Over the course of the past two days, the United States and China have held candid and constructive conversations on the status of the trade relationship between both countries. The relationship between President Xi and myself remains a very strong one, and conversations……..into the future will continue. In the meantime, the United States has imposed Tariffs on China, which may or may not be removed depending on what happens with respect to future negotiations!
…is what Donald Trump digitally shrieked on Friday afternoon in the course of bidding a tumultuous business week adieu.
An exhausted financial media lazily attributed US stocks’ green close in part to those tweets and to generalized “optimism” that a trade deal between the world’s two largest economies is still within reach, despite tariffs ratcheting higher on Friday. The US side informed the Chinese delegation that Beijing has one month to close a deal, or else face tariffs on the remainder of the country’s exports to the US.
Just after 6:30 PM ET, the USTR said details of levies on $300 billion in additional Chinese goods are coming on Monday.
The Dow’s 450-point Friday turnaround notwithstanding, the damage was already done by the time Trump and Vice Premier Liu He got around to rolling out the “candid and constructive” characterization to describe this week’s talks. It was the worst week for US stocks since December.
After the closing bell sounded on Wall Street, news broke that Richard Neal’s Ways and Means committee issued subpoenas compelling Steven Mnuchin and IRS Commissioner Charles Rettig to hand over six years of Trump’s tax returns by next Friday at 5 PM.
The move ends speculation about how Neal would proceed following Mnuchin’s decision to stonewall the committee on the advice of Willian Barr’s Justice Department.
“The IRS is under a mandatory obligation to provide the information requested”, Neal wrote, in a letter accompanying the subpoena. “The IRS has had more than four weeks to comply with the Committee’s straightforward request. Therefore, please see the enclosed subpoena.”
That subpoena demands the returns, administrative files, affidavits for those returns and, amusingly, returns for the Donald J. Trump Revocable Trust, the umbrella under which all manner of the president’s businesses sit, including “the winter White House” at Mar-a-Lago. You can read the full letter and subpoena below.
“After reviewing the options available to me, and upon the advice of counsel, I issued a subpoena today to the secretary of the Treasury and the commissioner of the I.R.S. for six years of personal and business returns”, Neal said in a statement, adding that while he doesn’t “take this step lightly, I believe this action gives us the best opportunity to succeed and obtain the requested material.”
At this point, Trump is staring down subpoenas from the Ways and Means, Judiciary, Oversight, Financial Services and the Intelligence Committees. The president has promised to fight literally all of them – as one does when one is innocent and when one takes seriously the idea of checks and balances.
Assuming Mnuchin continues to argue that Neal has no legislative purpose for the request, he (Neal) will likely take the matter to court when the deadline expires a week from now.
Apparently, the subpoena will bolster Neal’s chances given legal ambiguity around the Section 6103 invocation. Really, though, there was no ambiguity, which is what paradoxically made this such an interesting legal subplot. Tax attorneys variously suggested that Neal was unequivocally entitled to Trump’s returns, but it was the novelty of resorting to an arcane tax code provision to obtain a sitting president’s returns that raised questions about how it would hold up in court.
“The subpoena could bolster Neal’s position in federal court because it will help him demonstrate he pursued all possible avenues to obtain the returns before filing a lawsuit against the administration”, the Washington Post writes, citing Steve Rosenthal, a legal expert at the Tax Policy Center. “That, at least in theory, will make it less likely for the court to strike down his claim on procedural grounds”, WaPo added.
And so, the legal battle for the Holy Grail of Trump dirt is now joined. This comes during a week that saw the White House assert executive privilege over the unredacted Mueller report following Jerry Nadler’s move to hold William Barr in contempt. And it comes two weeks and three weeks, respectively, after Trump sued Deutsche Bank and Elijah Cummings in an effort to block Congress from getting their hands on other financial records. Also this week, America learned that the GOP-controlled Senate Intelligence Committee subpoenaed Don Jr., much to the chagrin of the president.
As ever, the question is who will be willing to push back if Trump simply decides to defy anyone and everyone on everything. As ridiculous as this sounds, it’s not entirely far-fetched to suggest that he might refuse to comply if the courts rule against him, which brings the discussion back to what we said the day after Barr delivered his infamous four-page summary of the Mueller report.
America is midway through a transition to becoming an autocratic state. No matter what you might hear from the liberal or the conservative media (they would both call this idea insane, only for different reasons), it is by no means clear who would stop Trump if he simply instructed Mnuchin (and, by extension, the IRS) not to hand over his returns under any circumstances, no matter who’s asking and no matter what the courts say. You might well claim that kind of brazenness would be grounds for immediate impeachment, but Republicans would just say the courts are wrong, and even if the GOP went along with impeachment proceedings, who, exactly, is going to remove Trump from the White House if he refuses to leave?
It’s something to think about, precisely because I’m not sure anybody has a good answer.
Full letter and subpoena from Richard NealNealFull