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In Trump-Xi faceoff, both 'have a great deal to lose'
Tariff and currency punches keep leaders locked in a fight that both hope will be politically advantageous

Donald Trump

Xi Jinping

When Xi Jinping first met Donald Trump back in 2017, the Chinese leader said they had "a thousand reasons to make the China-U.S. relationship a success, and not a single reason to break it."

Two years on, ties are at their lowest point in decades- and they appear to be worsening by the day. Trump's threat to raise tariffs on all Chinese goods last week shattered a truce reached with Xi just weeks earlier, unleashing tit-for-tat actions on trade and currency policy that risk accelerating a wider geopolitical fight between the world's biggest economies.

A big part of the problem is that neither leader believes the other is serious about making a deal: China sees Trump as posturing ahead of the 2020 election, while U.S. officials think Xi is looking to wait him out for a better deal.

Either way, the political space for compromise is diminishing as hard-liners take center stage, prompting investors to weigh the potential economic fallout.

"We are looking at a situation now that is a bit of a perfect storm," said Dennis Wilder, former senior director for Asia on the National Security Council who is now at Georgetown University. "Both have a great deal to lose in this high-stakes poker."

For Trump, the bet is that a hard-line stance on China will help him win another four years in the Oval Office. His administration has proudly trumpeted what it calls the most robust response in decades to a rising China, and most Democratic candidates agree with the need to stay tough on Beijing even if they don't agree with Trump's tariffs.

While U.S. farmers and business groups have sounded the alarm over Trump's escalation of trade tensions, the Federal Reserve's interest-rate cut last week — and the prospect of more to come — may give Trump some breathing space. And the president tweeted Tuesday that he'd support a fresh round of aid to farmers hurt by tariff increases, if necessary.

Analysts say Xi is under pressure from senior leaders to get tougher as U.S. ties deteriorate, corporate giant Huawei Technologies Co. comes under attack and protests in Hong Kong spiral out of control.

China's move on Monday to let its currency weaken and halt agricultural purchases marked a stark escalation in its response to Trump. His administration labeled Beijing a currency manipulator in return.

"It is unlikely China will buckle to any further pressure as they are convinced dealing with the current U.S. administration means give them an inch and they want a foot," said Charles Liu, a former economic negotiator with the Chinese delegation at the United Nations and founder of Hao Capital. "There does not seem to be serious interest from the U.S. side of actually wanting to do a deal."

The U.S. has a much different version of events.

People within and close to the White House blame China's own hawks for scuttling key parts of a trade agreement in May, and they say Xi failed to live up to promises to step up agriculture purchases after the leaders met almost six weeks ago at the Group of 20 summit in Japan. They insist that Trump's threat of new tariffs last week was meant to bring China back to the negotiating table and say Beijing's retaliation showed that Xi didn't want to reach a deal and would try to wait out Trump.

To some U.S. hawks, the breakdown in relations could provide an opportunity to tighten restrictions on Huawei, follow through on selling F-16 fighter jets to Taiwan and signal support for Hong Kong protesters. The U.S. has indicated that it will base intermediate-range missiles in Asia — something China warned against Tuesday — and potentially take further action against Chinese students and scientists.

"Both sides are clearly looking at their tool kits to see how to respond both in terms of the underlying issues - that is, trade and technology - and from what the political optics are at home and abroad," said James Green, who until recently was the senior official in the U.S. Trade Representative's Office in Beijing.

Xi, meanwhile, still has plenty of ammunition to use against Trump. He could take punitive action on U.S. business interests in China, undermine American efforts to isolate Iran and North Korea, and even take more drastic measures to block U.S. companies from its recently opened sectors, such as finance.

The potential for miscalculation is high. Some former U.S. officials who worked on China trade issues said the administration overestimated its own leverage by refusing to gradually remove tariffs in exchange for reforms, a move that some see as leading to China's move to pull back from talks.

For the business community, the threat of greater escalation is particularly worrying. Both nationsmust sit down and reach a deal that is as close as possible to reciprocity, said James McGregor, China chairman of APCO Worldwide, which advises foreign companies.

"The path forward will be dangerous and ugly if both sides don't get out of the ring and move to a negotiating table," he said. "This is real life, not a reality show."

Iowa and Nebraska schools hit hard by flooding expect traumatized students and empty desks

On the first day of school in one Iowa district, there will be some empty desks.

The Hamburg Community School District, hammered by spring flooding, will start Aug. 23 with about 20% fewer students.

“We lost 200 homes, and there’s just nowhere for families to come back to,” Superintendent Mike Wells said.

On the eve of a new school year, Iowa and Nebraska districts in hard-hit areas are dealing with displaced students — both losing and gaining them — and expecting some students will enter school still traumatized by their ordeal.

School leaders say they’re determined to make things as normal as possible for them, aware that for some kids, school can be the most consistent and stable thing in their lives.

Hamburg, a town of 1,200 people, saw families scatter into other communities where housing was available.

Last spring, in the immediate aftermath of the flooding, Hamburg, the Bellevue Public Schools and other districts tried to keep things normal. They sent buses into other districts to transport students made homeless by the flooding back to their home school. But since then, as those families take up stable residence elsewhere and lose their homeless status, transporting them from a neighboring district is no longer possible.

“They’re out of luck,” Wells said. “If they want to come to our school, they’re going to have to transport themselves. And a lot of those families lost their cars and lost their homes. They don’t have means to get back and forth, so they’ll be forced to go to other schools, which is sad. Sad for our kids.”

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While displaced families are the most serious challenge for Hamburg schools, there are lesser concerns.

From March through July 19, the school served as the supply center for Fremont County flood relief.

“We basically had a Walmart set up in our gym, and in our shop area was our food bank,” Wells said.

The gym floor was damaged from the coming and going of pallets of supplies and from workers’ boots carrying in gravel.

Only last week were workers able to begin sanding down and sealing the floor.

“That will delay us at least a week for junior high volleyball,” he said.


The gym dries after it was resurfaced at Marnie Simons Elementary in Hamburg, Iowa.

Carpet and tiles needed replacing, too, he said.

Flooding also forced the Hamburg Fire Department to relocate its trucks and pumpers to the school’s gravel parking lot.

In mid-July, the waters receded and the trucks were removed, but the lot is “in shambles,” he said.

Some area roads are still closed, making bus routes longer.

On the positive side, he said, the Hamburg schools have a great teaching staff.

And the schools have gotten enough donations that every student can have free school supplies, he said.

Shenandoah Iowa Community Schools Superintendent Kerri Nelson said it’s still too early to tell how many displaced Hamburg students may have moved to her district.

Shenandoah, about 25 miles from Hamburg, was lucky, she said. The flooding only nipped at its edges.

“Those kids are going somewhere,” Nelson said. “It’s whether they’re going to land in Sidney or Shenandoah or even some in Council Bluffs.”

She said her district will welcome families and try to understand their circumstances and assist them.

“I really feel for the families because they’re in a difficult position, she said. “Schools are pretty resilient. We tend to find ways to serve students and tend to find ways to adjust and overcome. But families, they need a lot of support right now.”


The HESCO barriers that were used as levees are starting to sprout weeds in Hamburg, Iowa.

Devin Embray, superintendent of the Glenwood Community School District, said he won’t know for a couple of weeks how the severe flooding in Pacific Junction will affect his enrollment.

He said 144 students were displaced.

“We think we’re going to be as normal as we can be,” he said.

In the Fremont Public Schools in Nebraska, 550 students were displaced, 10% of enrollment, Superintendent Mark Shepard said.

Some were displaced only for a few days, some longer, he said.

He said Fremont officials were encouraged by the high summer school attendance at a school serving the flooded area, Washington Elementary.

“We have not had additional requests for transfer paperwork or student records to be forwarded on to another district, which is always the key indicator as to whether or not you’re losing students,” he said.

Shepard said a bigger concern is students suffering from lingering stress.

After the flood last spring, he said, the first rainstorm caused students at one elementary school to cry, worried that the river would flood again.

On the plus side, one district split by a bridge wash-out has been reconnected with a temporary road.

People in the towns of Genoa and Silver Creek can get back and forth on a temporary “shoo-fly” road that runs around the collapsed Highway 39 bridge.

Last spring, officials in the Twin River district serving those towns had to set up a makeshift school in Silver Creek where students learned via teleconferencing on laptops.

In Niobrara, school starts next week, and folks were still waiting Tuesday for Highway 12 west of town to reopen.

Margaret Sandoz, superintendent of the Niobrara Public Schools, said everyone’s eager to see the town reconnected with Niobrara State Park, an important contributor to the local economy.

“That’s going to really boost spirits and hopefully get people feeling better about the future and how we can continue to move forward from that catastrophic event that occurred in March,” Sandoz said.

Photos: Major flooding hits Nebraska and Iowa towns

Teams assess threats, put 'pieces together' to prevent school attacks

There were so many questions after 17-year-old Ely Serna brought a shotgun to his Ohio school and opened fire in 2017, wounding two.

Along with the whys, West Liberty-Salem High School Assistant Principal Andy McGill recalled thinking, "Is there something I missed?"

"I never would have thought in a million years that it would be that person," he said. The questions now focus on how to prevent anything like that from happening again. Schools like McGill's have been setting up teams to assess threats posed by students who display signs of violence, like another Ohio student, Connor Betts, who compiled a "hit list" years ago in high school and went on to kill nine people in a weekend shooting in Dayton.

In the 2017-18 school year, 43.7% of public schools had threat assessment teams and 49.3% had systems for anonymous reporting of threats, according to U.S. Education Department statistics. The schools consider concerns raised by other students, school community members and even people commenting anonymously through tip lines.

"They put the pieces together and look at all these moving parts together, put the puzzle together," said Mac Hardy, operations director for the National Association of School Resource Officers.

"The parents are interviewed by a school counselor. Are there weapons inside the home? Where are they kept?" Hardy said. "There's a whole list of questions that they discuss. The teachers have a list of questions that they respond to in writing. You get a lot of information when you do this correctly."

Serna's attorney blamed his actions on mental illness, saying he believed he was following a deity's orders.

Despite consensus on the approach's benefits, school officials say they are limited in what they can do by privacy concerns, a lack of resources and limits on what they can communicate once a student leaves school.

Betts was suspended for compiling a "hit list" and a "rape list" during his junior year at Bellbrook High School, former classmates told the Associated Press on condition of anonymity out of fear that they might face harassment. The Bellbrook-Sugarcreek Schools wouldn't release information about Betts, citing legal protections for student records.

The goal of screening programs is not only to flag and address threats raised by students, but also to track and manage any risk they might pose. School districts are encouraged to set up a threat assessment team including at least a school administrator, a mental health professional and a law enforcement representative.

At the Hilliard City Schools in Ohio, the district uses a network of trained students, Superintendent John Marschhausen said. After Hilliard Davidson High School student John Staley was arrested in 2016 for plotting to attack his school, the district began requiring a mental health evaluation before it allows any student who has exhibited troubling behavior to return to school.

Marschhausen said privacy laws can make it difficult to keep up the support beyond high school.

"One of our challenges as a society is - we have learned that with these young people who need support - it's a journey," Marschhausen said. "It's not like you take an action and you're cured."

Schools are coming under pressure to have threat assessment systems in place because of new state laws and court rulings that have held school systems liable, said Stephen Brock, a professor at the school psychology program at California State University, Sacramento.

Student confidentiality prevents discussion of success stories, Brock said, but he said interventions have prevented tragedies.

It's unclear how widely the protocols have been implemented in communities around the country. Schools need significant resources and commitment to set up effective prevention teams, said Joshua Starr, CEO of PDK International, a professional organization for educators.

Superintendent Jennifer Hefner of the Alexander County Schools in North Carolina said the district will have a threat assessment team for the first time this school year.

"We are ready to implement the team, but we hope it doesn't happen," Hefner said.

Omaha council members ask: Should the city spend more on potholes, recycling and inspections?

The Omaha City Council asked Tuesday whether the city needs to spend more money in 2020 on pothole repairs, recycling and housing code inspectors.

City department leaders answered five hours of council questions Tuesday about Mayor Jean Stothert’s proposed budget. A few highlights:


A sign alerts Omaha drivers to a pothole. Omaha has spent more than $13 million patching potholes in 2019. The 2020 budget discusses them, too.


No department faced more questions than Public Works, the fee- and tax-funded agency responsible for streets, sewers, trash, recycling and more.

Public Works Director Bob Stubbe spent nearly an hour explaining the department’s $434.9 million budget, including capital spending.

Stubbe and Finance Director Steve Curtiss also fielded council questions about planned spending on people, trucks and potholes.

Councilman Brinker Harding asked whether Public Works had set aside enough money to hire street maintenance contractors in 2020 — $550,000.

Public Works in 2019, after a terrible winter for potholes, spent more than $3 million on private contractors to help city crews catch up, Stubbe said.

But Omaha street maintenance supervisor Austin Rowser built his 2020 road maintenance budget for a typical year, Stubbe said, not an exceptional one.

Until this year, Stubbe told council members, the last time the city needed private contractors to patch potholes was 2010.

“Typically we shouldn’t have to use a contractor at all,” Stubbe said. “Whether we need to use them depends on what kind of winter we have.”

Stothert’s 2020 budget includes funding for seven new street maintenance workers to patch roads and help clear ice and snow.

Councilman Pete Festersen asked if that was enough to be fully staffed. Stubbe said it was enough to meet industry standards on staffing.


A truckload of paper that needs to be recycled is dropped off at Firststar Recycling in Omaha.


Harding and Councilwoman Aimee Melton asked why Public Works’ 2020 budget included no funds for expected new costs to process local recycling.

The reason: Officials said they don’t yet have a number to budget. The city is likely to seek a new recycling processing contract early, perhaps yet this year.

The existing contract expires at the end of 2020, but local recycling processor Firststar Recycling has said it is losing money and needs out of its contract.

Firststar CEO Dale Gubbels has said the company might stop accepting Omaha’s recycling if the city won’t negotiate new contract terms.

Today, the city just about breaks even on recycling. Firststar wants to charge Omaha a tipping fee of up to $100 per ton of waste it drops off to recycle.

Currently, Firststar doesn’t charge the city. Paying the fee could cost Omahans an extra $1.7 million a year, or nearly $1 per month per household.

The city’s position is that it can’t renegotiate the contract without running afoul of laws meant to keep contract bidding processes open and fair.

So Stubbe’s department aims to craft a new bid early that will adjust to market conditions, costing the city less if the market for recyclables rebounds.


Ta Ayea Ayea peeks from her doorway as the City of Omaha inspected and shut down Yale Park Apartments at 34th and Lake Streets for housing code violations.

Housing inspectors

It was clear before Tuesday that Planning Director Dave Fanslau would face questions about adding only a single housing code inspector in 2020.

Council members had heard from advocates who pushed for the city’s new rental registry and housing inspections ordinance.

Many have said the city needs more than 10 housing code inspectors to start implementing the city’s increased focus on pursuing problem landlords.

Councilman Ben Gray asked Fanslau why the city thought adding a single inspector in 2020, to reach 10, was enough.

Fanslau said the city had been getting by with six inspectors until about a year ago, when it filled three inspector positions that had been funded but not filled. The inspectors follow up on reports of substandard properties and try to get code violations corrected or prosecuted.

He said adding a tenth inspector should be good for now. He aims to add two more inspectors in 2021 and two or three in 2022, when mandatory inspections of all rental properties begin under the ordinance.

The city set out to improve reporting and follow-through of housing code violations after finding thousands at Yale Park Apartments.

“I think we’re headed in the right direction,” Fanslau said. “I believe that the (code inspections) section is being managed probably better than it ever has been.”

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Photos: Potholes causing problems across Omaha