US, China will try to hash out differences on economy

Leaders of the U.S. and China, the world’s two largest economies, will sit down on Wednesday to talk about trade, markets and finance. It’s a sensitive time.

The talks are part of a 100-day plan announced in April, following Chinese President Xi Jinping’s visit with President Trump at Mar-a-Lago. The idea is to broker a dialogue and negotiate policy disagreements.

Wednesday’s bilateral talks are expected to touch on trade, investment, financial markets and global development.

U.S. business executives have long expressed frustration with China on a wide swath of issues: intellectual property theft, a ballooning trade deficit, and hefty government subsidies that benefit Chinese companies.

A top official from China prefaced the meetings in an optimistic tone on Tuesday.

“The giant ship of China-U.S. economic trade relations is sailing on the right course,” Vice Premier H.E. Wang said in a speech before the U.S.-China Business Council.

Wilbur Ross, the U.S. commerce secretary, acknowledged that dialogue between both countries has become “more challenging.” But he said the two countries have “shared objectives.”

“This is a good start, but a lot of work remains,” Ross said Tuesday. “There remain serious imbalances that we must work to rectify.” He said, for example, that China puts greater restrictions on inbound investment than the United States does.

The meeting comes as the Trump administration weighs whether to slap big tariffs on shipments of steel from other countries due to national security risks.

Canada, Mexico, Brazil, the European Union and Japan are among the top steel exporters to the United States. China, which Trump has criticized for cheating on steel prices, ranked 11th last year, and trade experts say it is a likely target.

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Trans woman takes photo with Texas gov. ahead of bathroom bill debate

Sometimes a photo says more than you think it does.

Texas Gov. Greg Abbott, who is at the center of controversy over a bill that regulates bathroom use for transgender people, posed alongside a woman from San Antonio.

A day later, the woman, Ashley Smith, shared the photo on social media.

“How will the Potty Police know I’m transgender if the Governor doesn’t,” longtime San Antonio resident Smith captioned the photo, which has the hashtag #BATHROOMBUDDY.

The photo has garnered nearly 5,000 likes, with many praising Smith for her move.

Smith, who is transgender, said she took the photo to prove transgender people “don’t pose a threat” to others.

‘I’m really encouraged’

Smith took the photo on Friday after Abbott held a rally in San Antonio to announce his re-election bid. She said she attended the rally to listen to his speech, have a chat with him and snap a picture.

Smith said the photo shows that “sometimes it’s not really apparent who transgender people are.”

“We’re just regular folks,” she added.

Smith feels encouraged by people’s positive comments, saying most Texans are interested in other issues and “don’t care where I use the bathroom.”

CNN reached out to Abbott’s office for comment but has not received a response.

Controversy over bathroom bill

The Texas Legislature debated the so-called bathroom bill during its last session. Senate Bill 6 would require public high school students to use restrooms that match the gender on their birth certificates. The bill was stalled after the contentious legislative session came to an end in May. Abbott weighed in on the issue in April, tweeting that he supports “the principles of both the Senate & House to protect privacy in bathrooms. We will work to get a bill to my desk.”

The Republican governor called for a special 30-day session in which the debate over the bathroom bill is expected to continue.

The potential legislation has members of Abbott’s party divided. Moderate voices say Texas will face the same backlash North Carolina did last year when it passed a similar but broader bill. North Carolina lawmakers repealed the bill in March after numerous business groups, athletic organizations and entertainers condemned it.

Major corporations have publicly opposed the Texas bill. Tech giant IBM ran a full-page ad in local publications that said the company “opposes any measure that would harm the state’s LGBT+ community and make it difficult for businesses to attract and retain talented Texans.”

Supporters, like Lt. Gov. Dan Patrick, say the bill protects the privacy of women and children.

Smith said a bathroom bill would put already vulnerable transgender people “at significant risk.”

“I think it would be a disaster,” Smith said. “Transgender people have faced harassment just for being who they are.”

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What happens if Congress fails to repeal Obamacare?

The Republicans’ health care bill may be close to death, but Obamacare remains alive — for now — and in need of support.

The latest Senate effort to repeal and replace the health reform law collapsed Monday night after two conservative senators declared their opposition to the legislation. The next step, Senate Majority Leader Mitch McConnell said, would be to vote on a bill to simply repeal Obamacare with a two-year delay, though it’s questionable whether that will succeed.

If this last-ditch attempt fails, lawmakers will have to decide whether to shore up Obamacare or just let it wither.

In some states, Obamacare is doing relatively well, but in others it’s struggling and even starting to fail.

Many insurers have stopped bleeding money from sicker-than-expected enrollees, but they remain wary about continuing to play on the exchanges. The number of insurers filing initial applications on the federal marketplace dropped 38% for 2018, the Trump administration announced earlier this month. Just over 25,000 people in 38 counties in Ohio, Indiana and Nevada are at risk of having no options on the exchange next year, according to the Kaiser Family Foundation.

That figure could grow if more insurers get spooked by Washington’s indecisiveness. Insurers aren’t locked into participating in 2018 until late September. Open enrollment begins November 1.

The Trump administration and Congress have sent mixed signals about Obamacare’s future since President Trump took office in January.

Clearly, they have been trying to eradicate the health reform law from Day One, when Trump signed an executive order seeking to ease the financial burden that the law placed on Americans, insurers and others. Republicans have also said again and again that Obamacare is collapsing and they must rescue the country from it.

Trump has also unmoored insurers by refusing to commit to continue paying the cost-sharing subsidies. These payments, which reduce deductibles and co-pays for lower-income enrollees, are crucial to insurers, and without them, they would likely withdraw from the exchanges. The president has also cast doubt on whether his administration will enforce the individual mandate, which requires nearly all Americans to buy coverage or pay a penalty. The mandate is key to getting younger, healthier people to enroll.

“The Trump administration is also in the position to do a lot of damage — by announcing it is not enforcing the individual mandate or paying cost sharing reduction payments, for example — and could quite possibly destroy the individual insurance market in some states if it chooses to do so,” said Timothy Jost, emeritus professor, Washington and Lee University School of Law.

At the same time, however, the administration and lawmakers have acknowledged they must stabilize Obamacare — at least in the near term. The Health and Human Services Department addressed some insurer concerns earlier this year in hopes of strengthening the market. The agency enacted rules that tighten enrollment periods, allow insurers to offer plans that cover less of the cost of care but have lower premiums, and let carriers offer plans with fewer providers.

Some in Congress recognize the need to bolster Obamacare, regardless of what happens with the legislation.

Tennessee Senators Lamar Alexander and Bob Corker, both Republicans, introduced a bill earlier this year that would allow those with no Obamacare options in 2018 to use their federal premium subsidies to buy policies outside the exchanges. Also, it would waive the individual mandate for those in this situation.

Even before the defections by the two Republican senators Monday night, McConnell acknowledged that Congress would have to take some action to strengthen the individual market.

“If my side is unable to agree on an adequate replacement, then some kind of action with regard to the private health insurance market must occur,” McConnell said at a lunch in Kentucky earlier this month, according to several media reports. “No action is not an alternative. We’ve got the insurance markets imploding all over the country, including in this state.”

Republicans will likely feel pressured to do something even if the bill fails since their party controls the White House and oversees the Affordable Care Act, said Sabrina Corlette, research professor at Georgetown University’s Health Policy Institute.

“They could still face political fallout if insurers pull out or hike rates dramatically,” she said. “The risk is that people will blame the Republicans because they are the people in power.”

So it won’t be so easy for the Congress and the Trump administration to simply walk away from health reform even if they can’t figure out a way to pass the repeal and replace legislation.

A version of this story originally ran on July 12.

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Trump recruiting challengers to GOP Sen. Jeff Flake

President Donald Trump and White House officials have had a series of conversations with prospective Republican candidates about challenging Arizona GOP Sen. Jeff Flake in the 2018 primary.

Kelli Ward, who has already launched her campaign, and Robert Graham, a former state GOP chair and Trump adviser who is considering it, both told CNN on Monday they have had multiple conversations with White House officials about opposing Flake in the Senate primary.

Graham said the talks began shortly after the 2016 presidential campaign concluded, and both Graham and Ward said further conversations took place as recently as two weeks ago.

Another potential candidate — state treasurer Jeff DeWit — has had multiple conversations with Trump, sources familiar with those talks said. DeWit is close with Graham, making it unlikely both would run.

Trump was furious at Flake last fall when the Arizona senator called on Trump to withdraw from the presidential race after the emergence of the “Access Hollywood” tape.

He told a small group of Arizona Republicans last fall — including Graham — that he would spend $10 million on defeating Flake in the 2018 Senate primary, a source familiar with the conversation confirmed. That conversation and the White House’s further involvement in recruiting a primary challenger were first reported Monday by Politico’s Alex Isenstadt.

“They used Jeff Flake in Hillary Clinton’s ads, for heaven’s sakes. It was like pouring salt on the wounds,” Graham told CNN.

“I don’t think that that relationship has been mended, even though Jeff Flake is using Donald Trump’s name in some of his fundraising emails,” Ward said in a separate interview.

Flake campaign manager Josh Daniels told CNN that the campaign is “Not going to speculate on speculation.”

“The only thing Sen. Flake concerns himself with is doing the job Arizonans expect him to,” Daniels said. “The rest will take care of itself.”

CNN has reached out to the White House for comment and has not yet received a response.

Polls commissioned by Republicans, sources familiar with the data said, have shown that Trump’s popularity among Arizona GOP primary voters is still at or near 90%, while Flake’s numbers are much lower — fueling donor interest in ousting Flake.

“The donor community has really come to life in terms of recruitment,” Graham said.

Ward would not say whether she has spoken directly with Trump, saying she wants to “keep my conversations private.” But, she said, “I do know that I have a lot of support in Arizona and in Washington, DC.”

“I think a lot of people had election 2016 fatigue, but I think that they are awakening from that fatigue and are ready to put their money behind the candidate that they believe can actually do the work they want done,” she said, calling Flake “such a disappointment.”

David Bossie, Trump’s deputy campaign manager and the head of Citizens United, a conservative nonprofit organization, told Graham outside a Republican National Committee meeting in San Diego in May that he or DeWit would get a major injection of outside cash if one were to take on Flake, sources familiar with those conversations said.

The Trump-aligned super PAC America First Action announced, but later withdrew, a major advertising buy against Nevada Republican Sen. Dean Heller when Heller crossed Trump by announcing his opposition to the Senate Republican health care bill. The group has not begun discussing financially backing a Flake challenger, a spokeswoman for the group said.

Flake has broken with Trump on several high-profile issues since the election — including the President’s positions on pulling back on ties to Cuba, the North American Free Trade Agreement and the travel ban.

He also publicly said Trump did not have an “acceptable rationale” for firing FBI Director James Comey.

Those positions, Republican sources said, have fueled a fear in the White House and among Republicans supportive of Trump that Flake could be emboldened by winning another six-year term and would become a thorn in Trump’s side for the duration of his presidency.

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Senate GOP health care bill collapses

The Republican Party’s efforts to gut former President Barack Obama’s legacy health care law came to an abrupt — if temporary — halt Monday night. Just hours after the Senate was gaveled back into session, Senate Majority Leader Mitch McConnell was handed two more public defections on his health care bill to overhaul Obamacare.

The dramatic and simultaneous announcement from Sens. Jerry Moran of Kansas and Mike Lee of Utah means McConnell officially does not have the votes to even begin debate on his legislation to overhaul the Affordable Care Act.

The development deals a devastating blow not only to Republicans who have railed against the law for years, but also President Donald Trump, who campaigned on killing Obamacare and made repealing the law his top legislative priority since taking office.

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