Morning News Brief

Jul 5, 2018
Originally published on July 5, 2018 6:58 am
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NOEL KING, HOST:

We are now four months out from fall's midterm elections, and we know one thing Democrats stand for. The party is offering itself as a counterweight to President Trump.

STEVE INSKEEP, HOST:

There's some question what else Democrats will stand for and much question about how candidates will approach voters. A primary in New York City intensified this debate. Alexandria Ocasio-Cortez won a nomination for Congress.

Now to be clear, she doesn't differ from Democrats on every issue, but she calls herself a democratic socialist and upset a party leader twice her age. At the same time, Democrats between the coasts are seeking wins in more conservative states.

KING: NPR's lead political editor Domenico Montanaro is with us now. Good morning, Domenico.

DOMENICO MONTANARO, BYLINE: Good morning, Noel.

KING: All right. So let's talk about this big win in New York - Alexandria Ocasio-Cortez. What does this tell us about the state of the Democratic Party?

MONTANARO: Well, she may be an example of where the party is going. But I'd say most likely, after these - after these midterms, not currently, and I'll get back to that in a minute. But Ocasio-Castro (ph), if you think about her profile, she's young, female and progressive. Democratic House Leader Nancy Pelosi was asked about those qualities after her win, and Pelosi said of herself, trying to joke, that she's got 2 out of those - 2 out of 3 of those, which ain't bad.

But underlying the point was the fact that Ocasio-Castro (ph) and...

KING: Ocasio-Cortez.

MONTANARO: I'm sorry, yes. Ocasio-Cortez and candidates like her stand in sharp contrast to the current Democratic leadership and kind of represent something of a threat.

KING: Well, does she have the ability - I mean, she is one person. Does she alone have the ability to push the Democrats more to the left?

MONTANARO: Not her alone. In fact, you know, this is something where the party is trying to figure out where it's going to be heading. And Democratic leaders would argue that currently, the far-left politics that you've seen from candidates like her are more isolated to liberal places like New York, California and Maryland.

In more moderate places, though, where Democrats are having some success this year, that's not what's quite happening. Let's take a listen to veteran Democratic strategist Joe Trippi, who helped run Democratic moderate Doug Jones' campaign in Alabama last year.

JOE TRIPPI: When you get that confrontational tone, what you do is you help drive people to their corners. Look, these districts are gerrymandered, or they're red states like Alabama. If you drive people to their corners, then you're going to lose.

KING: So you need a candidate with broad appeal is what he's saying. Despite all this, you've still got to appeal to a lot of people.

MONTANARO: Yeah. I mean, his theory is that voters want calm among the current chaos. Of course, that works, perhaps, in these more moderate places. And so far, Democratic voters have shown that they've been pretty pragmatic in the places they need to win to take back those 23 seats they need to win in the House, which are in pretty moderate places.

You know, I do think, though, that this fight for the Democratic soul is still going to happen, but it's more likely to take place more acutely in the 2020 primaries, which will start next year.

KING: Well, listen. Republicans have their own factions, of course, right? We've got the Tea Party. They make it difficult for Republican majorities to govern. Are the Democrats headed in that direction?

MONTANARO: Look, if enough of these candidates win in liberal districts, you could see something of a mirror image of the Freedom Caucus on the left. Call it the Resist Caucus or something like that. We saw the Freedom Caucus cost John Boehner his job as speaker. Does that group lead to new leadership in the Democratic Party?

KING: All right. NPR's Domenico Montanaro. Thanks, Domenico.

MONTANARO: You're welcome.

(SOUNDBITE OF MUSIC)

KING: All right. Here is the most positive spin we could imagine on this next story. If American distillers lose their global market for exporting whiskey, at least there will be more for the rest of us.

INSKEEP: There you go. Still, it's hard to imagine distillers themselves being thrilled with this news. They're becoming tariff targets. President Trump, you will recall, unilaterally raised import taxes on aluminum and steel that Americans buy from abroad. He justified this by citing national security, even when targeting U.S. allies. Now those allies, including the European Union, Canada and Mexico, are taxing the whiskey that Americans sell to them.

KING: NPR's John Ydstie has been reporting on all of this. Good morning, John.

JOHN YDSTIE, BYLINE: Hi, Noel.

KING: So why is whiskey a target? Is it a big U.S. export?

YDSTIE: Not a huge export, but important to the industry and to the state of Kentucky. U.S. bourbon exports boomed in the past decade to about a billion dollars annually. And the Kentucky Distillers' Association credits that boom to trade deals done over the past few decades that have put U.S. whiskey on a level playing field globally. A little ironic...

KING: Yeah.

YDSTIE: ...Given President Trump's criticism of U.S. trade deals. And, of course, it's a famous American publics - or American product, so the public takes notice when it's singled out. Our trading partners figure that might put some pressure on the administration. And then, there's no accident that the majority of American bourbon is made in Kentucky, and it's a major driver of the state's economy. And the senior senator from Kentucky is Mitch McConnell, the majority leader of the Senate. So trying to inflict political pain to force a resolution.

KING: You've just come back from a reporting trip to Kentucky. You were speaking with distillers there. What were you hearing about how this could impact their businesses?

YDSTIE: There's a lot of concern. One distiller told me he anticipates the shelf price of his whiskey could rise at least 25 percent in Europe...

KING: Wow.

YDSTIE: ...And may price him out of the market. The maker of Jack Daniel's says it's already raising some European prices. And the whiskey industry has been adding capacity and is already aging huge numbers of barrels of whiskey to meet the global demand. So Amir Peay of James E. Pepper distillery worries if the whiskey export boom stalls because of these tariffs, all that whiskey might be dumped on the U.S. market. Here's Amir.

AMIR PEAY: So then what? Do we now have a flooded market where there's too much whiskey, brutal price competition, distilleries get shut down?

KING: All right.

YDSTIE: That might be good for you, Noel, but Peay says, you know, it could hurt - really could hurt the whiskey business.

KING: And he does actually get to a much bigger question, which is, are any of these distillers telling you that they're thinking currently about having to lay people off?

YDSTIE: Well, yeah. I mean, I think they figure, in the worst decision - worst-case scenario, they could certainly lay people off. That would be a big hit to the Kentucky economy.

KING: A bigger picture here, the U.S. and China have threatened to levy new tariffs on each other tomorrow. Any ideas on what we should expect, real quick?

YDSTIE: Well, these are $34 billion worth of goods the Trump administration has threatened to punish several months ago. The U.S. aim is to put pressure on China to stop stealing American technology. China has said it's going to reciprocate and hit bourbon, whiskey, pork and wheat, again, targeting farmers and a significant part of Trump's base.

KING: A lot of worried people down in Kentucky. NPR's John Ydstie. Thanks, John.

YDSTIE: You're welcome, Noel.

(SOUNDBITE OF MUSIC)

KING: The U.S. and Iran are trading threats over oil exports and a key shipping lane in the Persian Gulf.

INSKEEP: Yeah. Iran's President Hassan Rouhani has suggested that Mideast oil exports could be disrupted if the United States should squeeze Iran's oil exports. Now Washington says it's going to do what's necessary to keep the Strait of Hormuz, through which much of that oil passes, open for tankers.

KING: Now this is all happening as Iran is preparing to sit down tomorrow with European leaders. They're going to try to save the 2015 nuclear agreement that President Trump walked away from in March. NPR's Peter Kenyon is in Istanbul following all of this.

Good morning, Peter.

PETER KENYON, BYLINE: Hi, Noel.

KING: All right. So remind us how did this dispute develop?

KENYON: Well, we've got American oil sanctions due to kick back in on Iran in November under President Trump's plan when he walked away from the nuclear deal. And President Rouhani in Europe said that it would be meaningless for other states to be able to export their oil and gas if Iran can't export its own. That's seen as a threat to block the Strait of Hormuz. It would be a serious blow to daily oil flows if it happened.

And the Pentagon quickly came out to say it can keep the Strait of Hormuz open and is ready to do so. These aren't new tensions. Iran's threatened similar actions in the past. The U.S. Navy's been operating in the area for decades.

KING: Why exactly is the Strait of Hormuz so sensitive?

KENYON: It's probably the most important oil and gas chokepoint in the world. Relatively narrow waterway off Iran leading out towards open ocean, something like 17 million barrels of oil go through it every day. The Iranian and American navies have clashed there in the past. One ship was hit by an Iranian mine towards the end of the Iran-Iraq War. The USS Vincennes shot down an Iranian passenger jet, killing 290 civilians, having mistaken it for a fighter jet. So it's been a tense area.

KING: All of this current tension is as a result, of course, of the U.S. pulling out of the nuclear agreement and threatening to reimpose sanctions on Iran and on any country that tries to do business there. Now Europe says it is going to keep Iranian trade going despite sanctions. How is that plan working out for Europe?

KENYON: Well, the question at the moment is, can Europe put together a package that will convince Iran to stay in the deal? There's a meeting tomorrow in Vienna where Iran will look over this proposal. That might give us some indication of whether they've got something that might work.

KING: And if they don't, briefly?

KENYON: Well, then Iran could stop cooperating with the U.N. nuclear inspectors. It could ramp up nuclear activities. And, obviously, tensions would increase.

KING: Thanks so much, Peter.

KENYON: Thank you.

KING: NPR's Peter Kenyon in Istanbul.

(SOUNDBITE OF PHILANTHROPE'S "MELLOWMONDAYS") Transcript provided by NPR, Copyright NPR.