Exclusive: U.S. pushing for regular review of China trade, reform progress

BEIJING/WASHINGTON (Reuters) – The United States is pushing for regular reviews of China’s progress on pledged trade reforms as a condition for a trade deal – and could again resort to tariffs if it deems Beijing has violated the agreement, according to sources briefed on negotiations to end the trade war between the two nations.

A continuing threat of tariffs hanging over commerce between the world’s two largest economies would mean a deal would not end the risk of investing in businesses or assets that have been impacted by the trade war.

“The threat of tariffs is not going away, even if there is a deal,” said one of three sources briefed on the talks who spoke with Reuters on condition of anonymity.

Chinese negotiators were not keen on the idea of regular compliance checks, the source said, but the U.S. proposal “didn’t derail negotiations.”

A Chinese source said the United States wants “periodic assessments” but it’s not yet clear how often.

“It looks like humiliation,” the source said. “But perhaps the two sides could find a way to save face for the Chinese government.”

The administration of U.S. President Donald Trump has imposed import tariffs on Chinese goods to put pressure on Beijing to meet a long list of demands that would rewrite the terms of trade between the two countries.

The demands include changes to China’s policies on intellectual property protection, technology transfers, industrial subsidies and other trade barriers.

Regular reviews would be one potential solution to address a demand from U.S. Trade Representative Robert Lighthizer for ongoing verification of any trade pact between the two countries, three sources familiar with the talks told Reuters. The threat of tariffs would be used to keep reform on track, the sources said.

Lighthizer is leading negotiations with China. A USTR spokesman declined to comment on the possibility of regular assessments.

The idea of quarterly reviews of quarterly reviews was part of a U.S. negotiating document leaked after talks in May 2018, before the United States had slapped its first round of duties on $50 billion worth of Chinese goods.

The renewed focus on regular reviews in current negotiations – this time carrying the threat of tariffs – underscores the growing distrust between the two countries.

An enforcement and verification process is unusual for trade deals and is akin to the process around punitive economic sanctions such as those imposed on North Korea and Iran.

Disputes over trade are more typically dealt with through courts, the World Trade Organization (WTO) or through arbitration panels and other dispute settlement mechanisms built into trade agreements.

Trump’s team has criticized the WTO for failing to hold China to account for not executing on promised market reforms. The U.S. has also criticized the WTO’s dispute settlement process and is seeking reforms at the organization.

BROKEN PROMISES

Trump’s administration has accused China of repeatedly failing to follow through on previous pledges to implement reforms sought by the United States.

Washington often cites as an example the difficulties still faced by foreign payment card operators in entering China’s market despite a 2012 WTO ruling that Beijing was discriminating against them.

A separate industry source said it is likely that different agreement on separate issues – forced technology transfer, intellectual property, changes to China’s legal system – would require separate verification processes, all of which will need to be hammered out by negotiators.

“The challenge of verification and enforcement stems from the fact that China has made promises it hasn’t kept,” the source said.

Trump and Chinese President Xi Jinping agreed to a 90-day truce in the trade war in December to give their teams time to negotiate a deal. Nearly 50 days later, there is little sign that China will make the concessions the U.S. is seeking.

Lighthizer saw no progress on structural issues at three days of mid-level talks in Beijing last week, Republican Senator Chuck Grassley said on Tuesday.

China’s Vice Premier and lead negotiator Liu He is due to visit Washington for the next round of talks with Lighthizer and U.S. Treasury Secretary Steven Mnuchin at the end of the month.

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U.S. chipmakers may give clues on China hazard

SAN FRANCISCO (Reuters) – Intel Corp (INTC.O) operates mostly outside the Apple-sphere, and that is exactly why whatever it says next week about business in its vital Chinese market matters so much for investors.

Apple (AAPL.O) rattled global markets this month when the iPhone maker cut its revenue outlook for the first time in 15 years, blaming factors like the U.S.-China trade dispute and a slowdown in the Chinese economy.

Upcoming quarterly scorecards from Intel, Texas Instruments (TXN.O) and other chipmakers, as well as Ford Motor (F.N), will shed light on whether Apple made a convenient excuse for its own troubles or revealed a strengthening headwind faced by global companies that rely on China for a big chunk of their sales.

“They should give us a good gauge of what is happening in China beyond smartphones because Texas Instruments is mostly industrials and autos, and Intel is PCs and servers, and they’re not being driven by the Apple smartphone situation,” said Daniel Morgan, a portfolio manager at Synovus Trust Company in Atlanta.

Underscoring Wall Street’s sensitivity to China trade, stocks surged on Friday after a report that China has offered to go on a six-year buying spree to ramp up U.S. imports in order to reconfigure the relation between the two countries.

China accounts for almost a quarter of Intel’s revenue, while modem chips for iPhones, the focus of recent concerns about Apple, account for just a tiny part of Intel’s business.

While most Intel processors sold in China are used to build laptops and servers for export, Chinese consumers and companies also purchase many of those devices.

With the tariff war already taking a toll on China’s trade sector and increasing the risk of a sharper slowdown in the world’s second largest economy, U.S. multinationals will face pressure to be cautious about their outlooks for 2019.

“Anyone doing business in China, especially if you are an American company – I don’t think you can come out with super-positive guidance. You have to be retrospect about what you say,” said Stephen Massocca, Senior Vice President at Wedbush Securities in San Francisco.

Texas Instruments and programmable chipmaker Xilinx (XLNX.O), both reporting on Wednesday, and Intel, reporting on Thursday, are among the S&P 500 companies most reliant on China for their revenue. Investors will listen closely to what those companies may say about how the China trade dispute and the country’s cooling economic expansion are affecting demand for their products.

Also on Wednesday, Ford’s quarterly report will give investors a glimpse of the automaker’s progress trying to reverse a sales slump in China, the world’s biggest car market.

Other chipmakers and related companies reporting next week include ASML Holding (ASML.AS), Lam Research (LRCX.O), SK Hynix (000660.KS) and Western Digital (WDC.O).

Fears about the impact of the trade conflict on U.S. technology companies crystallized this month after Apple (AAPL.O) cut its sales forecast, blaming China’s economy.

Diminished expectations for chipmakers account for most of a recent steep drop in expectations for tech sector earnings growth in 2019, according to IBES data from Refinitiv.

In October, analysts on average forecast S&P 500 technology companies would increase their earnings per share by 8.5 percent in 2019, according to Refinitiv. But expectations for 2019 tech EPS growth have since withered to just 2.2 percent.

Still, many Silicon Valley companies remain in favor among investors. Technology was the third most recommended sector among 13 big research firms recently surveyed by Reuters, behind healthcare and financials.

With the S&P 500 recently trading at 15 times expected earnings, down from 18 times a year ago, a key argument for Wall Street bulls is that the stock market has become undervalued after December’s selloff. But if Apple’s warning about slow China demand is repeated by Intel, Texas Instruments and others, the S&P 500 may appear less of a bargain at current levels.

The Philadelphia Semiconductor Index .SOX is down about 15 percent from its high in March 2018, as chipmakers struggle with a cooling smartphone industry and slower demand for memory chips used in cars, industrial equipment and other markets.

While Wall Street gained this month due to optimism that the trade dispute will be resolved, China for years has struggled to maintain its pace of economic growth. Even a quick end to the trade dispute would not guarantee a return to strong results from U.S. companies’ China operations.

“Trade may be pointed to as a reason for issues with input costs or weakness in sales, but I think that just as important is the fact that the economy in China is slowing, and they are incremental buyers for both semiconductors and cars,” said Patrick Palfrey, an earnings analyst at Credit Suisse.

In Intel’s October quarterly conference call, Interim Chief Executive Bob Swan said the company was working to reduce the impact on its supply chain from potential new tariffs.

Analysts, on average, expect Intel to report fourth-quarter revenue up 11 percent to $19 billion, and to forecast 2019 revenue will rise 3 percent to $73.2 billion, according to Refinitiv.

Analysts expect Texas Instruments to grow net income by 10 percent in the December quarter then shrink in 2019, according to Refinitiv.

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U.S. manufacturing output posts biggest gain in 10 months

WASHINGTON, (Reuters) – U.S. manufacturing output increased by the most in 10 months in December, boosted by a surge in the production of motor vehicles and a range of other goods, which could allay fears of a sharp slowdown in factory activity.

The Federal Reserve said on Friday manufacturing production jumped 1.1 percent last month, the biggest gain since February. Data for November was revised slightly up to show output at factories gaining 0.1 percent instead of being unchanged as previously reported.

Economists polled by Reuters had forecast manufacturing output rising 0.3 percent in December. Production at factories increased at a 2.3 percent annualized rate in the fourth quarter after expanding at a 3.7 percent pace in the July-September period.

Last month’s surge in manufacturing production is unlikely to be sustained after a report earlier this month showed a measure of new orders received by factories tumbling in December to its lowest level since August 2016.

Manufacturing activity, which accounts for about 12 percent of the economy, is slowing as some of the boost to capital spending from last year’s $1.5 trillion tax cut package fades. In addition, a strong dollar and cooling growth in Europe and China is hurting exports. Lower oil prices are also slowing purchases of equipment for oil and gas well drilling.

Last month, motor vehicle production surged 4.7 percent after gaining 0.2 percent in November. Excluding motor vehicles and parts, manufacturing advanced a solid 0.8 percent last month, boosted by a strong increase in the output of construction supplies, business supplies and material. That followed a 0.1 percent gain in November.

December’s surge in manufacturing output, together with a rise in mining production offset a drop in utilities, leading to a 0.3 percent increase in industrial production. Industrial output rose 0.4 percent in November. It increased at a 3.8 percent rate in the fourth quarter after notching a 4.7 percent gain in the third quarter.

Utilities output tumbled 6.3 percent in December as mild temperatures lowered demand for heating, after rising 1.3 percent in the prior month.

Mining output increased 1.5 percent last month after climbing 1.1 percent in November. Oil and gas well drilling fell 0.3 percent in December.

Capacity utilization for the manufacturing sector, a measure of how fully firms are using their resources, rose to 76.5 percent in December from 75.8 percent in November.

Overall capacity use for the industrial sector rose to 78.7 percent from 78.6 percent in November. It is 1.1 percentage points below its 1972-to-2017 average. Industrial capacity use rose to 78.0 percent in 2018, the highest since 2014, compared to 76.1 percent in 2017.

Officials at the Fed tend to look at capacity use measures for signals of how much “slack” remains in the economy — how far growth has room to run before it becomes inflationary.

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U.S. refiners scramble as White House eyes Venezuela sanctions

(Reuters) – U.S. refiners are bidding up prices for scarce types of crude oil needed for their most sophisticated plants as the United States reconsiders harsher sanctions on Venezuela that could further reduce imports of the country’s oil.

Trump administration officials in recent days met with U.S. oil company executives to lay out potential actions in response to the Jan. 10 inauguration of Venezuelan President Nicolas Maduro in an election it considered illegitimate.

Among other steps, U.S. officials have recognized the opposition-run Venezuelan congress as the only legitimately elected authority. But the proposals that would most affect the energy industry involve banning U.S. exports of refined products or limiting oil imports – a move that, until now, the White House has not taken even after sanctioning individuals and barring access to U.S. banks.

“It’s more serious than I’ve heard before,” said a refining industry executive familiar with the White House discussions. “They are setting the table to pull the trigger if they have to.”

U.S. refiners have few supply alternatives if the Trump administration were to cut off crude imports from that country. Supplies of the heavy oils preferred by Gulf Coast refiners have been harder to secure in recent months because of cutbacks and production curbs in Western Canada, Mexico and Venezuela.

One type of U.S. heavy oil, called Mars, traded at a $6.80 per barrel premium to U.S. crude futures on Thursday, the strongest in nearly five years and up from a $4.50 per barrel premium on Tuesday, a U.S. oil broker said.

U.S. oil companies that depend on Venezuelan oil have opposed past proposals that would halt imports and did so again this week, said several people close to the talks. Two big refiners, Phillips 66 (PSX.N) and PBF Energy (PBF.N), cut their dependence on the South American country last year, according to U.S. Energy Information Administration data.

Latin American advisors have warned the administration that oil sanctions could backfire by making the United States appear too involved in the Venezuelan political crisis, said a person familiar with talks among the White House, the National Security Council and oil firms.

U.S. Secretary of State Mike Pompeo has become directly involved, accelerating possible financial and political steps against Maduro, the person said. State Department spokespeople were not immediately available for comment.

Venezuela exported 500,013 barrels per day to the United States last year, down from 591,422 bpd in 2017.

The largest U.S. importers of Venezuelan oil last year were Citgo Petroleum [PDVSAC.UL], the U.S. refining arm of Venezuela’s state-run oil company PDVSA, Valero Energy (VLO.N), Chevron Corp (CVX.N) and PBF Energy.

Citgo, Valero and PBF Energy either did not respond to requests for comment or declined to comment. Chevron declined to comment on the potential for sanctions, but said it actively manages supplies and has plans in place to make necessary adjustments to ensure it can supply customers.

White House officials are aware hitting Venezuela with oil sanctions could deepen the humanitarian crisis there and hurt U.S. businesses and consumers by raising fuel prices.

“With regard to sanctions, all options are on the table,” said Garrett Marquis, spokesman for the White House National Security Council who declined to discuss specifics of the deliberations.

Mexico, a supplier of heavy crude, reported its production dropped to 1.72 million barrels per day in November, from 1.93 million bpd at the start of the year.

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U.S. legislation steps up pressure on Huawei and ZTE, China calls it 'hysteria'

WASHINGTON/BEIJING (Reuters) – A bipartisan group of U.S. lawmakers introduced bills on Wednesday that would ban the sale of U.S. chips or other components to Huawei Technologies Co Ltd [HWT.UL], ZTE Corp or other Chinese telecommunications companies that violate U.S. sanctions or export control laws.

The proposed law drew sharp criticism from China where Foreign Ministry spokeswoman Hua Chunying called the U.S. legislation “hysteria”, intensifying a bitter trade war between Beijing and Washington.

The bills were introduced shortly before the Wall Street Journal reported federal prosecutors were investigating allegations that Huawei stole trade secrets from T-Mobile U.S. Inc and other U.S. businesses.

The Journal said that an indictment could be coming soon on allegations that Huawei stole T-Mobile technology, called Tappy, which mimicked human fingers and was used to test smartphones.

Huawei said in a statement the company and T-Mobile settled their disputes in 2017 following a U.S. jury verdict that found “neither damage, unjust enrichment nor wilful and malicious conduct by Huawei in T-Mobile’s trade secret claim”.

Hua urged U.S. lawmakers to block the bills.

“I believe the action of these few representatives are an expression of extreme arrogance and an extreme lack of self-confidence,” Hua said.

“Actually the whole world can see very clearly that the real intent of the United States is to employ its state apparatus in every conceivable way to suppress and block out China’s high-tech companies,” she added.

The legislation is the latest in a long list of actions taken to fight what some in the Trump administration call China’s cheating through intellectual property theft, illegal corporate subsidies and rules hampering U.S. corporations that want to sell their goods in China.

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PRESSURE MOUNTING

In November, the U.S. Department of Justice unveiled an initiative to investigate China’s trade practices with a goal of bringing trade secret theft cases.

At that time, Washington had announced an indictment against Chinese chipmaker Fujian Jinhua Integrated Circuit Co Ltd for stealing trade secrets from U.S. semiconductor company Micron Technology relating to research and development of memory storage devices.

Jinhua, which has denied any wrongdoing, was put on a list of entities that cannot buy goods from U.S. firms.

On Capitol Hill, Senator Tom Cotton and Representative Mike Gallagher, both Republicans, along with Senator Chris Van Hollen and Representative Ruben Gallego, both Democrats, introduced the bills that would require the president to ban the export of U.S. components to any Chinese telecommunications company that violates U.S. sanctions or export control laws.

The bills specifically cite ZTE and Huawei, both of which are viewed with suspicion in the United States because of fears that their switches and other gear could be used to spy on Americans. Both have also been accused of failing to respect U.S. sanctions on Iran.

“Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party whose founder and CEO was an engineer for the People’s Liberation Army,” Cotton wrote in a statement. “If Chinese telecom companies like Huawei violate our sanctions or export control laws, they should receive nothing less than the death penalty – which this denial order would provide.”

The proposed law and investigation are two of several challenges that Huawei, the world’s biggest telecommunications equipment maker, faces in the U.S. market.

In addition to allegations of sanctions-busting and intellectual property theft, Washington has been pressing allies to refrain from buying Huawei’s switches and other gear because of fears they will be used by Beijing for espionage.

Huawei’s founder, Ren Zhengfei, denied this week that his company was used by the Chinese government to spy.

Canada detained Ren’s daughter, Meng Wanzhou, who is Huawei’s chief financial officer, in December at the request of U.S. authorities investigating an alleged scheme to use the global banking system to evade U.S. sanctions against Iran.

For its part, ZTE agreed last year to pay a $1 billion fine to the United States that had been imposed because the company breached a U.S. embargo on trade with Iran.

As part of the agreement, the U.S. lifted a ban in place since April that had prevented ZTE from buying the U.S. components it relies on heavily to make smartphones and other devices.

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U.S. investigating Huawei for alleged trade secret theft: WSJ

WASHINGTON (Reuters) – Federal prosecutors are investigating Huawei Technologies[HWT.UL], the world’s largest telecommunications equipment maker, for allegedly stealing trade secrets from U.S. businesses and could soon issue an indictment, the Wall Street Journal reported on Wednesday.

Citing people familiar with the matter, the Journal said that one area of investigation is the technology behind a device that T-Mobile U.S. Inc (TMUS.O) used for testing smartphones. Reuters could not immediately confirm the report.

The action is the latest in a long list taken to fight what some in the Trump administration call China’s cheating through intellectual property theft, illegal corporate subsidies and rules hampering U.S. corporations that want to sell their goods in China.

The investigation arose out of civil lawsuits against Huawei, the Journal said, including one in Seattle where Huawei was found liable for misappropriating robotic technology from T-Mobile (TMUS.O).

A Huawei spokesman and a spokeswoman for the U.S. attorney in the western district of Washington declined comment.

T-Mobile alleged in a 2014 lawsuit, filed in federal court in Seattle, that Huawei employees stole technology relating to a smartphone-testing robot T-Mobile had in a lab in Bellevue, Washington.

The robot, Tappy, used human-like fingers to simulate tapping on mobile phones.

According to T-Mobile’s lawsuit, Huawei employees photographed the robot and attempted to remove one of its parts.

In May 2017, a jury said Huawei should pay T-Mobile $4.8 million in damages.

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As shutdown lingers, Pelosi pushes Trump to delay State of Union address

WASHINGTON (Reuters) – With the partial U.S. government shutdown dragging into its 26th day, House Speaker Nancy Pelosi on Wednesday urged President Donald Trump to reschedule his State of the Union address – a move that could deny the president the opportunity to use the pageantry of the speech to attack Democrats in their own chamber over the impasse.

With Trump’s address set for Jan. 29, Pelosi wrote him a letter citing security concerns because the Secret Service, which is required to provide security for the address, has not received funding during the dispute.

The standoff was triggered by Trump’s demand for a round of funding for his promised wall on the U.S.-Mexico border.

Presidents traditionally deliver the address, which lays out the administration’s goals for the upcoming year, in the House of Representatives chamber before a joint session of Congress and the majority of the Cabinet.

Democrats took control of the House after last November’s congressional elections. During the shutdown, Trump has routinely blamed them for the stalemate, although he had earlier said he would take responsibility.

Pelosi, speaking to reporters, suggested that if Trump would not agree to reschedule the speech until the government reopens, he could deliver it from the Oval Office instead, a setting that would lack the grandeur of a congressional address.

The White House had no immediate comment on Pelosi’s request, and her letter appeared to have taken aides by surprise. It pointed out that she had invited Trump to make the State of the Union address at the Capitol but said the shutdown complicated the situation.

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“Sadly, given the security concerns and unless government re-opens this week, I suggest we work together to determine another suitable date after government has re-opened for this address or for you to consider delivering your State of the Union address in writing to the Congress,” Pelosi wrote.

In response, Homeland Security Secretary Kirstjen Nielsen said on Twitter her department and the Secret Service were prepared to handle a presidential speech at the Capitol.

Representative Jim Jordan of the House Freedom Caucus, a group of conservative Republicans allied to Trump, said Pelosi’s move showed Democrats are “more focused on stopping the president than they are on serving the country.”

DEMOCRATIC SENATORS RALLY

Meanwhile, both sides in the long-running conflict sought to ratchet up the pressure.

Democratic senators huddled on the outdoor steps leading to the Senate in 39-degree (3.9-degree Celsius), windy Washington weather, holding large photographs of constituents furloughed by the shutdown or otherwise affected by it.

Senate Democratic Leader Chuck Schumer said Trump “is using these men and women as pawns. Using them in an extortion game saying, ‘I am going to hurt these people unless I get my way.’”

At the same time, the president hosted a bipartisan group of House members to discuss finding a solution to the impasse. White House Press Secretary Sarah Sanders said the meeting was constructive.

Democratic members who met with Trump said they called on him to end the shutdown and then talk about the issues dividing them.

“Our singular message was we’ve got to reopen the government and then in good faith we can have negotiations,” said Dean Phillips, a freshman representative from Minnesota, told reporters.

A handful of Republican senators, including Lindsey Graham and Lisa Murkowski, were circulating a bipartisan draft letter to Trump asking him to support a measure that would reopen the government for three weeks while they work on funding legislation that would address his concerns about border security.

A Democrat who signed the letter, Chris Coons, said it would not be sent unless a substantial amount of Republicans supported it.

Trump on Wednesday was expected to sign legislation that would ensure 800,000 federal employees will receive back pay when the government reopens.

Some government employees are being asked to return to work after being initially told to stay home during the shutdown, although they will not be paid on schedule.

Both the Internal Revenue Service and the Federal Aviation Administration on Tuesday said they would call back nearly 50,000 employees to handle tax returns, refunds and other tasks or to work in aviation safety inspection.

The U.S. Department of Agriculture said it was recalling about 2,500 furloughed employees to assist farmers with existing loans and ensure the agency meets a deadline for providing tax documents.

The shutdown began on Dec. 22 after Trump insisted he would not sign legislation funding the idled government agencies unless it included more than $5 billion for the border wall.

The wall was a signature campaign promise of his before the 2016 presidential election. Trump said at the time Mexico would pay for it but has since reversed himself, denying that he ever said Mexico would directly pay the bill.

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United States signals it may toughen stance on Cuban lawsuits provision

WASHINGTON/HAVANA (Reuters) – The Trump administration on Wednesday shortened the U.S. government’s customary waiver of legislation that would allow Cuban Americans to sue foreign companies in Cuba, indicating it could allow the 23-year-old law to take effect for the first time.

The legislation, which allows Cuban Americans to sue foreign companies in Cuba using properties seized from them by the Cuban government after the 1959 revolution, was suspended for just 45 days, instead of the customary six months.

The so-called Title III rule forms part of the Helms-Burton Act, which codified all U.S. sanctions against Cuba into law in 1996. It has been waived by various presidents ever since due to opposition from the international community and fears it could create chaos in the U.S. court system, analysts say.

If Title III went into effect, it could seriously dampen foreign investment that Cuba has been seeking to drum up to support its beleaguered state-dominated economy.

“This extension will permit us to conduct a careful review of the right to bring action under Title III in light of the national interests of the United States and efforts to expedite a transition to democracy in Cuba,” the State Department said in a statement.

“We encourage any person doing business in Cuba to reconsider whether they are trafficking in confiscated property and abetting this dictatorship.”

John Kavulich, president of the U.S.-Cuba Trade and Economic Council, said the decision presented “a likelihood of an ominous commercial, economic and political landscape for the Republic of Cuba, European Union-member countries, and members of the World Trade Organization.”

“Once again, the Trump Administration has used weaponized potentiality to create uncertainty and, thus anxiety,” he said.

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Democratic Senator Gillibrand to launch 2020 White House bid

WASHINGTON/NEW YORK (Reuters) – U.S. Senator Kirsten Gillibrand told CBS’ “The Late Show With Stephen Colbert” that she would file paperwork on Tuesday night to explore a run for the Democratic presidential nomination in the 2020 election.

Colbert, during the taping of an episode that will air on Tuesday night, asked Gillibrand, who has been taking the steps to begin a presidential campaign, if she had anything she would like to announce.

“Yes,” the lawmaker from New York said. “I’m filing an exploratory committee for president of the United States tonight.”

The formation of an exploratory committee will allow Gillibrand, 52, who is known for spearheading efforts to change how Congress handles allegations of sexual harassment and became a prominent voice in the #MeToo movement, to begin fundraising and organizing her campaign.

“I’m going to run for president of the United States because as a young mom I’m going to fight for other people’s kids as hard as I would fight for my own,” Gillibrand said to applause.

She has hired several top political aides in recent weeks, fueling speculation her jump into the 2020 fray was imminent.

There is no dominant early front-runner in what is expected to be a crowded Democratic nominating race to take on President Donald Trump, the likely Republican nominee.

Texas Democrat Julian Castro, a former San Antonio mayor and top U.S. housing official, formally launched his White House bid on Saturday. Former U.S. Representative John Delaney has been running for more than a year. U.S. Senator Elizabeth Warren of Massachusetts formed an exploratory committee last month and Representative Tulsi Gabbard said Friday that she will run for president.

Some in the party believe an establishment figure who can appeal to centrist voters is the way to victory. Others argue a fresh face, and particularly a diverse one, is needed to energize the party’s increasingly left-leaning base.

Gillibrand was a member of the centrist and fiscally conservative Blue Dog Coalition while in the House of Representatives. Her positions became more liberal after she was appointed to fill the Senate seat vacated by Hillary Clinton in New York when Clinton became former President Barack Obama’s secretary of state.

Gillibrand then won the seat in a special election and was re-elected to six-year terms in 2012 and 2018. She has attributed the ideology shift to representing a liberal state versus a more conservative district.

As a senator, Gillibrand was outspoken about rape in the military and campus sexual assault years before the #MeToo movement against sexual harassment and assault first arose in 2017.

In late 2017, as she pushed for a bill changing how Congress processes and settles sexual harassment allegations made by staffers, some prominent party leaders criticized her for being the first Democratic senator to urge the resignation of Senator Al Franken, who was accused of groping and kissing women without their consent.

During the same period, Gillibrand said Hillary Clinton’s husband, former President Bill Clinton, should have resigned from the White House after his affair with intern Monica Lewinsky, which led to his impeachment by the House. Some criticized the senator for attacking the Clintons, who had supported her political career.

Gillibrand backs a Medicare-for-all bill championed by Democratic Party liberals. She was the first senator to call in June 2018 for the abolishment of Immigration and Customs Enforcement (ICE) amid controversy over Trump’s separation of families entering the country at the U.S.-Mexico border.

“I believe healthcare should be a right and not a privilege,” Gillibrand told Colbert.

In a dig at Trump, Gillibrand said the first thing she would do if elected to the White House is “restore what’s been lost” like the “integrity and compassion of this country.”

“You have to start by restoring what’s been lost, restoring our leadership in the world, addressing things like global climate change and being that beacon of light and hope in the world,” Gillibrand said.

Trump and Gillibrand have sparred publicly in the past. In December 2017, the president targeted her with a sexually tinged tweet, calling her a “total flunky” who had “come to my office ‘begging’ for campaign contributions not so long ago (and would do anything for them).”

Gillibrand shot back immediately on Twitter.

“You cannot silence me or the millions of women who have gotten off the sidelines to speak out about the unfitness and shame you have brought to the Oval Office,” she wrote.

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Democratic U.S. Senator Gillibrand to discuss potential White House bid

WASHINGTON (Reuters) – Democratic U.S. Senator Kirsten Gillibrand, who has been taking steps to prepare for a run for the White House in 2020, is scheduled to appear on CBS’ “The Late Show with Stephen Colbert” on Tuesday night and is expected to discuss her political plans.

The senator from New York has hired several top political aides in recent weeks, fueling speculation her jump into the 2020 fray was imminent.

Her staff would not confirm details about her announcement. CBS News, citing an unnamed person familiar with Gillibrand’s plans, reported she is expected to launch her White House bid.

Gillibrand, 52, is known for spearheading efforts to change how Congress handles allegations of sexual harassment and became a prominent voice in the #MeToo movement.

There is no dominant early front-runner in what is expected to be a crowded Democratic nominating race to take on President Donald Trump, the likely Republican nominee. But Gillibrand will have to compete against better-known candidates in a party still debating the best path forward after losing the White House in 2016.

Some in the party believe an establishment figure who can appeal to centrist voters is the way to victory. Others argue a fresh face, and particularly a diverse one, is needed to energize the party’s increasingly left-leaning base.

Gillibrand was a member of the centrist and fiscally conservative Blue Dog Coalition while in the House of Representatives. Her positions became more liberal after she was appointed to fill the Senate seat vacated by Hillary Clinton in New York when Clinton became former President Barack Obama’s secretary of state.

Gillibrand then won the seat in a special election and was re-elected to six-year terms in 2012 and 2018. She has attributed the ideology shift to representing a liberal state versus a more conservative district.

As a senator, Gillibrand was outspoken about rape in the military and campus sexual assault years before the #MeToo movement against sexual harassment and assault first arose in 2017.

In late 2017, as she pushed for a bill changing how Congress processes and settles sexual harassment allegations made by staffers, some prominent party leaders criticized her for being the first Democratic senator to urge the resignation of Senator Al Franken, who was accused of groping and kissing women without their consent.

During the same period, Gillibrand said Hillary Clinton’s husband, former President Bill Clinton, should have resigned from the White House after his affair with intern Monica Lewinsky, which led to his impeachment by the House. Some criticized the senator for attacking the Clintons, who had supported her political career.

Gillibrand backs a Medicare-for-all bill championed by Democratic Party liberals. She was the first senator to call in June 2018 for the abolishment of Immigration and Customs Enforcement (ICE) amid controversy over Trump’s separation of families entering the country at the U.S.-Mexico border.

In December 2017, Trump targeted her with a sexually tinged tweet, calling her a “total flunky” who had “come to my office ‘begging’ for campaign contributions not so long ago (and would do anything for them).”

Gillibrand shot back immediately on Twitter.

“You cannot silence me or the millions of women who have gotten off the sidelines to speak out about the unfitness and shame you have brought to the Oval Office,” she wrote.

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