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Exclusive: Trump says Republican border tax could boost U.S. jobs

The U.S. border with Mexico is seen in Nogales, Arizona, U.S., January 31, 2017. REUTERS/Lucy Nicholson

By Steve Holland

WASHINGTON (Reuters) – U.S. President Donald Trump on Thursday spoke positively about a border adjustment tax being pushed by Republicans in Congress as a way to boost exports, but he did not specifically endorse the proposal.

Trump, who has lashed out at U.S. companies for moving operations and jobs to countries such as Mexico, had previously sent mixed signals on the proposal at the heart of a sweeping Republican plan to overhaul the tax code.

“It could lead to a lot more jobs in the United States,” Trump told Reuters in an interview, using his most approving language to date on the proposal.

Trump sent conflicting signals about his position on the border adjustment tax in separate media interviews in January, saying in one interview that it was “too complicated” and in another that it was still on the table.

The proposal has divided American businesses. Critics say the planned 20 percent tax on imports could be passed along in higher prices to consumers, including manufacturers that rely on imported goods to make their products.

Some critics have warned of a potential global trade war which would sharply curtail U.S. and world economic growth.

Advocates say U.S. exporters will gain as their revenues will be excluded from federal taxes. They say the tax on imports will encourage domestic production and cause the already strong dollar to rise, offsetting upward pressure on import prices.

COMPANIES ‘TO COME BACK’

Trump has also called for a 35-percent border tax on U.S. companies that move jobs abroad and import products back into the U.S. market. It has been unclear in the past if those references referred to the border adjustment proposal.

“I certainly support a form of tax on the border,” he told Reuters on Thursday. “What is going to happen is companies are going to come back here, they’re going to build their factories and they’re going to create a lot of jobs and there’s no tax.”

White House spokesman Sean Spicer also came to the defense of border adjustment on Thursday, disputing the claim that it could lead to higher consumer prices. “That benefits our economy, it helps American workers, it grows the manufacturing base,” Spicer told reporters at a White House briefing.

The Mexican peso <MXN=> weakened slightly against the U.S. dollar immediately after Trump’s comments and was last trading at 19.68 per dollar. Earlier on Thursday, the Mexican currency hit its strongest level since Trump’s Nov. 8 election victory.

Stocks of retailers, which could be hurt by border adjustment, weakened on Wall Street after Trump’s remarks. The S&P 500 retailing index <.SPXRT> ended down 1 percent. Shares of Wal-Mart Stores <WMT.N> slipped and closed down 0.6 percent. Trump said his administration will tackle tax reform legislation after dealing with Obamacare, the health insurance system that his fellow Republicans have bashed since it was put in place in 2010 by his predecessor, President Barack Obama.

Earlier on Thursday, Treasury Secretary Steven Mnuchin told CNBC the Trump administration aimed to formulate a tax plan with support from the Republican-controlled House of Representatives and Senate and pass it before August.

BUSINESS DIVIDED

Lawmakers and corporate lobbyists say the border adjustment tax could die in Congress, potentially jeopardizing the prospects for tax reform, mainly because of opposition from a handful of Senate Republicans.

But experts say Trump’s endorsement could change the political climate. “If Trump supports it, that makes it considerably more likely,” Harvard Business School professor Mihir Desai told Reuters.

Trump’s comments were followed by dueling statements from lobbying groups.

A statement from the pro-border adjustment American Made Coalition said the White House was “sending its strongest signals yet that it’s leaning toward supporting the House blueprint with border adjustability.”

The Americans for Affordable Products coalition that opposes the border adjustment tax issued a statement saying Trump’s remarks were “consistent with what he’s already said” and that it was “impossible” to know if they were specific to any individual legislative policy.

Trump spoke to Reuters after meeting with more than 20 chief executives of major U.S. companies to discuss ways to return manufacturing jobs to the United States, one of the linchpins of his 2016 presidential campaign.

Many CEOs of large multinationals back the border adjustment tax. The chiefs of 16 companies, including Boeing Co <BA.N>, Caterpillar Inc <CAT.N> and General Electric Co <GE.N>, sent a letter to Congress on Tuesday urging support for it.

A border adjustment has emerged as the most controversial segment of the House Republican tax reform blueprint. Under the House plan, it would raise more than $1 trillion in revenues to help pay for a corporate tax cut.

(Reporting by Steve Holland; Additional reporting by David Morgan, David Shepardson and Ginger Gibson in Washington and by Lewis Krauskopf in New York; Editing by Kevin Drawbaugh, Paul Simao and Howard Goller)

Trump wants to make sure U.S. nuclear arsenal at ‘top of the pack’

U.S. President Donald Trump pauses during an an interview with Reuters in the Oval Office at the White House in Washington, U.S., February 23, 2017. REUTERS/Jonathan Ernst

By Steve Holland

WASHINGTON (Reuters) – President Donald Trump said on Thursday he wants to ensure the U.S. nuclear arsenal is at the “top of the pack,” saying the United States has fallen behind in its weapons capacity.

In a Reuters interview, Trump also said China could solve the national security challenge posed by North Korea “very easily if they want to,” ratcheting up pressure on Beijing to exert more influence to rein in Pyongyang’s increasingly bellicose actions.

Trump also expressed support for the European Union as a governing body, saying “I’m totally in favor of it,” and for the first time as president expressed a preference for a two-state solution to the Israeli-Palestinian conflict, but said he would be satisfied with whatever makes the two sides happy.

Trump also predicted his efforts to pressure NATO allies to pay more for their own defense and ease the burden on the U.S. budget would reap dividends. “They owe a lot of money,” he said.

In his first comments about the U.S. nuclear arsenal since taking office on Jan. 20, Trump was asked about a December tweet in which he said the United States must greatly strengthen and expand its nuclear capacity “until such time as the world comes to its senses regarding nukes.”

Trump said in the interview he would like to see a world with no nuclear weapons but expressed concern that the United States has “fallen behind on nuclear weapon capacity.”

“I am the first one that would like to see … nobody have nukes, but we’re never going to fall behind any country even if it’s a friendly country, we’re never going to fall behind on nuclear power.

“It would be wonderful, a dream would be that no country would have nukes, but if countries are going to have nukes, we’re going to be at the top of the pack,” Trump said.

Russia has 7,000 warheads and the United States, 6,800, according to the Ploughshares Fund, an anti-nuclear group.

“Russia and the United States have far more weapons than is necessary to deter nuclear attack by the other or by another nuclear-armed country,” said Daryl Kimball, executive director of the independent Arms Control Association non-profit group.

The new strategic arms limitation treaty, known as New START, between the United States and Russia requires that by February 5, 2018, both countries must limit their arsenals of strategic nuclear weapons to equal levels for 10 years.

The treaty permits both countries to have no more than 800 deployed and non-deployed land-based intercontinental and submarine-launched ballistic missile launchers and heavy bombers equipped to carry nuclear weapons, and contains equal limits on other nuclear weapons.

Analysts have questioned whether Trump wants to abrogate New START or would begin deploying other warheads.

In the interview, Trump called New START “a one-sided deal.”

“Just another bad deal that the country made, whether it’s START, whether it’s the Iran deal … We’re going to start making good deals,” he said.

“WE’RE VERY ANGRY”

The United States is in the midst of a $1 trillion, 30-year modernization of its aging ballistic missile submarines, bombers and land-based missiles.

Trump also complained that the Russian deployment of a ground-based cruise missile is in violation of a 1987 treaty that bans land-based American and Russian intermediate-range missiles.

“To me it’s a big deal,” said Trump, who has held out the possibility of warmer U.S. relations with Russia.

Asked if he would raise the issue with Putin, Trump said he would do so “if and when we meet.” He said he had no meetings scheduled as of yet with Putin.

Speaking from behind his desk in the Oval Office, Trump expressed concern about North Korea’s ballistic missile tests and said accelerating a missile defense system for U.S. allies Japan and South Korea was among many options available.

“There’s talks of a lot more than that,” Trump said, when asked about the missile defense system. “We’ll see what happens. But it’s a very dangerous situation, and China can end it very quickly in my opinion.”

China has made clear that it opposes North Korea’s nuclear and missile programs and has repeatedly called for denuclearization of the Korean peninsula and a return to negotiations between Pyongyang and world powers.

But efforts to change Pyongyang’s behavior through sanctions have historically failed, largely because of China’s fear that severe measures could trigger a collapse of the North Korean state and send refugees streaming across their border.

Trump’s meeting with Japanese Prime Minister Shinzo Abe earlier this month in Florida was interrupted by a ballistic missile launch by North Korea.

Trump did not completely rule out possibly meeting North Korean leader Kim Jong Un at some point in the future under certain circumstances but suggested it might be too late.

“It’s very late. We’re very angry at what he’s done, and frankly this should have been taken care of during the Obama administration,” he said.

According to Japanese news reports, the Japanese government plans to start debate over the deployment of a U.S. missile defense system known as the Terminal High Altitude Area Defense, or THAAD, and the land-based Aegis Ashore missile defense system to improve its capability to counter North Korean ballistic missiles.

The strength of Trump’s remarks in favor of the EU took some Brussels officials by surprise after his support for Britain’s vote last summer to exit from the EU.

“I’m totally in favor of it,” Trump said of the EU. “I think it’s wonderful. If they’re happy, I’m in favor of it.”

Statements by him and others in his administration have suggested to Europeans that he sees little value in the Union as such, which Trump last month called a “vehicle for Germany.”

(Additional reporting by Jeff Mason, Roberta Rampton, Emily Stephenson, John Walcott, Matt Spetalnick, Arshad Mohammed and David Brunnstrom in Washington and Alastair Macdonald in Brussels; editing by Ross Colvin)

One month in, anti-Trump movement shows signs of sustained momentum

A man reacts outside of The Stonewall Inn during a protest against the Trump administration's move to rescind guidance allowing transgender students to use the bathrooms of their choice, in Manhattan, New York, U.S., February 23, 2017. REUTERS/Bria Webb

By Joseph Ax and Emily Stephenson

BRANCHBURG, N.J./VIRGINIA BEACH, Va. (Reuters) – U.S. Representative Leonard Lance, who has held more than 40 town hall-style meetings with constituents in his central New Jersey district, has never faced a crowd like he did on Wednesday.

The Republican endured catcalls, chants and caustic questions from more than 1,000 residents at a local college, while hundreds of others outside brandished signs with messages like “Resist Trump.”

Parallel scenes have played out across the country this week during the first congressional recess since Donald Trump became president. Republican lawmakers returning home confronted a wave of anger over a spectrum of issues, including immigration, healthcare and Trump’s possible ties to Russia.

The raucous meetings are the latest in a relentless series of rallies, marches and protests that shows no signs of abating more than 30 days into the new administration.

The anti-Trump energy has prompted talk of a liberal-style Tea Party movement, in reference to the protests in 2009 that helped reshape the Republican Party and arguably laid the groundwork for Trump’s surprise electoral victory last year.

“Some of the lessons to draw from that are persistence, repetition, not taking ‘no’ for an answer,” said Victoria Kaplan, the organizing director for the grassroots progressive group MoveOn.

Since the day after Trump’s inauguration, when millions of protesters joined women’s marches worldwide, left-wing organizers have sought to harness that anger to fuel a lasting political campaign.

Hundreds of progressive groups have sprung up across the country – some affiliated with national organizations like Indivisible or MoveOn – to help coordinate.

At town halls in New Jersey and Virginia this week, constituents came armed with red “disagree” signs they held aloft to register their disapproval of what they heard from their representatives.

Some U.S. senators, such as Pat Toomey, Republican of Pennsylvania, have faced weekly protests outside their offices, and a Pennsylvania healthcare network set up a “town hall” this week with an empty suit in place of Toomey, who declined to attend.

More marches are scheduled across the country in the coming months, including several major events in Washington, tied to gay rights, science and a push for Trump to release his tax returns.

The sheer volume of protests – last week, there were three nationwide calls for action within a five-day span – has some political observers wondering how long it can last.

But several experts who study protests said the level of outrage may be increasing, rather than subsiding, after a tumultuous first month in which Trump’s words and actions created fresh outrage among liberals almost daily.

“We’re not anywhere near reaching a saturation point for protest,” said Michael Heaney, the author of “Party in the Street: The Antiwar Movement and the Democratic Party after 9/11” and a University of Michigan professor. “If anything, it’s just getting started.”

The key for organizers is to convert large-scale protests into sustained action by building databases of names and encouraging locally based events, experts said.

“You can’t just have the diehards,” said Dana R. Fisher, a University of Maryland professor who studies collective action. “And then you need to channel them into new types of activism.”

When Fisher surveyed participants at the women’s march in Washington, she found one-third were attending their first protest – the highest percentage she has ever observed.

“This is unprecedented,” she said. “But there’s nothing that’s not unprecedented about the Trump presidency.”

Some Republicans have dismissed the protests as manufactured. Trump on Tuesday tweeted that “so-called angry crowds” in Republicans’ districts were “planned out by liberal activists.”

But Kaplan of MoveOn said the vast majority of actions were “organic.” A weekly conference call the group hosts to discuss the movement has attracted a bigger number of participants each week, with 46,000 people joining the latest discussion.

“We are firing on all cylinders to catch up” with grassroots protests, she said. “That is a demonstration of energy and sustainability.”

Experts also said social media has made it far easier to organize mass protests quickly and efficiently.

In what Kaplan said was a sign the protests are having an impact, many Republicans have eschewed town halls this week to avoid confrontations. There were fewer than 100 in-person Republican town halls scheduled for the first two months of the year, compared with more than 200 in the same period in 2015, according to a Vice report.

In Louisiana on Wednesday, residents shouted down Republican Senator Bill Cassidy as he tried to explain his healthcare proposal. Scott Taylor, a freshman Republican representative in Virginia, sparred with hundreds of impassioned constituents on Monday at his own event.

Like Lance, whose district voted for Hillary Clinton over Trump, Taylor is already a midterm target for Democrats. Taylor said in an interview after the town hall that he recognized many of the attendees from the local Democratic Party.

“It’s not like they’re just some new organic people who just came about and are concerned,” Taylor said.

But not everyone was a Democrat. Austin Phillips, a 22-year-old Trump voter, told Taylor at the town hall he was worried about losing healthcare coverage if Obamacare is repealed.

“Trump has talked about wanting to repeal it,” Phillips, who is self-employed and purchased insurance through an exchange created by the law, said in a later interview. “If they quickly repeal it with no replacement lined up, then theoretically everybody would lose their insurance.”

(Additional reporting by Steve Bittenbender in Louisville, Kentucky; editing by Frank McGurty and Jonathan Oatis)

China say North Korea’s nuclear plan is a problem between U.S. and North Korea

North Korean leader Kim Jong Un watches a performance given with splendor at the People's Theatre on Wednesday to mark the 70th anniversary of the founding of the State Merited Chorus in this photo released by North Korea's Korean Central News Agency (KCNA) in Pyongyang on February 23, 2017. KCNA/via REUTERS

BEIJING (Reuters) – China on Friday dismissed renewed pressure from U.S. President Donald Trump over its role in North Korea, saying the crux of the matter was a dispute between Washington and Pyongyang.

Trump told Reuters in an interview on Thursday that China could solve the national security challenge posed by North Korea “very easily if they want to”, turning up pressure on Beijing to exert more influence to rein in Pyongyang’s increasingly bellicose actions.

It has also insisted it is dedicated to enforcing U.N. sanctions against North Korea.

“We have said many times already that the crux of the North Korean nuclear issue is the problem between the United States and North Korea,” Chinese Foreign Ministry spokesman Geng Shuang told a daily news briefing, responding to Trump’s remarks.

“We hope the relevant parties can shoulder their responsibilities, play the role the should, and together with China play a constructive role for peace and stability on the Korean peninsula and for its denuclearization,” he added.

The official Xinhua news agency said China’s influence on North Korea had been exaggerated.

“The Trump White House needs to make the first move and talk to Pyongyang. The United States stands to lose nothing for trying this,” it said in an English-language commentary.

China announced on Saturday last week it was banning imports of coal from North Korea, after it tested an intermediate-range ballistic missile.

North Korean state media issued a rare reproach of China on Thursday saying its main diplomatic backer was “dancing to the tune” of the United States for halting its coal imports because of its nuclear and missile programs.

The North’s state-run KCNA news agency did not refer directly to China by name but in an unmistakable censure it accused a “neighboring country” of going along with North Korea’s enemies to “bring down its social system”.

Asked about the report, Geng said the U.N. sanctions were a clear signal of opposition from the international community about North Korea’s nuclear and missile programs and that China would enforce them.

However, he also described China and North Korea as being friendly neighbors.

“We are willing to work with North Korea to promote the stable and healthy development of relations,” Geng said, adding North Korea was well aware of China’s position on its nuclear program.

(Reporting by Ben Blanchard; Editing by Robert Birsel)

Trudeau defends move to give U.S. agents more powers in Canada

OTTAWA (Reuters) – Canadian Prime Minister Justin Trudeau on Wednesday defended plans to give more powers to U.S. border agents stationed in Canada, saying travelers would at all times be protected by domestic laws.

As part of a 2015 deal between Canada and the United States, Trudeau’s government has introduced draft legislation allowing U.S. border agents based in Canada more leeway to question and search people wishing to enter the United States.

Critics say this increases the chance of abuse at a time when the administration of U.S. President Donald Trump is cracking down on immigrants, prompting dozens of people to cross the border into Canada every week.

“Canadian laws are in place, so there is extra protection when Canadians go through American customs in Canada,” Trudeau told reporters.

U.S. border agents have been working in Canada since the 1950s, pre-clearing would-be visitors and addressing potential security threats. The agents are currently based at eight Canadian airports and under the 2015 deal, the program will be expanded to two more airports as well as Montreal train station.

Travelers who change their minds and decide not to enter the United States are currently allowed to leave. The new law permits U.S. agents to question and if need be strip search people seeking not to enter the United States.

Officials say the new tougher provisions are needed to deter militants probing for weaknesses at U.S.-operated border facilities.

Trudeau is under pressure in Parliament from the left-leaning opposition New Democrats, who say U.S. border guards are already racially profiling Canadians who wish to enter the United States.

“What will the government do to secure clear assurances for Canadians who wish to cross the border? When will the Prime Minister stand up for Canadians … will he stand up to the bully?” asked Jenny Kwan, the party’s spokeswoman for immigration, referring to Trump.

(Reporting by David Ljunggren; Editing by Alistair Bell)

China military says aware of U.S. carrier in South China Sea

Sailors man the rails as the USS Carl Vinson aircraft carrier departs on deployment from Naval Station North Island in Coronado, California, U.S. January 5, 2017. REUTERS/Mike Blake

BEIJING (Reuters) – China’s defense ministry said on Thursday it was aware of the presence of a U.S. aircraft carrier strike group in the South China Sea and China respected freedom of navigation for all countries in the waters there.

The U.S. navy said the strike group, including the Nimitz-class aircraft carrier the USS Carl Vinson, began “routine operations” in the South China Sea on Saturday amid growing tension with China over control of the disputed waterway.

Defence ministry spokesman Ren Guoqiang said China had a “grasp” of the situation regarding the carrier group in the South China Sea.

“China hopes the U.S. earnestly respects the sovereignty and security concerns of countries in the region, and earnestly respects the efforts of countries in the region to maintain peace and stability in the South China Sea,” Ren told a regular monthly news briefing.

“Of course, we also respect freedom of navigation and overflight for all countries in the South China Sea in accordance with international law,” he added.

The situation in the South China Sea was generally stable, Ren said.

“We hope the actions of the U.S. side can contribute positive energy towards this good situation, and not the opposite.”

Good military relations between the two countries are in interests of both, and well as of the region and the world, and China hoped the United States could meet China half way, strengthen communication and avoid misjudgment, Ren said.

Friction between the United States and China over trade and territory under U.S. President Donald Trump have increased concern that the South China Sea could become a flashpoint.

China wrapped up its own naval exercises in the South China Sea late last week. War games involving its only aircraft carrier have unnerved neighbors with which it has long had rival claims in the waters.

China lays claim to almost all of the resource-rich South China Sea, through which about $5 trillion worth of trade passes each year.

Brunei, Malaysia, the Philippines, Taiwan and Vietnam also claim parts of the waters that have rich fishing grounds, along with oil and gas deposits.

The United States has criticized China’s construction of man-made islands and build-up of military facilities in the sea, and expressed concern they could be used to restrict free of movement.

(Reporting by Ben Blanchard; Editing by Robert Birsel)

Jobless claims up, four-week average lowest since 1973

FILE PHOTO: Job seekers apply for the 300 available positions at a new Target retail store in San Francisco, California August 9, 2012. REUTERS/Robert Galbraith/File Photo

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits rose slightly more than expected last week, but the four-week average of claims fell to its lowest level since 1973, pointing to strengthening labor market conditions.

Initial claims for state unemployment benefits increased 6,000 to a seasonally adjusted 244,000 for the week ended Feb. 18, the Labor Department said on Thursday. Data for the prior week was revised to show 1,000 fewer applications received than previously reported.

It was the 103th straight week that claims remained below 300,000, a threshold associated with a healthy labor market. That is the longest stretch since 1970, when the labor market was much smaller. The labor market is at or close to full employment, with the unemployment rate at 4.8 percent.

Economists polled by Reuters had forecast new claims for unemployment benefits rising to 241,000 in the latest week.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 4,000 to 241,000 last week, the lowest reading since July 1973.

U.S. financial markets were little moved by the data.

Minutes of the Federal Reserve’s Jan. 31-Feb monetary policy meeting published on Wednesday showed that many policymakers believed another interest rate hike might be appropriate “fairly soon” if labor market and inflation data meet or beat expectations.

The U.S. central bank raised its benchmark overnight interest rate last December. It has forecast three rate increases this year.

A Labor Department analyst said there were no special factors influencing last week’s claims data. Claims for Wyoming, Virginia and Hawaii were estimated.

Last week’s claims report covered the survey period for the Labor Department’s nonfarm payrolls data for February. The four-week average of claims fell 6,500 between the January and February payrolls survey weeks. This suggests another month of strong job gains after payrolls increased 227,000 in January.

Thursday’s claims report also showed the number of people still receiving benefits after an initial week of aid fell 17,000 to 2.06 million in the week ended Feb. 11. The four-week average of the so-called continuing claims declined 10,750 to 2.07 million.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)

Exclusive: China finishing South China Sea buildings that could house missiles – U.S. officials

File Photo: Chinese dredging vessels are purportedly seen in the waters around Mischief Reef in the disputed Spratly Islands in the South China Sea in this still image from video taken by a P-8A Poseidon surveillance aircraft provided by the United States Navy May 21, 2015. U.S. Navy/Handout via Reuters/File Photo

By Idrees Ali

WASHINGTON (Reuters) – China, in an early test of U.S. President Donald Trump, has nearly finished building almost two dozen structures on artificial islands in the South China Sea that appear designed to house long-range surface-to-air missiles, two U.S. officials told Reuters.

The development is likely to raise questions about whether and how the United States will respond, given its vows to take a tough line on China in the South China Sea.

China claims almost all the waters, which carry a third of the world’s maritime traffic. Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claims. Trump’s administration has called China’s island building in the South China Sea illegal.

Building the concrete structures with retractable roofs on Subi, Mischief and Fiery Cross reefs, part of the Spratly Islands chain where China already has built military-length airstrips, could be considered a military escalation, the U.S. officials said in recent days, speaking on condition of anonymity.

“It is not like the Chinese to build anything in the South China Sea just to build it, and these structures resemble others that house SAM batteries, so the logical conclusion is that’s what they are for,” said a U.S. intelligence official, referring to surface-to-air missiles.

Another official said the structures appeared to be 20 meters (66 feet) long and 10 meters (33 feet) high.

A Pentagon spokesman said the United States remained committed to “non-militarization in the South China Sea” and urged all claimants to take actions consistent with international law.

In Beijing, Chinese Foreign Ministry spokesman Geng Shuang said on Wednesday he was aware of the report, though did not say if China was planning on placing missiles on the reefs.

“China carrying out normal construction activities on its own territory, including deploying necessary and appropriate territorial defense facilities, is a normal right under international law for sovereign nations,” he told reporters.

In his Senate confirmation hearing last month, U.S. Secretary of State Rex Tillerson raised China’s ire when he said Beijing should be denied access to the islands it is building in the South China Sea.

Tillerson subsequently softened his language, and Trump further reduced tensions by pledging to honor the long-standing U.S. “one China” policy in a Feb. 10 telephone call with Chinese President Xi Jinping.

LONGER RANGE

Greg Poling, a South China Sea expert at the Center for Strategic and International Studies in Washington, said in a December report that China apparently had installed weapons, including anti-aircraft and anti-missile systems, on all seven of the islands it has built in the South China Sea.

The officials said the new structures were likely to house surface-to-air missiles that would expand China’s air defense umbrella over the islands. They did not give a time line on when they believed China would deploy missiles on the islands.

“It certainly raises the tension,” Poling said. “The Chinese have gotten good at these steady increases in their capabilities.”

On Tuesday, the Philippines said Southeast Asian countries saw China’s installation of weapons in the South China Sea as “very unsettling” and have urged dialogue to stop an escalation of “recent developments.”

Philippine Foreign Secretary Perfecto Yasay did not say what provoked the concern but said the 10-member Association of South East Asian Nations, or ASEAN, hoped China and the United States would ensure peace and stability.

POLITICAL TEST

The U.S. intelligence official said the structures did not pose a significant military threat to U.S. forces in the region, given their visibility and vulnerability.

Building them appeared to be more of a political test of how the Trump administration would respond, he said.

“The logical response would also be political – something that should not lead to military escalation in a vital strategic area,” the official said.

Chas Freeman, a China expert and former assistant secretary of defense, said he was inclined to view such installations as serving a military purpose – bolstering China’s claims against those of other nations – rather than a political signal to the United States.

“There is a tendency here in Washington to imagine that it’s all about us, but we are not a claimant in the South China Sea,” Freeman said. “We are not going to challenge China’s possession of any of these land features in my judgment. If that’s going to happen, it’s going to be done by the Vietnamese, or … the Filipinos … or the Malaysians, who are the three counter-claimants of note.”

He said it was an “unfortunate, but not (an) unpredictable development.”

Tillerson told the Senate Foreign Relations Committee last month that China’s building of islands and putting military assets on them was “akin to Russia’s taking Crimea” from Ukraine.

In his written responses to follow-up questions, he softened his language, saying that in the event of an unspecified “contingency,” the United States and its allies “must be capable of limiting China’s access to and use of” those islands to pose a threat.

(Reporting by Idrees Ali; Additional reporting by Arshad Mohammed Arshad, David Brunnstrom and John Walcott, and Ben Blanchard in Beijing; Editing by John Walcott, Peter Cooney and Nick Macfie)

Iran ready to give U.S. ‘slap in the face’: commander

Head of Iran's Revolutionary guards ground forces Mohammad Pakpour (C) attends a funeral ceremony in Tehran October 20, 2009. REUTERS/Morteza Nikoubazl

DUBAI (Reuters) – The United States should expect a “strong slap in the face” if it underestimates Iran’s defensive capabilities, a commander of the elite Revolutionary Guards said on Wednesday, as Tehran concluded war games.

Since taking office last month, U.S. President Donald Trump has pledged to get tough with Iran, warning the Islamic Republic after its ballistic missile test on Jan. 29 that it was playing with fire and all U.S. options were on the table.

“The enemy should not be mistaken in its assessments, and it will receive a strong slap in the face if it does make such a mistake,” said General Mohammad Pakpour, head of the Guards’ ground forces, quoted by the Guards’ website Sepahnews.

On Wednesday, the Revolutionary Guards concluded three days of exercises with rockets, artillery, tanks and helicopters, weeks after Trump warned that he had put Tehran “on notice” over the missile launch.

“The message of these exercises … for world arrogance is not to do anything stupid,” said Pakpour, quoted by the semi-official news agency Tasnim.

“Everyone could see today what power we have on the ground.” The Guards said they test-fired “advanced rockets” and used drones in the three-day exercises which were held in central and eastern Iran.

As tensions also mounted with Israel, a military analyst at Tasnim said that Iran-allied Hezbollah could use Iranian made Fateh 110 missiles to attack the Israeli nuclear reactor at Dimona from inside Lebanon.

Hezbollah leader Sayyed Hassan Nasrallah said last Thursday that his group, which played a major role in ending Israel’s occupation of Lebanon, could strike Dimona.

“Since Lebanon’s Hezbollah is one of the chief holders of the Fateh 110, this missile is one of main alternatives for targeting the Dimona installations,” Hossein Dalirian said in a commentary carried by Tasnim.

Iran says its missile program is defensive and not linked to its 2015 nuclear deal with world powers. During the U.S. election race, Trump branded the accord “the worst deal ever negotiated”, telling voters he would either rip it up or seek a better agreement.

(Reporting by Dubai newsroom; Editing by Sami Aboudi and Alison Williams)

Trump issues first public condemnation of anti-Semitic incidents

Alveda King (C), the niece of slain U.S. civil rights leader Martin Luther King Jr., praises U.S. President Donald Trump as he visits the National Museum of African American History and Culture on the National Mall in Washington, U.S., February 21, 2017. REUTERS/Jonathan Ernst

By Ayesha Rascoe

WASHINGTON (Reuters) – U.S. President Donald Trump delivered his first public condemnation of anti-Semitic incidents in the United States on Tuesday after a new spate of bomb threats to Jewish community centers around the country and vandalism in a Jewish cemetery.

Several of the centers were evacuated for a time on Monday after receiving the threats, the JCC Association of North America said, and another center was evacuated on Tuesday morning in San Diego, California, according to police.

Also, vandals toppled about 170 headstones at the Chesed Shel Emeth Society cemetery in St. Louis, Missouri, over the weekend.

“The anti-Semitic threats targeting our Jewish community and community centers are horrible and are painful and a very sad reminder of the work that still must be done to root out hate and prejudice and evil,” Trump told reporters.

He was speaking at the end of a tour of the National Museum of African American History and Culture in Washington, which Trump said showed “why we have to fight bigotry, intolerance and hatred in all of its very ugly forms.”

The comments marked a change for Trump, who had not explicitly and publicly condemned the threats against Jews when asked last week. Instead, he spoke more generally about his hopes of making the nation less “divided.”

The president reacted with anger at a news conference last week when a journalist from a Jewish magazine asked how his government planned to “take care” of a rise in threats.

Trump berated the reporter for asking a “very insulting” question, appearing to believe the reporter was accusing him of being anti-Semitic.

“Number one, I am the least anti-Semitic person that you’ve ever seen in your entire life,” the president said, adding that he was also the least racist person. Trump has often noted that one of his daughters is a convert to Judaism, he has Jewish grandchildren and he employs many Jews in his business.

Trump’s daughter Ivanka, a close adviser to her father who practices Orthodox Judaism, responded to the latest threats in a message on her Twitter account on Monday evening.

“America is a nation built on the principle of religious tolerance,” she said. “We must protect our houses of worship & religious centers.”

On Tuesday, Trump again declined to answer a question about what action he would take to address the threats to Jewish organizations. Sean Spicer, a White House spokesman, said later that Trump would respond through “deed and action” over the coming months and years.

‘BAND-AID’

Trump’s derogatory campaign rhetoric against Muslims and Mexican immigrants won enthusiastic backing from prominent white supremacists who embrace anti-Jewish, anti-black and anti-Muslim ideologies. It also drew greater media attention to fringe extremist groups.

Trump has disavowed their support. His chief strategist, Steve Bannon, is the former publisher of Breitbart, a news website popular among right-wing extremist groups.

The Anne Frank Center for Mutual Respect in New York, which has criticized the Trump administration repeatedly over anti-Semitism, said his comments were too little too late.

“The president’s sudden acknowledgement is a Band-Aid on the cancer of anti-Semitism that has infected his own administration,” Steven Goldstein, the group’s executive director, said in a statement.

Spicer rejected the characterization.

“I wish that they had praised the president for his leadership in this area,” he told reporters when asked about Goldstein’s comment. “Hopefully as time goes by they’ll recognize his commitment to civil rights.”

Jewish groups criticized the White House for omitting any mention of Jews in its statement marking Holocaust Memorial Day last month. The White House said the omission was deliberate since the Nazis also killed people who were not Jews, if in smaller numbers. The stated goal of the Nazis was the extermination of Jews.

One day after speaking at a security summit in Munich, U.S. Vice President Mike Pence spent Sunday morning walking through the grounds of the Dachau concentration camp in Germany with a camp survivor.

Over the course of the U.S. Presidents Day holiday on Monday, bomb threats were sent to 11 Jewish community centers, including ones in the Houston, Chicago and Milwaukee areas, according to the JCC association. They were found to be hoaxes, as was another threat that forced the evacuation of a center in San Diego on Tuesday morning, according to police.

No arrests were made. The FBI has said it is investigating recent threats as “possible civil rights violations.”

The Council on American-Islamic Relations, a prominent Muslim human rights group, has offered a $5,000 reward for information leading to the conviction of anyone behind the threats, saying Muslims felt a duty to support any targeted minority group.

The incidents on Monday followed three waves of bomb threats so far this year. In all, at least 69 incidents at 54 Jewish community centers in 27 states and one Canadian province have been reported, according to the JCC association.

(Reporting by Doina Chiacu in Washington, Tom Gannam in St. Louis and Jonathan Allen in New York; Editing by Chizu Nomiyama, Frances Kerry and Jeffrey Benkoe)

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