Mnuchin reports movement on COVID-19 relief as House heads toward vote

By David Lawder and Susan Cornwell

WASHINGTON (Reuters) – U.S. Treasury Secretary Steven Mnuchin on Wednesday said talks with House Speaker Nancy Pelosi made progress on COVID-19 relief legislation, though no deal was reached and the House of Representatives prepared to vote on a $2.2 trillion Democratic coronavirus relief bill.

Less than five weeks before the Nov. 3 presidential and congressional elections, Mnuchin and Pelosi both said negotiations would continue toward a bipartisan agreement to deliver aid to millions of Americans and businesses reeling from the coronavirus pandemic. The virus has infected more than 7.2 million people and killed over 206,000 in the United States.

“We made a lot of progress over the last few days. We still don’t have an agreement, but we have more work to do. And we’re going to see where we end up,” Mnuchin told reporters after meeting with Pelosi for about 90 minutes in the U.S. Capitol.

“We’ve made a lot of progress in a lot of areas,” he said.

For her part, Pelosi avoided use of the term “progress.”

“Secretary Mnuchin and I had an extensive conversation and we found areas where we are seeking further clarification. Our conversation will continue,” the top Democrat in Congress said in a statement.

She said the House would vote late on Wednesday on a $2.2 trillion updated Heroes Act “to formalize our proffer to Republicans in the negotiations to address the health and economic catastrophe in our country.” A vote was expected between 8 p.m. and 9 p.m. EDT (0000-0100 GMT on Thursday).

Before the meeting in Pelosi’s office broke up, Senate Majority Leader Mitch McConnell, a Republican, told reporters that Republicans and Democrats were still “very, very far apart” on how much to spend and called Pelosi’s $2.2 trillion bill “outlandish.”

House Democratic Conference Chairman Hakeem Jeffries told reporters that a vote on the legislation would show the Democratic caucus’ “vision on what’s right legislatively at this moment.”

Formal talks between Pelosi, Mnuchin, Senate Democratic leader Chuck Schumer and White House Chief of Staff Mark Meadows broke down on Aug. 7. Pelosi has since taken the lead for Democrats.

Before talks between Pelosi and Mnuchin resumed, the White House had said Trump could agree to a $1.3 trillion bill.

(Reporting by David Lawder, David Morgan, Richard Cowan and Susan Cornwell; Editing by Lisa Shumaker, Chizu Nomiyama and Jonathan Oatis)

‘Sometimes you have to walk’: Trump scraps North Korea summit deal

U.S. President Donald Trump holds a news conference after his summit with North Korean leader Kim Jong Un at the JW Marriott hotel in Hanoi, Vietnam, February 28, 2019. REUTERS/Leah Millis

By Jeff Mason and Josh Smith

HANOI (Reuters) – U.S. President Donald Trump said he had walked away from a nuclear deal at his summit with Kim Jong Un in Vietnam on Thursday because of unacceptable demands from the North Korean leader to lift punishing U.S.-led sanctions.

Trump said two days of talks in the Vietnamese capital Hanoi had made good progress in building relations and on the key issue of denuclearization, but it was important not to rush into a bad deal.

“It was all about the sanctions,” Trump said at a news conference after the talks were cut short. “Basically, they wanted the sanctions lifted in their entirety, and we couldn’t do that.”

The United Nations and the United States ratcheted up sanctions on North Korea when the reclusive state undertook a series of nuclear and ballistic missile tests in 2017, cutting off its main sources hard cash.

Trump and Kim cut short their talks, skipping a planned working lunch at the French-colonial-era Metropole hotel after a morning of meetings.

“Sometimes you have to walk, and this was just one of those times,” Trump said, adding “it was a friendly walk”.

He later left Vietnam to return to Washington.

Failure to reach an agreement marks a setback for Trump, a self-styled dealmaker under pressure at home over his ties to Russia and testimony from Michael Cohen, his former personal lawyer who accused him of breaking the law while in office.

Trump said Cohen “lied a lot” during Congressional testimony in Washington on Wednesday, though he had told the truth when he said there had been “no collusion” with Russia.

The collapse of the talks raised questions about the Trump administration’s preparations and about what some critics see as his cavalier style of personal diplomacy.

Since their first summit in Singapore in June, Trump has stressed his good chemistry with Kim, but there have been doubts about whether the bonhomie could move them beyond summit pageantry to substantive progress on eliminating a North Korean nuclear arsenal that threatens the United States.

Things had appeared more promising when the leaders met on Wednesday, predicting successful talks before a social dinner with top aides.

The White House had been confident enough to schedule a “joint agreement signing ceremony” at the conclusion of talks. Like the lunch, the ceremony did not take the place.

North Korea's leader Kim Jong Un and U.S. President Donald Trump speak during the second U.S.-North Korea summit in Hanoi, Vietnam, in this photo released on February 28, 2019 by North Korea's Korean Central News Agency (KCNA). KCNA via REUTERS

North Korea’s leader Kim Jong Un and U.S. President Donald Trump speak during the second U.S.-North Korea summit in Hanoi, Vietnam, in this photo released on February 28, 2019 by North Korea’s Korean Central News Agency (KCNA). KCNA via REUTERS

MARKETS HIT

“No deal is a surprise, especially as they were both all smiley last evening,” said Lim Soo-ho, senior research fellow at the Institute for National Security Strategy.

“But no-deal today doesn’t mean there won’t be one in coming months. It means stakes were way too high for the two leaders to give another wishy-washy statement like they did in Singapore.”

The Singapore summit, the first between a sitting U.S. president and a North Korean leader, produced a vague statement in which Kim pledged to work toward denuclearization of the Korean peninsula.

But little progress followed.

News of the summit failure sent South Korea’s currency lower and knocked regional stock markets. South Korea’s Kospi index closed 1.8 percent lower, marking the biggest one-day percentage loss since Oct 2018.

North Korea’s old rival South Korea, which backs efforts to end confrontation on the peninsula, said it regretted that no deal had been reached but the two sides had made progress.

Senior Chinese diplomat Wang Yi said difficulties in the talks were unavoidable but the two sides should press on and China would play a constructive role.

Japanese Prime Minister Shinzo Abe said he backed Trump’s decision and wanted a meeting with Kim.

There was no indication of when Trump and Kim, or their negotiators, might meet again.

Kicking off their second day in Hanoi, Trump said he would be happy as long as North Korea conducted no more nuclear or intercontinental ballistic missile tests.

North Korea has conducted no tests since late 2017, and Trump said Kim had promised him there would be no resumption.

Trump said he and Kim had discussed dismantling North Korea’s main nuclear facility at Yongbyon, which Kim was willing to do, but Kim had wanted sanctions relief first.

There were other facilities that Trump said he wanted included in a deal – and the North Koreans had been surprised the Americans knew about them – but they had baulked.

“We asked him to do more and he was unprepared to do that, but I’m still optimistic,” U.S. Secretary of State Mike Pompeo told the news conference, referring to Kim.

Trump said the United States would be able to inspect some North Korean facilities but he did not go into specifics.

TESTING TRUMP?

Daniel Russel, a former top State Department diplomat for East Asia, said Kim might have thought he could drive a hard bargain, given Trump’s troubles at home.

“Kim Jong Un is not testing ballistic missiles and nuclear bombs at the moment, but he is testing Donald Trump. Kim may have wanted to see if Trump’s domestic legal and political woes made him desperate enough to take any deal he could get,” he said.

Trump had indicated a more flexible stance in the run-up to the Hanoi summit prompting some critics to warn that he risked squandering leverage over North Korea if he gave away too much.

U.S. intelligence officials have said there is no sign North Korea would eve give up its entire arsenal of nuclear weapons, which Kim’s ruling family sees as vital to its survival.

Earlier Kim and Trump, sitting across from each other at a conference table, appeared confident of progress, and Kim had suggested he was ready to give up his nuclear bombs.

“If I’m not willing to do that, I won’t be here right now,” Kim told reporters through an interpreter when asked if he was ready to give up his nuclear weapons.

Reporting by Soyoung Kim and Jeff Mason in HANOI; Additional reporting by Soyoung Kim, Joyce Lee, Jeongmin Kim, Hyonhee Shin, Jack Kim, James Pearson, Mai Nyugen, Ju-min Park, Khanh Vu in HANOI, Ben Blanchard in BEIJING, David Brunnstrom and Matt Spetalnick in WASHINGTON; Editing by Robert Birsel and Lincoln Feast)

Too little too late? No-deal Brexit planning shakes service suppliers

FILE PHOTO: Protesters demonstrate against the possible stockpiling of medicines and food in the event of a no-deal Brexit in London, Britain. Aug 22, 2018. REUTERS/Peter Nicholls/File Photo

y Elisabeth O’Leary

LONDON (Reuters) – From Britain’s hospitals and schools to its prisons and armed forces, firms supplying essential public services have been asked by the government to outline plans for a no-deal Brexit.

But with exit day set for March 29, Britain’s Prime Minister Theresa May has yet to strike a deal to leave the European Union which is acceptable to parliament, leaving the companies worried that the government is doing too little too late.

“The government has written to some of us asking us ‘what are you doing in preparation for a no-deal?’ – which is timely, at eight weeks to go,” one industry source told Reuters, speaking on condition of anonymity.

“I have never been in such an unknowing place in all of my corporate life,” the source added.

Private firms including Babcock, Capita, Serco, G4S, Mitie and Compass play a central role in providing Britain’s public services, which means they have to procure medicines, toiletries, food, spare parts and labor, much of which come from the EU.

Britain began outsourcing in the 1980s and private firms now carry out work with contracts valued at 250 billion pounds ($324 billion) for the government each year.

But their role has come under scrutiny since the collapse of Carillion last year, sparking a debate about how much public work should be done by private contractors.

Britain’s government has allocated 2 billion pounds funding to support Brexit preparations for 2019/20 which reaches across 25 government and arms-length bodies for both “deal” and “no-deal” scenarios. 

NO-DEAL NERVES

While the government says it is confident it will strike a deal with the EU, companies worry that may not be the case. If Britain exits abruptly, new customs checks could lead to major delays at ports with a knock-on effect on the supplies needed for them to provide day-to-day services.

“Companies are getting more and more nervous (about a no-deal Brexit),” a second industry source said, echoing fears raised by Serco’s CEO Rupert Soames who in December described the British business climate as “bad and getting worse”.

“I am increasingly worried we are now in a place where people are talking about supply chains and trying to guarantee them. But beyond stockpiling, nobody actually knows what no-deal might mean,” another source in the sector told Reuters.

A survey last week showed that factories had stockpiled goods in January at the fastest rate since records began in the early 1990s in case of a chaotic Brexit.

“Leaving the EU with a deal remains the government’s top priority – but in December, we took the decision to step up no deal planning to ensure we are fully prepared,” a government spokesperson said of its plans.

Providers of services for the defense sector are among those who have been asked to share contingency plans.

Three sources said they had received a letter from the Ministry of Defence’s (MoD) Chief Commercial Officer Andrew Forzani last week asking about their efforts.

“As part of our no deal preparations, we are talking to suppliers to ensure any potential challenges or impacts are addressed. This is routine contingency planning,” an MoD spokesperson said.

($1 = 0.7710 pounds)

(Reporting by Elisabeth O’Leary; Editing by Georgina Prodhan and Alexander Smith)