Trump Expected to Turn Up the Heat on China in Looming Trade War

U.S. President Donald Trump is expected at any time to fire a salvo directly at China in what could escalate into a full-scale trade war between the world’s two largest economies.

Trade actions against China, partly in response to the theft and improper transfer of American technology to Chinese companies, are expected to be announced by Trump as soon as Thursday.

The White House schedule for Thursday shows Trump signing “a Presidential Memorandum targeting China’s economic aggression” at 12:30 p.m. EDT (1630 UTC).

On the anticipated eve of the measures, U.S. officials spoke to reporters about their monthslong investigation under Section 301 of the Trade Act of 1974 of Beijing’s trade practices.

China has long been considered by many in the international community to have contravened fundamental principles of global trade, despite joining the World Trade Organization in 2001.  

There have been a “number of specific failings by China to live up to its WTO obligations,” said an official of the U.S. Trade Representative in a Wednesday background briefing for reporters.  

The briefing and other comments not for attribution by officials are seen as clear signals the administration, in response to an Aug. 14 memo by Trump, intends to use the Section 301 trade tool.

The last time it was wielded was by the Clinton administration against Japan to pry open that country’s automotive sector.

‘Ripping off’

China has been “ripping off” the United States, Trump has emphasized numerous times in public remarks during which he has harshly criticized his predecessors for not doing anything about it.  

According to published reports, Trump is expected to impose tariffs, valued at tens of billions of dollars, on a number of Chinese products. Sources say that in addition to tariffs, restrictions on Chinese investment in the United States are likely as a response to Beijing using state funds and enterprises under the government’s control to purchase intellectual property here.

Trump in January hit the Chinese-dominated solar panel and cell industry with tariffs. Earlier this month, he launched global tariffs on steel and aluminum (from which Canada and Mexico were quickly given indefinite exemptions), a move China’s commerce ministry said it “strongly opposed.”   

U.S. Trade Representative officials on Wednesday declined to specify what new actions will be taken, but they did not disagree that an announcement is expected as soon as Thursday.

“We’re getting very close,” said a USTR official speaking to reporters on condition of not being named. “The president will have the final say.”


Bracing for an anticipated harsh reaction from China, the official noted, “We recognize the potential gravity of the situation here.”

Depending on the severity of the measures taken by Trump, stock markets in Asia and elsewhere could be roiled, according to market analysts.

Trade groups representing American retail giants, such as Walmart, and tech companies, including Apple, warn that sweeping tariffs would raise prices for consumers in the United States and might not do much to reduce the trade deficit.

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US Congress Races to Pass $1.3 Trillion Spending Bill

U.S. congressional leaders appeared Wednesday to have reached a deal on a $1.3 trillion spending bill as a budget deadline loomed. 

The bipartisan bill, which would keep the government funded until the end of September, has President Donald Trump’s support, the White House said in a statement.

“The president had a discussion with [House] Speaker [Paul] Ryan and [Senate Majority] Leader [Mitch] McConnell, where they talked about their shared priorities secured in the omnibus spending bill,” White House press secretary Sarah Huckabee Sanders said. 

Deadline late Friday

Negotiators planned to unveil the spending bill later in the day in hopes of passing it before a Friday midnight deadline to avoid a government shutdown.

The bill will give Trump a huge budget increase for the military, including a 2.4 percent pay raise for military personnel.

It also will include a measure strengthening the federal background check system for gun purchases.

WATCH: Federal Budget Explainer

The measure would provide funding for states to comply with the existing National Instant Criminal Background Check System and penalize federal agencies that don’t comply.

It also will provide money to improve school safety. The funds would go toward training school officials and law enforcement officers how to identify signs of potential violence and intervene early, and installing metal detectors and other steps to “harden” schools to prevent violence. 

GOP aides said Trump would win $1.6 billion for a wall and physical barriers along the U.S.-Mexico border. But Trump would be denied a far larger $25 billion request for multiyear funding for the project. 

To the Democrats’ disappointment, the bill offers no protections for so-called Dreamers, undocumented immigrants brought to the United States as children. 

No insurer subsidies

It also won’t provide subsidies to health care insurers who cut costs for low-earning customers. And it won’t provide federal payments to carriers to help them afford to cover their costliest clients.

Both parties touted the $4.6 billion in total funding to fight the nation’s opioid addiction epidemic, and a record $3 billion increase for medical research at the National Institutes of Health.

The House is expected to vote on the bill by Thursday, followed quickly by the Senate, to meet Friday’s midnight deadline.

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US, EU to Launch Fresh Round of Talks to Settle Trade Spats 

The U.S. and the European Union are set to engage in a new round of talks to resolve trade disputes, including those over U.S.-proposed tariffs on steel and aluminum imports.

“We have agreed to launch immediately a process of discussion with President Trump and the Trump administration on trade issues of common concern, including steel and aluminum, with a view to identifying mutually acceptable outcomes as rapidly as possible,” a joint U.S.-E.U. statement said Wednesday.

The announcement was made after talks in Washington between Commerce Secretary Wilbur Ross and E.U. Trade Commissioner Cecilia Malmstroem.

U.S. President Donald Trump’s announced tariffs on aluminum and steel imports are scheduled to take affect later this week. 

Washington already temporarily exempted Canada and Mexico from the tariffs during talks to renegotiate the North American Free Trade Agreement.  

U.S. Trade Representative Robert Lighthizer said in congressional testimony Wednesday the administration is currently discussing tariff exemptions with Argentina, Australia and Brazil.

Lighthizer also told lawmakers he expected a decision soon from Trump on tariffs on imports from China, which Washington accuses of stealing U.S. intellectual property.

The Trump administration’s aggressive actions on trade issues have triggered alarm among legislators in the president’s own Republican Party and among industry groups who say the tariffs exposes the U.S. to higher prices and potential trade wars.


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US Central Bank Slightly Bumps Up Interest Rate

Top officials of the U.S. central bank raised the key interest rate slightly Wednesday, amid strong job gains and moderate economic growth. 

The rate is one-quarter of a percentage point higher, putting it in a range between 1.5 and 1.75 percent. 

Federal Reserve officials said that is still “accommodative,” meaning it is still fairly low, compared to the average rate during the past few decades. Fed officials said they will probably raise interest rates a few more times this year if the economy continues along its current path.

The Federal Reserve tries to manage the economy to maximize employment and keep prices stable. 

The bank slashed interest rates nearly to zero during the financial crisis in 2008 to stimulate economic growth. However, economists say keeping rates too low for too long could push inflation up fast enough to damage the economy. 

While inflation is below the 2 percent rate the Fed thinks is best for the economy, the bank said inflation seems likely to rise a bit.  

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Record-Size US Offshore Oil Lease Sale Draws Modest Bidding

The largest lease sale in American history in the offshore Gulf of Mexico yielded $124.76 million in winning bids Wednesday, a modest response to the Trump administration’s effort to pump up investment in the region.

The Interior Department had offered up more than 77 million acres (31.2 million hectares), an area twice the size of Florida, as part of a broader effort by President Donald Trump’s administration to ramp up U.S. fossil fuels output.

Companies bid on just 1 percent of that acreage, and won those tracts with bids averaging $153 an acre — 35 percent below average winning bids at a similar auction last year, and a fraction of the level paid in the region in 2013 when oil prices were much higher, according to a Reuters review of the data.

The Interior Department’s Bureau of Ocean Energy Management, which administered the auction, characterized the results as robust.

“I think we’re seeing continued consistent investment in the Gulf of Mexico,” BOEM spokesman Mike Celata said in a conference call with reporters.

He said 33 companies, including majors Royal Dutch Shell Plc and Total SA, had placed 159 bids on 148 blocks.

But critics of the administration have called the unusually large lease sale ill-timed. U.S. crude oil and natural gas output is already smashing records thanks to improved drilling technology that has opened up cheaper onshore reservoirs, and Brazil and Mexico are competing for drilling investment in their own deep-water acreage.

“Offering a nearly unrestricted supply in a low demand market with a cut-rate royalty and almost no competition is bad policy and an inexcusable waste of taxpayer resources,” the Center for American Progress, a left-leaning policy think tank, said in a statement.

The United States produces about 1.5 million barrels of oil per day from the Gulf of Mexico, about 15 percent of the national total, according to the Energy Information Administration.

The U.S. government offers Gulf of Mexico leases annually, but usually in smaller regional batches. An auction in March 2017, for example, offered up 48 million acres in the Central Gulf of Mexico planning region.

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Peter Peterson, Billionaire and Philanthropist, Dies at 91

Peter G. Peterson, a billionaire and business executive who became one of the most prominent voices to argue for entitlement reform and reducing the U.S. national debt, died of natural causes early Tuesday, his family said. He was 91.

Born in the small town of Kearney, Nebraska, to Greek immigrants, Peterson was CEO of two major U.S. companies and co-founded one of the world’s largest private-equity firms.

He was a national figure in business by the early 1960s, serving as chairman and CEO of Bell and Howell, one of the largest manufacturers of movie cameras at the time.


He left Bell and Howell to work for the Nixon administration in the early 1970s, eventually serving as secretary of commerce from 1972 to 1973.

Lehman Brothers 

He took over as chief executive of the investment bank Lehman Brothers in 1973 after leaving the Nixon administration. In 1985, he co-founded the private-equity firm Blackstone Group with Stephen Schwarzman.

“His intelligence, wit and vision made him an inspirational leader who brought people together from the White House to Wall Street,” his family said in a statement.

Blackstone went on to become one of biggest private-equity firms in the world, with $434 billion in assets under management at the end of last year. When the firm went public in 2007, Peterson’s stake in the company made him a billionaire. His wealth was estimated at $2 billion, according to Forbes Magazine.

Fiscal challenges

Peterson dedicated the rest of his life to what he called “key fiscal challenges threatening America’s future,” donating $1 billion to create the Peter G. Peterson Foundation in 2007.

He never publicly endorsed the fiscal ideals of the Tea Party. However, his ideas did give him some common ground with them.


He long argued that the United States’ entitlement programs, principally Medicaid, Medicare and Social Security, had to be restructured or benefits cut back to avoid bankrupting the government. Through his foundation, he disseminated his ideas among the public and politicians.

“The fact he was able to start a serious debate about the future of Social Security and other entitlement programs was a huge accomplishment,” said Fred Bergsten, founder of the Peterson Institute for International Economics, who worked with Peterson in various capacities going back to the 1970s.

Raising taxes

Peterson was not considered ideological when it came to dealing with Social Security and Medicare. A life-long Republican, he still believed that raising taxes should be considered as part of any major restructuring of the U.S. budget, Bergsten said.

The foundation quickly became a major voice on all budget-related matters, repeatedly quoted in national media outlets. In 2008, his organization helped bankroll the documentary “I.O.U.S.A,” with the goal of making the federal government’s ballooning national debt, then around $10 trillion, a central campaign issue.


“What is most significant is most of our challenges are not really being discussed,” Peterson told The Associated Press in 2008 when he created his foundation. “I’ve been a very lucky beneficiary of the American dream as the son of immigrants. And, the more I look at some of these problems, the more persuaded I am they will pose a serious threat to this country.”

Peterson is survived by his wife, Joan Ganz Cooney, who co-founded the Children’s Television Workshop, and children John Peterson, Jim Peterson, David Peterson, Holly Peterson and Michael Peterson, and nine grandchildren.

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Report: Women Short-Changed on Commercial Land Deals in Africa

Women are often short-changed compared to men when communities are compensated or resettled during commercial land deals in Africa, and governments should take action to rectify that, researchers said Tuesday.

The World Resources Institute’s (WRI) research showed men had received up to six times as much for their land. And although women usually had smaller land parcels, they also lost access to resources such as rivers, forests and social networks.

Among other measures, the U.S.-based WRI said governments should enact laws ensuring women receive an equitable share of compensation payments made to households.

“There is usually a power asymmetry between the community and the investor. These deals are presented to the community as almost-done deals with women getting the short-end,” said WRI associate researcher Celine Salcedo-La Vina.

“Most of the time the expected benefits are not legally binding,” she told Reuters by Skype.

WRI focused on Tanzania and Mozambique, which are among the places where major commercial deals in agribusiness, tourism and mining have displaced thousands over the last decade, she said.

Land in Africa is often communally held, with fathers assumed to be the rightful owners who usually pass it on to their sons. That makes it hard for women to own land except through their husbands or by buying it, the World Bank has said.

Women are usually not compensated for lost farms because they are not deemed to own the fields they cultivate, and often grow subsistence crops. Men, on the other hand, typically plant cash crops whose value is easy to determine, WRI said.

Changing land laws

Some African governments, including Tanzania and Mozambique, have enacted new laws to address how investors engage communities during land deals to reduce inequality, WRI said.

But these changes have done little to address how women are compensated or resettled during commercial deals, because most of the laws use “gender-neutral language.”

“When applied in patriarchal contexts [these laws] result in women’s marginalization,” the report said.

Tanzania and Mozambique are working to change their land laws to bring in more rights for women during commercial land deals. However, those would first have to tackle the cultural norms of how women come to own land, Salcedo-La Vina said.

“We have seen where we have men and women working together during land deals, it usually strengthens community rights,” she said.

WRI also recommended that women’s land uses and contributions as heads of households be taken into account, that land titles be in both spouses’ names, and that intangible assets be included when determining compensation.

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Trump Tariffs Set Off Industry Scramble for Exemptions

When Commerce Secretary Wilbur Ross held up a can of Campbell’s soup in a CNBC interview to make the case that the Trump administration’s steel and aluminum tariffs were “no big deal,” the canning industry begged to disagree — and they were hardly alone.

President Donald Trump’s strong-armed trade policies have set off an intense scramble among industry groups, companies and foreign countries seeking exemptions from tariffs of 25 percent on steel imports and 10 percent on imported aluminum. The push comes ahead of a round of new penalties expected to be slapped on China by week’s end.

The Can Manufacturers Institute, which represents 22,000 workers at manufacturers across the nation, estimates the steel and aluminum tariffs will harm their industry and consumers alike. The institute says there are 119 billion cans made in the U.S., meaning a 1 cent tariff would lead to a $1.1 billion tax on consumers and businesses.

“Secretary Ross has made cans a poster child to dispel concerns about the costs of tariffs,” said Robert Budway, the institute’s president. He said his organization was concerned Ross “is already predisposed to deny our petitions.”

Trump’s one-two punch on trade has set in motion a deluge of requests to the Commerce Department for exclusions for certain steel and aluminum products. Foreign countries, meanwhile, complain the U.S. trade representative’s office has not provided specific guidance on gaining exemptions before the steel and aluminum tariffs are implemented on Friday.

Countries in the dark

“Typically, the countries are determined before tariffs are announced,” said Josh Zive, senior principal at the law firm Bracewell LLP. This time, countries don’t know whether they will end up being targeted or exempted — “that’s weird and no one knows what to make of it.”

The Trump administration, which has said steel and aluminum imports threaten U.S. national security, has already given Mexico and Canada a reprieve — provided they agree to a revamp of the North American Free Trade Agreement. The European Union, South Korea, Australia and Brazil are among the groups and countries seeking the exemptions.

Senator Ron Wyden of Oregon, the ranking Democrat on the Senate Finance Committee, said tariffs are “sometimes necessary tools” to protect national security or fight unfair trade practices. But he said the administration’s approach is producing “chaos, uncertainty and an alienation of our closest allies.”

Emily Davis, a spokeswoman for U.S. Trade Representative Robert Lighthizer, said the U.S “is engaged in discussions with several countries to determine if means other than tariffs can be arranged to address our national security concerns.”

Companies that buy imported steel and aluminum can request tariff relief from the Commerce Department, especially if they rely on types of imported steel and aluminum that aren’t available from domestic U.S. producers.

Expect a deluge: Steel and aluminum producers have 30 days to make their exemption requests. Commerce expects 4,500 requests for relief and 1,500 objections — and it is supposed to reach decisions in 90 days.

Commerce has said it intends to reach decisions on a company-by-company basis, not by making across-the-board exemptions for individual steel and aluminum products. That decision has created anxieties that certain companies could get tariff relief while others would be forced to pay tariffs on the same product — perhaps because in the time between the two requests domestic U.S. production has ramped up to fill shortages.

“The big thing is, it’s arbitrary,” said Mary Lovely of the Peterson Institute for International Economics. “The government is becoming the matchmaker between the purchaser and the supplier.”

“It’s a real question to me whether they understand the magnitude of the requests they are going to get,” Zive said of Commerce. “How they’re going to get through them in 90 days is difficult to understand.”

Industry officials said other aspects of the exemption process will burden companies. Manufacturers are unclear whether companies will qualify for refunds if they end up getting exemptions after they’ve begun paying the tariffs. And since Trump set no timeline for ending the tariffs, the companies will need to reapply for the exemptions annually.

Stocking up

Companies, meanwhile, have been trying to beat the tariffs by stocking up on imports. Steel imports rose 15 percent last year and another 17 percent in January.

The steel and aluminum tariffs may only be the opening salvo.

Administration officials said Trump is expected to announce $60 billion in tariffs on Chinese imports by Friday on a wide array of consumer goods, from apparel to electronics, and even on imported parts for products made in the U.S.

Ross, appearing before a House budget panel on Tuesday, faced questions about the trade moves, with lawmakers warning the tariffs could lead to retaliation from foreign countries and wreak economic havoc for consumers.

“I worry that now we’re engaged in a trade war which is further going to alienate us from our adversaries,” said Representative Rodney Frelinghuysen, a New Jersey Republican who chairs the powerful House Appropriations Committee.

Representative Derek Kilmer, a Washington state Democrat, noted that the decision to exclude aluminum and steel producers on a company-by-company basis — rather than by individual products — could create the possibility that some companies will gain a huge advantage over their competitors if they win exemptions.

Ross vowed that “the process will be open and transparent” and that Commerce was working to “minimize the amount of inconvenience that any of the affected parties will suffer as a result of the process. We’re gearing up to be fast, to be fair and to be practical.”

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G-20 Sees Need for ‘Dialogue,’ Fails to Defuse Trade War Threat

The world’s financial leaders rejected protectionism Tuesday and urged “further dialogue” on trade, but failed to blunt the threat of a trade war days before U.S. metals tariffs take effect and Washington is to announce measures against China.

Finance ministers and central bankers of the world’s 20 biggest economies, which represent 75 percent of world trade and 85 percent of global gross domestic product, discussed trade disruptions as a risk to growth at a two-day meeting.

But after talks described by participants as “polite” and mainly consisting of read-out statements with no debate, the Group of 20 agreed only to stand by an ambiguous declaration on trade from 2017 and “recognize” the need for more “dialogue and actions.”

“We reaffirm the conclusions of our leaders on trade at the Hamburg Summit and recognize the need for further dialogue and actions. We are working to strengthen contribution of trade to our economies,” the G-20 ministers’ final statement said.

But the declaration did little to dispel concern about a global trade war as the U.S. tariffs of 25 percent on imported steel and 10 percent on aluminum take effect Friday.

Tariffs on Chinese products

Two officials briefed on the matter said U.S. President Donald Trump would also unveil tariffs on up to $60 billion in Chinese technology and telecoms products by Friday, a move stemming from Beijing’s intellectual property practices.

The 2017 Hamburg declaration, which the financial leaders referred to on Tuesday, said G-20 countries would “continue to fight protectionism, including all unfair trade practices.”

But it also said G-20 leaders “recognize the role of legitimate trade defense instruments,” an ambiguity that provides the United States with a way to argue its cause on the tariffs.

U.S. Treasury Secretary Steven Mnuchin made clear Washington’s tariff action was such a legitimate defense.

“We need to be prepared to act in the U.S. interest, again, to defend free and fair, reciprocal trade,” he said in a news conference after the talks, adding that there was always a risk that others would reciprocate.

“There’s a risk of a trade war. The president has said we’re not afraid of getting into a trade war, given the size of our market, the size of our economy, and the fact that we have a big trade deficit,” Mnuchin said.

“On the steel and aluminum issue, this is a result of unfair trade practices and that’s why we’ve responded that way.”

Canadian Finance Minister Bill Morneau, comparing this G-20 meeting to the one in Germany last year, when Mnuchin demanded a rewrite of the long=standing communique language on trade, said the rest of the world now has a better sense of the U.S. view on how the rules of trade should be reworked.

“There’s not a consensus. Everyone around the table doesn’t have the same point of view, but there’s a greater understanding of what it is they’re trying to achieve,” Morneau said.

Europe ready to retaliate

The European Union, the biggest U.S. trading partner, wants to be exempt from the metals tariffs like Canada and Mexico, but so far has not had any success in securing an exemption.

As a result, the EU is preparing retaliatory tariffs on U.S. products such as bourbon, jeans and Harley-Davidson motorcycles.

European officials said that a trade war would produce only losers and that the G-20 ministers were united in support of “multilateralism” — G-20 jargon for solving disputes through negotiations in the World Trade Organization.

“We all agreed trade wars are a negative sum game,” Bank of Italy Governor Ignazio Visco told reporters on the sidelines of the meeting. “There hasn’t been any voice against rule-based multilateralism.”

French Finance Minister Bruno Le Maire stressed Europe expected to get exemptions from the U.S. tariffs without any conditions and warned protectionism would hurt world growth.

Jeopardy to recovery

“It is of the utmost importance to avoid any unilateral choice that might jeopardize our growth. Unfair trade conditions [and] protectionism might jeopardize the economic recovery all over the world,” he said.

Mnuchin said he’d had very direct conversations with his counterparts in China and that he looked forward to working with Liu He, China’s newly installed, Harvard-educated vice premier in charge of financial and industrial policy, on getting better access to the Chinese market.

“I think there’s a general view among the G-20 that it is our desire to see China open their markets so that we can participate in their markets the way they participate in ours in a much more … reciprocal … relationship,” Mnuchin said.

The G-20 also called for continued international monitoring of cryptocurrencies such as bitcoin and the risks they posed. It said these assets raised issues with consumer and investor protections, market integrity, money laundering and terrorist financing.

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Border Wall, Tunnel Tussle Hold Up Sweeping US Spending Bill

President Donald Trump will reap a huge budget increase for the military while Democrats cement wins on infrastructure and other domestic programs that they failed to get under President Barack Obama if lawmakers can agree on a $1.3 trillion governmentwide spending bill before a deadline this week. 

Battles over budget priorities in the huge bill were essentially settled Tuesday, but a scaled-back plan for Trump’s border wall and a fight over a tunnel under the Hudson River still held up a final agreement. 

Republican leaders were hopeful a deal could be announced as early as Tuesday evening, allowing for a House vote Thursday. If a bill doesn’t pass Congress by midnight Friday, the government will shut down for a third time this year. 

The measure on the table would provide major funding increases for the Pentagon — $80 billion over current limits — bringing the military budget to $700 billion and giving GOP defense hawks a long-sought victory. 

“We made a promise to the country that we would rebuild our military. Aging equipment, personnel shortages, training lapses, maintenance lapses — all of this has cost us,” said House Speaker Paul Ryan, a Wisconsin Republican. “With this week’s critical funding bill we will begin to reverse that damage.”

Domestic accounts would get a generous 10 percent increase on average as well, awarding Democrats the sort of spending increases they sought but never secured during the Obama administration.

Opioid problem

Democrats touted billions to fight the nation’s opioid addiction epidemic. More than $2 billion would go to strengthen school safety through grants for training, security measures and treatment for the mentally ill. Medical research at the National Institutes of Health, a long-standing bipartisan priority, would receive a record $3 billion increase to $37 billion.

“We have worked to restore and in many cases increase investments in education, health care, opioids, NIH, child care, college affordability and other domestic and military priorities,” said Senator Patty Murray, a Washington state Democrat who has been a key negotiator of the measure.

Agencies historically unpopular with Republicans, such as the Internal Revenue Service, appear likely to get increases, too, in part to prepare for implementation of Trump’s recently passed tax measure. The Environmental Protection Agency, always a GOP target, may get a reprieve this year.

Lawmakers agreed on the broad outlines of the budget plan last month, after a standoff forced an overnight shutdown. The legislation implementing that deal is viewed as possibly one of few bills moving through Congress this year, making it a target for lawmakers and lobbyists seeking to attach their top priorities. 

But efforts to add on unrelated legislation to tackle politically charged issues, such as immigration and rapidly rising health insurance premiums, appeared to be faltering.

Dreamer measure

An effort to extend protections for so-called Dreamer immigrants brought to the country as children appears to have failed. Democrats seemed likely to yield on $1.6 billion in wall funding as outlined in Trump’s official request for the 2018 budget year, but they were digging in against Trump’s plans to hire hundreds of new Border Patrol and immigration enforcement agents.

A dispute over abortion seemed likely to scuttle a Senate GOP plan to provide billions in federal subsidies to insurers to help curb health insurance premium increases.

Senate Majority Leader Mitch McConnell, a Kentucky Republican, was working on Trump’s behalf against funding for a Hudson River tunnel and rail project that’s important to Senate Minority Leader Chuck Schumer, a New York Democrat, and Republicans from New York and New Jersey.

The bill would implement last month’s budget agreement, adding $143 billion over limits set under a 2011 budget and debt pact that forced automatic budget cuts on annual agency appropriations. Coupled with last year’s tax cuts, it heralds the return of trillion-dollar budget deficits as soon as the budget year starting in October.

Republican conservatives are dismayed by the free-spending measure, meaning Democratic votes are required to pass it. That gave Democrats leverage to force GOP negotiators to drop numerous policy riders that Democrats considered poison pills.

Ryan said negotiations were ongoing about adding a widely backed measure that aims to strengthen federal background checks by prodding states to provide all records that disqualify people with severe mental health problems and other issues from buying firearms.

Grain sales subsidies

Republicans continued to press to fix a glitch in the recent tax bill that subsidizes grain sales to cooperatives at the expense of for-profit grain companies, lawmakers said.

“We need to fix that problem,” said House Majority Leader Kevin McCarthy, a California Republican. Schumer was demanding a provision of his own — tax subsidies to construct low-income housing — in exchange, lawmakers said.

The president, meanwhile, has privately threatened to veto the whole package if a $900 million payment is made on the Hudson River Gateway Project. Trump’s opposition is alarming Northeastern Republicans such as Representative Peter King of New York, who lobbied Trump on the project at a St. Patrick’s luncheon in the Capitol last week.

The Gateway Project would add an $11 billion rail tunnel under the Hudson River to complement deteriorating, century-old tunnels that are at risk of closing in a few years. The project enjoys bipartisan support among key Appropriations panel negotiators on the omnibus measure who want to get the expensive project on track while their coffers are flush with money.

“I think we ought to get it done and it has good bipartisan support,” Schumer said. “I’m not going to get into a back-and-forth with the president. This is a needed project, and I hope Congress rises to the occasion.”

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