Tag Archives: United States

U.S. House approves tighter North Korea sanctions

FILE PHOTO - A North Korean flag flies on a mast at the Permanent Mission of North Korea in Geneva October 2, 2014. REUTERS/Denis Balibouse/File Photo

WASHINGTON (Reuters) – The U.S. House of Representatives overwhelmingly approved legislation on Thursday to tighten sanctions on North Korea by targeting its shipping industry and companies that do business with the reclusive state.

The vote was 419 to 1.

Supporters said the legislation was intended to send a strong message to North Korea, amid international concern over the escalation of its nuclear program.

The measure would have to be approved by the Senate before it could be sent to the White House for President Donald Trump to sign into law.

Although legislation addressing North Korea has been introduced in the Senate, there was no immediate word on when or if the Senate might take up a bill.

Any new U.S. sanctions against North Korea would likely affect China, the North’s most important trade partner.

While China has been angered by North Korea’s nuclear and missile tests, it has signed up for increasingly tough U.N. sanctions against it, and says it is committed to enforcing them.

Asked about the latest U.S. legislation, Chinese Foreign Ministry spokesman Geng Shuang reiterated that China opposed other countries using their own domestic law to impose unilateral sanctions.

With the situation tense on the Korean Peninsula, all sides need to exercise restraint and not irritate each other to avoid the situation worsening, he said.

(Reporting by Patricia Zengerle; Additional reporting by Ben Blanchard in Beijing; Editing by Leslie Adler)

With Obamacare vote, House Republicans free to turn to tax reform

U.S. President Donald Trump (C) celebrates with Congressional Republicans in the Rose Garden of the White House after the House of Representatives approved the American Healthcare Act, to repeal major parts of Obamacare and replace it with the Republican healthcare plan, in Washington, U.S., May 4, 2017. REUTERS/Carlos Barria

By David Morgan

WASHINGTON (Reuters) – The Republican-controlled U.S. House of Representatives plans to turn to tax reform in earnest, after concluding a lengthy healthcare debate this week with a vote to repeal and replace Obamacare.

But even as Republicans predicted that tax reform would succeed before year-end, lawmakers encountered new uncertainties about what a final tax package might contain, as well as doubts about whether Republicans will be able to enact reforms without Democratic help.

President Donald Trump and Republicans in Congress have pledged to complete the biggest tax reform since 1986, when President Ronald Reagan was in office, before the end of 2017. But they face an uphill battle, mainly over policy differences within their own ranks.

Thursday’s 217-213 House vote on healthcare legislation raised confidence in the Republican-controlled chamber’s ability to move major legislation after two earlier pushes ended in failure.

But to move forward on tax reform, the House, Senate and Trump administration must agree on where to set tax rates, how to pay for cuts and whether the final package should add to the deficit or pay for itself, all areas where common ground may be hard to find.

A plan to enact reforms without Democratic support will also require Republicans to pass a 2018 budget authorizing the parliamentary process known as reconciliation. But a new budget agreement poses a daunting task given Republican opposition to Trump demands for deep domestic spending cuts.

“That may prove to be one, if not the most difficult votes of the tax reform process,” Jonathan Traub, a managing principal at the consulting firm Deloitte Tax LLP.

Meanwhile, the need to reach agreement between the House, Senate and White House will likely delay introduction of a tax reform bill, which had been expected in early June.

But Republicans say it will ultimately make it easier to enact reforms before the end of the year.

The House Ways and Means Committee, which will unveil the initial tax bill, is still aiming for a revenue-neutral package that raises $2.4 trillion for tax cuts through a new border adjustment tax and elimination of business deductions for net interest payments, both controversial measures.

Panel chairman Kevin Brady told reporters that revenue neutrality is necessary to ensure bold, permanent changes to tax policy that can drive economic growth.

“That’s the argument and the case we’re going to make to the Senate and the Trump administration,” he said.

But Representative Mark Meadows, who chairs the conservative Freedom Caucus that helped block Trump’s first healthcare bill,

voiced opposition to a revenue neutral approach.

“If it’s revenue neutral, you’re not really lowering taxes. You’re shifting the burden,” Meadows told reporters.

The Trump tax plan unveiled last week calls for steep tax cuts financed by government revenues that officials say will result from higher growth. Some fear the plan could add trillions of dollars to the deficit if growth does not materialize.

Meadows said tax cuts should be offset by cuts to entitlement programs including Social Security and Medicare, which Trump has promised not to touch.

(Editing by Alistair Bell)

Tillerson urges ASEAN to cut North Korea funding, minimize ties

U.S. Secretary of State Rex Tillerson (C) poses with ASEAN foreign ministers before a working lunch at the State Department in Washington, U.S., May 4, 2017. REUTERS/Yuri Gripas

By David Brunnstrom

WASHINGTON (Reuters) – U.S. Secretary of State Rex Tillerson urged Southeast Asian foreign ministers on Thursday to do more to help cut funding streams for North Korea’s nuclear and missile programs and to minimize diplomatic relations with Pyongyang.

In his first ministerial meeting with all 10 members of the Association of Southeast Asian Nations (ASEAN), Tillerson also called on nations with competing claims in the South China Sea to cease all island building and militarization while talks aimed at creating a maritime code of conduct were under way.

Patrick Murphy, U.S. deputy assistant secretary of state for East Asia, said Tillerson stressed Washington’s security and economic commitment to the region, amid doubts raised by President Donald Trump’s “America First” platform and withdrawal from the Trans Pacific Partnership (TPP) trade pact.

Tillerson called on ASEAN countries to fully implement U.N. sanctions on Pyongyang, which is working to develop a nuclear-tipped missile capable of reaching the United States, and to show a united front on the issue, Murphy said.

“We think that more can be done, not just in Southeast Asia,” he told reporters. “We are encouraging continued and further steps across all of ASEAN.”

Last week, Tillerson called on all countries to suspend or downgrade diplomatic ties with Pyongyang, saying that North Korea abuses diplomatic privileges to help fund its arms programs. Tillerson also warned that Washington would sanction foreign firms and people conducting business with North Korea if countries did not act themselves.

All ASEAN members have diplomatic relations with North Korea and five have embassies there.

Murphy said Washington was not encouraging ASEAN states to formally cut ties, but to examine the North Korean presence “where it clearly exceeds diplomatic needs.”

He said some countries were already doing this and also looking at the presence of North Korean workers, another significant revenue earner for Pyongyang.

KEEPING TENSION FROM INCREASING

Some officials of ASEAN members, speaking to reporters, acknowledged concerns about North Korea, but also cited concerns about trade relations with the United States.

Philippine acting Foreign Affairs Secretary Enrique Manalo, whose country currently chairs ASEAN, said of the U.S. call to minimize relations with Pyongyahng, “We haven’t really discussed that among the ASEAN countries, so that’s probably something we will look at.

“Our immediate concern is to try and ensure the tension on the peninsula doesn’t increase. … The last thing we would like to see is to have a conflict break out due to some miscalculation,” Manalo said.

Singapore’s foreign minister, Vivian Balakrishnan, said sanctions would have to be fully implemented, but North Korea’s presence in his country is already minimal.Asked if that could be further reduced, he said: “I won’t say never, but at this point in time that’s not the issue – we will stick with the U.N. Security Council’s resolutions.”

Balakrishnan, whose country signed the TPP, stressed the importance of U.S.-ASEAN business ties – annual trade of $100 billion supporting half a million U.S. jobs and $274 billion of U.S. investment.

“Southeast Asia is replete with economic opportunities and it’s too big to miss out on,” he said.

His remark highlighted growing concern in Asia that Trump has ditched former President Barack Obama’s economic “pivot” to the region by abandoning the TPP, something analysts say has led to more countries being pulled into China’s orbit.

Murphy said Tillerson stressed that ASEAN remained a “very important … strategic partner,” which is shown by Trump’s commitment to attend regional summits in the Philippines and Vietnam in November.

Manalo called the meeting with Tillerson and Trump’s travel plans “encouraging” signs.

“ROOM AND SPACE”

Washington wants ASEAN countries to crack down on money laundering and smuggling involving North Korea and to look at restricting legal business too.

It has been working to persuade China, North Korea’s neighbor and only major ally, to increase pressure on Pyongyang. U.S. officials are also asking China to urge more China-friendly ASEAN members, such as Laos and Cambodia, to do the same.

U.S. efforts have included a flurry of calls by Trump to the leaders of the Philippines, Thailand and Singapore.

Diplomats say U.S. pressure has caused some irritation in ASEAN, including Malaysia, which has maintained relations with Pyongyang in spite of the assassination of North Korean leader Kim Jong Un’s estranged half brother at Kuala Lumpur International airport in February/

On the issue of the South China Sea, ASEAN has adopted a cautious approach recently, with a weekend summit avoiding references to China’s building and arming of artificial islands there.

This stance coincided with moves by China and ASEAN to draft a framework to negotiate a code of conduct. Murphy said Tillerson had stressed that this process needed “room and space” through avoiding fortifying existing claims.

The United States has conducted freedom of navigation operations to challenge South China Sea claims, angering China, but not yet under Trump. Murphy said such operations would continue, but declined to say when the next might occur.

(Reporting by David Brunnstrom; Editing by Grant McCool and Leslie Adler)

State Dept. seeks tougher visa scrutiny, including social media checks

A person stands at the counter of U.S. Immigration upon arriving at Miami airport March 13, 2013. REUTERS/Desmond Boylan

By Yeganeh Torbati and Mica Rosenberg

WASHINGTON/NEW YORK (Reuters) – The U.S. Department of State has proposed tougher questioning of visa applicants believed to warrant extra scrutiny, according to a document published Thursday, in a push toward the “extreme vetting” that President Donald Trump has said is necessary to prevent terrorist attacks.

Questions about social media accounts would be part of the stepped-up criteria, which would apply to 65,000 people per year, or about 0.5 percent of U.S. visa applicants worldwide, the State Department estimated. It did not target nationals of any particular countries.

A set of new questions would apply to visa applicants “who have been determined to warrant additional scrutiny in connection with terrorism or other national security-related visa ineligibilities,” the State Department said in a notice to the Federal Register.

Those applicants would be required to provide all prior passport numbers, five years’ worth of social media handles, email addresses and phone numbers, as well as 15 years of biographical information, when applying for a U.S. visa. Consular officers would not request user passwords for social media accounts, the document said.

If granted, the new criteria would mark the first concrete step toward more stringent vetting that Trump asked federal agencies to apply toward travelers from countries he deemed a threat to the United States in an executive order issued in January and revised in March.

While parts of the travel order, including a temporary ban on the entry of nationals from several majority-Muslim countries, were halted by federal courts, the review of vetting procedures detailed in an accompanying memorandum remains in place.

“Collecting additional information from visa applicants whose circumstances suggest a need for further scrutiny will strengthen our process for vetting these applicants and confirming their identity,” a State Department official said.

The State Department’s proposal also says that applicants may be asked to provide additional travel dates if a consular officer determines they have been in an area which was “under the operational control of a terrorist organization.”

The proposed changes must undergo a public comment period before being approved or denied by the Office of Management and Budget (OMB) by May 18. OMB did not respond to a request for comment.

The Department of Homeland Security, which was also tasked with reviewing vetting procedures for visa applicants, said the State Department request does not preclude DHS from identifying new “ways to protect the American people.”

“Some improvement will be classified, others will be public, but the Department has only just begun ways to enhance the security of our immigration system,” DHS spokesman David Lapan said.

SOCIAL MEDIA SNAGS

Immigration lawyers and advocates say the request for 15 years of detailed biographical information, as well as the expectation that applicants remember all their social media handles, is likely to catch applicants who make innocent mistakes or do not remember all the information requested.

They also question whether the time-consuming screening can achieve its intended goal of identifying potential terrorists.

“The more effective tactics are the methods that we currently use to monitor terrorist organizations, not just stumbling into the terrorist who is dumb enough to post on his Facebook page ‘I am going to blow up something in the United States,'” said John Sandweg, a former senior official at DHS who is now with the firm Frontier Solutions, which provides investigatory, crisis management and other services.

Applicants may not necessarily be denied a visa if they fail to provide all the information if it is determined they can provide a “credible explanation,” the notice said.

Secretary of State Rex Tillerson first introduced similar measures in a March cable to American consular officers that outlined questions officers should ask in order to tighten vetting of visa applicants.

But Tillerson had to withdraw that guidance just days later because the OMB had not approved those specific questions.

The State Department estimated that the additional screening measures would take approximately an hour per applicant, meaning an additional 65,000 additional hours of work per year.

Tillerson’s cables anticipated delays as a result of the rules implementation.

“Somebody’s got to do the work,” said Greg Siskind, an immigration attorney in Memphis. “It’s going to cause operations at a lot of consulates slow to a crawl.”

(Link to proposal: https://www.federalregister.gov/documents/2017/05/04/2017-08975/notice)

(Reporting by Yeganeh Torbati in Washington and Mica Rosenberg in New York; Additional reporting by Arshad Mohammed; Writing by Julia Edwards Ainsley; Editing by Yara Bayoumy, Alistair Bell and Leslie Adler)

U.S. job growth rebounds sharply, unemployment rate hits 4.4 percent

A job seeker fills out an application at the King Soopers grocery store table at a job fair at the Denver Workforce Center in Denver, Colorado, U.S. February 15, 2017. REUTERS/Rick Wilking

By Lucia Mutikani

WASHINGTON – U.S. job growth rebounded sharply in April and the unemployment rate dropped to a near 17-year low of 4.4 percent, signs of a tightening labor market that could seal the case for an interest rate increase next month despite moderate wage growth.

Nonfarm payrolls jumped by 211,000 jobs last month, the Labor Department said on Friday, well above the monthly average of 185,000 for this year and a jump from the gain of 79,000 in March.

Job gains were driven by a surge in hiring in the leisure and hospitality sector as well as business and professional services.

The drop of one-tenth of a percentage point in the unemployment rate took it to its lowest level since May 2007.

The decline reflected both an increase in hiring and people leaving the labor force.

The labor force participation rate, or the share of

working-age Americans who are employed or at least looking for a job, fell to 62.9 percent from an 11-month high of 63 percent.

The rebound in hiring supports the Federal Reserve’s contention that the pedestrian 0.7 percent annualized economic growth pace in the first quarter was likely “transitory,” and its optimism that economic activity would expand at a “moderate”

pace.

The Fed on Wednesday kept its benchmark overnight interest rate unchanged and said it expected labor market conditions would “strengthen somewhat further.”

The U.S. central bank raised its overnight interest rate by a quarter of a percentage point in March and has forecast two more increases this year.

Average hourly earnings rose seven cents, or 0.3 percent, last month, partly because of a calendar quirk. While that lowered the year-on-year increase to 2.5 percent, the lowest since August 2016, there are signs that wage growth is accelerating as labor market slack diminishes.

A government report last week showed private sector wages recorded their biggest gain in 10 years in the first quarter.

NEAR FULL EMPLOYMENT

The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population. Job growth averaged 178,000 per month in the first quarter.

With the labor market expected to hit a level consistent with full employment this year, payroll gains could slow amid growing anecdotal evidence that firms are struggling to find qualified workers.

Construction payrolls rose 5,000 last month and manufacturing employment advanced by 6,000 jobs. Leisure and hospitality payrolls jumped by 55,000 in April. Professional and business services payrolls rose by 39,000.

Retail payrolls gained 6,300 after two straight months of declines. Retailers including J.C. Penney Co Inc <JCP.N>, Macy’s Inc <M.N> and Abercrombie & Fitch <ANF.N> have announced thousands of layoffs as they shift toward online sales and scale back on brick-and-mortar operations.

Government payrolls jumped 17,000 last month.

Other labor market measures also showed strength last month.

A broad measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, dropped to 8.6 percent from 8.9 percent in March.

The employment-to-population ratio rose one-tenth of percentage point to a fresh eight-year high of 60.2 percent.

((Reporting by Lucia Mutikani; Editing by Paul Simao))

Trump signs order to ease ban on political activity by churches

U.S. President Donald Trump signs an Executive Order on Promoting Free Speech and Religious Liberty during the National Day of Prayer event at the Rose Garden of the White House in Washington D.C., U.S., May 4, 2017. REUTERS/Carlos Barria

WASHINGTON (Reuters) – U.S. President Donald Trump on Thursday signed an executive order on religious liberties designed to ease a ban on political activity by churches and other tax-exempt institutions.

The order also mandates regulatory relief to religious employers that object to contraception, such as Little Sisters of the Poor.

It does not include provisions to allow government agencies and businesses to deny services to gay people in the name of religious freedom, as was feared by some civil liberties and gay rights groups.

The American Civil Liberties Union said in a statement it would file a lawsuit challenging Trump’s order.

Trump, addressing religious leaders in a signing ceremony at the White House, said: “We will not allow people of faith to be targeted, bullied or silenced any more”.

“No one should be censoring sermons or targeting pastors,” he said.

Trump’s order directs the Internal Revenue Service to “alleviate the burden of the Johnson Amendment,” the White House said in reference to a 1954 law sponsored by Lyndon Johnson, then a Texas senator who later became president.

Under the tax code, organizations that enjoy tax-free status, such as churches, are prohibited from participating in a political campaign or supporting any one candidate for elective office.

This includes a ban on making financial contributions to campaigns and candidates, but the law does allow certain non-partisan political activity such as voter registration or get-out-the-vote drives.

Trump would need Congress to rescind the Johnson Amendment, but he can instruct his administration not to enforce it through executive order.

(Reporting by Ayesha Rascoe and Daniel Trotta; Editing by Susan Heavey and James Dalgleish)

Mexico, Canada seek U.S. soft spots to bolster NAFTA defense

FILE PHOTO: Canada's Prime Minister Justin Trudeau (R) and Mexico's President Enrique Pena Nieto arrive at a news conference on Parliament Hill in Ottawa, Ontario, Canada on June 28, 2016. REUTERS/Chris Wattie/File Photo

By Dave Graham and David Ljunggren

MEXICO CITY/OTTAWA (Reuters) – From launching a data-mining drive aiming to find supply-chain pressure points to sending officials to mobilize allies in key U.S. states, Mexico and Canada are bolstering their defenses of a regional trade pact President Donald Trump vows to rewrite.

Trump has blamed the North American Free Trade Agreement (NAFTA) for the loss of millions of manufacturing jobs and has threatened to tear it up if he fails to get a better deal.

Fearing the massive disruptions a U.S. pullout could cause, the United States’ neighbors and two biggest export markets have focused on sectors most exposed to a breakdown in free trade and with the political clout to influence Washington.

That encompasses many of the states that swept Trump to power in November and senior politicians such as Vice President Mike Pence, a former Indiana governor or Wisconsin representative and House Speaker Paul Ryan.

Prominent CEOs on Trump’s business councils are also key targets, according to people familiar with the lobbying push.

Mexico, for example, has picked out the governors of Texas, Arizona and Indiana as potential allies.

Decision makers in Michigan, North Carolina, Minnesota, Illinois, Tennessee, Wisconsin, Ohio, Florida, Pennsylvania, Nebraska, California and New Mexico are also on Mexico’s priority list, according to people involved in talks.

Mexican and U.S. officials and executives have had “hundreds” of meetings since Trump took office, said Moises Kalach, foreign trade chief of the Mexican private sector team leading the defense of NAFTA. (Graphic:http://tmsnrt.rs/2oYClp2)

Canada has drawn up a list of 11 U.S. states, largely overlapping with Mexico’s targets, that stand to lose the most if the trade pact enacted in 1994 unravels.

To identify potential allies among U.S. companies and industries, Mexican business lobby Consejo Coordinador Empresarial (CCE) recruited IQOM, a consultancy led by former NAFTA negotiators Herminio Blanco and Jaime Zabludovsky.

In one case, the analysis found that in Indiana, one type of engine made up about a fifth of the state’s $5 billion exports to Mexico. Kalach’s team identified one local supplier of the product and put it touch with its main Mexican client.

“We said: talk to the governor, talk to the members of congress, talk to your ex-governor, Vice President Pence, and explain that if this goes wrong, the company is done,” Kalach said. He declined to reveal the name of the company and Reuters could not immediately verify its identity.

Trump rattled the two nations last week when his administration said he was considering an executive order to withdraw from the trade pact, which has been in force since 1994. He later said he would try to renegotiate the deal first and Kalach said the lobbying effort deserved much credit for Trump’s u-turn.

“There was huge mobilization,” he said. “I can tell you the phone did not stop ringing in (Commerce Secretary Wilbur) Ross’s office. It did not stop ringing in (National Economic Council Director) Gary Cohn’s office, in the office of (White House Chief of Staff Reince) Priebus. The visits to the White House from pro-NAFTA allies did not stop all afternoon.”

Among those calling the White House and other senior administration officials were U.S. Chamber of Commerce chief Tom Donohue, officials from the Business Roundtable and CEOs from both lobbies, according to people familiar with the discussions.

PRIME TARGET

Mexico has been the prime target of NAFTA critics, who blame it for lost manufacturing jobs and widening U.S. trade deficits. Canada had managed to keep a lower profile, concentrating on seeking U.S. allies in case of an open conflict.

That changed in late April when the Trump administration attacked Ottawa over support for dairy farmers and slapped preliminary duties on softwood lumber imports.

Despite an apparently weaker position – Canada and Mexico jointly absorb about a third of U.S. exports, but rely on U.S. demand for three quarters of their own – the two have managed to even up the odds in the past by exploiting certain weak spots.

When Washington clashed with Ottawa in 2013 over meat-labeling rules, Canada retaliated by targeting exports from the states of key U.S. legislators. A similar policy is again under consideration.

Mexico is taking a leaf out of a 2011 trucking dispute to identify U.S. interests that are most exposed, such as $2.3 billion of yellow corn exports.

Mexico is also targeting members of Trump advisory bodies, the Strategic and Policy Forum and the Manufacturing Council, led by Blackstone Group LP’s Stephen Schwarzman and Dow Chemical Co boss Andrew Liveris respectively.

Senior Trump administration officials and Republican lawmakers in charge of trade, agriculture and finance committees also feature among top lobbying targets.

Canada has spread the task of lobbying the United States among ministries, official say, and is particularly keen to avoid disruption to the highly-integrated auto industry.

A core component of Mexico’s strategy is to argue the three nations have a common interest in fending off Asian competition and exploring scope to source more content regionally.

The defenders of NAFTA also say that it supports millions of jobs in the United States, and point out that U.S. trade shortfalls with Canada and Mexico have declined over the past decade even as the deficit with China continued to climb.

Part of IQOM’s mission is to identify sectors where NAFTA rules of origin could be modified to increase regional content.

For example, U.S., Canadian and Mexican officials are debating how the NAFTA region can reduce auto parts imports from China, Japan, South Korea or Germany, Mexican officials say.

“The key thing is to see how we can get a win-win on the products most used in our countries, and to develop common manufacturing platforms that allow us just to buy between ourselves the biggest amount of inputs we need,” said Luis Aguirre, vice-president of Mexican industry group Concamin.

Graphic: Trade battles – http://tmsnrt.rs/2pAdPcp

(Additional reporting by Michael O’Boyle Alexandra Alper, Ana Isabel Martinez, Ginger Gibson and Adriana Barrera; Editing by Tomasz Janowski)

U.S. needs to balance foreign alliances: Tillerson

U.S. Secretary of State Rex Tillerson delivers remarks to the employees at the State Department in Washington, U.S., May 3, 2017. REUTERS/Yuri Gripas

By Yeganeh Torbati

WASHINGTON (Reuters) – U.S. Secretary of State Rex Tillerson on Wednesday outlined for his staff how an “America First” agenda translates into foreign policy, but did not address the Trump administration’s proposed budget cuts, which worry many diplomats.

It was the first time Tillerson had addressed all employees since his first day on the job on Feb. 2, when he spoke to hundreds of State Department officials in the building’s lobby, and the most thorough explanation yet of the Trump administration’s approach to foreign policy.

Some allies and even some U.S. officials have interpreted Republican President Donald Trump’s “America First” agenda, which puts Americans’ interests at home ahead of those of its partners overseas, as a threat to retreat from the world.

Tillerson said U.S. foreign policy priorities had gotten “a little bit out of balance” in the previous decades, with the United States too focused on promoting economic activity and trade with emerging economies.

“These are really important relationships to us, and they’re really important alliances, but we’ve got to bring them back into balance,” he said, speaking without notes and walking around the stage in a packed State Department auditorium.

He also signaled that the United States would de-emphasize human rights concerns in some of its interactions with other countries, saying that while U.S. values remain constant, its policies can adapt.

“If we condition too heavily that others must adopt this value that we’ve come to over a long history of our own, it really creates obstacles to our ability to advance our national security interests, our economic interests,” Tillerson said.

TILLERSON’S WORLD TOUR

Tillerson gave a tour of U.S. priorities around the world, including in East Asia, Russia, Africa, and the Western Hemisphere, omitting Europe.

With regard to North Korea’s nuclear program, Tillerson said the administration is willing to use so-called secondary sanctions to target foreign companies that continue to do business with Pyongyang in contravention of United Nations sanctions.

The pressure campaign on North Korea is “at about dial setting 5 or 6 right now,” Tillerson said.

On China, Tillerson said the United States has a “tremendous opportunity” to define its relationship with the superpower for the next several decades, and that he sensed great interest by the Chinese leadership to do that as well.

He and Defense Secretary Jim Mattis will chair a dialogue with their Chinese counterparts in June, in addition to a dialogue focused on economics and trade and led by Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross.

Tillerson said he had told Russian President Vladimir Putin during his visit to Moscow last month that U.S.-Russia relations were at their lowest point since the Cold War.

“He did not disagree,” Tillerson said. “He shrugged his shoulders and nodded in agreement.”

But in remarks lasting nearly 40 minutes, Tillerson did not address the administration’s proposed 28 percent budget cut for U.S. diplomacy and foreign aid, which would reduce funding for the United Nations, climate change and cultural exchange programs. That proposal has made many American diplomats and aid workers anxious.

The Trump administration also has not named candidates for the vast majority of State Department positions requiring Senate confirmation, and many are being filled by career diplomats in “acting” positions. Tillerson began his remarks by thanking those officials, to applause from the crowd.

One veteran official who watched the speech criticized Tillerson’s use of the “America First” slogan. The phrase was used in the 1930s by isolationists who sought to keep the United States out of World War Two.

“The fact that they still use ‘America First’ shows they know nothing about history, and what’s worse is they don’t care.

“It’s offensive,” said the official, who requested anonymity.

Tillerson’s remarks followed an invitation to State Department and U.S. Agency for International Development employees this week to participate in an online survey to help identify “efficiency improvements,” in line with a March directive from Trump to “reorganize governmental functions and eliminate unnecessary agencies.” In his speech, the secretary urged employees to fill out the survey and give input on how to reform the agency.

Tillerson said the State Department, like many institutions, was built for the Cold War era.

He said he recognized that deep change to the State Department “is really stressful for a lot of people” and said the administration has “no preconceived notions on the outcome” of a review.

One State Department official faulted Tillerson for not talking in detail about the budget cuts, as well as for not taking questions from employees.

Previous secretaries of state, including Colin Powell, Condoleezza Rice and Hillary Clinton, held question-and-answer sessions with State Department employees within weeks of taking office.

“They wanted to make this look like he was talking to us, but it was more about the appearance than any substance,” said the official, speaking on the condition of anonymity.

Two other State Department officials, however, spoke highly of Tillerson’s remarks, saying it was early to expect him to take questions from the rank and file and saying he provided guidance both on foreign policy and on the challenge of reorganizing the department.

“I can understand folks wanting more details. I just don’t think we are in a place where he can provide more details,” said one of these officials about the expected State Department budget cuts. “My big takeaway was put on your big-girl britches, and when you look back you will feel like you were part of making this reform happen.”

(Additonal reporting by Arshad Mohammad, Jonathan Landay and John Walcott; Editing by Jonathan Oatis)

U.S. coaxes Mexico into Trump plan to overhaul Central America

A member of the military police keeps watch during a routine foot patrol at El Pedregal neighbourhood Tegucigalpa, Honduras, May 3, 2017. REUTERS/Jorge Cabrera

By Gabriel Stargardter

MEXICO CITY (Reuters) – The United States is plotting an ambitious attempt to shore up Central America, with the administration of President Donald Trump pressing Mexico to do more to stem the flow of migrants fleeing violence and poverty in the region, U.S. and Mexican officials say.

The U.S. vision is being shaped by Department of Homeland Security (DHS) Secretary John Kelly, who is due to give a speech about his goals for Central America in Washington on Thursday.

Kelly, who knows Honduras, Guatemala and El Salvador well from his time as chief of the U.S. Southern Command, helped the administration of former President Barack Obama design his Alliance for Prosperity. That $750-million initiative sought to curtail Central American migration through development projects as well as law-and-order funding to crack down on the region’s dominant gangs.

Kelly aims to re-tool the Obama-era alliance without a large increase in American funding by pressing Mexico to shoulder more responsibility for governance and security in Central America, and by drumming up fresh private investment for the region, U.S. and Mexican diplomats say.

“What we’re going to see is … greater engagement directly between the Central Americans and Mexican government … (and) a more intense effort to integrate the economic side of this effort with the security side,” William Brownfield, the U.S. assistant secretary for International Narcotics and Law Enforcement Affairs, told Reuters.

“We’re going to see a strategy that has already been developed, but it is going to be pushed harder and more aggressively in the coming year, and the year after.”

The reshaped alliance stands in contrast to some of the isolationist views jostling for power in the White House. Still it’s consistent with Trump’s foreign policy efforts to pressure China to do more to tackle the North Korea nuclear threat and to get European allies to pick up more of the tab for NATO.

The plan also puts Mexico in a delicate spot. President Enrique Pena Nieto has repeatedly expressed his desire to preserve the North American Free Trade Agreement (NAFTA), which has become a pillar of Mexico’s economy.

But he must avoid the appearance of capitulating to Trump, who has enraged the Mexican public with his threats to withdraw from NAFTA and force Mexico to pay for his proposed border wall.

“We want to be on good terms with them, because we’re dealing with a much more important issue,” said a senior Mexican diplomat who was not authorized to speak publicly. “In return, we want a beneficial NAFTA renegotiation.”

Neither Kelly nor the DHS responded to requests for comment.

“The prosperity and security of Central America … represent a priority of Mexico’s foreign policy,” the country’s foreign ministry said in a statement.

“The Alliance for Prosperity … is a valuable tool that can be strengthened with the participation of other governments.”

A MAN WITH A PLAN

The new-look Alliance will be firmed up in Miami next month, when U.S., Mexican and Central American officials will meet to negotiate various issues, including Mexico’s role, according to a draft U.S. schedule obtained by Reuters.

Mexico’s Foreign Minister Luis Videgaray has said publicly Mexico is willing to work with the United States in stabilizing Central America, without giving much detail.

In private, though, local officials say cash-strapped Mexico lacks the money to invest significantly in the region – a fact that hasn’t eluded the United States.

“We do not have significant expectations of major … financial contributions by the government of Mexico at this time,” Brownfield said.

However, he said it was reasonable to expect Mexico to help train Central American officials, and deepen coordination along its southern border. Mexican government agencies could also work more closely with their southern counterparts, he added, citing the example of Colombia, which is training Central America’s police forces at the United States’ behest.

Brownfield said the re-designed plan would be executed by the State Department and development agency U.S. AID, working closely with the DHS. The Inter-American Development Bank (IADB) is working with U.S. AID to design mechanisms for luring fresh investment, he added.

IADB President Luis Alberto Moreno told Reuters the Miami meeting, coordinated with DHS officials, aimed to deliver “an investment shock” to create jobs and prevent migration.

However, the Mexican diplomat who requested anonymity expressed concern the new plan could presage a deeper militarization of Central America. The region’s armies have launched violent attacks on the powerful “Mara Salvatrucha” and “Calle 18” gangs, sparking accusations of rights abuses.

Mexico, which is also grappling with widespread violence, is open to training Central American security forces, the diplomat said, but won’t send troops to fight the gangs given its long-standing policy not to intervene in foreign conflicts.

The “Alliance for Prosperity” was cooked up by the Obama administration after a 2014 surge in child migrants from Central America. It aimed to stabilize Central America with funding for security and development. But critics say the focus skewed heavily toward funding for tackling drug smuggling and gangs.

Brownfield pointed to falling homicides in Honduras, where the murder rate has dropped to 59 killings per 100,000 people last year from 90.4 in 2012, as evidence it is starting to yield results. Still, Central America remains one of the most violent regions on earth.

Mexican diplomats say U.S. and Central American officials for years quietly pressed Mexico to join the alliance – pressure they ignored until Trump was elected, threatening to scrap NAFTA.

“Now we’re facing a different scenario because we have an American government pressuring us on lots of issues,” said the Mexican diplomat. “We want to be on good terms with the United States.”

(Additional reporting by Patricia Zengerle in Washington; Editing by Frank Jack Daniel and Marla Dickerson)

Trump faces major test as vote looms on U.S. healthcare bill

A cyclist passes the the U.S. Capitol, on the day the House is expected to vote here to repeal Obamacare in Washington, D.C., U.S., May 4, 2017. REUTERS/Kevin Lamarque

By Richard Cowan and Yasmeen Abutaleb

WASHINGTON (Reuters) – The U.S. House of Representatives was set on Thursday for a cliffhanger vote to repeal Obamacare, as Republican leaders worked to deliver President Donald Trump a win for one of his top legislative priorities.

House Republican leaders have expressed confidence the bill would pass and several party moderates who previously objected to the measure got behind it on Wednesday, giving it new momentum.

“We’re optimistic that we’ll pass it out of the House today,” Representative Mark Meadows of North Carolina, chairman of the conservative Freedom Caucus, told MSNBC’s “Morning Joe” program on Thursday.

The vote, which a House Republican aide said was due this afternoon, was expected to be close. Even if the measure passes the House, it faces daunting odds in the Senate where Republicans hold a narrower majority.

“Today is the next step in what is likely to be a very long process,” Republican Representative Michael Burgess of Texas also said on MSNBC.

Keen to score his first major legislative victory since taking office in January, Trump threw his own political capital behind the bill, meeting Burgess and other lawmakers and calling them in an effort to win their support.

Trump, whose Republican party controls both the House and Senate, is seeking to make good on his campaign promise to repeal and replace Obamacare.

Aides said he worked the phones furiously.

Wavering moderate Republicans had worried that the legislation to overhaul President Barack Obama’s 2010 signature healthcare law would leave too many people with pre-existing medical conditions unable to afford health coverage.

But the skeptical Republican lawmakers got behind the bill after meeting with Trump to float a compromise proposal expected to face unanimous Democratic opposition.

The legislation’s prospects brightened after members of the Freedom Caucus, a faction of conservative House lawmakers who played a key role in derailing the original version last month, said they could go along with the compromise.

Millions more Americans got healthcare coverage under Obamacare, but Republicans have long attacked it, seeing it as government overreach and complaining that it drives up costs.

Called the American Health Care Act, the Republican bill would repeal most Obamacare taxes, including a penalty for not buying health insurance. It would slash funding for Medicaid, the program that provides insurance for the poor, and roll back much of Medicaid’s expansion.

The latest effort comes after earlier pushes by Trump collapsed twice, underscoring the difficulty in uniting the various factions of the Republican party.

Earlier this week, prospects for the legislation appeared grim as several influential moderate Republicans said they could not support the bill, citing concerns about people with pre-existing conditions.

House Energy and Commerce Committee Chairman Representative Greg Walden of Oregon on Thursday defended the leaders’ plan to vote on the bill without a new Congressional Budget Office analysis of the costs or impact on coverage, factoring in the recent changes.

“Obviously, it’s a work in progress,” Walden, who also met with Trump on Wednesday, said in a separate MSNBC interview.

House Democrats have rejected the latest change to the Republican legislation, saying it did not go far enough toward protecting people with pre-existing conditions.

“Republicans have made Trumpcare even more dangerous and destructive than the last time they brought it to the floor,” Democratic Leader Nancy Pelosi said to her caucus in a letter late Wednesday night.

Democrats have long thought their best chance of stopping the repeal would be in the Senate, where only a few Republicans would need to defect to stop the law from moving forward.

Republican Meadows told MSNBC he expected the Senate to make changes to the bill that would improve it. The bill would then face a final vote in the House.

With the difficulties in the House, Democrats are optimistic Republicans will face a backlash from voters and could lose seats in the 2018 mid-term elections.

(Additional reporting by David Morgan, Steve Holland, Roberta Rampton, Eric Beech and Susan Heavey; Writing by Ginger Gibson; Editing by Caren Bohan and Jeffrey Benkoe)