Trump Mulls Ending South Korea Trade Pact

President Trump is considering withdrawing from the U.S.-Korea Free Trade Agreement, sources tell Axios.

“Administration sources have cautioned that no decision has been made, but the leaking of these deliberations has startled many in the U.S. business and pro-trade communities, who were under the impression that KORUS withdrawal was not in the cards for 2017.”

“More than $100 billion of annual trade between U.S. and Korea in goods — and billions more in services — hangs in the balance as Trump weighs this decision. Withdrawing from the trade deal would also damage relations between the U.S. and a key ally in Asia at the same moment the North Korean threat is escalating to historic proportions.”

Most Unhappy with Direction of Country

A new Fox News poll finds just 36% of voters are happy with how things are going in the country — down 10 points since April — while 64% are dissatisfied.

Most interesting is that the shift “is not, as is often the case, tied to the economy. Positive views on the economy are higher than in more than a decade: 36% say it is in either “excellent” (6%) or “good” (30%) shape. The last time conditions were rated this positively was August 2004.”

Trump Twice Rejected China Steel Offer

Financial Times: “Donald Trump last month rejected a Chinese proposal to cut steel overcapacity despite it being endorsed by some of his top advisers, as he urged them instead to find ways to impose tariffs on imports from China. One week after the July G20 summit in Hamburg — where Mr. Trump criticised China for flooding the world market with cheap steel — Beijing proposed cutting steel overcapacity by 150m tonnes by 2022. But Mr. Trump twice rejected the deal, according to several people familiar with the internal debate.”

“Wilbur Ross, U.S. commerce secretary, endorsed the deal and brought it to Mr. Trump, but the president rejected the proposal. Mr. Ross, a long-time friend of the president, floated the deal again the following week during the two-day meetings with Chinese vice-premier Wang Yang, but Mr. Trump once again refused to accept it.”

Bonus Quote of the Day

“I know there are some people in the room right now that are upset. I know there are some globalists in the room right now. And they don’t want them, John, they don’t want the tariffs. But I’m telling you, I want tariffs.”

— President Trump, quoted by Axios, in an Oval Office discussion with chief of staff John Kelly and others.

Trump May Not Get the Win He Seeks in NAFTA Talks

Politico: “As a candidate, Donald Trump constantly called NAFTA the worst trade deal in history and promised ‘to get a better deal for our workers.’ Now that he is president, Trump is about to find out how hard it is to get an agreement that satisfies not only those workers who feel ‘shafted by NAFTA’ but also the powerful business interests currently benefiting from billions of dollars in cross-border sales.”

“Top trade officials from the United States, Canada and Mexico sit down on Wednesday to begin thrashing over hundreds of issues as distinct as Canadian dairy barriers and digital trade issues affecting both countries.”

Our Broken Economy, In One Chart

David Leonhardt: “The message is straightforward. Only a few decades ago, the middle class and the poor weren’t just receiving healthy raises. Their take-home pay was rising even more rapidly, in percentage terms, than the pay of the rich.”

“In recent decades, by contrast, only very affluent families — those in roughly the top 1/40th of the income distribution — have received such large raises. Yes, the upper-middle class has done better than the middle class or the poor, but the huge gaps are between the super-rich and everyone else.”

Trump’s Low Numbers Come Despite Good Economy

First Read: “What’s especially striking about Trump’s low approval numbers (in the CNN, CBS, Quinnipiac, and Gallup polls) is that they’re coming during relatively good economic times.”

“Indeed, in the same CNN poll showing Trump’s approval rating at 38 percent, 53 percent of Americans say things are going very well/fairly well in the country. And that raises the question: What happens to Trump’s numbers if/when the unemployment rate creeps up? Because right now, most Americans aren’t judging Trump on his stewardship of the economy.”

Exchange of the Day

President Trump spoke to Maggie Haberman of the New York Times:

HABERMAN: “Am I wrong in thinking — I’ve talked to you a bunch of times about this over the last couple years, but you are generally of the view that people should have health care, right? I mean, I think that you come at it from the view of …”

TRUMP: “Yes, yes. [garbled]”…

TRUMP: “It’s been a long time. Nothing changes. Wait till you see what we’re going to do on trade.”

HABERMAN: “Sounds like it’s going to be very interesting.”

TRUMP: “Much more interesting than anybody would understand.”

Hopes of ‘Trump Bump’ for U.S. Economy Fade

New York Times: “While the June jobs report, coming on Friday, is expected to show that hiring continued at a healthy pace last month, other recent indicators in areas like consumer spending, construction and auto sales have been decidedly less robust.”

“As a result, Wall Street forecasters have been busy lowering their growth estimates for the second quarter, which ended last Friday, much as they were forced to do over the first three months of the year. Economic expansion for the full year now appears unlikely to be much greater than 2 percent — about the average for the current recovery, which celebrates its eighth year this month.”

Trump Plots a Global Trade War

Mike Allen: “In a plan pushed by Commerce Secretary Wilbur Ross, and backed by chief strategist Steve Bannon (not present at the meeting), trade policy director Peter Navarro and senior policy adviser Stephen Miller, the United States would impose tariffs on China and other big exporters of steel. Neither Mike Pence nor Jared Kushner weighed in either way.”

“Everyone else in the room, more than 75% of those present, were adamantly opposed, arguing it was bad economics and bad global politics. At one point, Trump was told his almost entire cabinet thought this was a bad idea. But everyone left the room believing the country is headed toward a major trade confrontation.”

“The reason, we’re told: Trump’s base — which drives more and more decisions, as his popularity sinks — likes the idea, and will love the fight.”

Paris Deal Isn’t About Climate for Trump

Axios: “The most revealing moment of President Trump’s announcement that he is withdrawing from the Paris climate deal came in an off-hand response of a White House official after Trump’s speech. Asked whether Trump thinks climate change is real, the official said: ‘Can we stay on topic?'”

“To the Trump administration, the Paris climate deal has nothing to do with climate change. It’s an economic issue. To Trump, withdrawing from the accord represents a triumph of populist America over greedy globalism.”

“Unlike other policy goals (healthcare and tax reform) Trump isn’t even acknowledging climate change is a problem. That makes his overtures about being open to renegotiate and re-enter the Paris deal suspect.”