On The Hill

FOOD FIGHT: With tough reelection fights ahead, a handful of vulnerable Republican senators decided against biting the hand that feeds them. Senate Intelligence Committee Chair Richard Burr (R-N.C.) faced public backlash on Thursday from his colleagues over his surprising decision to subpoena Donald Trump Jr. to testify again in the committee's probe of Russian interference in the 2016 election.

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“I was very surprised,” Trump told reporters at the White House on Thursday. “I saw Richard Burr saying there was no collusion two or three weeks ago.”

Sens. John Cornyn (R-Tex.), Thom Tillis (R-N.C.), and others up for reelection in 2020 — who are likely to rely on help from the president on the campaign trail and the surrogacy of his son -- released public expressions of support for the Trump family and told reporters they disagreed with Burr.

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“The Mueller report has concluded no collusion, and Barr said no obstruction. What’s the deal? Why is this continuing on? I think there needs to be a better conversation about that,” Sen. John Cornyn (R-Texas), an Intelligence Committee member, told Politico's Burgess Everett and Marianne Levine.

“Don’s gotten really good,” Trump has privately said of his son's stumping for Republicans during the 2018 midterms, according to my colleagues Ashley Parker and Phil Rucker. “My people love him.”

Despite the mounting pressure and scrutiny, Burr has not backed down from his decision, privately defending his “reasoning behind the subpoena, according to people familiar with the discussion — including the timeline of the negotiations with Trump Jr. over his repeat testimony,” my colleagues Seung Min Kim and Karoun Demirjian report.

Allies of Burr told Power Up they don't expect the independent-minded senator to bend:

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“No one is going to influence Richard Burr — he doesn't care about any of this press coverage, ” a GOP strategist told Power Up. “I think he genuinely feeds that there was a reason for him to issue a subpoena . . . it shows a lack of a political calculus but in normal times, this would be a reasonable thing to do. Richard Burr is a big supporter of Donald Trump.”

“Senator Burr is doing his best to run an honest and fair bipartisan investigation,” Michael Steel, a partner at Hamilton Place Strategies and former spokesman for ex-House speaker John Boehner (R-Ohio), told Power Up. “I think that it might well be a different calculus for him if he were running for reelection — especially if he were in cycle in 2020 but he’s not.”

Sen. Marco Rubio (R-Fla.) defended Burr and said some of his colleagues seemed to have “inaccurately conflated” the committee's investigation with Bob Mueller's probe, per Seung Min and Karoun: “Mueller is a criminal justice investigation,” Rubio said. “Ours is an intelligence investigation about the Russia threat and about the way our agencies performed.”

Trump Jr.'s fate is now essentially in the hands of Senate Majority Leader Mitch McConnell (R-Ky.), who is also up for reelection in 2020:

“The GOP tensions could escalate further if the president’s eldest son defies the subpoena and Burr triggers a showdown by insisting on enforcing the summons — leaving it in the hands of McConnell to decide whether to hold Trump Jr. in contempt of Congress,” Seung Min and Karoun write.

A source with direct knowledge confirmed to Power Up that McConnell defended Burr's decision to issue a subpoena during a closed-door GOP lunch on Thursday. Publicly, the GOP leader spent the week pushing the line “case closed” with regards Mueller's investigation (not to mention placing an op-ed defending Trump in his favorite newspaper: The New York Post).

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“Mr. McConnell’s remarks seemed to many to run counter to a closely watched speech he delivered on the Senate floor this week, in which he declared the “case closed” on Russian collusion after the Mueller report . Donald Trump Jr. and several Republican senators pointed to the speech as evidence that Mr. Burr was missing his cues,” the New York Times's Nicholas Fandos, Maggie Haberman and Alexander Burns report.

“However, McConnell also acknowledged an exception for the Intelligence Committee’s probe, which he said should continue,” Seung Min and Karoun reported.

GOP strategists and Senate staffers viewed McConnell's "case closed” rhetoric as a deliberate decision to lay down a marker in an effort to move people off the topic.

“McConnell is where he is because he's a Zen master at navigating precarious positions,” GOP strategist Kevin Madden told Power Up. “This isn't the first committee chair to do what they believe is best for their committee. McConnell knows exactly where to shore up bulwarks of support elsewhere in his conference. As far as popularity as a measure, his political capital is always expertly deployed inside his home state and inside his Senate majority. That's how you become the longest serving leader in your party.”

“McConnell is a political survivor, ” a GOP Senate staffer told Power Up, adding that certain parts of the country like “what the Trumps are doing,” and McConnell understands that better than anyone.

“People have fallen in line with the McConnell messaging tone and context more than the alternative. A lot of folks have come out and made it clear that it is case closed,” the GOP strategist added.

At the White House

U.S. ESCALATES TRADE WAR at 12:01 a.m.: “The United States and China hurtled toward a defining moment in their four-decade-old, with financial markets bracing for the outcome of unusually dramatic trade talks in Washington,” our colleagues David J. Lynch and Damian Paletta report. Despite meeting Thursday evening, the two sides were unable to avert an increase in U.S. tariffs on $200 billion in Chinese products.

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What’s next: The two sides have agreed to continue talks today. There are no meetings with the Chinese on Trump's public schedule but White House spokesperson Judd Deere tweeted a This evening, Ambassador Lightizer and Secretary Mnuchin met with POTUS to discuss the ongoing trade negotiations with China. The Ambassador and Secretary then had a working dinner with Vice Premier Liu He, and agreed to continue discussions tomorrow morning at USTR.” The two sides have agreed to continue talks today. There are no meetings with the Chinese on Trump's public schedule but White House spokesperson Judd Deere tweeted a status update last night: “

There’s still time: “Because the higher tariffs apply only to goods that leave China on Friday — not shipments already approaching American shores — officials still have time to work out a last-minute solution,” David and Damian write.

Political consequences: “At stake — along with industrial supply chains supporting millions of American jobs — was the president’s core campaign promise to rebalance the U.S. trading relationship with China in favor of American blue-collar workers. Nearly $660 billion in goods were traded between the two countries last year,” David and Damian write.

The markets react: “Soybeans, a commodity sensitive to the state of Sino-US relations, have fallen below $8 a bushel for the first time since the financial crisis as uncertainty rises over trade talks between Washington and Beijing," according to the Financial Times's Gregory Meyer.

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“A sharp slide in the price of the oilseed came alongside a broader sell-off in financial markets on Thursday, with US stocks down about 1 percent at midday and long-term US government interest rates tumbling below short-term rates, in a sign investors were concerned about the economic outlook.”

“Countermeasures” are coming: Late last night, China vowed to retaliate. A statement from te Chinese commerce ministry, from CNBC's Beijing Bureau Chief, Eunice Yoon:

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At the Pentagon

TRUMP NAMES NEW DEFENSE SEC: President Trump ended months of uncertainty on Thursday by nominating acting Defense Secretary Patrick Shanahan as his pick to permanently head the Pentagon. A former Boeing executive, Shanahan is “a relatively low-profile and soft-spoken” leader at a time when tensions with Iran, Venezuela and North Korea are worsening, our colleagues Missy Ryan and Paul Sonne report.

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Goodbye to the brass cabinet: Shanahan signals a shift for Trump from tapping former generals to top national security positions, like former Defense secretary Jim Mattis.

His resume: “Before joining the Pentagon in 2017, Shanahan spent his career in the private sector with little foreign policy experience and no military background,” Missy and Paul write. “But for more than 18 months, he served as deputy defense secretary, overseeing budgets, weaponry and technology, in addition to spearheading the drive for Trump’s Space Force.”

How he took the news: “I called my mom,” Shanahan told reporters outside the Pentagon after the announcement. “She was super happy.”

The coming confirmation fight: “The Senate panel, chaired by Jim Inhofe (R-Okla.), has long been known for its bipartisan approach. But its members have had major differences with Shanahan and the administration more broadly in recent months,” As the trio point out, two 2020 candidates — Sens. Elizabeth Warren (Mass) and Kirsten Gillibrand (N.Y.) -- sit on the committee. “The Senate panel, chaired by Jim Inhofe (R-Okla.), has long been known for its bipartisan approach. But its members have had major differences with Shanahan and the administration more broadly in recent months,” Politico’s Bryan Bender, Connor O’Brien and Wesley Morgan write of the Senate Armed Services panel that will vet Shanahan.

As the trio point out, two 2020 candidates — Sens. Elizabeth Warren (Mass) and Kirsten Gillibrand (N.Y.) -- sit on the committee.

Global Power

INSIDE THE DECLINING U.S.-NORTH KOREAN RELATIONS: “President Trump and North Korean leader Kim Jong Un shattered more than a year of relative tranquility Thursday with the U.S. seizure of a North Korean vessel and the isolated regime’s launch of two short-range ballistic missiles,” our colleagues John Hudson and Josh Dawsey report.

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The latest: “It was the first time the United States had seized a North Korean cargo vessel for violating international sanctions, the Justice Department said, and the first confirmed missile test by Pyongyang in more than 500 days,” John and Josh write.

Things were different just last month: “Last month, Trump sent Kim a 'happy birthday' letter commemorating the birth date of his grandfather, Kim Il Sung, and expressed interest in future engagements following the collapse of their meeting in February in Hanoi,” per John and Josh.

Inside the White House: “Trump also has battled with his top advisers to preserve a positive atmosphere for a deal. On Tuesday, Trump told South Korea’s president in a phone call that he supports aid for North Korea to ease food shortages, despite the concerns of some U.S. officials that it might ease internal pressure on the regime,” John and Josh write.

The president has long pushed backed against criticism to his approach to Pyongyang and “recently complained privately that Kim makes for a tough and mercurial negotiating partner,” ‘It’s not like [I’m] dealing with the president of France,’ Trump said at a recent private gathering of supporters.”

Inside Kim’s circle: “In April, Kim demoted his point man for the nuclear talks, Kim Yong Chol, rebuking a prominent hard-liner and former spy chief who exasperated U.S. negotiators with his stubborn demands and aloof demeanor, two State Department officials said,” John and Josh report.

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“Besides blaming his own subordinates, Kim has directed his aides to lash out at Trump’s top advisers for enforcing a hard line in the negotiations, said diplomats familiar with the matter.”

Outside the Beltway

ALABAMA DELAYS ABORTION VOTE: Lawmakers in Alabama abruptly delayed consideration on Thursday of what could become the nation’s strictest abortion law, “a bill that would outlaw most abortions in the state and make performing the procedure a felony punishable by up to 99 years imprisonment,” our colleagues Emily Wax-Thibodeaux and Ariana Eunjung Cha report.

Shouting broke out on the state Senate floor: “The tumult and yelling on the Senate floor began when some Republicans attempted to remove amendments that would have allowed women to get abortions in cases of rape or incest,” Emily and Ariana report.

What’s next: Republican Senate President Pro Tempore Del Marsh voted to table the bill until next week, asking senators to “set the reset button” by taking the weekend to think about it.

The bigger picture: “Alabama is among more than two dozen states that have sought to impose new restrictions on abortion this year.

Georgia on Tuesday became the sixth state to impose a ban on abortions after the sixth week of pregnancy. It will, however, be challenged in the courts.

"Executives at three film production companies have vowed not to shoot anything in Georgia following news that Gov. Brian Kemp signed a restrictive 'heartbeat' abortion bill," the Atlanta Journal Constitution's Rodney Ho.

In the Media

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