned about it. They think they’re on the right path, but the problem is I think a lack of discipline coming out of that meeting and a lack of preparedness, making sure that everybody’s on the same page going forward. Those are long-term problems in this administration and this is just one symptom of that problem. They’re hoping to iron things out, straighten out the market. That’s why you saw President Trump repeatedly trying to clean up this week, but I think ultimately failing.
MR. COSTA: Carl –
CARL HULSE: Can I just say the “Tariff Man” is not a very exciting superhero? (Laughter.) You know, I can’t see –
MR. COSTA: No, you don’t collect Tariff Man comics, Carl?
MR. HULSE: Yeah, I can’t – it’s just Tariff Man.
MR. COSTA: What about on trade, Carl? Capitol Hill has a role to play here with the new version of NAFTA.
MR. HULSE: Well, the new agreement, yeah, no, and I think – actually, I think that that’s going to be a first real big test of how they’re going to be able to deal with the Democrats in the House. Nancy Pelosi knows her trade stuff. I’m presuming Nancy Pelosi is going to be the speaker. And, you know, when the president recently said, well, I’ll just cancel the existing NAFTA and they’ll have to take it, the Democrats laughed at that. It’s like, go ahead and cancel it, you know, we’re not that crazy about NAFTA; that’s Republican and the Chamber of Commerce, they like NAFTA. And so I think that reaching a deal here is not going to be that easy, and the Democrats are going to extract some things for this. I do think, to go the markets, that Trump has painted himself into a corner. He treats the Dow like a poll, and he’s up with the Dow and he’s down. This is how he watches this. It’s now the market’s given back all the gains from 2018 – check your 401(k) and you’ll find out that that’s the case – and I think if – you know, if it keeps going up and down like this it’s just going to be difficult for them. Remember, he’s spent all that time talking about the markets and how great it’s doing and it shows that the administration is doing such a great job. Now they have to try and talk up the market, and it’s not working.
MR. COSTA: Andrea?
MS. MITCHELL: He could well become the first president since Jimmy Carter to go into a reelection year in a real recession, and that is what markets are now saying.
MS. PHILLIP: Yeah, and I think one of the things I’ve been hearing is the concern that basically the recession becomes a self-fulfilling prophecy, that the more that the markets worry about it the more likely it is to become a reality. And that could be just because of the climate of uncertainty that the White House is exacerbating. They are not helping investors feel secure about the future. And the result could be that come next summer the economy starts to contract out of fear that a recession is on the horizon.
MR. COSTA: Carl, why didn’t the Senate Republicans pass the USMCA, the new version of NAFTA, in the lame duck session?
MR. HULSE: Why don’t they?
MR. COSTA: Right.
MR. HULSE: I don’t think that – well, it takes 60 votes, right? So I don’t think you could get it done. People – I’m not even sure that there’s that much of the agreement even circulating. No one has talked about that. I don’t see that happening. They’re barely doing anything as it is. That would be a big, big thing to take on.
MR. COSTA: Phil, any parting thoughts on foreign policy? Because one thing I wanted to ask you about is Jamal Khashoggi. The CIA came to Capitol Hill, briefed senators about the killing of a Washington Post writer and contributor, and they concluded – the senators who walked out of that meeting – they said Khashoggi was killed in coordination in some way with the Crown Prince Mohammad Bin Salman. And that’s, again, in contrast to what President Trump and his allies are saying.
MR. RUCKER: Yeah. The takeaway from the CIA’s intelligence for President Trump was maybe he did and maybe he didn’t. And the takeaway for Senator Lindsey Graham was there was not a smoking gun, but a smoking saw – a reference to the bone saw that was used at the consulate in Turkey. Senator Bob Corker, chairman of the Foreign Relations Committee, said he would be convicted within 30 minutes, I believe, right?
MS. MITCHELL: Thirty minutes.
MR. HULSE: They changed it to 20 after that briefing.
MR. RUCKER: They changed it to 20 after. And you know, President Trump at that G-20 summit in Buenos Aries exchanged pleasantries with the crown prince, who was persona non grata among a lot of the foreign leaders there. But President Trump said hello to him. President Putin, as we saw, had that high-five moment – really friendly moment. But there’s a huge gulf here between Republicans in the Senate and the president and how they believe the intelligence.
MS. MITCHELL: And this hurt Pompeo and Mattis, who the week before had tried to say: Oh, there was no evidence and the CIA did not find a smoking gun, which Mattis said. The fact is that the CIA doesn’t do assessments that way. They don’t say: Here’s the evidence, the proof. They say: The preponderance of confidence in this assessment is that it happened. And now we know, thanks to a lot of reporting, that there were 11 intercepted messages between the crown prince and the hit team, Qahtani, his top man, before and after the killing. So the implication is very strong. And President Trump is isolated in the world stage.
MR. COSTA: The one takeaway about this I find intriguing politically, Republicans willing to speak up against President Trump’s position, just as we head into divided government, just as Robert Mueller kicks into gear. Does it tell us about where the GOP is? Could they maybe break with President Trump in the future in a more willing way?
MS. PHILLIP: On certain issues, but I think it feels almost like this issue is in its own lane, separate from some of the other things. Lindsey Graham is more aligned with President Trump today than he was six months ago, and six months before that. I don’t think that the issue with Saudi Arabia changes that broader trend. And then several others who you’re hearing speak up are not necessarily going to be here in –
MR. HULSE: Well, I think there’s a good point to make about that. Jim Risch is going to be the new chairman of the Senate Foreign Relations Committee. He is very closely allied with the president. He is not anywhere near like Bob Corker in challenging the White House. In fact, voted against the resolution on Yemen support for Saudi Arabia. I think that committee is going to be very different, honestly.
MS. MITCHELL: I don’t think they’ll vote against – they will not vote, I don’t think, to cut off the war in Yemen. But there now is a move towards a resolution, you would know this better than I, Carl, which will actually sanction the crown prince. And that is –
MR. HULSE: Well, and they’re trying to find a balance on the sanctions. Even Mitch McConnell says we want to react to this and do something. We’re not like President Trump. But what’s the – what’s the sweet spot between total elimination of relations with Saudi and doing nothing? Maybe – so that’s what they’re really searching for.
MR. COSTA: Final thought, Abby?
MS. PHILLIP: I just don’t think you can take too much from this particular incident. Republicans appear to be willing to push back on the president on this, but I think that we will find that the next Congress is going to be much more beholden to President Trump than this current one is, both in the Senate and in the House. The president has a stronghold on his party, and I don’t think that that is going to change.
MR. COSTA: That’s it for this edition of the Washington Week Podcast. You can listen wherever you get your podcasts or watch online on our Washington Week website. And while you’re there, check out the Washington Week-ly News Quiz.
I’m Robert Costa. See you next time.