U.S. Supreme Court takes up presidential Electoral College dispute

By Andrew Chung

WASHINGTON (Reuters) – As the 2020 race heats up, the Supreme Court agreed on Friday to hear a dispute involving the complex U.S. presidential election system focusing on whether Electoral College electors are free to break their pledges to back the candidate who wins their state’s popular vote, an act that could upend an election.

The Supreme Court will take up appeals in two cases – from Washington state and Colorado – involving electors who decided to vote in the Electoral College process for someone other than Democrat Hillary Clinton in 2016 even though she won the popular vote in their states.

The justices will determine if such so-called faithless electors have the discretion to cast Electoral College votes as they see fit or whether states can impose restrictions including with penalties. The case is expected to be argued in April and decided by the end of June.

President Donald Trump is seeking re-election on Nov. 3, with a field of Democrats seeking their party’s nomination to challenge him. His administration did not take a side in either case.

“We are glad the Supreme Court has recognized the paramount importance of clearly determining the rules of the road for presidential electors for the upcoming election and all future elections,” said Lawrence Lessig, a lawyer for the faithless electors sanctioned in Washington and Colorado.

Colorado Secretary of State Jena Griswold, a Democrat, said she hopes the justices will let states enforce their laws.

“Unelected and unaccountable presidential electors should not be allowed to decide the presidential election without regard to voters’ choices and state law,” Griswold said.

The dispute involves the U.S. presidential election system set out in the U.S. Constitution in which the winner is determined not by amassing a majority of the national popular vote but by securing a majority of the electoral votes that are allotted to the 50 U.S. states and the District of Columbia.

Individuals who serve as Electoral College electors – typically party loyalists – cast these votes. All states, with the exception of Maine and Nebraska, have a winner-takes-all system awarding all electors to the presidential candidate who wins the state’s popular vote.

The number of electors in each state is the sum of its two U.S. senators and its number of members in the House of Representatives, based on population size. The District of Columbia, which is not a state, is allotted three electors.

Typically an overlooked formality, the Electoral College took on greater importance after the 2016 election, when 10 electors cast ballots for someone other than their party’s candidate. That was an unusually high number of faithless electors and could have changed the outcome in five of the 58 prior U.S. presidential elections, according to legal papers in one of the appeals filed at the Supreme Court.

LOSING THE POPULAR VOTE

Trump defeated Democratic rival Hillary Clinton by a margin of 304 to 227 Electoral College votes despite losing the popular vote nationally by about 3 million votes. Faithless electors could change the outcome of presidential elections with thinner Electoral College margins.

Electors pledge to vote for their party’s candidate if that person wins the state’s popular vote. At issue in the cases are laws requiring that electors follow through on those pledges.

While 32 states and the District of Columbia have such laws, a handful enforce them by removing and replacing faithless electors, or in some cases, imposing fines.

The plaintiffs challenged the sanctions, saying they were deprived of their rights under the Constitution’s Article II as well as its 12th Amendment, which spell out the Electoral College process.

In Colorado, one elector, Micheal Baca, was replaced and his vote canceled when he sought to vote for Republican John Kasich, Ohio’s former governor. A federal judge dismissed Baca’s challenge, but the Denver-based 10th U.S. Circuit Court of Appeals last year revived the suit, concluding that Baca’s constitutional rights were violated.

The Washington state case arose after three faithless electors voted for former U.S. Secretary of State Colin Powell, a moderate Republican, instead of Clinton. They each were fined $1,000 for their defiance, which they called the first such penalty in U.S. history. The Washington Supreme Court in 2019 upheld the fines.

(Reporting by Andrew Chung; Editing by Will Dunham)

Explainer: How close is Iran to producing a nuclear bomb?

By Francois Murphy and Arshad Mohammed

VIENNA/WASHINGTON (Reuters) – The central achievement of the Iran nuclear deal – keeping Tehran at arm’s length from nuclear weapons – is eroding.

The 2015 accord’s many restrictions on Iran’s atomic activities were built around one objective: to extend the “breakout time” Tehran would need to produce enough fissile material for one atomic bomb – if it decided to do so – to at least a year from around 2-3 months.

Iran maintains that it has never sought nuclear weapons and never would. It has long said it has enriched for civilian purposes including future nuclear energy and research projects.

Tehran began breaching the deal’s curbs last year in a step-by-step response to President Donald Trump’s withdrawal of the United States from the deal in May 2018 and the reimposition of U.S. sanctions that have throttled Iran’s vital oil exports.

Those breaches have shortened the breakout time slightly, though Iran is far from sprinting ahead as fast as it could, reports by the U.N. nuclear watchdog policing the deal show.

But the breaches have been enough to prompt the European signatories to the deal to trigger its dispute resolution mechanism, raising the prospect of the global, United Nations sanctions that were lifted under the deal being reinstated.

WHAT HAS IRAN DONE?

Iran has contravened many of the deal’s core restrictions, but has said it will continue to cooperate with the International Atomic Energy Agency and its inspectors. The deal has imposed on Iran the most intrusive nuclear verification regime of any country, and it has not backed out of that yet.

* Enriched uranium – The deal limits Iran’s stockpile of enriched uranium to 202.8 kg – less than half the amount it was producing per quarter before its accord with world powers, and a small fraction of the tonnes it possessed. This was the first of Iran’s breaches last year, verified by the IAEA on July 1. The last quarterly IAEA report in November said the stockpile stood at 372.3 kg. It will have continued to increase since then.

* Enrichment level – The deal caps the fissile purity to which Iran can refine uranium to at 3.67%, far below the 20% it was achieving before the deal and the 90% that is weapons-grade. Iran breached that cap on July 8. Since then, however, its enrichment level has remained steady at up to 4.5%.

* Centrifuges – The deal only allows Iran to produce enriched uranium with about 5,000 first-generation IR-1 centrifuges at its Natanz plant. It can operate small numbers of more advanced – faster-producing, more durable and efficient – models there without accumulating enriched uranium. Iran had roughly 19,000 installed centrifuges before the deal.

The IAEA verified on Sept. 25 that Iran had begun enriching with advanced centrifuges, but in much smaller numbers than the IR-1s. Iran has brought online two 164-machine cascades of centrifuges that were dismantled under the deal, and installed smaller clusters of other models. As those come online, its production of enriched uranium is likely to increase.

The Islamic Republic has yet to breach the cap on IR-1 centrifuges at Natanz.

* Fordow – The deal bans enrichment at Fordow, a site that Iran secretly built inside a mountain and was exposed by Western intelligence services in 2009. Centrifuges are allowed there for other purposes, like producing stable isotopes https://www.iaea.org/topics/nuclear-science/isotopes/stable-isotopes. Iran began enriching there on Nov. 9 but only with a small number of IR-1s.

HOW CLOSE IS IRAN TO HAVING A BOMB NOW?

The breaches have eaten into the breakout time slightly, but estimates of the current breakout time vary. Many diplomats and nuclear experts also believe the starting point of one year is a conservative estimate.

A European diplomat who previously put the breakout time at 12 months declined to offer an estimate but said Iran’s actions were now “having a serious impact”.

Another diplomat pointed to a statement by France’s foreign minister last week that it would take Iran one to two years to get a bomb, though it was not clear if that meant the necessary fissile material or an actual weapon.

David Albright, a former U.N. weapons inspector and a hawk on Iran, said Tehran could within five to 10 months amass 900 kg of uranium enriched to 4.5% at its current rate. That amount, if further refined, could yield the 25 kg of weapons-grade, highly enriched uranium needed for one nuclear bomb.

WHAT MORE WOULD IRAN NEED TO DO?

Even if Iran had accumulated sufficient fissile material, it would need to assemble a bomb, probably one small enough to be carried by its ballistic missiles. How long that would take exactly is unclear, but stockpiling enough fissile material is widely seen as the biggest hurdle in producing a weapon.

Both U.S. intelligence agencies and the IAEA believe Iran once had a nuclear weapons program that it halted. There is evidence suggesting Iran obtained a design for a nuclear weapon and carried out various types of work relevant to making one.

U.S. intelligence experts, however, believe Iran has yet to demonstrate an intention to shatter the 2015 deal, three U.S. government sources said, noting Tehran continues to grant the IAEA access to its declared nuclear facilities.

(Additional reporting by John Irish in Paris, Mark Hosenball and Jonathan Landay in Washington, Anthony Deutsch in Amsterdam; Editing by Mark Heinrich)

Yosemite National Park says 170 people ill in possible norovirus outbreak

(Reuters) – Some 170 people who have spent time in Yosemite National Park in recent weeks have suffered from a gastrointestinal ailment “consistent with norovirus” and two have been diagnosed with the illness, park officials said on Thursday.

Most of those who became ill spent time in Yosemite Valley during or around the first week in January, park spokesman Scott Gediman said in a written statement, while the number of new cases reported has declined in the past several days.

Yosemite and national park health officials were investigating the outbreak, Gediman said, adding: “The overwhelming majority of the reported cases are consistent with norovirus.”

The U.S. Centers for Disease Control and Prevention describes norovirus as a very contagious stomach illness, spread by contact with an infected person or contaminated surfaces, that causes vomiting and diarrhea.

Gediman said Yosemite was undertaking “extensive cleaning and enhanced sanitation protocols” following the outbreak.

(Reporting by Dan Whitcomb in Culver City, California; editing by Richard Pullin)

Iran can take fight beyond its borders, Khamenei says in rare sermon

By Parisa Hafezi

DUBAI (Reuters) – The Revolutionary Guards can take their fight beyond Iran’s borders, the supreme leader said on Friday, responding to the U.S. killing of his country’s most prominent commander and to anti-government unrest at home over the downing of an airliner.

In his first Friday prayers sermon in eight years, Ayatollah Ali Khamenei also told thousands of Iranians who chanted “Death to America!” that European powers could not be trusted in Iran’s nuclear standoff with Washington.

Iran’s nuclear ambitions have been at the heart of a months-long crisis, which briefly erupted in January into tit-for-tat military strikes between Iran and the United States.

“Resistance must continue until the region is completely freed from the enemy’s tyranny,” Khamenei said, demanding that U.S. troops leave neighboring Iraq and the wider Middle East.

Washington’s withdrawal in 2018 from Tehran’s nuclear deal with world powers and the reimposition of U.S. sanctions that have crippled Iran’s economy, led to the latest cycle of hostilities between Washington and Tehran, which have been at odds since the 1979 revolution toppled the U.S.-backed shah.

U.S. President Donald Trump ordered the killing in a drone strike on Jan. 3 of Qassem Soleimani, commander of the Quds Force, a unit of the Guards responsible for expanding Iran’s influence abroad. He built up regional militias that Washington has blamed for attacks on U.S. forces.

Iran responded with missile strikes on U.S. targets in Iraq on Jan. 8, injuring although not killing U.S. troops.

“The fact that Iran has the power to give such a slap to a world power shows the hand of God,” said Khamenei, in a reference to the strikes, adding that the killing of Soleimani showed Washington’s “terrorist nature”.

The Quds Force “protects oppressed nations across the region,” Khamenei said. “They are fighters without borders.”

In the tense aftermath of Iran’s missile strikes on U.S. targets when Iranian forces expected U.S. reprisals, the Guards’ air defenses shot down a Ukrainian airliner in error, killing all 176 people on board, mostly Iranians or dual nationals.

It took days for the Guards, which answer directly to Khamenei, to admit their mistake, even though a commander said he had told the authorities about the cause the same day. The delay sparked protests across Iran, sometimes meeting a violent crackdown.

‘AMERICAN CLOWNS’

Trump sent tweets in Farsi and English to support the demonstrators, drawing a sharp response from Khamenei.

“These American clowns who lie and say they are with the Iranian people should see who the Iranian people are,” he said in his sermon, telling Iranians to unite and show solidarity by turning out in numbers in a February parliamentary election.

Khamenei called for national unity and said Iran’s “enemies” had tried to use the downing of Ukraine International Airlines flight 752 to shift attention from the killing of Soleimani.

Most of those on the flight were Iranians or dual nationals. Canada, Ukraine, Britain, Sweden and Afghanistan, which all had citizens on the flight, have demanded compensation and a thorough investigation into what happened.

Khamenei described the crash as a tragedy, but stopped short of a direct apology although the Guards and other officials have issued profuse apologies since the incident. The supreme leader also called for steps to ensure there was no repeat.

The funeral of Soleimani, long portrayed as a national hero in Iran but seen by the West as a ruthless adversary, had brought huge numbers of Iranian mourners to the streets.

But scenes of mourning for Soleimani were followed by four days of protests over the plane disaster, when demonstrators chanted “Death to Khamenei” and scrawled it on walls. “Clerics get lost,” they shouted, as protests spread to several cities.

To quell the demonstrations, riot police were sent onto the streets in force, lining up outside universities that were a focus for the protests. Video footage online showed protesters were beaten and also recorded gunshots and blood on the streets.

Iran’s police denied firing at protesters and said officers had been ordered to show restraint.

In the bloodiest unrest the country has seen since 1979, Iranian authorities two months ago suppressed protests that erupted over sharp fuel price hikes, which have added to the suffering of ordinary Iranians already hurt by U.S. sanctions.

In reaction to Washington’s “maximum pressure” policy, Tehran has gradually scaled back on commitments to the nuclear deal, including lifting limits on its uranium enrichment.

Britain, France and Germany , which have been trying to salvage the pact, have subsequently launched the deal’s s dispute mechanism over Iran’s violations, starting a diplomatic process that could lead to reimposing U.N. sanctions.

“These European countries cannot be trusted. Even their negotiations with Iran are full of deceit,” Khamenei said.

(Reporting by Parisa Hafezi and Babak Dehghanpisheh; Editing by Edmund Blair and Gareth Jones)

Trump impeachment trial opens; White House faulted on Ukraine aid freeze

By Susan Cornwell and Susan Heavey

WASHINGTON (Reuters) – As the Senate formally opened the impeachment trial on whether to remove Donald Trump from office, a nonpartisan congressional watchdog on Thursday dealt the Republican president a blow by concluding that the White House violated the law by withholding security aid approved for Ukraine by U.S. lawmakers.

Democrat Adam Schiff, who heads a team of seven House of Representatives members who will serve as prosecutors, appeared on the Senate floor to read the two charges passed by the House on Dec. 18 accusing Trump of abuse of power and obstruction of Congress arising from his dealings with Ukraine.

The trial’s opening formalities were to continue later in the day, with U.S. Chief Justice John Roberts set to be sworn in to preside over the proceedings and then swear in all 100 senators to serve as jurors. Opening statements in the trial, only the third in U.S. history, are expected on Tuesday.

The abuse of power cited by the House included Trump’s withholding of $391 million in security aid for Ukraine, a move Democrats have said was aimed at pressuring Kiev into investigating political rival Joe Biden, the president’s possible opponent in the Nov. 3 U.S. election.

“Faithful execution of the law does not permit the President to substitute his own policy priorities for those that Congress has enacted into law,” the Government Accountability Office (GAO) concluded, referring to the fact that Congress had already voted to appropriate the funds.

An arm of Congress, the GAO is viewed as a top auditing agency for the federal government that advises lawmakers and various government entities on how taxpayer dollars are spent.

While the agency’s assessment was a setback to Trump, it was unclear how or even if it would figure in his trial in the Republican-led Senate given that key issues such as whether witnesses will appear or new evidence will be considered remain up in the air.

Democrats said the GAO report showed the importance of the Senate hearing from witnesses and considering new documents in the trial.

“This reinforces – again – the need for documents and eyewitnesses in the Senate,” House Speaker Nancy Pelosi told a news conference.

Senate Majority Leader Mitch McConnell, a Republican, has said senators should consider only the evidence amassed by the House.

The House voted on Wednesday 228-193, largely along party lines, to give the Senate the task of putting Trump on trial. The Senate is expected to acquit him, keeping Trump in office, as none of its 53 Republicans has voiced support for removing him, a step that requires a two-thirds majority.

Trump has denied wrongdoing and has called the impeachment process a sham.

DEMOCRAT SOUGHT REPORT

The GAO issued its opinion after receiving a letter inquiring about the aid from Democratic Senator Chris Van Hollen. The agency’s findings are not legally binding, but its reports are seen by lawmakers as objective, reliable and generally uncontested. The GAO has no prosecutorial power.

Its report noted that the U.S. Constitution grants a president no unilateral authority to withhold funds in the way that Trump did. Instead, a president has a “strictly circumscribed authority” to withhold spending only in limited circumstances expressly provided by law. Holding up money for a policy reason, which the Trump administration did in this case, is not permitted, the report said.

Asked about the GAO report, House Republican leader Kevin McCarthy defended Trump’s withholding of aid, citing concerns about corruption in Ukraine’s new government.

“I think it was the rightful thing to do,” McCarthy told a news conference.

Congress approved the $391 million to help Ukraine combat Russia-backed separatists in the eastern part of the country. The money ultimately was provided to Kiev in September after the controversy had spilled into public view.

A pivotal event leading to Trump’s impeachment was a July 25 call in which he asked Ukraine’s president to investigate Biden and his son Hunter Biden over unsubstantiated allegations of corruption and to look into a discredited theory that Ukraine, not Russia, interfered in the 2016 U.S. election.

Schiff indicated that the House prosecutors were considering calling Lev Parnas, an associate of Trump’s personal lawyer Rudy Giuliani, as a witness if the Senate permits testimony in the trial.

“We are continuing to review his (media) interviews and the materials he has provided to evaluate his potential testimony in the Senate trial,” Schiff said in a statement.

Giuliani has said Parnas, a Ukraine-born U.S. citizen, helped him in investigating the Bidens. Documents released this week indicate Parnas was also involved in monitoring the movements of former ambassador to Ukraine Marie Yovanovitch before Trump removed her in May after being urged to do so by Giuliani.

Democrats have said Trump abused his power by asking a foreign government to interfere in a U.S. election for his own benefit at the expense of American national security.

Republicans have argued that Trump’s actions did not rise to the level of impeachable offenses. They have accused Democrats of using the Ukraine affair as a way to nullify Trump’s 2016 election victory.

The Senate will formally notify the White House of Trump’s impending trial later on Thursday.

(Reporting by Susan Cornwell and Susan Heavey; Additional reporting by David Morgan and Richard Cowan; Writing by Sonya Hepinstall; Editing by Will Dunham)

Harvey Weinstein jury selection: bias, big data and ‘likes’

By Tom Hals

(Reuters) – When lawyers in the Harvey Weinstein rape trial question potential jurors on Thursday, they may already know who has used the #MeToo hashtag on Twitter or criticized victims of sexual harassment in a Facebook discussion.

The intersection of big data capabilities and prevalence of social media has transformed the business of jury research in the United States, which once meant gleaning information about potential jurors from car bumper stickers or the appearance of a home.

Now, consultants scour Facebook, Twitter, Reddit and other social media platforms for hard-to-find comments or “likes” in discussion groups or even selfies of a juror wearing a potentially biased t-shirt.

“This is a whole new generation of information than we had in the past,” said Jeffrey Frederick, the director of Jury Research Services at the National Legal Research Group Inc.

The techniques seem tailor-made for the Weinstein trial, which has become a focal point for #MeToo, the social media movement that has exposed sexual misconduct by powerful men in business, politics and entertainment.

Weinstein, 67, has pleaded not guilty to charges of assaulting two women. The once-powerful movie producer faces life in prison if convicted on the most serious charge, predatory sexual assault.

On Thursday, the legal teams will begin questioning potential jurors, a process known as voir dire. More than 100 people passed an initial screening and the identities of many of those people have been known publicly for days, allowing for extensive background research.

Mark Geragos, a defense lawyer, said it is almost malpractice to ignore jurors’ online activity, particularly in high-profile cases.

When Geragos was representing Scott Peterson, who was later found guilty of the 2002 murder of his pregnant wife Laci, it came to light that a woman told an internet chatroom she had duped both legal teams to get on the California jury.

“You just never know if someone is telling the truth,” said Geragos.

Weinstein’s lawyer, Donna Rotunno, told Reuters recently that her team was considering hiring a firm to investigate jurors’ social media use to weed out bias.

The Manhattan District Attorney’s office does not use jury consultants and office spokesman Danny Frost declined to comment if prosecutors were reviewing potential jurors’ social media.

Frederick’s firm, which has not been involved in the Weinstein case, creates huge databases of online activity relevant to a case, drilling down into interactions that do not appear in a user’s social media timeline. His firm combs through Facebook news articles about a particular case or topic, cataloging every comment, reply, share as well as emojis or “likes,” in the hopes some were posted by a potential juror.

“The social media aspect can be enormously helpful in looking at people’s political motives,” said defense attorney Michael Bachner. He said Weinstein’s team will probably want to know about a potential juror’s ties to women’s causes, with “#MeToo being the obvious one.”

Consultants only use public information and focus on those with extremist views, said Roy Futterman of consulting firm DOAR.

“You’re looking for the worst juror,” he said.

Julieanne Himelstein, a former federal prosecutor, said the best vetting tool remains a lawyer’s questioning of a potential juror in the courtroom.

“That trumps all the sophisticated intelligence gathering anyone can do,” said Himelstein.

But trial veterans said that potential jurors are reluctant to admit unpopular viewpoints during voir dire, such as skepticism about workplace sexual harassment.

During questioning in a trial involving a drug company, consultant Christina Marinakis recalled a potential juror who said he did not have negative feelings toward pharmaceutical companies.

“We found he had a blog where he was just going off on capitalism and Corporate America and pharmaceutical companies especially,” said Marinakis, the director of jury research for Litigation Insights. The juror was dismissed.

Marinakis said the blog was written under a username, and only came to light by digging through the juror’s social media for references to pseudonyms.

Lawyers can reject an unlimited number of potential jurors if they show bias. Each side can typically use “peremptory” challenges to eliminate up to three potential jurors they believe will be unsympathetic, without providing a reason.

In a Canadian civil trial, jury consulting firm Vijilent discovered that a potential juror who appeared to be a stay-at-home mom with no history of social activism, in fact had been arrested three times for civil disobedience while promoting the causes of indigenous people.

“Unless you got into her social media, you wouldn’t have known that information,” said Vijilent founder Rosanna Garcia.

(Reporting by Tom Hals; additional reporting by Brendan Pierson and Gabriella Borter in New York; Editing by Noeleen Walder and Rosalba O’Brien)

U.S., China set to sign massive purchases deal, easing trade war

By David Lawder

WASHINGTON (Reuters) – U.S. President Donald Trump and Chinese Vice Premier Liu He will sign an initial trade deal on Wednesday that will roll back some tariffs and see China boost purchases of U.S. goods and services, defusing an 18-month conflict between the world’s two largest economies.

Liu said the two sides will work more closely together to obtain tangible results and achieve a win-win relationship despite differences in their political and economic models, China’s official Xinhua news agency reported on Wednesday.

U.S. officials called the deal a huge win that marked a significant shift in Washington’s relations with China, but said it included a tough enforcement measure that could trigger renewed tariffs if Beijing does not live up to its promises.

The Phase 1 agreement caps a trade war marked by tit-for-tat tariffs that has hit hundreds of billions of dollars in goods, roiling financial markets, uprooting supply chains and slowing global growth.

Some analysts and economists have questioned whether the outcome of the drawn-out talks justified that economic pain.

Trump and Liu, who led the Chinese side in the trade talks with Washington, are scheduled to sign the 86-page Phase 1 deal at a White House event at 11:30 a.m. EST (1630 GMT) before over 200 invited guests from business, government and diplomatic circles.

It is not clear at this time whether the entire document will be released on Wednesday.

Trump, who entered the White House in 2017 vowing to rebalance global trade in favor of the United States, has already begun touting the deal as a pillar in his 2020 re-election campaign, calling it “a big beautiful monster” at a rally in Toledo, Ohio last week.

“Our farmers will take it in. I keep saying, ‘Go buy larger tractors, go buy larger tractors,'” Trump said.

The centerpiece of the deal is a pledge by China to purchase an additional $200 billion worth of U.S. farm products and other goods and services over two years. That will help reduce the bilateral U.S. trade deficit in goods, which peaked at $420 billion in 2018. The United States had a small services trade surplus with China of $40.5 billion in 2018.

Top White House economic adviser Larry Kudlow told Fox News the agreement would add 0.5 percentage point to U.S. gross domestic product growth in both 2020 and 2021.

Kudlow said the deal called for China to buy an additional $75 billion worth of U.S. manufactured goods over the two-year period. A source told Reuters this week that would include aircraft, autos and car parts, agricultural machinery and medical devices.

Beijing will boost energy purchases by some $50 billion and services by $40 billion, mostly in the financial sector, Kudlow said.

The Reuters source said agricultural purchases will get a $32 billion lift over the two years, compared to a 2017 baseline of U.S. exports to China.

When combined with the $24 billion in 2017 farm exports, the $16 billion annual increase approaches Trump’s goal of $40 billion to $50 billion in annual agricultural sales to China.

China will significantly increase imports of U.S. soybeans after the Phase 1 deal is signed, the Global Times reported on Wednesday, citing comments from a senior Chinese economist at a state think tank.

Wang Liaowei, senior economist at the China National Grain and Oils Information Center, which is under the National Food and Strategic Reserves Administration, also told the paper that imports of U.S. products such as pork and cotton could also see a jump.

Although the deal could be a big boost to farmers, planemaker Boeing <BA.N>, U.S. automakers and heavy equipment manufacturers, some analysts question https://af.reuters.com/article/commoditiesNews/idAFL4N29J26S China’s ability to divert imports from other trading partners to the United States.

“I find a radical shift in Chinese spending unlikely. I have low expectations for meeting stated goals,” said Jim Paulsen, chief investment strategist at Leuthold Group in Minneapolis. “But I do think the whole negotiation has moved the football forward for both the U.S. and China.”

TARIFFS TO STAY

The Phase 1 deal, reached in December, canceled planned U.S. tariffs on Chinese-made cellphones, toys and laptop computers and halved the tariff rate to 7.5% on about $120 billion worth of other Chinese goods, including flat panel televisions, Bluetooth headphones and footwear.

But it will leave in place 25% tariffs on a vast, $250 billion array of Chinese industrial goods and components used by U.S. manufacturers.

U.S. Treasury Secretary Steven Mnuchin told CNBC on Wednesday the deal would boost the U.S. economy, and that Washington could lower tariffs as part of a Phase 2 agreement that would address complex issues such as cybersecurity.

Mnuchin said the U.S. relationship with China was complicated and Washington would continue to raise humanitarian and national security concerns with Beijing in separate discussions. “You have to negotiate different pieces at different times,” he said.

He said Chinese telecom equipment maker Huawei Technologies Co Ltd was not a “chess piece” in the economic negotiations.

China’s Global Times said the Phase 2 discussions may not start anytime soon.

Evidence is mounting that tariffs have raised input costs for U.S. manufacturers, eroding their competitiveness.

Diesel engine maker Cummins Inc <CMI.N> said on Tuesday that the deal will leave it paying $150 million in tariffs for engines and castings that it produces in China.

The company issued a tepid statement of approval on Tuesday: “We believe this is a positive step and remain optimistic that all parties will remain at the table in order to create a pathway to eliminate all of the instituted tariffs.”

Lighthizer and Mnuchin insisted there were no side agreements to remove more tariffs after the November U.S. elections. Mnuchin on Wednesday reiterated that Trump could consider easing tariffs if the two countries move quickly to seal a Phase 2 follow-up agreement.

CORE ISSUES UNTOUCHED

The Phase 1 deal includes pledges by China to forbid the forced transfer of American technology to Chinese firms as well as to increase protections for U.S. intellectual property.

But it stops well short of addressing the core U.S. complaints about China’s trade and intellectual property practices that prompted the Trump administration to pressure Beijing for changes in early 2017.

The deal contains no provisions to rein in rampant subsidies for state-owned enterprises, which the administration blames for excess capacity in steel and aluminum and says threaten industries from aircraft to semiconductors.

It also fails to address digital trade restrictions and China’s onerous cybersecurity regulations that have hobbled U.S. technology firms in China.

China has agreed in the Phase 1 deal to open its financial services sector more widely to U.S. firms, and to refrain from deliberately pushing down its currency to gain a trade advantage, the latter prompting Treasury to drop its currency manipulator label on Beijing.

(Additional reporting by Lisa Lambert, Andrea Shalal, Echo Wang, Alexandra Alper, and Herb Lash in New York, and Se Young Lee and Stella Qui in Beijing; Editing by Simon Cameron-Moore and Paul Simao)

China to ramp up U.S. car, aircraft, energy purchases in trade deal: source

By David Lawder and Andrea Shalal

WASHINGTON (Reuters) – China has pledged to buy almost $80 billion of additional manufactured goods from the United States over the next two years as part of a trade war truce, according to a source, a target that could provide a much-needed boost for planemaker Boeing but is being questioned by U.S. trade experts.

Under the trade deal to be signed on Wednesday in Washington, China would also buy over $50 billion more in energy supplies, and boost purchases of U.S. services by about $35 billion over the same two-year period, the source told Reuters late on Monday.

The Phase 1 agreement calls for Chinese purchases of U.S. agricultural goods to increase by some $32 billion over two years, or roughly $16 billion a year, said the source, who was briefed on the deal.

When combined with the $24 billion U.S. agricultural export baseline in 2017, the total gets close to the $40 billion annual goal touted by U.S. President Donald Trump.

The numbers are expected to be announced at Wednesday’s White House signing ceremony between Trump and Chinese Vice Premier Liu He and represent a staggering increase over recent Chinese imports of U.S. manufactured goods. The size of the targets has raised questions https://af.reuters.com/article/commoditiesNews/idAFL4N29J26S about how realistic they are.

BEYOND THE FARM

Two other sources familiar with the Phase 1 trade deal agreed with the rough breakdown of the purchases, without providing specific numbers.

A spokesman for U.S. Trade Representative Robert Lighthizer’s office could not immediately be reached for comment.

Lighthizer on Monday called the deal a “huge step forward” for U.S.-China trade relations and “a really, really good deal for the United States.” He told Fox Business Network that Beijing’s compliance would be monitored closely.

Lighthizer and his counterparts from Japan and the European Union on Tuesday took aim at China, proposing new global trade rules to curb subsidies that they say are distorting the worldwide economy.

Beijing’s subsidies to state-owned firms are expected to be addressed under a later Phase 2 U.S.-China trade deal, but it remains unclear when those negotiations will begin.

Senate Democratic Leader Chuck Schumer warned Trump in a letter that a weak agreement that failed to address what he called China’s “rapacious trade behaviors” and structural inequities would harm U.S. workers and firms for years to come.

When the Phase 1 trade deal was struck on Dec. 13, U.S. officials said China had agreed to buy $200 billion in additional U.S. farm products, manufactured goods, energy and services over the next two years, compared to the baseline of 2017.

They said they would publish targets for the four broad areas, but would keep details of specific products classified to avoid market distortions.

The $32 billion agriculture increase over 2017 was confirmed by Myron Brilliant, the U.S. Chamber of Commerce’s head of international affairs, who spoke to reporters on Monday in Beijing.

Analysts and traders doubted whether China could absorb such a big increase. Relying on the United States so heavily could expose China to price and supply risks, they said.

Large Chinese purchases of Brazilian soybeans and Beijing’s suspension of a plan to implement a nationwide gasoline blend containing 10% ethanol this year have also raised questions about China’s ability to double its imports of U.S. farm products.

Trump had mainly touted the increased farm exports, which would benefit a major political constituency that has been battered by Chinese retaliatory tariffs during his 18-month trade war with Beijing.

Company executives have been waiting eagerly for details of what other U.S. goods China would be buying more of, aside from farm products, after 18 months of tit-for-tat tariffs that have stalled U.S. business investment.

MANUFACTURING CHALLENGES

The $80 billion increase for manufactured goods includes significant purchases of autos, auto parts, aircraft, agricultural machinery, medical devices and semiconductors, said one of the sources, without naming any specific suppliers.

The aircraft would likely be built by Boeing Co <BA.N>, the No. 1 U.S. exporter, whose new sales to China have ground to a halt over the past two years. That would be a welcome boost for the aerospace giant, where shares and earnings have plummeted as its best-selling 737 MAX aircraft remains grounded due to two fatal crashes.

The source providing the purchase figures expressed skepticism about manufactured goods pledges by Beijing since the U.S.-China trade deal does not address any of the non-tariff barriers that have kept these U.S. goods out of the Chinese market for decades, including procurement rules, product standards and subsidies to Chinese state-owned firms.

With Chinese car sales flagging and excess domestic assembly capacity on the rise, China would seem unlikely to purchase significantly more U.S.-built cars. Among the most popular U.S.-built vehicles sold in China are BMW <BMWG.DE> and Mercedes-Benz <DAIGn.DE> sport-utility vehicles.

China also has major industrial policy goals to dominate the very manufacturing sectors in which it has pledged to pump up purchases of U.S. goods, further fueling skepticism.

Many economists and experts are dubious the Phase 1 trade agreement will be implemented as written, despite what U.S. officials describe as an important enforcement clause.

If a U.S. claim of Chinese non-compliance cannot be resolved, Washington would have the right to reimpose tariffs on Chinese goods in proportion to the economic damage alleged. But nothing would preclude China from retaliating, people familiar with the deal said.

Oil traders and analysts were also doubtful whether China would be able to purchase an extra $50 billion of energy products, including crude oil, liquefied natural gas (LNG) and imports of petrochemical raw materials such as ethane and liquefied petroleum gas (LPG).

(Additional reporting by Gabriel Crossley and Hallie Gu in Beijing, and Florence Tan in Singapore; Editing by Simon Cameron-Moore and Howard Goller)

Oil back in positive territory ahead of U.S.-China trade deal

By Ron Bousso

LONDON (Reuters) – Global oil benchmark Brent crude rose to more than $64.50, recovering from four days of declines on easing Middle East tensions, as the United States and China prepared to sign a preliminary trade deal.

Brent crude gained 43 cents, or 0.7%, to $64.63 a barrel by 1507 GMT. U.S. West Texas Intermediate crude futures rose 11 cents, or 0.2%, to $58.20 a barrel.

The outlook for oil demand was supported by the expected signing of a Phase 1 U.S.-China trade deal on Wednesday, marking a major step in ending a dispute that has cut global growth and dented demand for oil.

China has pledged to buy more than $50 billion in energy supplies from the United States over the next two years, according to a source briefed on the trade deal.

The trade war between the world’s two biggest energy consumers had a tangible impact on global oil demand growth last year, said Tamas Varga, an analyst at broker PVM. Varga pointed to 2019 demand growth of 890,000 barrels per day (bpd), compared with initial forecasts of 1.5 million bpd.

“This year, however, the pace is expected to pick up again and average 1.25 million bpd … In the event of a trade deal upward revisions can be anticipated,” Varga said.

Regardless of trade wars, China’s crude oil imports in 2019 surged 9.5% from the previous year, setting a record for a 17th straight year as demand growth from new refineries propelled purchases by the world’s top importer, data showed.

However, gains were limited by easing concern over possible supply disruptions as a result of tensions in the Middle East.

The recent declines came as investors unwound bullish positions built after the killing of a senior Iranian general in a U.S. air strike on Jan. 2, which sent oil prices to a four-month high, said Harry Tchilinguirian, global oil strategist at BNP Paribas in London.

“As geopolitical tensions take a back seat for now, we may see more of the same in the short term,” Tchilinguirian told the Reuters Global Oil Forum.

Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, said his country will work for oil market stability at a time of heightened U.S.-Iranian tension.

He also said it was too early to talk about whether the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, would continue with production curbs that are due to expire in March.

Separately, U.S. crude oil inventories were expected to have fallen last week, a preliminary Reuters poll showed on Monday.

The poll was conducted ahead of reports from the American Petroleum Institute (API), an industry group, and the Energy Information Administration, an agency of the U.S. Department of Energy.

(Additional reporting By Jessica Jaganathan; Editing by Louise Heavens and David Goodman)

Factbox: Trump impeachment – what happens next?

(Reuters) – The Democratic-led U.S. House of Representatives is expected to vote on Wednesday to send formal impeachment charges against President Donald Trump to the Senate, where Majority Leader Mitch McConnell has said he would help acquit his fellow Republican at a trial.

Here is what can be expected in the coming days and weeks:

Jan. 15

The House will vote to formally transmit the charges against Trump to the Senate, according to House Speaker Nancy Pelosi. Democratic lawmakers, who represent the House majority, voted along party lines on Dec. 18 to impeach Trump over his dealings with Ukraine.

The resolution would also appoint a number of House Democrats as “managers,” who would prosecute Trump in the Senate on charges that he abused his power by pressuring Ukraine to investigate former Vice President Joe Biden, a leading Democratic presidential contender for 2020, and that Trump obstructed efforts by Congress to uncover any misconduct.

Pelosi had delayed sending the charges to the Senate in an unsuccessful effort to get McConnell to agree to allow new witness testimony that could be damaging to Trump.

Jan. 16

A Wednesday vote would lead the Senate to take up impeachment on Thursday. The Senate will likely take several days to get through formalities before the trial begins in earnest.

The Senate would initially receive notification from the House that managers have been appointed and then adopt a resolution telling the House when it is ready to receive the managers to present the charges, known formally as articles of impeachment.

The House managers would then physically bring the articles of impeachment into the well of the Senate and present them. The Senate would inform the House when it is ready for the trial and organize for the proceedings.

U.S. Chief Justice John Roberts would be sworn in to preside over the trial. Senators would be sworn in as jurors.

Week of Jan. 20

House managers would present their case against Trump, and the president’s legal team would respond, with senators sitting as jurors. McConnell has said the Senate will sit in session six days a week, taking only Sundays off.

Senators would then be given time to submit questions to each side.

Senators could also vote on whether to dismiss the charges against Trump.

McConnell has said that, once the charges are formally submitted to the Senate, he will back a resolution that would set initial rules for the trial but postpone a decision on whether to hear from witnesses.

McConnell has not yet published a draft of the resolution but he said it would be “very similar” to one adopted in January 1999 during the impeachment of Democratic former President Bill Clinton.

That resolution set deadlines for the prosecution and defense to submit “trial briefs” that laid out their cases in writing. The resolution also allocated 24 hours for representatives of each side to make oral arguments and set aside 16 hours for senators to ask them questions.

The Clinton resolution referenced by McConnell did not resolve whether witnesses would be called. A follow-up resolution allowing for three witnesses to testify in videotaped depositions passed later along a party-line vote.

Late January to early February

Democrats will push to hear from witnesses during the trial. If McConnell’s resolution on initial trial rules is adopted, as expected, senators would likely vote after the trial has started on whether to introduce witness testimony sought by the Democrats. Republicans could seek to call witnesses of their own as well.

The Senate now has 53 Republicans, 45 Democrats and two independents who usually vote with the Democrats. That means four Republicans would need to cross party lines and join Democrats in requesting witness testimony.

The trial could continue into February, when Iowa and New Hampshire hold the first nominating contests for the 2020 presidential election. That could pose logistical problems for the four senators seeking the Democratic nomination: Bernie Sanders, Elizabeth Warren, Amy Klobuchar and Michael Bennet.

(Reporting by David Morgan and Jan Wolfe; editing by Andy Sullivan and Grant McCool)