Tom Block’s Takeaways: Trade and Presidential hopefuls fight with impeachment and Iran for attention

• Impeachment trial looks headed to Senate this week, questions: short or drawn-out; will four Republicans vote for witnesses; Presidential behavior during trial – will Tweets go ballistic.
• Is Iran in rearview mirror or will issues such an attack by proxy terror groups, dispute over alleged attacks on embassies, or focus on impeachment push President into Tweet frenzy.  Does ghost of Benghazi dominate President’s focus on embassy attacks and provoke killing of General Soleimani?
• Big week for trade with signing of US/China Phase One and possible Senate action on USMCA.
• Democrats head to first vote in Iowa on February 3 with final pre-Iowa debate Tuesday with 6 candidates on the stage. Attention as Sanders and Warren battle for progressive mantle, Biden tries to go mistake free, and Buttigieg, Klobuchar and Steyer position themselves if Biden slips, while Bloomberg waits in the wings.

Impeachment and Iran’s shadow

Speaker Pelosi has announced her intention to move the impeachment process forward, name the House managers, and send the impeachment articles over to the Senate.  Senate Leader McConnell has made clear that he has the votes to start the process as soon as the impeachment articles arrive and has the votes to use the rules created by a unanimous bipartisan majority for the impeachment trial of Bill Clinton.  Under those rules the trial had opening statements and presentation of the case, and then the Senate decided the issue of witnesses. The statement by John Bolton that he would testify if subpoenaed has added an increased level of suspense to the witness issue.

For the Democrats to prevail on the question of witnesses they would need at least four Republicans to vote with them, the motion for witnesses would die on a 50 to 50 tie.  The current divide in the Senate is 53 Republicans and 47 Democrats.  Three Republican Senators have indicated they might vote for witnesses: Collins, Murkowski, and Romney.  Senators Gardner of Colorado and McSally of Arizona both have tough races in states that are trending Democratic and are viewed as potentially providing the fourth vote for witnesses.

President Trump is the master of dominating news cycles with Tweets, and he could almost become a witness with a running Twitter commentary on the Senate trial.  While the Republican majority will not convict the President, the trial will dominate the headlines and has the potential to sway undecided voters.  With three of the top tier candidates serving in the Senate it will have a direct impact on the Presidential campaign and will take much of the attention away from the Iowa caucuses as impeachment dominates the news.

While the US and Iran avoided a war last week, it would be a mistake to view the relationship as settled.  One threat, and perhaps most likely, is an attack by one of the rogue, proxy terrorist groups that Iran has supported.  These groups were particularly close to General Soleimani and an attack for retribution seems possible.  Secondly, as we saw with the President’s statements on attacks focused on US Embassies, in my view the attack on the US Embassy in Benghazi haunts President Trump.  Attacking the reactions of Clinton and Obama to Benghazi are central to Trump’s view of their weak foreign policy versus his strong foreign policy.  The killing of Soleimami came after the attack and near takeover of the US Embassy in Baghdad, a very strong US action was needed by President Trump to demonstrate the difference between his Administration’s reaction and the Obama/Clinton reaction in Libya  

While the President wants to be viewed as strong on Iran, he also offered a crack for future talks with his statements that Iran could emerge as an economic power if it changes its ways.  From North Korea to China trade President Trump appears to want peaceful resolutions if possible but never appearing to take such an action from a position of weakness.  This world view will be tested in coming weeks and months.

Trade

On Wednesday China Vice Premier and chief trade negotiator Liu He is scheduled to be in Washington and join President Trump for the signing of the Phase One agreement between the two economic superpowers.  The only possible glitch is that there are apparently a few outstanding issues, and days before the White House signing neither side has released an official summary of the deal.  While there is an outside chance the outstanding details could delay a signing, President Trump appears committed to finalizing the agreement this week.

The President is also on the cusp of a second major trade accomplishment, the approval of the revised NAFTA agreement USMCA, which the President said could be easily remembered as it rhymes with YMCA and the song he remembers by the Village People.

The agreement has received widespread support ranging from the AFL-CIO to the US Chamber of Commerce. It was approved by the House before the end of last year and was passed by the Senate Finance Committee last week on a strong bipartisan vote of 25 to 3.  The Senate Parliamentarian threw a legislative curveball when he ruled that other committees of the Senate needed to ratify the agreement; however there seem little doubt that the Senate will give USMCA its final legislative approval if not this week then right after the impeachment trial.  The White House signing ceremony will be a great Trump made for television moment perfect for the early months of a Presidential election.

Democrats and Iowa
Tuesday will be the last Democratic Presidential debate prior to the Iowa Caucuses on February 3. There will be six candidates in the debate with the last-minute addition of businessman Tom Steyer. It will be an important moment in the campaign as the polls show a tight race and Senators Sanders and Warren are fighting to be the lead candidate for the party’s growing progressive wing.  The most recent polling appears to indicate that Senator Sanders is pulling ahead with this constituency leaving little room or reason for Senator Warren’s campaign.  A clear victory for Sanders in Iowa could be the end of the Warren campaign.

Former Vice President Biden continues to lead in most national polls but lags both Sanders and Warren in Iowa.  With the Vice President’s proven track record of gaffes each debate is a high-wire act with the chance Biden could fall.  Buttigieg, Klobuchar and Steyer all will try to have a strong night in order to be in a position to be the beneficiary of a poor night by Biden.  And of course, standing in the wings is Mayor Mike Bloomberg who is building his political brand with an historic spend on television spots and could step in to be the “Stop Bernie” candidate if Biden and the others fall short.