START YOUR ENGINES: Today is the first day negotiators from Mexico, Canada, and the U.S. will sit down and begin modernizing the NAFTA. The Administration has already laid out some initial objectives: they want to make it easier for produce farmers to bring cases against Mexico for selling goods below market rates and want to target Canada’s dairy and poultry supply chain. Canada wants to include progressive provisions such as environmental and labor protections, gender equality, and indigenous rights. They also want to increase the flow of skilled workers between the two countries. It is not just those at the negotiation table who have clear objectives; this deal is dividing Republicans into the traditional free trade believers and the protectionist who want an America First trade deal. Once the Trump Administration comes to an agreement, it has to pass both houses of Congress and Republicans will likely need support from Democrats - turning the tables since passage in 1993 when Democrats controlled the Capitol and needed help from their friends on the other side of the aisle.
THE YEAR OF THE TURTLE: President Trump issued a memorandum to initiate an investigation into China’s trade practices. The memo asks Trade Secretary Robert Lighthizer to “use all options available” to understand China’s alleged theft of proprietary information from U.S. companies. This is just the beginning of a long process which could result in economic sanctions and import tariffs or quotas. The president postponed any concrete actions on China steel dumping and started this investigation with a public announcement; likely trying to have them both loom over the Chinese government as leverage to prod China into taking a stronger stance against North Korea.
CBO REPORTS: The Congressional Budget Office (CBO) released an analysis on health care markets if President Trump were to pull federal payments that stabilize the insurance markets (CSRs). The report shows premiums and other health care costs will skyrocket as will the U.S. deficit. While Trump has suggested Obamacare must implode before it gets fixed, this could be especially damaging to swaths of his base (rural communities). The CBO has taken a lot of heat from Republicans over their scoring of insurance markets. This report will likely be dismissed by Congressional Republicans who are already working on ways to continue the CSR payments as well as discredit the CBO.
RED TAPE ROLLBACK: President Trump used a very long flowchart to explain the pain of the current permitting process for infrastructure projects. He signed an Executive Order that will reform the process by streamlining it and holding agencies accountable. What used to take 20 years could now only take two, saving hundreds of millions of dollars and changing local economies. Infrastructure is one of the few issues left where the president can rally support from both sides of the aisle - although our view is that his chances are dwindling. It also has the potential to spark investments - oil and gas pipelines, factories, interstate, and airport construction could start moving sooner than later.
TRUMP'S FOREIGN POLICY AND NATIONAL SECURITY TEAMS - A PERSPECTIVE: Our Senior Advisor General Dan Christman wrote while random presidential tweets and statements continue to roil our security relationships, General John Kelly appears to be stabilizing the White House staff. Read the full piece here.
DECLINING REGULATORY PROTECTION FOR VIDEO STREAMING SERVICES: Our Senior Telecom Analyst Paul Glenchur writes regulators appear less likely to ensure OTT services gain access to the "must have" content of subscription TV operators. Read his full piece here.
PRICE PUTS HIS STAMP ON MEDICARE POLICY | ENDING SOME MANDATORY BUNDLED PAYMENTS, CHANGING OTHERS: Our Senior Health Policy Analyst Emily Evans wrote unimplemented cardiac bundles to be canceled; the fate of CJR unclear; good news for certain cardiac device manufacturers. Read the full piece here.
CMS TAKES MAJOR DEREGULATORY STEP | ENDS MANDATORY CARDIAC BUNDLES, CJR VOLUNTARY IN CERTAIN CITIES: Our Senior Health Policy Analyst Emily Evans wrote CMS rescinds Cardiac EPMs & CR Incentives; make CJR voluntary in some MSAs; no word on implications to TKA and IPO. Read the full piece here.
