The Jim Bakker Show

Israeli PM seeks ‘no gaps’ with Trump ahead of White House talks

Israeli Prime Minister Benjamin Netanyahu

By Luke Baker

WASHINGTON (Reuters) – Prime Minister Benjamin Netanyahu, preparing for his first meeting with President Donald Trump at the White House, will work with advisers on Tuesday to align Israeli and U.S. thinking on the Middle East and ensure “no gaps” remain.

Staff have cleared most of Tuesday for discussions with Israel’s ambassador to the United States, Ron Dermer, and other senior advisers ahead of Wednesday’s Oval Office meeting. The only event of the day is an evening meeting with U.S. Secretary of State Rex Tillerson.

“There isn’t going to be any daylight, no gaps,” one adviser said as the prime minister left for Washington, the first time Netanyahu, the head of a right-wing coalition, has overlapped with a Republican in the White House in four terms in office.

Those reassurances came as Netanyahu took a cautious line on whether he would support a two-state solution to the Israeli-Palestinian conflict, the bedrock of U.S. diplomacy for two decades, when he sits down with Trump.

During the presidential campaign, Trump was often unabashedly pro-Israel, promising to move the U.S. embassy from Tel Aviv to Jerusalem, backing David Friedman, a supporter of settlements, as his envoy to Israel, and saying that he wouldn’t apply pressure for talks with the Palestinians.

But in the three-and-a-half weeks since taking office, positions have shifted. The embassy transfer has been put on hold as the fallout from such a move, not least the potential for unrest across the Middle East, has been explained, including by Jordan’s King Abdullah during an impromptu visit.

When it comes to settlements, Trump has laid out a more nuanced position, saying that while he does not see them as an obstacle to peace, building new ones or expanding existing ones beyond their current boundaries is “not good”.

And rather than no pressure for peace talks, Trump has said he wants to have a go at the “ultimate deal”. In an interview with newspaper Israel Hayom last week, he urged Israel to act “reasonably” in the Middle East peace process.

LEADERS IN LOCKSTEP

For Netanyahu, under investigation at home in two criminal cases involving allegations of abuse of office, ensuring he and Trump are in lockstep is critical to putting the friction of the Obama administration behind him and laying the ground for a more fruitful relationship with the United States.

At a time when the Middle East is in turmoil and Palestinian politics is fractured by long-standing divisions between the Western-backed Fatah party and the Islamist group Hamas, Israeli officials argue that the time is not ripe for peace.

But while Netanyahu has announced plans for 6,000 more settlement homes, he is also uneasy about pressure from the far-right in his coalition for more dramatic steps, such as the annexation of parts of the West Bank, which the Palestinians want for their own state together with Gaza and East Jerusalem, or the rejection of a Palestinian state altogether.

Netanyahu’s task during the scheduled two-hour meeting with Trump will be to find common ground on both the settlements issue and the prospects for a two-state solution to the conflict: Israel and a Palestine side by side and at peace.

The prime minister committed to the two-state goal in 2009 and has reiterated the position since. But on Monday, a senior minister in his cabinet said no ministers, foremost Netanyahu, truly believed in the emergence of a Palestinian state.

Officials with Netanyahu declined to comment on the remark. But Netanyahu has spoken of a “state minus”, something short of full sovereignty for the Palestinians. It was unclear if the contours of that idea would be discussed with Trump.

As well as Palestinian issues, the two leaders will discuss regional stability and the threat from Iran, with both intent on re-examining and strengthening the nuclear deal with Tehran.

“The alliance between Israel and America has always been extremely strong and it’s about to get even stronger,” Netanyahu said as he prepared to leave Israel on Monday.

“Donald Trump and I see eye-to-eye on the dangers emanating from the region but also on the opportunities. We’ll talk about both as well as upgrading the relations between Israel and the United States in many, many fields.”

Aside from Trump and Tillerson, Netanyahu will meet Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, House Speaker Paul Ryan and Vice President Mike Pence during the Feb. 13-16 visit.

(Writing by Luke Baker; Editing by Mary Milliken)

Analysis: Trump’s hostility to help keep Iran’s Rouhani in office, but make his life harder

By Parisa Hafezi

ANKARA (Reuters) – Donald Trump’s bellicose rhetoric towards Iran now appears likely to help keep President Hassan Rouhani in office for another term, but will make it harder for the Iranian leader’s team of moderates to govern.

With an election due in three months and a hostile new administration in the White House, Iran’s hardliners seem to have backed off from trying to reclaim the presidency for their faction, at least for now.

No single candidate has emerged as a potential hardline champion to challenge the relative moderate Rouhani in the vote. Instead, officials speak of ideological rivals uniting behind him as best suited to deal with a Trump presidency.

“To protect the Islamic Republic against foreign threats we need to put aside our disputes and unite against our enemy,” said a senior official speaking on condition of anonymity like other figures within Iran contacted for this story.

“Under the current circumstances, Rouhani seems the best option for the establishment.”

Still, Rouhani’s supporters worry that even though hardliners no longer seem intent on removing him, they will take advantage of confrontation with the Trump administration to weaken the president at every turn.

“To cement their grip in power, hardliners will do whatever they can to provoke Trump. From missile tests to fiery speeches,” said a former senior official, close to Rouhani.

“By making Rouhani a lame-duck president, they will try to prevent any change in the balance of power in Iran.”

Rouhani, elected in a landslide in 2013 on a pledge to reduce Iran’s isolation, is the face of Tehran’s deal with the Obama administration to curb Iran’s nuclear program in return for the lifting of U.S. and European sanctions.

Trump and other U.S. Republicans have frequently disparaged that deal, as have hardliners in Iran.

For now, the Iranian hardliners appear to have concluded that they still need Rouhani in office, if only so Washington rather than Tehran will be blamed if the deal collapses, said Iran analyst Ali Vaez of the International Crisis Group.

“With the deal in jeopardy, the system will be in vital need of Rouhani’s team of smiling diplomats and economic technocrats to shift the blame to the U.S. and keep Iran’s economy afloat,” said Vaez.

But ultimately, said analyst Meir Javedanfar, any atmosphere of heightened tension with Washington benefits the hardliners and weakens the moderates in Iran.

“Now with Trump in charge, Iran’s hardliners can sleep easy as they thrive on threats and intimidation from the U.S., it feeds their narrative,” said Javedanfar, an Iranian-born Israeli lecturer on Iran at Israel’s Interdisciplinary Center Herzliya.

PRESERVATION

Under Iran’s theocratic governing system, the elected president is subordinate to the unelected supreme leader, 77-year-old Ayatollah Ali Khamenei, a hardliner in power since succeeding revolutionary founder Ruhollah Khomeini in 1989.

A hardline watchdog body can control the elected government by vetting candidates before they stand and by vetoing policies.

Khamenei uses anti-American sentiment as the glue to hold together the faction-ridden leadership, but he will not risk a total collapse in relations with Washington that might destabilize Iran, say Iranian officials.

“The leader’s top priority has always been preserving the Islamic Republic … A hardline president might intensify tension between Tehran and America,” said an official close to Khamenei’s camp.

Rouhani’s efforts to open up Iran to less hostile relations with the West still have to be couched in the rhetoric of anti-Americanism that has been a pillar of Iranian rule since the Islamic Revolution of 1979.

On Friday, hundreds of thousands marked the anniversary of the revolution, taking to the streets chanting slogans that include “Death to America”. At such events, Rouhani can strike a note that sounds as hardline as anyone. [ID:nL5N1FV1SX]

“We all are followers of our leader Khamenei,” Rouhani said in a speech that cast his own re-election bid as an opportunity for Iranians to demonstrate their defiance of Washington. “Our nation will give a proper answer to all those threats and pressures in the upcoming election.”

For his part, Khamenei said in a speech earlier this week that Trump had shown “the real face of America”, echoing the hardline Iranian criticism of the Obama administration’s comparatively accommodating stance as insincere or devious.

Khamenei dismissed a Trump administration threat to put Iran “on notice” for carrying out missile tests. But he also avoided signaling a break with the nuclear accord, and the speech was interpreted as a sign that he will stick by Rouhani for now.

“The leader’s speech showed that the leadership has agreed on a less confrontational line. They prefer to wait and see Trump’s actions and not to act based on his rhetoric,” said Tehran-based political analyst Saeed Leylaz.

Ordinary Iranian voters also seem inclined to keep Rouhani in power. Many complain that they have still seen few economic benefits from the lifting of sanctions, and those who hoped Rouhani would reform restrictive social policies say they are disappointed by the lack of meaningful change so far.

Nevertheless, there seems to be little appetite to reverse course at the election and restore power to a confrontational hardliner like Rouhani’s predecessor Mahmoud Ahmadinejad.

“I did not want to vote. Nothing has changed under Rouhani. But now I have to choose between bad and worse in Iran. We cannot afford a hardline president when Trump is in power,” said high-school teacher Ghamze Rastgou in Tehran.

(Editing by Peter Graff)

Eight countries sign up to counter Trump’s global anti-abortion move

STOCKHOLM (Reuters) – Eight countries have joined an initiative to raise millions of dollars to replace shortfalls caused by President Donald Trump’s ban on U.S.-funded groups around the world providing information on abortion, Sweden’s deputy prime minister said.

Isabella Lovin told Reuters a conference would be held on March 2 in Brussels to kick-start the funding initiative to help non-governmental organizations whose family planning projects could be affected.

The Netherlands announced in January the launch of a global fund to help women access abortion services, saying Trump’s “global gag rule” would cause a funding shortfall of $600 million over the next four years.

Sweden, Denmark, Belgium, Luxemburg, Finland, Canada and Cape Verde have all lent their support, Lovin said.

“(The gag order) could be so dangerous for so many women,” said Lovin who posed for a photograph this month with seven other female officials signing an environmental bill, in what was seen a response to a photograph of Trump signing the gag order in the White House with five male advisors.

The global gag rule, which affects U.S. non-governmental organizations working abroad, is one that incoming presidents have used to signal their positions on abortion rights. It was created under U.S. President Ronald Reagan in 1984.

Trump signed it at a ceremony in the White House on his fourth day in office. Barack Obama lifted the gag rule in 2009 when he took office.

“If women don’t have control over their bodies and their own fate it can have very serious consequences for global goals of gender rights and global poverty eradication,” Lovin said.

(Reporting by Alistair Scrutton; Editing by Robin Pomeroy)

U.S. to issue new Iran sanctions, opening shot in get-tough strategy: sources

By Arshad Mohammed, Matt Spetalnick and Jonathan Landay

WASHINGTON (Reuters) – U.S. President Donald Trump is poised to impose new sanctions on multiple Iranian entities, seeking to ratchet up pressure on Tehran while crafting a broader strategy to counter what he sees as its destabilizing behavior, people familiar with the matter said on Thursday.

In the first tangible action against Iran since Trump took office on Jan. 20, the administration, on the same day he insisted that “nothing is off the table,” prepared to roll out new measures against more than two dozen Iranian targets, the sources said. The announcement is expected as early as Friday, they added.

The new sanctions, which are being taken under existing executive orders covering terrorism and weapons of mass destruction, may mark the opening shot in a more aggressive policy against Iran that Trump promised during the 2016 presidential campaign, the sources, who had knowledge of the administration’s plans, said.

But the package, targeting both entities and individuals, was formulated in a way that would not violate the 2015 Iran nuclear deal negotiated between Iran and six world powers including Trump’s predecessor, Barack Obama, they added.

The sources said the new sanctions had been in the works for some time and that Iran’s decision to test-fire a ballistic missile on Sunday helped trigger Trump’s decision to impose them, although Washington has not accused Iran of violating the nuclear deal.

The White House declined comment.

A U.S. State Department official said: “As standard policy, we do not preview sanction decisions before they are announced.”

The White House signaled a tougher stance toward Iran on Wednesday when Michael Flynn, Trump’s national security adviser, said he was putting Iran “on notice” after the missile test and senior U.S. officials said the administration was reviewing how to respond.

A top adviser to Iranian Supreme Leader Ayatollah Ali Khamenei said his country would not yield to “useless” U.S. threats from “an inexperienced person” over its ballistic missile program. The adviser, Ali Akbar Velayati, did not identify a specific U.S. official in his comments.

STILL-EVOLVING PLAN

The impact of the new sanctions will be more symbolic than practical, especially as the move does not affect the lifting of broader U.S. and international sanctions that took place under the nuclear deal. Also, few of the Iranian entities being targeted are likely to have U.S. assets that can be frozen, and U.S. companies, with few exceptions, are barred from doing business with Iran.

But the administration is working with congressional staffers and outside experts on a still-evolving broader plan aimed at hitting Iran’s pressure points, including its already restricted nuclear program, missile development and support of militant groups in the region, several sources said.

Leading a chorus of Republican calls for new sanctions, Paul Ryan, the speaker of the House of Representatives, said the United States should stop “appeasing” Tehran. “I would be in favor of additional sanctions on Iran,” he told reporters.

Options that may be among the first to be implemented include sanctioning Iranian industries that contribute to missile development and designating as a terrorist group the Islamic Revolutionary Guard Corps, which has been blamed by U.S. officials for fueling regional proxy wars. The designation could also dissuade foreign investment because it oversees a sprawling business empire.

Another approach would be “zero tolerance” for any Iranian violations of the nuclear deal, by taking a stricter interpretation of the terms than the Obama administration.

That could include U.S. opposition to Iranian requests for waivers from restrictions requiring the approval of a committee comprising the United States and its negotiating partners, Russia, China, Britain, France and Germany, the sources said.

“Michael Flynn did not put Iran on notice as mere empty words,” said Mark Dubowitz, an Iran sanctions expert and head of the conservative Washington-based Foundation for Defense of Democracies who is advising the Trump administration. “Iran’s continued missile and terrorism activities will lead to dozens of new U.S. designations and tough new congressional sanctions.”

Some experts questioned how quickly the administration could develop the new strategy as many of the technical specialists on Iran have left the government.

‘NOTHING IS OFF THE TABLE’

Trump’s declaration that nothing had been ruled out in response to Iran appears to leave open the possibility of military action, although experts said both sides would take care to avoid armed confrontation in the oil-rich Gulf. Still, the U.S. threats of reprisals, coupled with Iran’s defiant reaction, could dangerously ratchet up tensions.

Every recent U.S. president, including Obama, a Democrat, has said U.S. military options were not off the table to prevent Iran from getting a nuclear weapon. Trump has gone much further in his rhetoric, especially in criticizing the Iran deal as weak and ineffective.

Since taking office, Trump and his aides have not repeated campaign rhetoric about tearing up the deal. He may instead be trying to force Iran to either renegotiate the terms or pull out unilaterally, thereby shouldering the blame internationally.

Defenders of the deal said there was little chance Iran could be goaded back to the negotiating table and warned that too stringent an approach could escalate into a confrontation and embolden Iranian hardliners.

In the latest move, one source, who spoke on condition of anonymity, said about eight Iranian entities were to be sanctioned or designated, for terrorism-related activities and about 17 for ballistic missile-related activities under separate existing U.S. executive orders. The source declined to name the entities, which were targeted under executive orders signed by President George W. Bush in 2001 and 2005.

Sanctions designations can lead to asset freezes, travel bans and other penalties.

Republican lawmakers said they were working with the Trump administration to push back on Iran without risking the collapse of the deal, widely supported internationally.

Senator Bob Corker, chairman of the Senate Foreign Relations Committee, told Reuters that his panel was “in the early stages” of working on legislation on Iran.

(Additional reporting by Patrica Zengerle, Ayesha Rascoe, Roberta Rampton in Washington and Parisa Hafezi in Ankara; Writing by Matt Spetalnick and Patricia Zengerle; Editing by Yara Bayoumy and Peter Cooney)

Israel interprets U.S. settlements statement as green light

By Luke Baker

JERUSALEM (Reuters) – Israeli officials welcomed on Friday what they took as U.S. consent to expand existing settlements, after the White House reversed a long-standing policy of condemning building on occupied land.

In its first substantive announcement on the Israeli-Palestinian conflict, the Trump administration said it did not see existing settlements hampering peace with the Palestinians, although it recognized that “expansion of existing settlements beyond their current borders may not be helpful in achieving that goal.”

At one level, that appeared to be an attempt to rein in Prime Minister Benjamin Netanyahu, who has announced wide-ranging settlement expansion plans since the Jan. 20 inauguration, including around 6,000 new homes.

But on closer reading, the statement was a softening of policy from the Obama administration and even that of George W. Bush, because it does not view settlements as an obstacle to peace or rule out their expansion within existing blocs.

“Netanyahu will be happy,” a senior Israeli diplomat said in a text message. “Pretty much carte blanche to build as much as we want in existing settlements as long as we don’t enlarge their physical acreage. No problem there.”

Israel’s deputy foreign minister, Tzipi Hotovely from the right-wing of Netanyahu’s Likud party, interpreted it in a similar way, saying construction in the occupied West Bank and East Jerusalem, which the Palestinians want for their own state together with Gaza, would go on unhindered.

“It is also the opinion of the White House that settlements are not an obstacle to peace and, indeed, they have never been an obstacle to peace,” she said. “Therefore, the conclusion is that more building is not the problem.”

Israel seized the West Bank and East Jerusalem in the 1967 Middle East war. The 50th anniversary of the occupation, which Israel marks as a reunification of Jerusalem, is in June.

There was no immediate comment from the Palestinians.

DOUBLE BENEFITS

Since taking office, President Trump has largely kept quiet on the Israeli-Palestinian issue, making no comment in response to Netanyahu’s announcements for thousands more settler homes, a silence interpreted as endorsement. During the campaign, Trump said he would not interfere or push Israel to negotiate on a two-state solution to the conflict.

He has nominated David Friedman as ambassador to Israel, a religious Jew who has raised money for the settlements and supports moving the U.S. embassy from Tel Aviv to Jerusalem. Trump supported that idea during the election campaign, but it has been put on the back-burner in recent weeks.

Under Barack Obama, the White House maintained a firm anti-settlements line, calling them illegitimate and an obstacle to peace. Most of the world considers settlements illegal under international law, a position Israel rejects.

The European Union and Britain issued statements this week criticizing Netanyahu’s settlement plans, which they see as further breaking up the West Bank and undermining the possibility of a contiguous Palestinian state ever emerging.

Netanyahu, who will visit Trump in Washington on Feb. 15, may see the White House statement as doubly beneficial.

As well as not ruling out building within existing blocs, which Israel hopes to retain in any final agreement with the Palestinians, it may allow him to silence far-right voices in his own coalition calling for much greater settlement growth and annexation of parts of the West Bank.

Trump has effectively set a limit on how far-ranging settlement-building can be, so Netanyahu will be able to tell the far-right their ambitions are out of the question.

At the same time, Netanyahu may have to curtail some of the plans he himself has announced in recent days.

While most of the 6,000 settler homes he has promised are in existing blocs, many are not and may have to be scrapped if he wants to adhere to the White House line. He may also have to rethink a pledge this week to build the first new West Bank settlement since the 1990s.

(Additional reporting by Ori Lewis; Editing by Tom Heneghan and Robin Pomeroy)

U.S. Treasury holds debt auctions steady, plans cyber test

By Jason Lange

WASHINGTON (Reuters) – The U.S. Treasury announced on Wednesday it will hold the size of coupon auctions steady in the upcoming quarter when it conducts a small “contingency auction” that an official said would test its ability to borrow following a cyber attack.

It was unclear how much of a role, if any, the White House had in crafting the Treasury’s quarterly debt policy statement, which was the first since President Donald Trump took office last month.

The U.S. Senate has yet to confirm Trump’s Treasury secretary nominee, Steven Mnuchin. Several Treasury officials from the Obama administration have left, with their positions filled on a temporary basis by career bureaucrats or political appointees from the last administration.

The latest policy statement was made by Monique Rollins, Treasury’s acting assistant secretary for financial markets and a holdover from the Obama administration. A Treasury official told reporters separately that the new political leadership was aware of the debt policies announced on Wednesday.

Rollins said in the policy statement that Treasury plans to offer $62 billion in notes and bonds next week, raising approximately $17 billion in new cash.

The contingency test was part of regular auction infrastructure testing, Rollins said.

The Treasury official who briefed reporters separately said the test would gauge the government’s ability to borrow money if a cyber attack disrupted normal auctions.

On future coupon sizes, Rollins said the department “will continue to monitor projected financing needs and make appropriate adjustments as necessary.”

(Reporting by Jason Lange; Editing by Paul Simao)

Trump, South Korea’s Hwang agree to strengthen defenses against North Korea: White House

WASHINGTON (Reuters) – U.S. President Donald Trump and South Korean Acting President Hwang Kyo-ahn agreed to take steps to strengthen joint defense capabilities to defend against North Korea’s nuclear threat, the White House said on Sunday after a telephone call between the two leaders.

“President Trump reiterated our ironclad commitment to defend (South Korea), including through the provision of extended deterrence, using the full range of military capabilities,” the White House said in a statement.

It also said Trump and Hwang discussed the upcoming visit by the new U.S. defense secretary to Japan and South Korea, where shared concerns about North Korea will top the agenda.

The United States and South Korea have agreed to deploy a Terminal High Altitude Area Defense (THAAD) system designed to protect against North Korea’s growing nuclear and ballistic capabilities despite objections from China, which says the radar could penetrate Chinese territory.

North Korean leader Kim Jong Un said on Jan. 1 his country was close to test-launching an intercontinental ballistic missile (ICBM), and state media has said a launch could come at any time.

North Korea has maintained its nuclear and missile programs in violation of repeated rounds of international sanctions.

(Reporting by Lesley Wroughton; Editing by Lisa Von Ahn and Will Dunham)

Trump tells Republican lawmakers: Enough talk. Time to deliver

By Richard Cowan and Susan Cornwell

PHILADELPHIA (Reuters) – President Donald Trump pushed Republican lawmakers on Thursday for swift action on a sweeping agenda including his planned U.S.-Mexican border wall, tax cuts and repealing the Obamacare law, despite tensions over timetables and priorities.

Congressional Republicans were in Philadelphia for a three-day retreat to hammer out a legislative agenda, with the party in control of the White House, Senate and House of Representatives for the first time in a decade.

“This Congress is going to be the busiest Congress we’ve had in decades, maybe ever,” Trump said in a speech to the lawmakers at a Philadelphia hotel.

“Enough ‘all talk, no action.’ We have to deliver,” Trump added.

But Trump did not hold an expected question-and-answer session with the lawmakers, and his speech veered into side issues such as predicting crowd size for an anti-abortion march in Washington, alleging American voting irregularities and touting winning Pennsylvania in the Nov. 8 election.

House of Representatives Speaker Paul Ryan, who initially hesitated in endorsing Trump last year and has criticized him on some issues, disputed the notion that congressional Republicans were not in synch with the New York businessman who was sworn in less than a week ago having never previously held public office.

“We are on the same page with the White House,” Ryan said during a joint news conference with Senate Majority Leader Mitch McConnell.

“This is going to be an unconventional presidency,” Ryan added. “I think you know this by now. … I think we’re going to see unconventional activities like tweets and things like that. I think that’s just something that we’re all going to have to get used to.”

Trump pressed the lawmakers for action on repealing and replacing Democratic former President Barack Obama’s Affordable Care Act, known as Obamacare, even as Republicans scramble to devise a replacement plan, and lowering taxes on “all American businesses” and the middle class.

For weeks, Republicans talked about formulating an agenda for the first 100 days of Trump’s presidency. In recent days, the talk has turned into a 200-day agenda for passing major legislation before the lawmakers’ August recess.

“It’s going to take more than simply 100 days,” Ryan said.

Ryan said that it is “our goal is to get these laws done in 2017,” without guaranteeing that a replacement for Obamacare and a tax reform bill would be enacted by the end of December.

McConnell said lawmakers will take up legislation to provide $12 billion to $15 billion to pay for Trump’s planned wall along the U.S.-Mexico border. Trump signed an executive order on Wednesday for the wall to proceed, part of a package of measures aimed at curbing illegal immigration, although the action has tested already frayed relations with Mexico.

House Republican leader Kevin McCarthy said the pace of legislative action may frustrate Trump.

“President Trump comes from a different world,” McCarthy told reporters. “Out in the business community, he likes things done fast, and he’s going to continue to push them.”

PROTESTS IN PHILADELPHIA

Thousands of anti-Trump protesters took to the streets in Philadelphia, a heavily Democratic bastion that is one of the cities that could be stripped of federal funds for protecting illegal immigrants under a Trump directive.

Marchers carried signs including, “Fascist Pig,” “Protect My Health Care,” “Immigration Makes America Great,” “Planet Over Profit” and “Impeach Trump.”

During his speech, Trump took time to explain his side of the story on Mexico’s president canceling a meeting next week because of Trump’s insistence that America’s southern neighbor eventually pay for the wall. Mexico has said it will not.

Trump said a tax reform bill “will reduce our trade deficits, increase American exports and will generate revenue from Mexico that will pay for the wall, if we decide to go that route.”

McConnell and Ryan did not say whether Congress would offset the wall’s cost by cutting other programs or simply add to huge budget deficits that Republicans have criticized for years.

Ryan and McConnell also indicated congressional Republicans do not plan to modify U.S. law banning torture even as Trump considers bringing back a CIA program for holding terrorism suspects in secret overseas “black site” prisons where interrogation techniques often condemned as torture were used.

“I think the director of the CIA (Mike Pompeo) has made it clear he’s going to follow the law. And I believe virtually all of my members are comfortable with the state of the law on that issue now,” McConnell said.

“Torture’s not legal,” Ryan said. “And we agree with it not being legal.

In a highly unusual move for a visiting foreign leader, British Prime Minister Theresa May, who will see Trump in Washington on Friday, addressed the retreat, calling herself a “fellow conservative who believes in the same principles that underpin the agenda of your party.”

She was loudly applauded for praising Trump’s victory.

“Because of what you have done together, because of that great victory you have won, America can be stronger, greater, and more confident in the years ahead,” May said.

(Additional reporting by David Morgan and Doina Chiacu; Writing by Will Dunham; Editing by Frances Kerry and Cynthia Osterman)

U.S.-Mexico crisis deepens as Trump aide floats border tax idea

boy watches as U.S. workers build wall between U.S. and Mexico

By Steve Holland and Miguel Gutierrez

PHILADELPHIA/MEXICO CITY (Reuters) – The White House on Thursday floated the idea of imposing a 20 percent tax on goods from Mexico to pay for a wall at the southern U.S. border, sending the peso tumbling and deepening a crisis between the two neighbors.

Mexican President Enrique Pena Nieto announced on Twitter around midday on Thursday that he was scrapping a planned trip to meet with U.S. President Donald Trump, who has repeatedly demanded that Mexico pay for a wall on the U.S. border.

Later in the day, White House spokesman Sean Spicer sent the Mexican peso falling to its low for the day when he told reporters that Trump wanted a 20 percent tax on Mexican imports to pay for construction of the wall.

Spicer gave few details, but his comments resembled an existing idea, known as a border adjustment tax, that the Republican-led U.S. House of Representatives is considering as part of a broad tax overhaul.

The White House said later its proposal was in the early stages. Asked if Trump favored a border adjustment tax, White House Chief of Staff Reince Priebus said such a tax would be “one way” of paying for the border wall.

“It’s a buffet of options,” he said.

The plan being weighed by House Republicans would exempt export revenues from taxation but impose a 20 percent tax on imported goods, a significant change from current U.S. policy.

“If you tax exports from Mexico into the United States, you’re going to make things ranging from avocados to appliances to flat-screen tvs, you’re going to make them more expensive,” Mexican Foreign Minister Luis Videgaray told reporters at the Mexican Embassy in Washington on Thursday night.

Countries like Mexico would not pay such taxes directly. Companies would face the tax if they import products made there into the United States, potentially raising prices for American consumers.

The idea is unpopular with retailers and businesses that sell imported goods in the United States. It also has met opposition from some lawmakers worried about the impact on U.S. consumers.

Trump himself appeared to pan the idea in a Wall Street Journal interview last week, saying the House border adjustment provision was “too complicated.”

Even after Trump’s comments, congressional Republicans have continued to discuss the issue with White House officials in an effort to bring them on board with the idea.

RIFT WITH MEXICO

Trump, who visited Republican lawmakers at their policy retreat in Philadelphia, told them he would use tax reform legislation to pay for the border wall.

“We’re working on a tax reform bill that will reduce our trade deficits, increase American exports and will generate revenue from Mexico that will pay for the wall if we decide to go that route,” he said.

Trump, who took office last week, views the wall, a major promise during his election campaign, as part of a package of measures to curb illegal immigration. Mexico has long insisted it will not heed Trump’s demands to pay for the construction project.

He signed an executive order for construction of the wall on Wednesday. The move provoked outrage in Mexico. A planned meeting between Videgaray and U.S. Homeland Security Secretary John Kelly was canceled, a department spokeswoman said.

Videgaray said Mexico would work with Trump but that paying for the wall was out of the question.

“There are things that go beyond negotiation,” he said. “This is about our dignity and our pride.”

Pena Nieto, who had been under pressure to cancel the summit, tweeted on Thursday: “We have informed the White House that I will not attend the working meeting planned for next Tuesday with @POTUS.”

Trump had tweeted earlier that it would be better for the Mexican leader not to come if Mexico would not pay for the wall. He said later the meeting was canceled by mutual agreement.

Relations have been frayed since Trump launched his presidential campaign in 2015, characterizing Mexican immigrants as murderers and rapists. His trade rhetoric has hit the Mexican economy, causing consumers to rein in spending and foreign businesses to wait on new investments, according to the International Monetary Fund.

Trump has vowed to renegotiate the North American Free Trade Agreement with Mexico and Canada and slap high tariffs on American companies that have moved jobs south of the border.

Mexico ships 80 percent of its exports to the United States, and about half of Mexico’s foreign direct investment has come from its northern neighbor over the past two decades.

The United States runs a $58.8 billion trade deficit with Mexico, according to the latest U.S. government figures. But Mexico is also the United States’ second-largest export market.

(Additional reporting by Roberta Rampton and Ayesha Rascoe in Washington, David Morgan in Philadelphia and Frank Jack Daniel, Dave Graham and Christine Murray in Mexico City; Writing by Emily Stephenson; Editing by Alistair Bell and Peter Cooney)

China says will protect South China Sea sovereignty

By Ben Blanchard and David Brunnstrom

BEIJING/WASHINGTON (Reuters) – China said on Tuesday it had “irrefutable” sovereignty over disputed islands in the South China Sea after the White House vowed to defend “international territories” in the strategic waterway.

White House spokesman Sean Spicer in his comments on Monday signaled a sharp departure from years of cautious U.S. handling of China’s assertive pursuit of territorial claims in Asia.

“The U.S. is going to make sure that we protect our interests there,” Spicer said when asked if Trump agreed with comments by his secretary of state nominee, Rex Tillerson. On Jan. 11, Tillerson said China should not be allowed access to islands it has built in the contested South China Sea.

“It’s a question of if those islands are in fact in international waters and not part of China proper, then yeah, we’re going to make sure that we defend international territories from being taken over by one country,” Spicer said.

Chinese Foreign Ministry spokeswoman Hua Chunying told a regular news briefing on Tuesday “the United States is not a party to the South China Sea dispute”.

China claims most of the South China Sea, while Taiwan, Malaysia, Vietnam, the Philippines and Brunei claims parts of the sea that commands strategic sealanes and has rich fishing grounds along with oil and gas deposits.

China’s sovereignty over the Spratly Islands in the South China Sea was “irrefutable” Hua said. But China was also dedicated to protecting freedom of navigation and wants talks with nations directly involved to find a peaceful solution.

“We urge the United States to respect the facts, speak and act cautiously to avoid harming the peace and stability of the South China Sea,” Hua said.

“Our actions in the South China Sea are reasonable and fair. No matter what changes happen in other countries, what they say or what they want to do, China’s resolve to protect its sovereignty and maritime rights in the South China Sea will not change,” she added.

BAR ACCESS TO ISLANDS

Tillerson’s remarks at his Senate confirmation hearing prompted Chinese state media to say at the time that the United States would need to “wage war” to bar China’s access to the islands, where it has built military-length air strips and installed weapons systems.

Tillerson was asked at the hearing whether he supported a more aggressive posture toward China and said: “We’re going to have to send China a clear signal that, first, the island-building stops and, second, your access to those islands also is not going to be allowed.”

The former Exxon Mobil Corp <XOM.N> chairman and chief executive did not elaborate on what might be done to deny China access to the islands.

But analysts said his comments, like those of Spicer, suggested the possibility of U.S. military action, or even a naval blockade. Such action would risk an armed confrontation with China, an increasingly formidable nuclear-armed military power. It is also the world’s second-largest economy and the target of Trump accusations it is stealing American jobs.

Spicer declined to elaborate when asked how the United States could enforce such a move against China, except to say: “I think, as we develop further, we’ll have more information on it.”

Tillerson narrowly won approval from a Senate committee on Monday and is expected to win confirmation from the full Senate.

RISK OF DANGEROUS ESCALATION

Military experts said that while the U.S. Navy has extensive capabilities in Asia to stage blockading operations with ships, submarines and planes, any such move against China’s growing naval fleets would risk a dangerous escalation.

Aides have said that Trump plans a major naval build-up in East Asia to counter China’s rise.

China’s foreign ministry said earlier this month it could not guess what Tillerson meant by his remarks, which came after Trump questioned Washington’s longstanding and highly sensitive “one-China” policy over Taiwan.

Washington-based South China Sea expert Mira Rapp-Hooper at the Center for a New American Security called the threats to bar China’s access in the South China Sea “incredible” and said it had no basis in international law.

“A blockade – which is what would be required to actually bar access – is an act of war,” she added.

“The Trump administration has begun to draw red lines in Asia that they will almost certainly not be able to uphold, but they may nonetheless be very destabilizing to the relationship with China, invite crises, and convince the rest of the world that the United States is an unreliable partner.”

Bonnie Glaser at the Center for Strategic and International Studies think tank called Spicer’s remarks “worrisome” and said the new administration was “sending confusing and conflicting messages.”

Dean Cheng, a China expert at the conservative Heritage Foundation, said Spicer’s remarks showed the South China Sea was an important issue for the Trump administration.

He said it was significant that neither Spicer nor Tillerson had been specific as to what actions would be taken and this left open the possibility that economic measures – instead of military steps – could be used against China and firms that carry out island building.

(Clarifies paragraph 4 attribution)

(Additional reporting by Matt Spetalnick in Washington, and Christian Shepherd in Beijing; Editing by Andrew Hay and Bill Tarrant)

Sign up for Jim Bakker Show