Trump expected to pressure China’s Xi to rein in North Korea: officials

Trump expected to pressure China's Xi to rein in North Korea: officials

By Steve Holland

WASHINGTON (Reuters) – U.S. President Donald Trump is expected to pressure China’s president when they meet next month in Beijing to do more to rein in North Korea out of a belief that Xi Jinping’s consolidation of power should give him more authority to do so.

Trump leaves Nov. 3 on a trip that will take him to Japan, South Korea, China, Vietnam and the Philippines. It will be his first tour of Asia since taking power in January and one with a major priority: Preventing the standoff with North Korea from spiraling out of control.

Xi is immersed in a Communist Party Congress expected to culminate in him consolidating his control and potentially retaining power beyond 2022, when the next congress takes place.

Trump believes that Xi should have even more leverage to work on the North Korea problem.

“The president’s view is you have even less of an excuse now,” said one official. “He’s not going to step lightly.”

Trump wants to gain some serious cooperation from China to persuade Pyongyang to either change its mind or help deprive it of so much resources that it has no choice but to alter its behavior, the official said.

Trump has heaped praise on Xi in recent weeks in hopes of gaining Chinese cooperation and has held back from major punitive trade measures.

In an interview with Fox Business Network’s Maria Bartiromo, Trump said he wants to “keep things very, very low key” with Xi until the Chinese leader emerges from the party congress.

“I believe he’s got the power to do something very significant with respect to North Korea. We’ll see what happens. Now with that being said, we’re prepared for anything. We are so prepared, like you wouldn’t believe,” Trump said in the interview, to air on Sunday.

Trump has traded bitter insults with North Korean leader Kim Jong Un, using his speech at the United Nations General Assembly last month to dismiss Kim as a “rocket man” on a suicide mission for his repeated nuclear tests and ballistic missile launches. He said if threatened, the United States would “totally destroy” North Korea.

Kim in recent weeks said the United States would face an “unimaginable strike” from North Korea if provoked.

CIA chief Mike Pompeo said on Thursday that North Korea could be only “months” away from gaining the ability to hit the United States with nuclear weapons.

(Additional reporting by David Brunnstrom; Editing by James Dalgleish)

Iran president defends Guards in show of unity anticipating Trump

FILE PHOTO - Iran's President Hassan Rouhani listens during a meeting with U.N. Secretary-General Ban Ki-moon on the sidelines of the U.N. General Assembly in New York, U.S., September 23, 2014. REUTERS/Jewel Samad/Pool/File Photo

By Babak Dehghanpisheh

BEIRUT (Reuters) – Iran’s moderate president gave a full-throated defense of his one-time rivals in the Revolutionary Guards on Wednesday, as the country’s pragmatist and hardline factions rallied together in the face of threats from Donald Trump.

The U.S. president is expected to “decertify” Iran’s nuclear deal with global powers this week and add its Revolutionary Guards military force to Washington’s black list of terrorist groups under a strategy to increase pressure on Tehran.

The threat of U.S. action has united the two main factions of Iran’s leadership, with the pragmatists led by President Hassan Rouhani who seek greater openness to the West demonstrating their support for the hardline Guards.

During a cabinet meeting shown on state television on Wednesday, Rouhani said U.S. action against the Guards would be a “mistake beyond mistakes”.

“They think that the Guards are a military entity. The Revolutionary Guards are not a military entity. They’re in the heart of the people. The Revolutionary Guards, in all the days of danger, have defended our national interests,” he said.

“We’re one society. We’re Iran. There are no differences between different factions in confronting the plots of our enemies,” he added.

Rouhani, the architect of Iran’s 2015 deal with global powers to curb its nuclear program in return for the lifting of international sanctions, won re-election in a landslide five months ago on a platform promising greater openness to the world and reform at home.

During an unprecedentedly bitter campaign, he repeatedly spoke out in public against the political influence of the Guards, accusing them of backing his hardline opponent to defend their economic interests.

In recent days, however, the threat of new action from Washington has prompted a public display of unity from the rival factions among Iran’s rulers.

“Today, the president of America has created conditions where Iran is more united than ever. Today, those who oppose the nuclear deal and those who support it are side by side. We all have one voice,” Rouhani said.

Newspapers on Tuesday ran pictures of the urbane, U.S.-educated Foreign Minister Javad Zarif laughing and hugging the commander of the guards, Major-General Mohammad Ali Jafari.

Zarif brief lawmakers on Wednesday about the expected U.S. action and about Iran’s plans for a response, according to members of parliament quoted in state media.

“CRUSHING RESPONSE”

“In the closed session Zarif emphasized that if the Americans take any steps against the nuclear deal that the Islamic Republic of Iran will give them a more crushing response,” Shahbaz Hassanpour, a lawmaker representing the city of Sirjan, told the Islamic Republic News Agency (IRNA).

Lawmakers did not disclose the specific actions that Zarif had discussed as plans for Iranian retaliation.

Trump’s expected move to decertify the nuclear deal would not by itself withdraw the United States from the agreement, but would pass that decision on to Congress, requiring lawmakers to decide within 60 days whether to re-impose sanctions.

The nuclear deal is supported by Washington’s European allies Britain, France and Germany, as well as by Russia and China, all of which say Iran has complied so far.

Adding the Guards to the terrorism blacklist could have economic consequences, since the elite military force also has a vast business empire in Iran. International banks are required to make sure their clients are not blacklisted.

Washington has already blacklisted other entities and individuals for supporting Guards’ activities, but has not yet blacklisted the Guards themselves.

During the meeting with Zarif, parliament members expressed their support for the Guards, Hassanpour said. Zarif also noted during the session that European countries will continue backing the nuclear deal regardless of what actions the U.S may take, Hassanpour told IRNA.

(Reporting By Babak Dehghanpisheh; editing by Peter Graff)

Trump eviscerates health insurance birth control mandate

Supporters of contraception rally before Zubik v. Burwell, an appeal brought by Christian groups demanding full exemption from the requirement to provide insurance covering contraception under the Affordable Care Act, is heard by the U.S. Supreme Court in Washington, U.S., March 23, 2016. REUTERS/Joshua Roberts/File Photo

By Sarah N. Lynch and Caroline Humer

WASHINGTON/NEW YORK (Reuters) – President Donald Trump’s administration on Friday eviscerated requirements under the Obamacare law that employers provide insurance to cover women’s birth control, keeping a campaign pledge that pleased his conservative Christian supporters.

Administration officials said two new federal rules will let any non-profit or for-profit entity make religious or moral objections to obtain an exemption from the law’s contraception mandate. The changes also let publicly traded companies obtain a religious exemption.

The move drew fire from reproductive rights advocates and praise from a conservative Christian activists. California’s Democratic attorney general pledged to fight to protect the mandate from circumvention. It remained unclear how many women would lose contraception coverage and which companies would use the exemptions.

“The Trump administration just took direct aim at birth control coverage for 62 million women,” Planned Parenthood Federation of America President Cecile Richards said in a statement.

“This is an unacceptable attack on basic healthcare that the vast majority of women rely on. With this rule in place, any employer could decide that their employees no longer have health insurance coverage for birth control,” Richards added.

Trump, who criticized the birth control mandate in last year’s election campaign, and won strong support from conservative Christian voters. The Republican president signed an executive order in May asking for rules that would allow religious groups to deny their employees insurance coverage for services they oppose on religious grounds.

The U.S. Department of Health and Human Services on Friday moved to broaden those narrow religious exemptions to include an exception “on the basis of moral conviction” for non-profit and for-profit companies.

The contraception mandate was one provision of the 2010 Affordable Care Act, Democratic former President Barack Obama’s signature legislative achievement, also called Obamacare.

The law required employers to provide health insurance that covers birth control, but religious houses of worship were exempted. Some private businesses sued regarding their rights to circumvent such coverage, and the Supreme Court ruled in 2014 that they could object on religious grounds.

“All Americans should have the freedom to peacefully live and work consistent with their faith without fear of government punishment,” the conservative Christian legal activist group Alliance Defending Freedom said in a statement praising the administration’s action.

“HHS has issued a balanced rule that respects all sides – it keeps the contraceptive mandate in place for most employers and now provides a religious exemption,” said Mark Rienzi, one of the lawyers for the Little Sisters of the Poor, an order of Roman Catholic nuns that runs care homes for the elderly and previously challenged the mandate in court.

“The Little Sisters still need to get final relief in court, which should be easy now that the government admits it broke the law,” Rienzi added.

The Little Sisters and other Christian nonprofit employers objected to a 2013 compromise offered by the Obama administration that allowed entities opposed to providing contraception insurance coverage to comply with the law without actually paying for the required coverage.

California Attorney General Xavier Becerra said he was “prepared to take whatever action it takes” to defend the mandate that health insurers provide birth control.

The administration’s new contraception exemptions “are another example of the Trump administration trampling on people’s rights, but in this case only women,” Becerra told Reuters.

The Justice Department on Friday released two memos that will serve as the government’s legal basis for justifying the rule and laying out a framework for how apply religious liberty issues in legal opinions, federal rules and grant making.

One memo instructs Justice Department employees to incorporate its legal arguments on religious freedom into litigation strategies and how they review rules. A second memo used a similar directive to government agencies to be used in the course of “employment, contracting and programing.”

(Reporting by Sarah N. Lynch in Washington and Caroline Humer in New York; writing by Will Dunham; Editing by David Gregorio)

In meeting with military, Trump talks of ‘calm before the storm’

In meeting with military, Trump talks of 'calm before the storm'

By Jeff Mason

WASHINGTON (Reuters) – After discussing Iran and North Korea with U.S. military leaders on Thursday, President Donald Trump posed for a photo with them before dinner and declared the moment “the calm before the storm.”

“You guys know what this represents?” Trump said after journalists gathered in the White House state dining room to photograph him and first lady Melania Trump with the uniformed military leaders and their spouses.

“Maybe it’s the calm before the storm,” he said.

What storm?

“You’ll find out,” Trump told questioning reporters.

Classical music played in the background and tables were set in the nearby Blue Room for a fancy meal.

The White House did not immediately reply to a request to clarify Trump’s remark.

Earlier in the evening, while seated with the top defense officials in the cabinet room, Trump talked about the threat from North Korea and preventing Iran from getting a nuclear weapon.

“In North Korea, our goal is denuclearization,” he said. “We cannot allow this dictatorship to threaten our nation or our allies with unimaginable loss of life. We will do what we must do to prevent that from happening. And it will be done, if necessary, believe me.”

During his speech to the United Nations General Assembly last month, Trump said the United States would “totally destroy” North Korea if needed to defend itself or U.S. allies.

The president on Thursday also had tough words for Iran, saying the country had not lived up to the spirit of an agreement forged with world powers to curb its nuclear program.

A senior administration official said on Thursday

that Trump was expected to announce soon he would decertify the landmark agreement.

Trump has filled top posts within his administration with military generals, including his chief of staff, retired General John Kelly, and national security adviser, Lieutenant General H.R. McMaster. McMaster, who normally dresses in civilian clothes at the White House, wore his uniform for the meeting.

Without being specific, Trump pressed the leaders to be faster at providing him with “military options” when needed.

“Moving forward, I also expect you to provide me with a broad range of military options, when needed, at a much faster pace. I know that government bureaucracy is slow, but I am depending on you to overcome the obstacles of bureaucracy,” he said during their cabinet room meeting.

(Reporting by Jeff Mason; Editing by Peter Cooney)

Dollar set for best week of 2017, stocks near records

FILE PHOTO: U.S. dollar notes are seen in this November 7, 2016 picture illustration. REUTERS/Dado Ruvic/Illustration/File Photo

By Lewis Krauskopf

NEW YORK (Reuters) – The dollar was headed for its strongest week of the year on Friday, while world stock markets climbed back near record-high levels on the last trading day of the quarter.

Firming expectations for another U.S. interest rate increase by year-end, combined with U.S. President Donald Trump’s tax-cut plan, have dominated markets for most of the week.

Data on Friday showed U.S. consumer spending barely rose in August but the report did little to change expectations that the Federal Reserve would raise interest rates again in December. Another report showed the Chicago purchasing management index, which gauges factory activity, came in better-than-expected for September.

“The economic data we got was either on target or it was slightly better than expected so there wasn’t anything negative at all to put a pause on things,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

“Generally, the overall economic backdrop is very solid. In a bull market when you don’t have bad news you tend to get up moves in the market,” Frederick said.

The Dow Jones Industrial Average <.DJI> fell 18.29 points, or 0.08 percent, to 22,362.91, the S&P 500 <.SPX> gained 4.93 points, or 0.20 percent, to 2,514.99 and the Nasdaq Composite <.IXIC> added 31.99 points, or 0.5 percent, to 6,485.44.

The S&P technology sector <.SPLRCT> led the way, rising 0.6 percent.

The S&P 500 had set a record closing high on Thursday.

The pan-European FTSEurofirst 300 index <.FTEU3> rose 0.34 percent and MSCI’s gauge of stocks across the globe <.MIWD00000PUS> gained 0.34 percent.

The MSCI global index was within 0.5 percent of an all-time high and on pace for its 11th consecutive positive month.

The dollar index <.DXY> was flat. The greenback was up about 1 percent for the week, on track for its best week since December.

“What you have seen is a general closing out of some short dollar positions but for that to be sustained we need greater detail on Trump’s fiscal plans and see it going through,” said James Binny, head of currency portfolio management for EMEA at State Street Global Advisors.

The euro <EUR=> was up 0.29 percent to $1.1818.

Benchmark 10-year notes <US10YT=RR> last fell 4/32 in price to yield 2.3193 percent, from 2.307 percent late on Thursday.

U.S. crude <CLcv1> fell 0.23 percent to $51.44 per barrel and Brent <LCOcv1> was last at $56.88, down 0.49 percent on the day.

Spot gold <XAU=> dropped 0.2 percent to $1,284.52 an ounce.

(Additional reporting by Abhinav Ramnarayan and Saikat Chatterjee in London; Editing by Andrew Bolton and Nick Zieminski)

Trump proposes U.S. tax overhaul, stirs concerns on deficit

U.S. President Donald Trump delivers remarks on proposed changes to the U.S. tax code at the state fairgrounds in Indianapolis, Indiana, U.S. September 27, 2017. REUTERS/Jonathan Ernst

By David Morgan and Richard Cowan

WASHINGTON (Reuters) – President Donald Trump proposed on Wednesday the biggest U.S. tax overhaul in three decades, calling for tax cuts for most Americans, but prompting criticism that the plan favors business and the rich and could add trillions of dollars to the deficit.

The proposal drew a swift, skeptical response from Senator Bob Corker, a leading Republican “fiscal hawk,” who vowed not to vote for any federal tax package financed with borrowed money.

“What I can tell you is that I’m not about to vote for any bill that increases our deficit, period,” Corker, who said on Tuesday he would not seek re-election in 2018, told reporters.

Trump said his tax plan was aimed at helping working people, creating jobs and making the tax code simpler and fairer. But it faces an uphill battle in the U.S. Congress with Trump’s own Republican Party divided over it and Democrats hostile.

The plan would lower corporate and small-business income tax rates, reduce the top income tax rate for high-earning American individuals and scrap some popular tax breaks, including one that benefits people in high-tax states dominated by Democrats.

Forged during months of talks among Trump’s aides and top congressional Republicans, the plan contained few details on how to pay for the tax cuts without expanding the budget deficit and adding to the nation’s $20 trillion national debt.

The plan still must be turned into legislation, which was not expected until after Congress makes progress on the fiscal 2018 budget, perhaps in October. It must then be debated by the Republican-led congressional tax-writing committees.

Analysts were skeptical that Congress could approve a tax bill this year, but that is what Republicans hope to achieve so they can enter next year’s congressional election campaigns with at least one legislative achievement to show for 2017.

Financial markets rallied on the plan’s unveiling, an event long anticipated by traders betting that stocks would benefit from both faster economic growth and inflation.

TRUMP IN INDIANA

At an event in Indianapolis, Trump called the plan the largest tax cut in U.S. history. “We want tax reform that is pro-growth, pro-jobs, pro-worker, pro-family and, yes, tax reform that is pro-American,” he said.

The real estate mogul-turned-politician, who promised big tax cuts as a candidate, told reporters he personally would not gain financially from the proposal.

“I think there’s very little benefit for people of wealth,” said Trump, who unlike many of his White House predecessors, has refused to make public his own tax returns.

Republicans have produced no major legislative successes since Trump took office in January, even though they control the White House and both chambers of Congress. Their top legislative priority, overhauling the U.S. healthcare system, collapsed again in the Senate on Tuesday.

A comprehensive rewrite of the U.S. tax code has eluded previous presidents and Congress for decades. The last one was passed in 1986 under Republican President Ronald Reagan.

Trump’s plan falls short of the sweeping, bipartisan package crafted by Reagan and congressional Democrats, analysts said.

The White House said that, under the proposal, typical middle-class families would have less income subject to federal tax. Trump said the first $12,000 earned by an individual and the first $24,000 by a married couple would be tax-free.

The plan would lower the top individual tax rate, paid by the nation’s top earners, to 35 percent from 39.6 percent.

It would lower the top corporate income tax rate to 20 percent from the current 35 percent. The existing rate is high globally, but many U.S.-based multinationals pay much less than the headline rate because of abundant loopholes and tax breaks.

DEMOCRATS SKEPTICAL

Trump has appealed to Democrats to back the plan, although they were not consulted in drafting it.

Republicans hold a thin 52-48 Senate majority and may need some Democratic support to win passage. But Democrats said the plan would expand the federal deficit in order to deliver tax cuts to wealthy Americans rather than the middle-class families that Trump and Republicans say they are trying to help.

“If this framework is all about the middle class, then Trump Tower is middle-class housing,” said Senator Ron Wyden, the top Democrat on the tax law-writing Senate Finance Committee.

Republican Kevin Brady, chairman of the tax-writing House of Representatives Ways and Means Committee, said he expected tax legislation to be passed by the end of this year.

The Committee for a Responsible Federal Budget, a Washington-based policy group, estimated on Wednesday the plan contained about $5.8 trillion of total tax cuts over a decade and would have a net cost of $2.2 trillion through 2027.

Analysts have warned huge tax cuts would balloon the deficit if economic growth projected by Republicans to offset the costs fails to materialize amid rising interest rates.

‘PASS-THROUGH’ RATE

The plan would set a new 25 percent tax rate for “pass-through” businesses, which are usually small, private enterprises, such as partnerships and sole proprietorships. They represent about 95 percent of all U.S. businesses.

Under current law, the profits of those companies “pass through” directly to their owners and are taxed as personal income, often at the top 39.6 percent individual income rate.

Cutting that to 25 percent could mean big tax savings for small-business owners, but also be vulnerable to abuse by other individuals and companies, analysts said.

Republicans proposed eliminating some tax deductions. They did not target the popular ones for mortgage interest and charitable giving, but called for scrapping the one for state and local tax payments. That could especially hurt people in high-tax states like California and New York.

In a step to simplify tax returns, the plan would shrink the current seven tax brackets to three: 12 percent, 25 percent and 35 percent. That would raise the bottom tax rate on low-earning Americans to 12 percent from 10 percent, but analysts said other parts of the plan would still mean a net tax cut.

(Reporting by David Morgan and Richard Cowan; Additional reporting by Susan Heavey, Doina Chiacu and Amanda Becker; Writing by Will Dunham and Kevin Drawbaugh; Editing by Alistair Bell and Peter Cooney)

Trump’s tax plan to propose deep U.S. rate cuts, lacks revenue details

U.S. President Donald Trump walks to Marine One as he departs for New York from the White House in Washington, U.S., September 26, 2017. REUTERS/Joshua Roberts

By David Morgan

WASHINGTON (Reuters) – U.S. President Donald Trump will call on Wednesday for slashing tax rates on businesses and the wealthy as part of a new tax plan that is likely to offer few details about how to pay for the cuts without expanding the federal deficit.

Hammered out over months of talks among Trump aides and top Republicans in Congress, the plan to be unveiled at an event in Indianapolis was expected to propose a 20 percent corporate income tax rate, a new 25 percent tax rate for pass-through businesses such as partnerships, and a reduced 35 percent top income tax rate for individual Americans.

While it would lower the top individual rate from 39.6 percent, the plan was also expected to double the standard deduction, a set amount of income exempt from taxation, for all taxpayers.

“You have to look at the plan in its entirety. It doubles the standard deduction, so in the end, even the lowest rates get a tax cut,” said Jim Renacci, a Republican on the tax-writing House of Representatives Ways and Means Committee.

Republicans will say that the tax cuts, widely leaked to the media by a variety of sources in recent days, would be offset by new revenues raised from eliminating tax loopholes, although few if any of those are expected to be named in the plan.

Republicans are also expected to predict that the Trump tax cuts, if approved by Congress, would drive more robust U.S. economic growth, predictions that critics are sure to question.

At a time of slow but steady U.S. economic expansion, the Trump tax-cut package has some support in Congress, even among Republican fiscal hawks who only a short time ago routinely opposed deficit-financed fiscal proposals.

Trump and his Republican allies made completing tax reform in 2017 a top promise of the 2016 election campaign and are under mounting pressure to finish the job since the collapse of the latest Republican effort to overturn the Obamacare healthcare law.

Trump was expected to push lawmakers hard to quickly approve his tax package, despite critics who will say it falls short of the “tax reform” he promised on the campaign trail.

The plan will be the latest in a series of Republican documents outlining tax policy goals, but failing to tackle the tough questions that have defied past administrations’ efforts to fix the tax code. It has not been reformed since 1986.

WARNINGS ON DEFICIT

The Republican president was expected to try to sell his proposals as beneficial to U.S. workers by saying they would drive economic growth, create jobs and raise wages.

Corporations now pay a statutory 35 percent income tax rate. That is high by global standards and corporations have been seeking a tax cut for years, even though many of them pay much less than the headline rate due to loopholes and tax breaks.

Profits of small, pass-through businesses that are passed directly to the owners are now taxed at the individual income tax rates, often at the top level of 39.6 percent.

Analysts have warned that huge tax cuts would balloon the federal deficit and debt if the economic growth projected by Republicans fails to materialize amid rising interest rates.

An early analysis of the Trump plan by the nonpartisan Tax Foundation think tank estimated it would reduce federal revenues by roughly $5 trillion over a decade, excluding offsets.

On Tuesday, Trump told Republicans and Democrats from the tax-writing House Ways and Means Committee that he wanted tax reform to be bipartisan.

The plan to be unveiled was developed by a small team of senior Republicans behind closed doors with no input from Democrats. It was not clear how far Republicans in Congress would go to accommodate Democratic demands for revenue neutrality and no tax cuts for the wealthy.

“Trump asked for Democrats to jump on the caboose after the tax train has already left the station. I saw no Democrat ready to jump on board,” Democratic Representative Lloyd Doggett said after the meeting.

(Reporting by David Morgan; Editing by Kevin Drawbaugh and Peter Cooney)

Trump: military option for North Korea not preferred, but would be ‘devastating’

Trump: military option for North Korea not preferred, but would be 'devastating'

By Steve Holland and Idrees Ali

WASHINGTON (Reuters) – President Donald Trump warned North Korea on Tuesday that any U.S. military option would be “devastating” for Pyongyang, but said the use of force was not Washington’s first option to deal with the country’s ballistic and nuclear weapons program.

“We are totally prepared for the second option, not a preferred option,” Trump said at a White House news conference, referring to military force. “But if we take that option, it will be devastating, I can tell you that, devastating for North Korea. That’s called the military option. If we have to take it, we will.”

Bellicose statements by Trump and North Korean leader Kim Jong Un in recent weeks have created fears that a miscalculation could lead to action with untold ramifications, particularly since Pyongyang conducted its sixth and most powerful nuclear test on Sept. 3.

Despite the increased tension, the United States has not detected any change in North Korea’s military posture reflecting an increased threat, the top U.S. military officer said on Tuesday.

The assessment by Marine Corps General Joseph Dunford, chairman of the U.S. Joint Chiefs of Staff, about Pyongyang’s military stance was in contrast to a South Korean lawmaker who said Pyongyang had boosted defenses on its east coast.

“While the political space is clearly very charged right now, we haven’t seen a change in the posture of North Korean forces, and we watch that very closely,” Dunford told a Senate Armed Services Committee hearing on his reappointment to his post.

In terms of a sense of urgency, “North Korea certainly poses the greatest threat today,” Dunford testified.

A U.S. official speaking on the condition of anonymity said satellite imagery had detected a small number of North Korean military aircraft moving to the North’s east coast. However the official said the activity did not change their assessment of Pyongyang’s military posture.

North Korean Foreign Minister Ri Yong Ho on Monday accused Trump of declaring war on the North and threatened that Pyongyang would shoot down U.S. warplanes flying near the Korean Peninsula after American bombers flew close to it last Saturday. Ri was reacting to Trump’s Twitter comments that Kim and Ri “won’t be around much longer” if they acted on their threats toward the United States.

North Korea has been working to develop nuclear-tipped missiles capable of hitting the U.S. mainland, which Trump has said he will never allow. Dunford said Pyongyang will have a nuclear-capable intercontinental ballistic missile “soon,” and it was only a matter of a “very short time”.

“We clearly have postured our forces to respond in the event of a provocation or a conflict,” the general said, adding that the United States has taken “all proper measures to protect our allies” including South Korean and Japan.

“It would be an incredibly provocative thing for them to conduct a nuclear test in the Pacific as they have suggested, and I think the North Korean people would have to realize how serious that would be, not only for the United States but for the international community,” Dunford said.

South Korean lawmaker Lee Cheol-uoo, briefed by the country’s spy agency, said North Korea was bolstering its defenses by moving aircraft to its east coast and taking other measures after the flight by U.S. bombers. Lee said the United States appeared to have disclosed the flight route intentionally because North Korea seemed to be unaware.

U.S. Air Force B-1B Lancer bombers, escorted by fighter jets, flew east of North Korea in a show of force after the heated exchange of rhetoric between Trump and Kim.

The United States has imposed sanctions on 26 people as part of its non-proliferation designations for North Korea and nine banks, including some with ties to China, the U.S. Treasury Department’s Office Of Foreign Assets Control Sanctions said on Tuesday.

The U.S. sanctions target people in North Korea and some North Korean nationals in China, Russia, Libya and Dubai, according to a list posted on the agency’s website.

‘CAPABILITY TO DETER’

U.S. Secretary of State Rex Tillerson will visit China from Thursday to Saturday for talks with senior officials that will include the crisis over North Korea and trade, the State Department said on Tuesday.

Evans Revere, a former senior diplomat who met with a North Korean delegation in Switzerland this month, said that Pyongyang had been reaching out to “organizations and individuals” to encourage talks with former U.S. officials to get a sense of the Trump administration’s thinking.

“They’ve also been accepting invitations to attend dialogues hosted by others, including the Swiss and the Russians,” he said.

Revere said his best guess for why the North Koreans were doing this was because they were “puzzled by the unconventional way that President Trump has been handling the North Korea issue” and were eager to use “informal and unofficial meetings to gain a better understanding of what is motivating Trump and his administration”.

During a visit to India, U.S. Defense Secretary Jim Mattis said diplomatic efforts continued.

Speaking in Beijing, Chinese Foreign Ministry spokesman Lu Kang said war on the Korean Peninsula would have no winner.

“We hope the U.S. and North Korean politicians have sufficient political judgment to realize that resorting to military force will never be a viable way to resolve the peninsula issue and their own concerns,” Lu said.

South Korean President Moon Jae-in urged Kim Jong Un to resume military talks and reunions of families split by the 1950-53 Korean War to ease tension.

“Like I’ve said multiple times before, if North Korea stops its reckless choices, the table for talks and negotiations always remains open,” Moon said.

In Moscow, Russia’s Foreign Ministry said it was working behind the scenes to find a political solution and that it plans to hold talks with a representative of North Korea’s foreign ministry who is due to arrive in Moscow on Tuesday, the RIA news agency cited the North’s embassy to Russia as saying.

The United States and South Korea are technically still at war with North Korea after the 1950-53 conflict ended in a truce and not a peace treaty.

(Additional reporting by Christine Kim in SEOUL, Christian Shepherd in BEIJING Michelle Nichols at the UNITED NATIONS, Dmitry Solovyov in MOSCOW, Malini Menon in NEW DELHI and Doina Chiacu, David Alexander, Susan Heavey, David Brunnstrom and Matt Spetalnick in WASHINGTON; Writing by Yara Bayoumy; Editing by Grant McCool and James Dalgleish)

Trump ally Stone denies collusion with Russia

U.S. political consultant Roger Stone, a longtime ally of President Donald Trump, speaks to reporters after appearing before a closed House Intelligence Committee investigating Russian interference in the 2016 U.S. presidential election at the U.S. Capitol in Washington, U.S., September 26, 2017. REUTERS/Kevin Lamarque

By Patricia Zengerle

WASHINGTON (Reuters) – Republican political consultant Roger Stone, a longtime ally of President Donald Trump, flatly denied allegations of collusion between the president’s associates and Russia during the 2016 U.S. election in a meeting with lawmakers on Tuesday.

In a 47-page opening statement seen by Reuters before his appearance before the House of Representatives Intelligence Committee, Stone said he viewed it “as a political proceeding” and accused some committee members of making “provably false” statements to create the impression of collusion with Russia.

After spending almost three hours behind closed doors taking questions from committee members, Stone again denied accusations that he had engaged in improper conduct during the 2016 campaign but was much more contentious than in the rambling statement.

“I am aware of no evidence whatsoever of collusion by the Russian state or anyone in the Trump campaign,” Stone told reporters.

The House panel is one of the main congressional committees investigating allegations that Russia sought to interfere in the 2016 U.S. election and probing whether any Trump associates colluded with Moscow.

Russia denies any such efforts, and Trump has dismissed any talk of collusion.

Stone said he had had a frank exchange with committee members, but described some clashes between Democrats and Republicans. He said he answered all of their questions except for refusing to identify an “opinion journalist” who had acted as a go-between between Stone and Julian Assange.

Assange is the publisher of WikiLeaks, which released emails stolen from Democrats that helped Trump’s campaign.

After Stone spoke, Representative Adam Schiff, the top Democrat on the Intelligence Committee, said Stone had declined to answer one line of questions, and the panel might have to subpoena him to return and do so.

Schiff declined to say whether those questions were related to Assange.

TIES TO TRUMP CAMPAIGN MANAGER

Stone, one of Trump’s closest political advisers in the years before he ran for president, was formerly a partner in a lobbying firm with Paul Manafort, a Trump campaign manager. Manafort has also been scrutinized in the investigations into Russia and the election. In August, FBI agents raided his home.

Stone said Manafort’s attorneys had informed his attorneys that federal prosecutors planned to indict Manafort.

Stone said he had not heard from Robert Mueller, the special counsel investigating Russian involvement in the election and possible collusion, and there were currently no plans for a similar appearance before the Senate Intelligence Committee.

Stone said he had spoken to Trump “recently,” but not about his appearance before the committee.

Mike Conaway, the Republican lawmaker overseeing the investigation, said he had no response to Stone. But he said he had watched Stone’s remarks to reporters “and they were very accurate.”

In his written statement, Stone also accused the committee of cowardice because he was not allowed to testify in an open forum. He said he wanted the transcript of his interview to be released.

“I am most interested in correcting a number of falsehoods, misstatements, and misimpressions regarding allegations of collusion between Donald Trump, Trump associates, The Trump Campaign and the Russian state,” Stone said in the statement.

U.S. intelligence agencies have concluded that Russia sought to influence the election to boost Trump’s chances of defeating former Secretary of State Hillary Clinton, his Democratic opponent.

In his statement, Stone acknowledged his reputation as a tough political strategist, but said he did not engage in any illegal activities.

“There is one ‘trick’ that is not in my bag and that is treason,” he said.

(Reporting by Patricia Zengerle; Editing by Susan Thomas and Jonathan Oatis)