President Trump’s schedule (EDT):
11:30 AM: Attends the White House Opportunity and Revitalization Council meeting;
12:15 PM: Daily intelligence briefing; and
4:30 PM: Meets with Chinese Vice Premier Liu He.
“Trump to Meet China’s Liu in a Sign Trade Talks Are Reaching Final Stages.” This morning’s Bloomberg article leads with:
U.S. President Donald Trump will meet Chinese Vice Premier Liu He at the White House on Thursday as speculation grows that negotiations over a trade deal between the world’s biggest economies are entering the final stages.
Talks are continuing in Washington where Liu held meetings with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Wednesday. The goal over the next few days is to strike an agreement on the core issues so Trump and Chinese leader Xi Jinping can hold a ceremony to sign a deal.
Drafts of an agreement to end a nearly year-long trade war would give Beijing until 2025 to meet commitments on commodity purchases and allow American companies to wholly own enterprises in the Asian nation, according to three people familiar with the talks.
“Both sides do want an agreement but they want to make sure it’s the right deal for their respective domestic audience,” said Tai Hui, Asia-Pacific chief market strategist at JPMorgan Asset Management in Hong Kong.
Stocks in Asia dipped from a six-month high, as investors look for signs of progress from the talks. The offshore yuan held at 6.7169 per dollar
As the talks resumed on Wednesday morning, Trump’s top economic adviser touted progress but cautioned that a final deal to end the trade war remained elusive. Negotiators are “making good headway,” White House economic adviser Larry Kudlow told reporters at an event in Washington. “But we’re not there and we hope this week to get closer,” he said.
U.S. and Chinese officials are still discussing when the two leaders could sit down to sign off on their trade deal. A meeting date between Trump and Xi could be announced as early as Thursday, people familiar with the plans said. After Xi’s team initially floated a formal state visit to Washington as an option, China has pushed back against a meeting on U.S. soil and wants to instead meet in a neutral third country, the people briefed on the plans said.
“Tariffs Take Center Stage in U.S.-China Trade Talks.” Last night’s Wall Street Journal article led with:
WASHINGTON—The Trump administration’s demand that punitive tariffs remain to ensure Beijing enacts genuine overhauls has emerged as one of the biggest sticking points, as U.S. and Chinese trade negotiators opened new face-to-face talks aimed at a deal.
Delegations met in Washington Wednesday, seeking to craft an agreement President Trump and President Xi Jinping of China could sign. The stakes are high for both sides, as failure to reach an accord threatens to rattle financial markets and further strain relations between the world’s two largest economies.
China trade envoy Liu He’s priority is to persuade his U.S. counterparts to remove tariffs on $250 billion of Chinese goods immediately on signing a deal, Chinese officials said. In exchange, Beijing is ready to eliminate retaliatory tariffs on $110 billion of U.S. goods.
In a sign that Mr. Liu may be making progress, Mr. Trump is looking to announce on Thursday the date of a summit with Mr. Xi, said an administration official. That’s a big signal the two sides are on the cusp of a deal, trade experts say, and a resolution of the tariff issue. But the official cautioned that the situation is fluid, and plans could change.
Beijing has few other trade demands in the negotiations, aside from opening U.S. services and agricultural markets further to Chinese companies. What is more, U.S. business leaders support China’s demand to completely lift tariffs.
“Without tariffs being removed, it’s highly unlikely there will be a deal anytime soon between China and the U.S.,” said Myron Brilliant, executive vice president of the U.S. Chamber of Commerce, who talks regularly to senior trade officials in both countries.
But U.S. trade negotiators look at tariffs as a way to make sure China lives up to its commitments in a trade deal. They want to roll levies back slowly. “We have to have real progress” before lifting tariffs, U.S. Trade Representative Robert Lighthizer told the Senate Finance Committee in March.
“Administration to Stick With Tariffs While It Sells New NAFTA.” Yesterday’s CQ Roll Call article led with:
President Donald Trump would veto any legislation Congress might send him that would limit or end Section 232 national security tariffs, White House chief economic adviser Lawrence Kudlow said Wednesday.
Some key Republicans have joined Democrats in urging the president to drop his national security tariffs on steel and aluminum imports, with Senate Finance Chairman Charles E. Grassley, R-Iowa, saying last week he expects bipartisan compromise legislation “in the coming weeks” that would limit the tariffs.
“The president is not in favor of that at the moment,” Kudlow said. “And he believes, as he conducts his trading relationships, he needs maximum [leverage] to bring home some deals,” he told reporters at a Christian Science Monitor-sponsored breakfast meeting.
Trump last year imposed steel and aluminum tariffs including on North American Free Trade Agreement (NAFTA) partners Mexico and Canada.
Lawmakers on both sides of the aisle have called on Trump to lift the tariffs on the two neighbors before the House and Senate vote on his proposed NAFTA replacement, the U.S.-Mexico-Canada Agreement (USMCA).
Grassley has said that any legislation must be able to garner a veto-proof 67 votes to pass the Senate.
Even so, Kudlow said that the Trump administration is upbeat about congressional approval of Trump’s proposed NAFTA re-write “whenever [Speaker Nancy] Pelosi will give us a vote.”
House Democrats have repeatedly cited several issues they have with the proposed pact including labor concerns, outsourcing of jobs and not enough provisions to lower prescription drug prices. U.S. Trade Representative Robert Lighthizer has met with House Democrats several times to win their support for the agreement.
On Tuesday, Pelosi said she is “inclined” to try and build upon the existing NAFTA, but she also laid out some concerns her caucus has about workers rights, environmental provisions and pharmaceuticals that she wants addressed before taking up the proposed agreement.
“The overarching concern that we (Democrats) have is even if you have the best language in the world in that, if you ain’t got enforcement, you ain’t got nothing,” Pelosi said.
“Few Winners, Many Losers From Trade Tariffs, IMF Study Finds.” Yesterday’s Wall Street Journal article led with:
WASHINGTON—Progress in trade talks between the U.S. and China has sidelined the Trump administration’s threat to raise tariffs on Chinese goods to 25%—and that’s a good thing for the U.S. and the world, a new study concludes.
Tariffs of 25% on the roughly $540 billion in Chinese goods imported annually to the U.S. and retaliatory tariffs on the $120 billion of U.S. exports to China would dent U.S. gross domestic product by 0.3% to 0.6%, according to a study published Wednesday [scroll down to Ch. 4] by the International Monetary Fund.
Such damage would come as trade declines or shifts to other countries, and as U.S. businesses and consumers have to shoulder higher costs for imported goods.
China would be hit even harder, with its GDP declining 0.5% to 1.5%, the IMF study found, because China’s exports to the U.S. are a larger share of its economy than vice versa. But Mexico, Canada, Europe and other parts of Asia would actually benefit somewhat, in the short run, as trade is diverted through their economies to avoid the tariffs.
Bipartisan Drug Pricing Bills Passed House Energy & Commerce Late Last Night. The Committee press release stated:
The Committee favorably reported the following bills:
H.R. 1781, the “Payment Commission Data Act of 2019,” introduced by Reps. Buddy Carter (R-GA), Tom O’Halleran (D-AZ), Tom Rice (R-SC), Jimmy Panetta (D-CA), Greg Gianforte (R-MT), and Peter Welch (D-VT), provides the Medicare Payment Advisory Commission (MedPAC) and the Medicaid and CHIP Payment and Access Commission (MACPAC) with access to drug pricing and rebate data in order for these independent, non-partisan commissions to help Congress better understand the true costs of prescription drugs to consumers and taxpayers. The bill was passed by voice vote.
H.R. 938, the “Bringing Low-cost Options and Competition while Keeping Incentives for New Generics (BLOCKING) Act of 2019,” introduced by Reps. Kurt Schrader (D-OR) and Buddy Carter (R-GA), would discourage parking of 180-day exclusivity by a first generic applicant that is blocking the approval of other generics. The bill was passed by voice vote.
H.R. 1520, the “Purple Book Continuity Act of 2019,” introduced by Rep. Anna G. Eshoo (D-CA), would codify publication of the patents of approved biological products in the Purple Book in a similar format and with similar requirements to the Orange Book, specify that the Purple Book should be published electronically on FDA’s website and updated routinely, and direct FDA to consider the types of patents that should be listed in the Purple Book. The bill was passed by voice vote.
H.R. 1503, the “Orange Book Transparency Act of 2019,” introduced by Rep. Robin Kelly (D-IL), would help to ensure that the Orange Book is accurate and up-to-date, by requiring manufacturers to share complete and timely information with FDA, as well as ensuring that patents listed in the Orange Book are relevant to the approved drug product. Patents found to be invalid through a court decision or a decision by the Patent Trial and Appeal Board would be required to be removed promptly. The bill was passed by voice vote.
H.R. 1499, the “Protecting Consumer Access to Generic Drugs Act of 2019,” introduced by Rep. Bobby Rush (D-IL), would make it illegal for brand-name and generic drug manufacturers to enter into agreements in which the brand-name drug manufacturer pays the generic manufacturer to keep a generic equivalent off the market. The bill was passed by voice vote.
H.R. 965, the “Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act of 2019,” introduced by Reps. David Cicilline (D-RI), Jim Sensenbrenner (R-WI), Jerrold Nadler (D-NY), Doug Collins (R-GA), Peter Welch (D-VT), and David McKinley (R-WV), would establish a process by which generic manufacturers could obtain sufficient quantities of brand drug samples for testing thereby deterring gaming of safety protocols that brand manufacturers use to delay or impede generic entry. The bill passed by a vote of 51-0.
H.R.1385, the “State Allowance for a Variety of Exchanges (SAVE) Act,” introduced by Reps. Andy Kim (D-NJ) and Brian Fitzpatrick (R-PA), would provide states with $200 million in federal funds to establish state-based Marketplaces. Under current law, federal funds are no longer available for states to set up state-based Marketplaces. The bill was passed by a vote of 29-22.
H.R.1386, the “Expand Navigators’ Resources for Outreach, Learning, and Longevity (ENROLL) Act,” introduced by Rep. Kathy Castor (D-FL), would provide $100 million annually for the Federally-Facilitated Marketplace (FFM) navigator program. The bill would reinstate the requirement that there be at least two navigator entities in each state and would require HHS to ensure that navigator grants are awarded to entities with demonstrated capacity to carry out the duties specified in the Affordable Care Act. The bill would also prohibit HHS from considering whether a navigator entity has demonstrated how it will provide information to individuals relating to association health plans or short-term, limited-duration insurance plans. The bill was passed by a vote of 30-22.
H.R. 987, the “Marketing and Outreach Restoration to Empower (MORE) Health Education Act of 2019,” introduced by Rep. Lisa Blunt Rochester (D-DE), would restore outreach and enrollment funding to assist consumers in signing up for health care, which has been slashed by the Trump Administration. The bill was passed by a vote of 30-22.
H.R. 1010, a bill to provide that the rule entitled “Short-Term, Limited Duration Insurance” shall have no force or effect, introduced by Rep. Kathy Castor (D-FL), would reverse the Trump Administration’s expansion of junk insurance plans, also known as short-term, limited-duration insurance plans. The bill was passed by a vote of 30-22.
H.R. 986, the “Protecting Americans with Preexisting Conditions Act of 2019,” introduced by Rep. Ann M. Kuster (D-NH), would require the Trump Administration to rescind the Section 1332 guidance of the ACA promulgated in October of 2018 that would undermine the law’s consumer protections. The bill was passed by voice vote.
H.R. 1425, the “State Health Care Premium Reduction Act,” introduced by Reps. Angie Craig (D-MN) and Scott Peters (D-CA), would provide $10 billion annually to states to establish a state reinsurance program or use the funds to provide financial assistance to reduce out-of-pocket costs for individuals enrolled in qualified health plans. The bill also requires CMS to establish and implement a reinsurance program in states that do not apply for federal funding under the bill. The bill was passed by a vote of 30-22.
Links to legislative language are here.
House passage of these bills is assured. The Senate Finance Committee will conclude its three-part Rx pricing hearings at 10:15 AM EDT, Tuesday, April 9, when it will interrogate insurers and pharmaceutical benefit managers. At the first two hearings, Chair Grassley (R-IA) called for Rx list prices to be shown in all advertising and expressed hope for a bipartisan bill that lowers Rx prices while maintaining incentives to innovate — no small challenge — but no proposal has emerged yet. I’ve long predicted that some Rx pricing bill will be enacted this year. The only question is how watered down it will be.
Tax Filing Season Hearing Set for April 10. The Senate Finance Committee will hear from IRS Commissioner Charles Rettig at 10:15 AM EDT, Wednesday, April 10.
