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OPPOSITION MOUNTS, TRUMP STILL TWEAKING: While the announcement of tariffs on steel and aluminum doesn’t appear on the official White House schedule today, President Trump’s senior trade advisor Peter Navarro insists that the president will be hosting an event today to “sign the proclamations” with steel union workers.  Navarro indicated that “within 15 to 30 days, the tariffs would go into effect.” That’s a sign that the Administration’s lawyers aren’t close to finishing the requisite language with Trump now tweaking the measure to exempt Mexico and Canada while NAFTA re-negotiations continue – but Trump is chomping at the bit to make “my tariffs” happen. Nonetheless, opposition to Trump’s actions continued to build on and off Capitol Hill yesterday with over 100 House Republicans signing a letter to the president asking him to reconsider and refocus his efforts and “deal with China’s unfair practices.”  Republicans are also asking the president to establish a “robust exclusion process” when he announces the tariffs so that businesses can apply for waivers to import products that cannot be obtained from domestic sources; details of additional exclusions may not be ready for 30 days.  Should the signing event not come off today with other White House officials continuing to push back on the timing, it’s likely to happen tomorrow.

NEXT WAVE OF TARIFFS CLOSER THAN EXPECTED: Trump threw out more red meat yesterday with a tweet aimed at China and their intellectual property practices. In an earlier note this week, we referenced an Oval Office meeting back in August 2017 with NEC Advisor Gary Cohn, Chief of Staff John Kelly, U.S. Trade Rep Robert Lighthizer and Advisor Peter Navarro where Trump chided his staff for not having the tariffs he’d doggedly been asking for since his inaugural. Their retort was that they were opening an investigation into China’s practices invoking Section 301of the U.S. Trade Act of 1974 and Trump later signed a memo initiating the year-long process on August 15. Officials inside the Administration and allies in Congress and the business community were supportive of that strategy and expected action on Section 301 first and were blindsided by Trump’s move using Section 232 on steel and aluminum imports. What’s done is already done and Trump doesn’t appear to be budging much on the 232 front, but we’re hearing that language on 301 and tariffs on over 100 Chinese products is nearing completion – well ahead of the one-year deadline of August 15, 2018.

CONSERVATIVE ALLIES JOIN THE FRAY: For the first time in the Trump presidency, the hype over tariffs has sparked a campaign by outside conservative groups to rally their troops in opposition to Trump’s forthcoming measure on steel and aluminum tariffs.  With their eye on the mid-terms, conservative groups are making the same set of arguments that tariffs and retaliation targeted at U.S. products (some of them in battleground states) will cause consumer prices to rise putting a damper on any household gains realized from tax reform.  And, putting a damper on their prospects for expanding their agenda with Republican majorities in 2019.

TEXAS TURNOUT: We heard a lot of chest-thumping on Democratic prospects for big gains in the red state of Texas given impressive early voting numbers posted by Democrats - and while turnout and enthusiasm were both greater than expected, it was still not enough to match the juggernaut that is the Republican party in the perennial red state. 

TRUMP'S TRADE TANTRUM: Read our note on Section 232 and Trump's trade actions here.

CALL REPLAY | IT IS A BRAVE NEW WORLD: POPULISM &TRUMP DRUG PRICING AND APPROVAL POLICY: Listen to our healthcare team discuss 2018 drug policy shifts including changes to Part B and D; opioid lawsuit and more.  Find the replay here.


ENJOY IT WHILE IT LASTS; FY18/19 DEFENSE BUDGET WILL BE HIGH WATER MARK: General Emo Gardner writes that FY18 Pentagon spending will be up 10.7% y/y at ~$671B and FY19 will +2.9% from there but growth in FY20 and beyond looks grim. His latest piece here.

ENERGY POLICY | VENEZUELA POLITICAL UPDATEReplay of Joe McMonigle's call with Dr. Francisco Monaldi, a Fellow in the Latin American Initiative and Energy Economics at the Baker Institute at Rice University on the latest situation on the ground in Venezuela as well as the developing White House announcement of possible new sanctions. You can access it here.