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Federal Stimulus, Covid and New China Tariffs Threatened: The Week Ahead

“Covid Relief Negotiations are moving along. Go Big!” President Trump tweeted on Friday.

After flip-flopping on strategy for an economy aid package, the White House is now offering Democrats a $1.8 trillion deal to clinch relief funding complete before the presidential election that’s just weeks.

While House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin reopened talks on Friday for what could be the fifth pandemic relief package since the coronavirus outbreak in March. However, the $1.8 trillion that the White House is now offering is below the $2.2 trillion plan passed by House Democrats earlier this month. Pelosi has since said she is okay with a standalone bill for aid to airlines provided it is part of a broader comprehensive deal. She is also pushing for language that would limit Trump’s ability to divert funding for testing and treatments to other projects.

But just because Trump is now pushing to get a deal done, there’s still a chance nothing will materialize before the Nov. 3 election.

Senate Majority Leader Mitch McConnell on Friday said that Congress isn’t likely to pass another Covid-related aid package before the election. That’s because the Republican-controlled Senate isn’t keen on spending trillions more on pandemic relief funding.

Both sides are still far apart in their demands. For example, Pelosi is seeking reinstatement of the $600 per week enhanced federal unemployment benefit, while Mnuchin is offering just $400 per week. That particular benefit, which helps to supplement state unemployment benefits, expired on July 31. She is also asking for a minimum of $436 billion in aid to state and local governments, while Mnuchin is offering just $250 billion.

The shift in White House strategy also has many confused about how it plans to proceed on any relief package, not to mention another flurry of questions over Trump’s health after testing positive for  Covid-19 just last week. On Friday, ABC news reported that Trump plans to hold a rally for hundreds on the lawn of the White House Saturday since he can’t travel to in-person rallies. Word surfaced later in the day that Trump also plans to travel to Florida Monday for a campaign rally. And separately, Trump said earlier this week that he would not participate in a second presidential debate if it was held in a virtual format.

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And if the possibility that the Saturday rally might turn into a super-spreader event wasn’t enough to worry about, Trump during an interview on Fox Business Network Thursday said he plans to punish China again with more tariffs if re-elected. Trump boasted about how the tariff strategy brought billions to U.S. coffers, pointing to the Phase One trade deal that required China to make purchases of certain agricultural products.

“They want to keep me happy because they know that I’m a hair trigger when it comes to them,” Trump said.

But while Trump claims that the tariffs raised have been paid by China, retail trade groups and economists stress that it is the American consumer who ultimately has paid those tariffs in the form of higher product prices.