Wednesday, April 5, 2017

Wednesday, April 5, Morning Global Market Roundup: Asian Stocks Rise As China Gains

By Saikat Chatterjee 
April 5, 2017

Asian stocks rose on Wednesday, helped by a bounce in Chinese shares, though the underlying sentiment was still cautious with investors wary of taking big positions before Presidents Donald Trump and Xi Jinping start their summit on Thursday.

Construction counters were among the top gainers in the mainland and Hong Kong after Beijing on Saturday announced plans to build Xiongan New Area, modeled on the Shenzhen special economic zone next to Hong Kong that helped kickstart China's economic reforms in 1980.

"This is a very headline-driven market and the only source of optimism is the new economic zone news over the weekend - but that is unlikely to be sustainable," said Conita Hung, an independent market strategist in Hong Kong.

Shares in more than 30 listed companies seen likely to benefit from the new zone jumped by the 10 percent daily trade limit.

Mainland markets reopened on Wednesday for trading after a long weekend. Hong Kong markets were closed on Tuesday.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent with Shanghai and Hong Kong leading the region by rising of 0.8 percent and 0.4 percent.

Energy-related shares also offered some support to investors as oil prices rose on Tuesday rose thanks to an unplanned production outage in the North Sea and growing concerns about diminishing U.S. oil stocks. [O/R]

U.S. crude edged higher to $51.19 per barrel on Tuesday. It hit its highest level since March. 8 at $51.30 per barrel in the previous session.

Still, investors remained broadly cautious with safe-haven assets such as gold and Japanese yen remaining well supported before the landmark Trump/Xi summit on Thursday and Friday.

It will be their first face-to-face meeting since Trump took office on Jan. 20, with trade and security issues set to feature prominently. Notably, North Korea fired a medium-range ballistic missile from its east coast into the sea on the eve of the summit. and Gold held near a one-month high at $1,254.45 per ounce, rising nearly 4.7 percent in the last three weeks.

Major currencies traded in a narrow range ahead of the release of minutes from the Fed March meeting in which it raised interest rates, and before the big U.S. jobs report on Friday.

The greenback got some help from Japanese importers on a 'gotobi' date - a multiple of five - on which accounts are traditionally settled.

The dollar held firm at 110.73 yen against the Japanese currency.

"Today, there is real demand for the dollar on 'gotobi,' so its downside should be limited," said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo. The dollar index, which tracks the greenback against a basket of six trade-weighted peers, was broadly flat at 100.49. The euro was a shade stronger at $1.06795.

Bonds came in for some profit-taking after yields fell in the previous sessions. Yields on two-year U.S. Treasury bonds rose to 1.26 percent after hitting a six-week low of 1.226 percent on Monday.

Article Link To Reuters:

Oil Rises To Near One-Month High On Gradual Tightening Of Supplies

By Henning Gloystein
April 5, 2017

Oil prices climbed to a one-month high on Wednesday on signs of gradual tightening in a market bloated by years of overproduction that has left storage tanks around the world brimming with unsold fuel.

Prices for front-month Brent crude futures, the international benchmark for oil, were at $54.40 per barrel, up 23 cents, or 0.4 percent, from their last close.

In the United States, West Texas Intermediate (WTI) crude futures were up 27 cents, or 0.5 percent, at $51.30 a barrel.

Both benchmarks on Wednesday hit their highest levels since March 8.

Traders said that slowly tightening market conditions were driving price rises, with the Organization of the Petroleum Exporting Countries (OPEC) leading an effort to cut output.

With most of OPEC's crude exported on tankers, tracking ship movements can be a good gauge of market conditions.

Shipped oil supplies have fallen by as much as 17 percent since the beginning of the year, according to oil analysis firm Vortexa.

"We have seen a significant reduction in global oil supply since January, with oil on water going from 978 million barrels on Jan. 1 to 812 million barrels on April 3," said Vortexa chief executive Fabio Kuhn.

"These changes are a signal that the rebalancing is happening faster than many in the market believe."

Oil trading data in Thomson Reuters Eikon shows that OPEC shipments to the rest of the world fell to 813.7 million barrels by the end of March from 796.6 million barrels in January.

But the tighter markets will only gradually lead to a reduction in bloated inventories as production in some countries, especially the United States, is rising.

U.S. crude stocks fell by 1.8 million barrels last week to 533.7 million, still near an all-time record, according to data released late Tuesday from the American Petroleum Institute.

The U.S. Energy Information Administration will issue its inventory figures on Wednesday.

At the heart of the bloated U.S. market is rising production, especially from shale drillers.

The U.S. rig count drilling for new oil rose for an 11th straight week last week to 662, making the first quarter the strongest for rig additions since mid-2011, according to energy services firm Baker Hughes said. [RIG/U]

Following a slump in 2015 and 2016, U.S. oil production has risen 8.5 percent since mid-2016 to 9.15 million barrels per day (bpd), the same level output stood at in 2014 when the market downturn began.

"Price upside will... be capped by the recovering U.S. shale sector," BMI Research said in a note.

Article Link To Reuters:

Apple Aims For More Control, Less Cost As It Accelerates In Chip Design

By Stephen Nellis 
April 5, 2017

Apple Inc's decision to stop licensing graphics chips from Imagination Technologies Group Plc is the clearest example yet of the iPhone maker's determination to take greater control of the core technologies in its products - both to guard its hefty margins and to position it for future innovations, especially in so-called augmented reality.

The strategy, analysts say, has already reduced Apple's dependence on critical outside suppliers like ARM Holdings Plc, now owned by SoftBank Group Corp. Apple once relied heavily on ARM to design the main processor for the iPhone, but it now licenses only the basic ARM architecture and designs most of the chip itself.

More recently, when Apple bought the headphone company Beats Electronics, part of a $3 billion deal in 2014, it ripped out the existing, off-the-shelf communications chips and replaced them with its own custom-designed W1 Bluetooth chip.

"Apple clearly got rid of all the conventional suppliers and replaced about five chips with one," said Jim Morrison, vice president of TechInsights, a firm that examines the chips inside electronics devices.

"Today we do much more in-house development of fundamental technologies than we used to," Apple Chief Financial Officer Luca Maestri said at a February conference. "Think of the work we do on processors or sensors. We can push the envelope on innovation. We have better control over timing, over cost and over quality."

Most vendors of consumer electronics products rely on outside suppliers for chip design and development, primarily because it is extremely expensive. That has created huge opportunities for companies like ARM, Qualcomm Inc and Nvidia Corp, which have developed core technologies for processing, communications and graphics that are used by scores of vendors.

Now, though, Apple is so big that it can economically create its own designs, or license small pieces of others' work and build on it. As with ARM and Qualcomm, the actual manufacturing of the chips is still contracted out to a semiconductor foundry, such as those run by Samsung Electronics and Taiwan Semiconductor Manufacturing Co Ltd.

Move Fast, Save Money

Bringing more of the design work in-house cuts complexity, people familiar with the processes say. Instead of managing one or more design teams and then a fabricator, Apple has only to manage the fabricator.

It may also help the company move faster - and save money - as it focuses on new technologies such as virtual and augmented reality. Apple CEO Tim Cook has indicated that Apple plans to integrate augmented reality into its products, which makes 3-D sensors and graphics chips like Imagination's especially important.

Even before formally cutting off Imagination, Apple had given hints that it was preparing to design its own graphics processors. Specifically, it introduced a piece of its own code called Metal for app developers. App developers use Metal to make their apps talk to the graphics chip on the iPhone.

By putting a piece of Apple-designed code between app developers and the phone's chip, Apple has made it possible to swap out the chip without interrupting how the developers work. That could also make it easier to bridge the gap for developers between the graphics chips on Apple's phones and its desktop computers, which currently require some separate coding.

“By promoting Metal instead of relying on other existing standards, Apple is not only able to control what graphics chip functionality is exposed at its own pace, but also blur the line for developers between coding for desktop and mobile GPUs," said Pius Uzamere, the founder of a virtual reality startup called Ether.

Taking control of the iPhone's chips can also help Apple keep costs down, which is especially important as it gears up for a feature-laden new iPhone this fall. Timothy Arcuri of Cowen & Co said in a research note that he thinks the curved screens expected on the new phone could add as much as $50 in cost, for example.

Shebly Seyrafi, an analyst at FBN Securities, estimates that the average price of an iPhone increased only 1 percent to $695 last quarter, while costs increased 8 percent to $420, resulting in an iPhone gross margin of 39.6 percent. That is down from the 44 percent average gross margin for iPhones in 2015, according to Seyrafi's estimates.

Apple spends only $75 million a year on licensing fees for Imagination's chips. But licensing fees to chip designers, taken together, are a significant cost for the iPhone. Apple recently sued Qualcomm for $1 billion over licensing terms for its communications chips - which Apple would have trouble designing in-house because of patent issues.

Article Link To Reuters:

Amazon Scores Streaming Rights For NFL's Thursday Night Football

By Jeffrey Dastin
April 5, 2017 Inc will live-stream games for the U.S. National Football League this year, a company spokeswoman said on Tuesday, marking a high-profile push by the online retailer to attract fans to its Prime shopping and video-playback club.

As part of the deal, Amazon will stream 10 Thursday-night games online for Prime members exclusively. The same games will be broadcast by networks CBS and NBC on television.

Amazon beat out Twitter Inc, Facebook Inc and Google's YouTube for the digital distribution rights, according to a person familiar with the matter. The Seattle-based company agreed to pay the NFL five times what Twitter spent on the rights last year, which was reported to be $10 million, the person said.

Amazon declined to comment on the deal's price tag.

The deal underscores a key strategy Amazon has to win a greater share of shoppers' wallets: offer benefits like fast shipping and video-streaming so people sign up for Prime and, consequently, turn to Amazon for more of their purchases.

While the Seattle-based company has streamed live events in the past, the NFL may be its biggest stage yet, and reflects Amazon's push beyond its mainstay of on-demand video.

Sports fans are increasingly relying on the internet to watch content at the expense of traditional cable and satellite connections. Twitter attracted 243,000 viewers on average during its NFL livestream debut last year.

"The NFL was a great partner to launch our strategy and we will continue to work with them to bring great content to our passionate sports fans," the social media company said in a statement.

News of the deal with Amazon was earlier reported by technology news site Recode.

Article Link To Reuters:

JAB Holdings In Advanced Talks To Buy Panera Bread

By Lauren Hirsch
April 5, 2017

JAB Holdings, the owner of Caribou Coffee and Peet's Coffee & Tea, is in advanced talks to acquire bakery chain Panera Bread Co (PNRA.O) as it expands its coffee and breakfast empire, a source familiar with the situation said on Tuesday.

JAB, which also owns coffee k-cup maker Keurig Green Mountain, could help Panera expand its breakfast business as it competes for the only growing meal in the fast-food industry.

The source requested anonymity because the talks are confidential. Luxembourg-based JAB, the investment vehicle of Germany's billionaire Reimann family, declined to comment. Panera also declined to comment.

St. Louis-based Panera, whose fresh offerings appeal to health-conscious consumers, has reported better-than-expected earnings per share for the last six quarters. Its stock has risen nearly 28 percent this year through last Friday, ahead of media reports on the talks.

Panera, which has 2,000 bakery cafes throughout the United States, has worked to remove artificial colors and preservatives from its menu. It has also faced increased competition for breakfast customers, as more restaurant chains cater to diners willing to pay for a cheap, fast breakfast but not a lunch or dinner.

In addition to breakfast stalwarts Starbucks Corp (SBUX.O) and Dunkin Brands Group Inc (DNKN.O), fast-food restaurant have jumped onto the breakfast bandwagon. McDonald's Corp (MCD.N) in 2015 added an all-day breakfast menu, and Yum! Brands Inc's (YUM.N) Taco Bell last year added a $1 breakfast menu.

JAB has been building its breakfast and coffee empire for years. It became the largest pure-play by volume in 2015, when its created Jacobs Douwe Egberts in Europe, a joint venture that combined its D.E. Master Blenders 1753 business with the coffee business of U.S.-based Mondelez International Inc (MDLZ.O).

Since then, it has acquired other breakfast and coffee companies, including Krispy Kreme Doughnuts for roughly $1.35 billion and Green Mountain for $13.9 billion.

JAB also controls cosmetics company Coty Inc (COTY.N) and luxury goods maker Jimmy Choo (CHOO.L).

Restaurant acquisitions have picked up speed in recent months, as the industry faces the challenge of a rising minimum wage. Restaurant Brands International (QSR.TO), which owns Burger King and Tim Hortons, in February announced a deal to buy Popeyes Louisiana Kitchen.

Darden Restaurants Inc (DRI.N), whose portfolio includes the Olive Garden and Longhorn Steakhouse chains, said in March it would buy casual dining chain Cheddars Scratch Kitchen.

Bloomberg first reported Panera was in advanced sale talks with JAB.

Article Link To Reuters:

Is China Already Altering Its Economy For Trump?

By Huileng Tan
April 5, 2017

It was just last week that details of the first meeting between President Donald Trump and his Chinese counterpart, Xi Jinping, were announced, but China has already been angling to position itself positively ahead of the encounter set for this week in Florida.

With Trump having repeatedly suggested on the campaign trail that China manipulated its currency to the downside, experts are saying the East Asian giant has done its best to prevent the yuan from falling further against the greenback by putting in measures to stem capital flight.

In fact, the renminbi has actually gained against the dollar in 2017 — even as it has fallen against a basket of currencies.

Shen Jianguang, chief economist at Mizuho Securities Asia said keeping the currency stable was a key move by China to present itself more positively, as was opening up the domestic bond market and the fund management sector to foreign companies.

And then there was the move in March this year, when the People's Bank of China (PBOC) raised the interest it charges for loans to banks by 10 basis points.

While many reported the move was a bid to stave off capital outflows and pre-empt CNY selling pressure after U.S. rates were hiked, there may be more than meets the eye, said Tim Condon, head of Asia research at ING Financial Markets.

"Ahead of the Trump-Xi summit favorable optics may have been a consideration," he said in a Monday note.

He added that PBOC's daily fix is a more important determinant of CNY moves rather than interest rates.

Indeed, "framing" China's pitch will be key, added Mizuho, where analysts are expecting a conciliatory tone at the meeting — even amid Trump's regular harping on China's large trade surplus with the U.S.

"We think that the compromise could take the form of Chinese investments in the U.S. creating jobs — this is already underway and more about framing," Mizuho said in a note Tuesday.

"What's more, China could open more sectors to U.S. firms and will rehash openness to high-tech U.S. imports as well as services trade as quid pro quo," the note added.

Some shift in trade may also be underway. According to the U.S. Commerce Department, the U.S. trade deficit fell sharply in February as imports from China fell by a record amount and American exports rose for a third straight month, the Associated Press reported on Tuesday.

There's nobody better to sell that pitch than Xi himself, said Kevin Nealer, principal and partner at business advisory The Scowcroft Group.

"President Xi is in a position to say credible, useful things about Chinese investment in the U.S." he said at a discussion at the Center for Strategic & International Studies in Washington D.C. on Friday.

For instance, the Chinese leader could talk about a voluntary restraint agreement on steel, auto parts and other sectors, he can also "tell a story about a transformed U.S.-China trade relationship," he said.

China could offer something "aspirational with a very big-dollar figure attached to it", Nealer added.

With Beijing possibly eyeing a stake in Trump's $1 trillion infrastructure push, China may already have a proposal tabled, said Christopher Johnson, the Freeman chair in China studies at CSIS at the same Friday event.

Xi Looks To Burnish Domestic Credibility

With the meeting taking place at Trump's home, the meeting could be "very fraught" for Xi, said Johnson, but the Chinese president has a bigger point to prove.

With a personality-driven following that many liken to former Chinese leader Mao Zedong, Xi does not appear to lack for self-confidence or vision, said Johnson. After all, he has managed to burnish his international credentials at events like the World Economic Forum in Davos, where his activities and speech generated significant attention.

Xi's meeting with Trump will be a series of public events leading to the 19th National Congress of the Communist Party of China to be held in Beijing this autumn. It will see the country's top leadership ranks decided, and it's the first such meeting since 2012.

As the Communist Party's newly-minted "core leader," Xi will need to prove that he can manage the external environment and China's most important bilateral relationship, according to Johnson.

"One might argue he will seek to control the incoming (U.S.) president because he had a pretty good track record under the previous president of managing the relationship quite well and seemingly outfoxing the previous president on certain issues," said Johnson.

Article Link To CNBC:

Dimon Warns ‘Something Is Wrong’ With The U.S.

Annual letter offers detailed assessment of economic problems; ‘It is understandable why so many are angry,’ Dimon writes.

Laura J. Keller
April 5, 2017

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon has two big pronouncements as the Trump administration starts reshaping the government: “The United States of America is truly an exceptional country,” and “it is clear that something is wrong.”

Dimon, leader of world’s most valuable bank and a counselor to the new president, used his 45-page annual letter to shareholders on Tuesday to list ways America is stronger than ever -- before jumping into a much longer list of self-inflicted problems that he said was “upsetting” to write.

Here’s the start: Since the turn of the century, the U.S. has dumped trillions of dollars into wars, piled huge debt onto students, forced legions of foreigners to leave after getting advanced degrees, driven millions of Americans out of the workplace with felonies for sometimes minor offenses and hobbled the housing market with hastily crafted layers of rules.

Dimon, who sits on Donald Trump’s business forum aimed at boosting job growth, is renowned for his optimism and has been voicing support this year for parts of the president’s business agenda. In February, Dimon predicted the U.S. would have a bright economic future if the new administration carries out plans to overhaul taxes, rein in rules and boost infrastructure investment. In an interview last month, he credited Trump with boosting consumer and business confidence in growth, and reawakening “animal spirits.”

Understands Anger

But on Tuesday, reasons for concern kept coming. Labor market participation is low, Dimon wrote. Inner-city schools are failing poor kids. High schools and vocational schools aren’t providing skills to get decent jobs. Infrastructure planning and spending is so anemic that the U.S. hasn’t built a major airport in more than 20 years. Corporate taxes are so onerous it’s driving capital and brains overseas. Regulation is excessive.

“It is understandable why so many are angry at the leaders of America’s institutions, including businesses, schools and governments,” Dimon, 61, summarized. “This can understandably lead to disenchantment with trade, globalization and even our free enterprise system, which for so many people seems not to have worked.”

Dimon’s name repeatedly came up last year as a potential Treasury secretary after Trump rode a wave of populism to win the November election. The job ultimately went to Steven Mnuchin, a former Goldman Sachs Group Inc. partner who had served as the campaign’s national finance chairman.

While Dimon’s letter marked a shift in his typical tone, he said he remains optimistic about JPMorgan’s ability to expand and profit. And the bank’s leaders have confidence in the underlying growth of the U.S. and global economies, he said.

Still, the U.S. is paying the price for bad decisions, and “something has gone awry in the public’s understanding of business and free enterprise,” he said.

“We need trust and confidence in our institutions,” he concluded. “Confidence is the ‘secret sauce’ that, without spending any money, helps the economy grow.”

Article Link To Bloomberg:

Trump Needs A Plan To Deal With China

By Editorial Board
The Bloomberg View
April 5, 2017

On the eve of their first-ever meeting this week, Chinese leader Xi Jinping has one great advantage over U.S. President Donald Trump: He knows what he wants. By contrast, U.S. policy toward China looks confused and contradictory. Until and unless this changes, not much progress will be made on critical issues in the most important bilateral relationship in the world.

China's president craves stability as he manages a slowing economy and oversees a major leadership transition this fall. China needs the world trading system to remain open; it would prefer that countries stick to their ambitious targets for reducing carbon emissions. Above all, it would like the room to pursue its strategic goals at home, in the region and around the world.

In the Trump administration, various advisers appear to be fighting over how and to what extent the U.S. should pursue trade complaints Trump raised on the campaign trail. Trump has had to reverse himself on the question of Taiwan, even as Secretary of State Rex Tillerson quietly walked back tough statements about the South China Sea dispute. The decision to abandon the Trans-Pacific Partnership has gravely damaged U.S. credibility. Huge proposed cuts to the State Department would hamper its ability to engage in regional diplomacy.

To have any chance of altering Chinese behavior, Trump needs a stronger and more coherent message. That means, first, identifying and prioritizing a set of clear, reasonable demands -- and then pushing them consistently across a broad front.

This has to start with North Korea, which launched another ballistic missile test on the eve of the talks. Rather than demand that China single-handedly rein in Kim Jong Un's regime, the administration needs to make clear that Chinese unhelpfulness threatens cooperation on any other bilateral issue. It should then test China's sincerity by demanding action on specific Chinese companies and banks involved in illicit trade with North Korea. The U.S. should be willing to discuss China's own priorities, including restarting talks between Washington and Pyongyang, but demand to see progress on sanctions first.

On trade, the administration should be similarly focused. Rather than issuing empty threats about imposing 45 percent tariffs or declaring China a currency manipulator -- for which there’s a shaky case at best -- the U.S. should look for ways to limit Chinese access to the U.S. market on a case-by-case, sector-by-sector basis. Massive Chinese investment in strategic industries such as semiconductors may deserve extra scrutiny; buyouts of Hollywood studios don't pose a similar threat. Accelerating negotiations on a bilateral investment treaty is in the interest of both sides.

Again, credibility depends on consistency -- which is especially important to U.S. allies in the region. Whatever the flaws in former President Barack Obama's "rebalance" strategy in Asia, it at least accelerated U.S. diplomatic engagement with Asian governments and citizens, visibly increased America's military presence in the region, and affirmed the U.S.'s commitment to trade. The Trump administration needs to work swiftly to rebuild and nurture these relationships, which have been eroded in just a few short months.

None of this will produce a quick breakthrough or grand bargain. At best, it will result in a series of incremental victories -- and then only if China sees that the administration is unwavering in its demands. That’s surely more, however, than can be expected of the current approach.

Article Link To The Bloomberg View:

Why Republicans Need To Rally Around Trump

Republicans must take Trump as he is, and try to find common ground on the issues where they differ.

By Ying Ma
The National Interest
April 5, 2017

During the 2016 campaign, numerous prominent conservatives opposed the Trump candidacy and warned that its success would be inexorably bad for conservatism.

Some two months into his presidency, rifts between Donald Trump and conservatives are in plain sight. The new president has blamed the recent failure to repeal and replace Obamacare on the conservative House Freedom Caucus. In various presidential tweets, he named and blamed various caucus members and even threatened to fight against the group along with Democrats in the midterm elections of 2018.

Were Trump’s conservative critics correct all along that he is bad for their cause?

While the failure to repeal Obamacare is no doubt a setback for the Trump administration and Republicans in general, conservatives should nevertheless be heartened by the overall progress made and broad direction set by the new president. Unconventional though his presidency may be—and it certainly is, beyond the wildest imagination—Trump has pursued an agenda that is friendly to many of conservatism’s cherished ideals.

Since his inauguration, President Trump has picked a cabinet that many acknowledge is the most conservative in history and nominated Neil Gorsuch, a highly respected conservative judge, to the Supreme Court. Furthermore, he has pursued regulatory reform, border and homeland security and pro-market measures that conservatives have long supported.

Regulatory Reform

While controversies—ranging from Russia’s interference with the 2016 presidential campaign to Trump’s accusations of the Obama administration’s “wiretapping”—have kept pundits and lawmakers busy, far less attention has been paid to the steady stream of White House executive orders and actions that chip away at the excess and absurdity of the federal regulatory state.

Since his inauguration, President Trump has done the following.

• Instructed every federal agency to establish a task force to study regulatory reform and make recommendations for simplifying and repealing cumbersome regulations.

• Required federal agencies to identify two regulations for elimination before issuing a new one.

• Ordered a comprehensive plan for reorganizing the Executive Branch (including by eliminating unnecessary agencies) to improve efficiency, accountability and effectiveness.

• Imposed a hiring freeze (that exempts the military) across the Executive Branch.

Conservatives have long complained about the gargantuan size of the federal government, the cumbersome regulations that stunt job growth and hamper entrepreneurship, and the army of faceless, nameless bureaucrats who waste taxpayer money but are seemingly immune to removal based on performance.

Trump, not known as a conservative, has taken the first steps toward thwarting the stupidity of government excess. Obviously, much more beyond the initial executive orders will be required to enact real, far-reaching regulatory reform. Still, conservatives should be pleased with the progress made during Trump’s first days in office.

Pro-Market Reforms

Meanwhile, the Trump administration has begun to remove Obama-era financial regulations and economic roadblocks that conservatives have long considered to be burdensome to the market.

Thus far, the administration has enacted the following measures.

• Commenced the rollback of various Obama administration energy regulations, including the controversial Clean Power Plan that restricts greenhouse gas emissions but have been criticized by conservatives for hurting jobs in the coal industry.

• Permitted the construction of the Keystone XL and the Dakota Access oil pipelines, both of which create jobs and deliver crude oil across the United States but stalled under the previous administration.

• Moved to reverse Obama-era financial regulations, including the Dodd-Frank Wall Street Reform and Consumer Protection Act regulations passed after the global financial crisis of 2008 to 2009 that have been criticized by conservatives for hampering lending, harming community banks and stunting economic growth.

Other Obama-era regulations have been targeted as well, with President Trump promising to “remove every job-killing regulation we can find.” These are words that should be music to conservative ears.

Border And Homeland Security

Trump’s rhetoric and actions on securing the border and defending the homeland against radical Islamic terrorism have created huge controversies. In many ways, they strike squarely at the core of what matters to conservatives: sovereignty and security. While plenty of Republicans, like Florida Sen. Marco Rubio and Arizona Sen. John McCain, are eager to offer amnesty to illegal immigrants, conservatives in the GOP base see things differently, and expressed their preferences accordingly by voting Trump into office.

Since assuming office, Trump has taken the following actions.

• Authorized the immediate plan, design and construction of “a physical wall along the southern border.” The Department of Homeland Security has in turn solicited bids from vendors for such a wall.

• Ordered the “faithful execution of the immigration laws of the United States,” the stripping of federal funds to sanctuary cities, the hiring of five thousand more Border Patrol agents, and an end to “catch-and-release” for illegal immigrants. Attorney General Jeff Sessions has since then reiterated the administration’s commitment to defund sanctuary cities.

• Put in place temporary restrictions of travel and directed heightened screening and vetting for visa applicants from terror-prone countries.

The construction of the wall no doubt faces numerous obstacles (including funding), while the executive order on travel restrictions is now tied up in court. Nevertheless, these are action items that conservatives in the GOP base overwhelmingly support.

On The Horizon

Down the road, there are numerous opportunities for making big changes and inking lasting legislative deals in the Trump era. The administration and congressional Republicans are now pursuing broad-ranging tax reform, a goal all conservatives have considered laudable for a long time. Though the recent failure to repeal Obamacare was disappointing, another compromise may well be possible down the road. Conservatives should remember that such an effort would have never been attempted by Hillary Clinton, Trump’s Democratic opponent in the presidential race.

Certainly, Trump will not follow traditional conservatism on certain policy issues. In particular, he differs significantly from GOP orthodoxy on free trade. On the campaign trail, he repeatedly threatened to impose stiff tariffs on imports from America’s major trading partners (45 percent tariff on imports from China and 35 percent on Mexico). Since assuming office, his administration has withdrawn U.S. participation in the Trans-Pacific Partnership, a free trade pact that free-market conservatives widely supported.

Conservatives will have to take Trump as he is, and attempt to find common ground on the issues where they differ. Whatever their qualms might have been, Trump has proven during his short time in office that he is, in fact, what former Speaker Newt Gingrich described during the election: “a natural ally of conservatism.” He has concluded, as Gingrich has argued, “that bureaucracy doesn’t work, that political correctness is stupid and that American interests as a nation deserves to be protected.” These conclusions fall well in alignment with conservative thought, and conservatives should be glad that the Trump administration has attempted to translate some of them into policy.

The Spectacle

Of course, governing requires mundane policy details and actual legislative achievements. The Trump presidency has given America a grand spectacle that is far more captivating in numerous other ways. For instance, when the president recently tweeted that everyone should watch Justice with Judge Jeanine on Fox News and the good judge delivered a strongly worded monologue calling for Speaker Ryan to step down, speculations abound about whether President Trump agreed with Judge Jeanine’s sentiments. The ensuing drama alone attracted more attention than Trump’s entire regulatory reform agenda.

Yet despite all the controversies and all the indignation from the mainstream media, the administration has outlined a blueprint for bold action and reform. Conservatives should not be afraid or ashamed to like it.

Article Link To The National Interest:

Window Closing For Republican Stealth Assault On U.S. Regulations

By Lisa Lambert and Sarah N. Lynch 
April 5, 2017

The clock began running out this week on a strategy that has provided U.S. Republicans in Congress with their only notable legislative successes this year: aggressive use of an obscure U.S. law known as the Congressional Review Act (CRA).

On his 75th day in power, President Donald Trump has yet to offer any major legislation or win passage of a bill he favors, but House of Representatives Majority Leader Kevin McCarthy has notched numerous small-scale victories with his strategy.

Vice President Mike Pence told business leaders at the White House on Tuesday that Trump would sign more CRA resolutions soon and roll back an "avalanche of red tape" from the administration of President Barack Obama, a Democrat.

Since Trump took office on Jan. 20, McCarthy has led Congress in churning out 13 resolutions under the CRA killing Obama-era regulations, most of concern to business interests.

Trump has signed 11 of these into law, not only rolling back the rules they targeted but also barring agencies from writing "substantially similar" regulations in the future.

White House spokesman Sean Spicer said on Tuesday the number of resolutions signed over two months showed Trump is "vastly different" from past presidents in rolling back regulations.

On Monday Trump signed a CRA resolution repealing broadband privacy protections. He has also signed resolutions killing rules meant to expand background checks for mentally ill gun purchasers, change public school assessments, and reduce coal waste runoff into streams.

Last Friday was the deadline for introducing any new CRA resolutions on regulations enacted by Obama's administration. Now Republicans must complete voting on resolutions already in the legislative pipeline by mid-May.

Democrats assail the reversals as harming the environment, education and checks on Wall Street, with many saying the regulations were killed in order to please big-money lobbyists.

Representative Louise Slaughter, the senior Democrat on the Rules Committee that sends resolutions to the House floor for votes, said in an interview "of course it benefits the lobbyists."

But she said fumbles around healthcare and tax reform also pushed CRA resolutions to the fore.

"Partly I think it’s because they don’t have anything else to do," she said about Republicans' eagerness. "Other than that I think it's just another 'take that Obama.'"

Unintended Consequences

McCarthy, a Californian and the No. 2 House Republican, saw the CRA's potential before the election. Written in 1996 and successfully used only once before 2017, the law was originally meant to restore the balance of power between Congress and the federal bureaucracy. But lobbyists and lawmakers recognized it could be used as a policy weapon, if the stars aligned.

Under the law, resolutions only need simple majorities in each chamber to go on for the president's signature. So one party must control both the legislative and executive branches for it to work. The law sets a short time span for introducing disapproval resolutions: 60 legislative days after a regulation is finalized, meaning it can only be used right after a president of an opposing party leaves office.

The stars aligned on Nov. 8, when Republicans captured the White House, Senate and House. For weeks Republican lawmakers bombarded McCarthy with lists of regulations to repeal and lobbying groups laid plans. The first disapproval resolutions were introduced on Jan. 30.

Right after the election, McCarthy told his party to "go through each regulation on our priority list," he said.

"If you look at Article One of the Constitution, this isn’t the role of these agencies. The agencies have become too big," McCarthy said in an interview with Reuters.

The first resolutions sailed through, primarily because Republicans had opposed the regulations long before they were finalized. McCarthy said so many lawmakers objected to the stream pollution rule that wiping it off the books was easy.

Even though the CRA effort is winding down, McCarthy's brief campaign showed that aggressive use of the law could succeed, and provided Republicans with some modest, but needed successes in a time when they are struggling with larger matters.

"After years of talk about cutting red tape, it is now actually happening," House Speaker Paul Ryan said on Tuesday. "We are reversing the Obama administration’s most recent and last regulatory onslaught."

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