Trumponomics Daily—Friday, March 3

A week that started for the Trump administration with some promise of a reset is ending in a familiar place. The mini-moon from the president’s well-reviewed address to a joint session of Congress lasted 24 hours. It expired Wednesday night when the Washington Post reported Attorney General Jeff Sessions met with the Russian ambassador twice last year despite denying such contact in his confirmation hearing. On Thursday afternoon, facing a rising, bipartisan chorus of demands that he recuse himself from a federal probe of Russian involvement with the Trump campaign, Sessions in a press conference announced he’d step aside from any investigations. The renewed focus on the Trump team’s Russia ties compelled the president to end a quasi-hiatus from Twitter, which he’d been observing in the apparent interest of not stepping on his post-speech momentum. In a string of tweets last night, Trump blasted Democrats for trying to distract from their election loss and “overplaying their hand.” He dismissed the Russia story as a “witch hunt.”

But the revelations keep piling up. Just yesterday, we also learned that Trump’s son-in-law and senior adviser Jared Kushner met with the Russian ambassador at Trump Tower in December; two other senior campaign hands, J.D. Gordon and Carter Page, met with the envoy on the sidelines of the Republican convention in Cleveland; and Gordon acknowledged he pushed to soften a U.S. commitment in the GOP platform to defending Ukraine from Russian aggression, a move he says he made to align the document with Trump’s views. The saga places Trump’s economic agenda in a squeeze: As the story grows, it saps time, energy and political goodwill the White House can hardly afford to spare from its push to repeal and replace Obamacare, overhaul the tax code, rewrite financial regulations and invest in new infrastructure. Even without the distraction, the administration would be reaching to achieve some measure of what it’s set out to do in its first year.

On taxes, mark down Commerce Secretary Wilbur Ross as a qualified fan of the House GOP’s border adjustment proposal. Appearing on CNBC this morning, Ross noted the U.S. is one of the only developed economies without some form of a value-added tax, “an unfair equation” that puts American exporters at a disadvantage. But Ross also cautioned that he’s “a little skeptical about the theory that there’s a totally free lunch” and that currency appreciation would offset cost increases from the levy as it raises roughly $1 trillion for the treasury. Nevertheless, Ross said, “I think there will be something found to fill the $1 trillion hole. Whether it will be exactly border adjustable —and if it is border adjustable, whether it will be in exactly the same form and size — is an open question.”

Tory Newmyer

@torynewmyer

tory_newmyer@fortune.com

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