Monday, August 14, 2017

President Trump's recent aggressive threats against North Korea appear to have opened new fissures between the United States and South Korea - ABC News

President Trump's recent aggressive threats against North Korea appear to have opened new fissures between the United States and its most important ally against Kim Jong Un's regime – South Korea.
While the country’s new president Moon Jae-in has largely kept quiet and reaffirmed the strategic alliance with the U.S., his outspoken top aide, Moon Chung-in, openly criticized Trump for his bellicose language.
“This is very unusual. We do not expect that the president of the United States would make that kind of statement,” the South Korean ambassador-at-large for international security told ABC News Chief Global Affairs Correspondent Martha Raddatz. “It is very worrisome for the president of the United States to fill [fuel] the crisis.”
ABC's Martha Raddatz interviews South Korean presidential adviser and ambassador-at-large Moon Chung-in about the Trump administration's response to the North Korean crisis.more +
Amb. Moon said the South Korean president – a member of the country's liberal party who was elected in May – wanted the U.S. president to tone down his rhetoric, a message he conveyed to Trump when they spoke on the phone last Monday.
But, 24 hours after that call, Trump vowed to unleash “fire and fury” on Kim Jong Un's regime, leaving President Moon’s administration “somewhat concerned,” his aide said. What followed was a week of escalating warnings from the U.S., culminating in the president's promise that America's military was “locked and loaded.
North Korea, of course, responded in kind, using the same pugnacious language its propaganda machine has fired off for years – but also specifically threatening to strike around Guam, a U.S. territory in the Pacific that is home to about 200,000 American citizens and a major U.S. military presence.
Kicking the threats made into higher gear the situation more dangerous, Amb. Moon said. He said both sides should rein it in, a rare rebuke from South Korea of its protector, the U.S.
“It is a chicken game, but I think what is needed right now is mutual restraint,” he said.
The disagreement between the Washington, D.C., and Seoul, however small, is exactly what North Korea wants, according to experts who say the outlaw regime in Pyongyang seeks to destroy the South Korean-American alliance and unify the two Koreas under its communist rule.
These aren’t the first disputes between the two allies.
Trump has angered some South Koreans with his demand that the longtime American ally pay up for U.S. defense, including the THAAD missile system. The weapon system, which could shoot down incoming ballistic missiles from the North, is controversial in South Korea because of its environmental as well as economic impact.
China, too, is concerned about the missile-defense system because of its advanced radar capabilities and has responded with a boycott of tourism to South Korea, impacting the country's businesses.
On a separate note, Trump has also argued that South Korea is cheating the U.S. through an unfair trade advantage, demanding that the two countries renegotiate trade agreements toward equalizing their trade deficit.
Amb. Moon criticized the Trump administration for what he said was a lack of clarity over North Korea. The White House has been knocked for sending mixed signals on North Korea, including on whether the U.S. supports talks with the North and whether it seeks regime change.
“I really don’t see a unified message. There is confusion,” the South Korean ambassador said. “We are very much confused. We think the American government has moved from ‘strategic patience’ of the Obama administration into strategic confusion.”
For eight years, Obama’s policy of “strategic patience” called for ignoring the Kim regime and seeking to increase its international isolation. The Trump administration has derided that strategy, with Secretary of State Rex Tillerson announcing on a trip to the region in February, “The era of ‘strategic patience’ is over.”
But it is unclear what exactly has replaced it. Tillerson has extended an olive branch to Kim Jong Un if he halts his ballistic missile tests, a position he reiterated earlier this month. But, in contrast, one week earlier, Vice President Mike Pence told The Wall Street Journal that the right strategy doesn’t involve “engaging North Korea directly.”
Amb. Moon is one of the leading advocates of South Korea's “sunshine policy,” which favors dialogue with North Korea and peaceful co-existence alongside its regime.
That sounds similar to Tillerson, who has said repeatedly that the Trump administration does not seek regime change in North Korea, even telling Kim Jong Un, “We are not your enemy.”
CIA Director Mike Pompeo, however, alluded to plans to eliminate the 33-year old leader, answering a question about regime change by saying, “I'm hopeful we will find a way to separate that regime from that [ballistic missile] system … The North Korean people, I'm sure, are lovely people and would love to see him go as well.”
Still, despite the differences, Amb. Moon said the U.S.-South Korean alliance was strong and would remain united against the North’s provocations. And, leaders from both administrations have remained in touch throughout the week, with the two national security advisers speaking Friday.
But with millions of South Koreans caught in the crosshairs, Moon suggested the country's leadership hopes to see a change in Trump's approach to North Korea: “We hope that President Trump will come up with the diplomatic skill to deal with the current crisis.”

Trump Will Get His Tax Cuts, Vast Majority of Economists Believe - Bloomberg

Trump Will Get His Tax Cuts, Vast Majority of Economists Believe
By Rich Miller and Catarina Saraiva
August 14, 2017, 6:00 PM GMT+10
Yet survey suggests the impact on economy will be limited
Fed seen raising interest rates, which may blunt stimulus
The pros who make their living forecasting the economy overwhelmingly expect President Donald Trump and his fellow Republicans to push through tax cuts in time for next year’s congressional elections. They just don’t think that the reductions will do all that much to help the economy in 2018.
That’s the message from the latest Bloomberg monthly poll of economists, taken Aug. 4 to Aug. 9. Of 38 respondents, 29 expect Congress to pass tax-cut legislation by November 2018. The policy changes though are only expected to add 0.2 percentage point to the pace of gross domestic product expansion in 2018, according to the median figure from analysts penciling in an impact.
The Bloomberg survey forecasts growth in 2018 to be only slightly higher than this year -- 2.3 percent versus 2.1 percent, according to median projections from a broader pool of 71 economists. What’s more, analysts see the economy losing momentum in 2019, with expansion falling back to 2 percent, contrasting with the Trump administration’s forecast of a further pickup.
“I think they’ll do something and it will probably be somewhat stimulative in the short run,” said High Frequency Economics Chief U.S. Economist Jim O’Sullivan, referring to Trump and Congress. “I don’t expect a huge impact from it.”
Cuts to individual and corporate rates would fall short of what GOP leaders and the Trump administration have promised -- a once-in-a-generation permanent overhaul of the U.S. tax code, similar to what happened in 1986 under former President Ronald Reagan. If Republicans use a budget procedure for a tax bill to bypass Democratic opposition in the Senate, cuts would have to expire if they add to the long-term federal deficit.
The administration is betting that a mixture of corporate and individual tax cuts, along with other tax code changes, will eventually help lift annual economic growth to 3 percent, from the 2.1 percent average rate of the last eight years. In the first half of 2017, coinciding with Trump’s first six months in office, output rose at a 1.9 percent annual pace.
In order to win passage of a sweeping tax plan, the administration is holding a weekly, all-hands-on-deck meeting to coordinate strategy between the president and his allies, according to White House officials. The intensive discussions contrast with the at times haphazard approach the administration took in its failed attempt to repeal former President Barack Obama’s health-care law.
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White House officials have said they’re still committed to a permanent tax revamp, and the plan is to start hearings and a markup of a tax bill after Labor Day so a version can get through the House in October and the Senate in November. Trump and Senate Majority Leader Mitch McConnell have sparred in recent days over the amount of time needed to pass complicated legislation, such as repealing and replacing Obamacare.
Trump officials see their policies accelerating GDP growth to 2.7 percent in 2019, on its way to 3 percent within the following two years. Economists beg to differ.
“The type of stimulus being talked about is temporary,” said Nariman Behravesh, chief economist at consultants IHS Inc. “It won’t deliver a sustained increase in growth.”
Texas Representative Kevin Brady, the Republican chairman of the House Ways and Means Committee, said Friday that Congress is on track to deliver a tax bill to Trump in 2017. Brady, in a Bloomberg Television interview, acknowledged the goal is “aggressive” but said there’s “urgency” in terms of the economy and U.S. competitiveness.
As the administration aims to add fuel to the economy, the Federal Reserve is expected to be withdrawing it, according to the poll. Economists forecast that the central bank will raise interest rates once more this year and three times in 2018, each time by a quarter percentage point.
That’s in line with Fed policy makers’ own projections but significantly below levels implied in financial markets.
“To keep the economy on a sustainable path of growth, we need to gradually reduce the monetary stimulus put in place during the recession and recovery,” San Francisco Fed President John Williams said in an Aug. 2 speech in Las Vegas. “If we delay too long, the economy will eventually overheat, causing inflation or other imbalances to emerge.”


Policy makers last increased borrowing costs in June, when they boosted the target range for the inter-bank federal funds rate to a range of 1 percent to 1.25 percent.