Trump, Erdogan discuss Syria, boosting U.S.-Turkish trade: White House

WASHINGTON (Reuters) – The U.S. and Turkish presidents agreed to keep pursuing a negotiated settlement for northeastern Syria that meets both countries’ security needs, as well as their mutual interest in expanding U.S.-Turkish trade, the White House said on Sunday.

In a phone call, Turkish President Tayyip Erdogan expressed condolences for the death of four U.S. citizens in Manbij, Syria, in a suicide bombing on Wednesday claimed by the Islamic State militant group, while U.S. President Donald Trump stressed “the importance of defeating terrorist elements” in Syria, White House spokeswoman Sarah Sanders said in a readout of the call.

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Giuliani says Trump pursued Moscow tower throughout '16, raising questions

WASHINGTON (Reuters) – U.S. President Donald Trump pursued a business deal to erect a tower bearing his name in Moscow throughout 2016, his attorney said on Sunday, raising new questions for congressional investigators looking into possible ties between the president and Russia.

Trump lawyer Rudy Giuliani said he may have continued to pursue the project and had discussions about it with his former personal attorney, Michael Cohen, until as late as October or November 2016, when Trump was closing in on his election victory against Democrat Hillary Clinton.

“It’s our understanding that they (the discussions) went on throughout 2016,” Giuliani, a former New York City mayor, told NBC’s “Meet the Press.”

“Probably up to, could be up to as far as October, November,” he said. “But the president’s recollection of them is that the thing had petered out quite a bit.”

The Moscow deal ultimately did not materialize but Giuliani’s remarks suggest that Trump’s discussions about the project with Cohen may have dragged on months longer than had been publicly known.

“That is news to me. And that is big news,” Senator Mark Warner, the top Democrat on the Senate Intelligence Committee, also said on “Meet the Press.” “It’s remarkable that we’re two years after the fact and just discovering it today.”

An investigation into Russia’s interference in the 2016 election and possible collusion between Moscow and Trump’s campaign has loomed large over the Trump presidency amid media reports of his team’s connections with Russia.

On Friday, the office of Special Counsel Robert Mueller who leads the investigation took the rare step of disputing elements of a BuzzFeed News report that Trump directed Cohen to lie to Congress about the Moscow real estate deal.

Trump has denied the BuzzFeed article’s claim and Giuliani backed him: “I can tell you his counsel to Michael Cohen throughout that entire period was: ‘Tell the truth’.”

Trump has repeatedly condemned the Mueller probe as a “witch hunt” while denying any collusion with Moscow. Russia also denies any interference in the U.S. elections.

Warner, whose panel is conducting its own Russia probe, said the possibility that Trump pursued a business deal with Russia until as late as the 2016 election increases the need to know about his dealings as president with his Russian counterpart, Vladimir Putin.

“That raises a whole host of questions that the American public needs an answer to and the Congress needs an answer to,” Warner said.

Cohen pleaded guilty in November to charges he lied to Congress when he testified that the discussions ended in January 2016. Instead, Cohen said they actually continued until that June, after Trump had clinched the Republican nomination.

Cohen, who has been sentenced to three years in prison for lying to lawmakers, is expected to testify before the Democratic-led House Oversight Committee on Feb. 7. The House and Senate intelligence committees also want to hear from Cohen.

The president has provided written answers to questions from Mueller on the Moscow project, according to Giuliani.

“Our answers cover until the election. So any time during that period, they could have talked about it,” he said.

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Trump says no amnesty for 'Dreamers,' signals support in broader deal

WASHINGTON (Reuters) – President Donald Trump said on Sunday that his proposed immigration deal to end a 30-day partial government shutdown would not lead to amnesty for “Dreamers,” but appeared to signal support for amnesty as part of a broader immigration agreement.

In a morning Twitter storm, Trump also said he would not seek the removal of millions of illegal aliens living in the United States, while bashing House of Representatives Speaker Nancy Pelosi and her fellow Democrats for turning down an offer he made on Saturday, including for Dreamers, the undocumented immigrants brought to the United States as children.

“No, Amnesty is not a part of my offer. It is a 3-year extension of DACA. Amnesty will be used only on a much bigger deal, whether on immigration or something else,” Trump said on Twitter.

“Likewise there will be no big push to remove the 11,000,000 plus people who are here illegally-but be careful Nancy!”

The Dreamers are protected from deportation under the Deferred Action for Childhood Arrivals (DACA) program.

DACA was put in place under former President Barack Obama. The Trump administration said in September 2017 it would rescind DACA but it remains in effect under court order.

Trump did not make clear what he was referring to regarding the 11 million people mentioned in his tweet. About 12 million people are living in the United States illegally, according to U.S. Department of Homeland Security estimates.

In a Saturday speech from the White House, Trump offered three years of protections for Dreamers and for holders of temporary protected status (TPS), another class of immigrants from designated countries affected by armed conflict, natural disaster, or other strife.

Senate Republican leader Mitch McConnell welcomed the plan as a “bold solution”, while a spokesman said he would seek Senate passage of the proposal this week.

But Trump’s amnesty tweet caught some Republicans off guard.

“I don’t know what the president’s calling amnesty,” Senator James Lankford, an Oklahoma Republican, told ABC’s “This Week” program. “That’s a longer debate and obviously not something we can solve quickly.”

Trump appeared to be responding to conservative critics who accused him of proposing amnesty and reneging on a campaign promise, which could alienate his right-wing base.

About one-quarter of the U.S. government shut down on Dec. 22 over Trump’s demand for $5.7 billion to fund a wall along the border with Mexico, which Democrats have refused to consider. Some 800,000 federal workers have been ordered to stay home or work without pay during the shutdown.

The promise of a border wall was a mainstay of Trump’s 2016 presidential election campaign. As a candidate, he said Mexico would pay for the barrier, but the Mexican government has refused.

The shutdown has caused widespread disruptions.

The Transportation Security Administration on Sunday reported an 8 percent national rate of unscheduled absences on Saturday, compared with 3 percent a year ago. More than 50,000 TSA officers are working without pay.

Some airports experienced longer wait times at security checkpoints, and Baltimore/Washington International Thurgood Marshall Airport closed one of its checkpoints due to excessive absences.

‘STARTING POINT’

On Sunday, a day after Trump’s DACA proposal, there appeared to be signs of movement, even as Democrats insisted the government should reopen before proceeding with talks over border security.

“What the president proposed yesterday – increasing border security, looking at TPS, looking at the Dreamers – I’ll use that as a starting point. But you’ve got to start by reopening the government,” U.S. Senator Mark Warner said on NBC’s “Meet the Press.”

Warner, a Virginia Democrat, said reopening the government ahead of border security negotiations was important for preventing future shutdowns, and that Congress should approve pay for federal workers affected by the shutdown before they miss another paycheck this week.

“If the president can arbitrarily shut down the government now, he will do it time and again,” Warner said.

Bennie Thompson, the Democratic chair of the House Homeland Security committee, said Democrats were not opposed to physical barriers on the southern border, but Trump’s changing position poses a problem for resolving the border security issue.

“I would not rule out a wall in certain instances,” Thompson said on ABC’s “This Week” on Sunday.

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Wall Street extends rally on U.S.-China trade optimism

NEW YORK (Reuters) – U.S. stocks rose on Friday as increased hopes that the United States and China would resolve their trade dispute lifted shares across sectors.

Wall Street moved higher after a Bloomberg report said China sought to raise its annual goods imports from the United States by a combined value of more than $1 trillion in order to reduce its trade surplus to zero by 2024.

The news followed a report on Thursday that U.S. Treasury Secretary Steven Mnuchin was considering lifting some or all tariffs imposed on Chinese imports. A Treasury spokesman denied Mnuchin had made any such recommendation.

With Friday’s gains, the three main indexes were on their way to a fourth successive weekly advance. A strong rally in January has put the benchmark S&P 500 index on track for its best monthly gain since March 2016.

The S&P 500 is now 9 percent below its Sept. 20 record close after dropping 19.8 percent below that level – near the 20-percent threshold commonly considered to confirm a bear market – on Christmas Eve.

“It’s risk-on again,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “We’ve gotten an olive branch from China regarding trade. Obviously there’s been a very positive reaction from the market.”

Even so, Ghriskey said, relatively light trading volume this week indicated that some investors were still waiting on the sidelines.

“Trade negotiations are still uncertain, despite these olive branches,” he said.

The Dow Jones Industrial Average .DJI rose 280.1 points, or 1.15 percent, to 24,650.2, the S&P 500 .SPX gained 29.08 points, or 1.10 percent, to 2,665.04 and the Nasdaq Composite .IXIC added 57.63 points, or 0.81 percent, to 7,142.09.

U.S. stock markets will be closed on Monday for the Martin Luther King Jr. holiday.

Industrial stocks .SPLRCI rose 1.7 percent, the most among the S&P 500’s major sectors, while the Philadelphia SE semiconductor index .SOX climbed 2.2 percent. Both groups of shares have been sensitive to trade developments.

Technology stocks .SPLRCT were the biggest boost to the S&P 500, rising 1.2 percent, while the defensive utilities sector lagged.

Shares of Schlumberger NV (SLB.N) jumped 7.7 percent after the oilfield services provider reported quarterly revenue that beat estimates.

Shares of Netflix Inc (NFLX.O), however, fell 4.1 percent after the video-streaming company forecast lower-than-expected revenue for the first quarter.

Analysts have lowered their fourth-quarter earnings forecast for S&P 500 companies to 14.2 percent year-over-year growth from 20.1 percent estimated on Oct. 1, according to IBES data from Refinitiv.

Advancing issues outnumbered declining ones on the NYSE by a 2.63-to-1 ratio; on Nasdaq a 2.06-to-1 ratio favored advancers.

The S&P 500 posted three new 52-week highs and no new lows; the Nasdaq Composite recorded 30 new highs and 19 new lows.

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White House restricts U.S. lawmakers' travel amid shutdown

WASHINGTON (Reuters) – The Trump administration has barred U.S. congressional travel on government-owned or operated aircraft during the partial government shutdown, unless they have White House approval, according to a memo issued on Friday by the White House Office of Management and Budget.

The move marks an escalation by the White House, which on Thursday blocked U.S. House Speaker Nancy Pelosi from using a military plane for a congressional trip to Afghanistan. Pelosi’s office accused the administration of leaking commercial travel plans on Friday, which a White House official has denied.

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Fed's Daly leaning toward pause in rate hikes: Washington Post

SAN FRANCISCO (Reuters) – San Francisco Federal Reserve Bank President Mary Daly is leaning toward pausing interest rates hikes for a while, though she sees “nothing in the data” to suggest an imminent recession, according to the Washington Post, which published a profile on the policymaker on Friday.

The article paraphrased Daly’s interest-rate remark without quoting it directly. A San Francisco Fed spokesman confirmed the remark was accurate.

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China offers to ramp up U.S. imports: Bloomberg

(Reuters) – China has offered to go on a six-year buying spree to ramp up imports from the United States in order to reconfigure the relation between the two countries, Bloomberg reported on Friday, citing people familiar with the matter.

By raising annual goods imports from the United States by a combined value of more than $1 trillion, China would seek to reduce its trade surplus, which last year stood at $323 billion, to zero by 2024, one of the people told Bloomberg.

It was unclear how the offer differed from what China pledged when U.S. President Donald Trump and Chinese President Xi Jinping met in Buones Aires in December. At that meeting, China offered more than $1.2 trillion in additional commitments on trade, Treasury Secretary Steve Mnuchin said.

Reuters reported on Jan. 9 that U.S. officials used three days of trade talks with Chinese counterparts in Beijing to demand more details on China’s pledge to make big purchases of American goods. China offered similar commitments, albeit on a smaller scale, during talks in Washington last May.

The Bloomberg report on Friday helped drive a rally on Wall Street where main stock indexes were on track for their fourth week of gains, in part on hopes the United States and China would strike a deal to end a trade war between the world’s two biggest economies. The two sides have imposed tit-for-tat tariffs that have disrupted hundreds of billions of dollars of commerce.

While increased purchases of U.S. goods have been part of the talks, American negotiators have also focused on issues that would require structural change in China. Those include finding ways to end the misappropriation of intellectual property from U.S. companies and halting industrial subsidies.

Halfway through a 90-day truce in the U.S.-China trade war agreed to on Dec. 1 when Trump and Xi met during the G20 summit in Argentina, there have been few details provided of any progress made. On Tuesday, a Republican senator said U.S. Trade Representative Robert Lighthizer had told him he had seen no progress on structural issues.

Data on Monday showed China’s exports unexpectedly fell the most in two years in December and imports also contracted, pointing to further weakness in the world’s second-largest economy in 2019 and deteriorating global demand.

The Wall Street Journal reported on Thursday that U.S. Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports and suggested offering a tariff rollback during trade discussions scheduled for Jan. 30.

Lighthizer has resisted the idea, and the proposal had not yet been introduced to Trump, according to the Journal.

Chinese Vice Premier Liu He will visit the United States on Jan. 30 and 31 for the latest round of trade talks aimed at resolving the bitter trade dispute. The Trump administration is scheduled to increase tariffs on $200 billion worth of Chinese goods to 25 percent on March 2 from 10 percent.

The Trump administration has urged China to take steps to protect U.S. intellectual property, end policies that force American companies to turn over technology to a Chinese partner, allow more market access for U.S. businesses and reduce other non-tariff barriers to American products.

China has repeatedly played down complaints about intellectual property abuses, and has rejected accusations that foreign companies face forced technology transfers.

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Russia says new U.S. missile strategy will unleash arms race in space

MOSCOW (Reuters) – Russia said on Friday Washington’s new missile defense strategy would lead to a dangerous arms race in space and amounts to a relaunch of the Cold War-era “Star Wars” program.

U.S. President Donald Trump on Thursday unveiled a plan which called for developing space-based sensors to detect incoming enemy missiles and exploring space-based weapons to shoot down missiles, among other steps to shield the United States.

In a statement, the Russian Foreign Ministry described the U.S. plan as confrontational and said it would deal a blow to already-fragile international stability.

“We are especially alarmed by the passages dealing with plans to develop the space arm of U.S. missile defense,” the statement said. “The strategy de facto gives the green light to the prospect of basing missile strike capabilities in space.

“The implementation of these ideas will inevitably lead to the start of an arms race in space, which will the most negative consequences for international security and stability,” it said.

“We would like to call on the U.S. administration to think again and walk away from this irresponsible attempt to re-launch, on a new and more high-tech basis, the still-remembered Reagan-era ‘Star Wars’ program,” the statement said.

The ministry urged Washington to engage with Russia in constructive talks about the nuclear arms balance “before it’s too late”.

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Fed's Williams says rate policy must be patient, data dependent

SOMERSET, N.J. (Reuters) – The U.S. Federal Reserve must be patient and guided by data when considering whether to raise interest rates, New York Fed President John Williams said on Friday, in remarks reinforcing the central bank’s commitment to a wait-and-see approach.

Williams said inflation pressures remain mild yet the economic “tailwinds” that boosted the economy in 2019 “have lost their gust,” including due to an ongoing partial shutdown of the U.S. government.

If those pressures cause the economic outlook to deteriorate, the Fed could pause rate hikes or adjust the path of balance sheet normalization, Williams said.

“The approach we need is one of prudence, patience, and good judgment – the motto of ‘data dependence’ is more relevant than ever,” he said in remarks prepared for delivery to the New Jersey Bankers Association.

“If growth continues to come in well above sustainable levels, somewhat higher interest rates may well be called for at some point. However, if conditions turn out to be less robust, then I will adjust my policy views accordingly.”

The remarks come as Fed policymakers have signaled a willingness to wait to deliver more rate hikes until they have a better handle on whether slowing global growth and financial market volatility will undercut an otherwise solid U.S. economic outlook.

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U.S. Treasury Secretary Mnuchin weighs lifting tariffs on China: WSJ

WASHINGTON (Reuters) – U.S. Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports and suggested offering a tariff rollback during trade discussions scheduled for Jan. 30, the Wall Street Journal reported on Thursday, citing people familiar with the internal deliberations.

But Trade Representative Robert Lighthizer has resisted the idea, and the proposal had not yet been introduced to President Donald Trump, according to the Journal.

A Treasury spokesman denied the report, telling the Wall Street Journal: “Neither Secretary Mnuchin nor Ambassador Lighthizer have made any recommendations to anyone with respect to tariffs or other parts of the negotiation with China.”

Chinese Vice Premier Liu He will visit the United States on Jan. 30 and 31 for the latest round of trade talks aimed at resolving a bitter trade dispute between the world’s two largest economies.

The Trump administration is scheduled to increase tariffs on $200 billion worth of Chinese goods from 10 percent to 25 percent on March 2.

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