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U.S.-South Korea Summit; Trump's Twitter Tirade; U.S. Health Care; Hong Kong Handover Anniversary; Battle for Mosul; Crisis in Venezuela. Aired 3-3:30a ET

Aired July 1, 2017 - 03:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


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CYRIL VANIER, CNN ANCHOR (voice-over): The U.S. and South Korea hope to bring North Korea back to the negotiating table over its nuclear and missile programs.

Plus the Chinese president warns Hong Kong that Beijing will not tolerate threats against its sovereignty in the territory.

And standing in line in a desperate effort to survive, continuing political turmoil puts Venezuela's economy into an ever steeper downward spiral.

Hi, everybody. Thank you very much for joining us. I'm Cyril Vanier from the CNN NEWSROOM in Atlanta.

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VANIER: The U.S. and South Korea don't seem to have a clear strategy in mind when it comes to North Korea. President Donald Trump is hosting President Moon Jae-in at the White House this week.

Mr. Moon is making it clear that he has no plans to attack or replace the regime in Pyongyang while Mr. Trump says that Washington's patience is over. Our Paula Hancocks takes a closer look.

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PAULA HANCOCKS, CNN CORRESPONDENT (voice-over): Two very different leaders with a common problem.

The presidents of South Korea and the United States discuss an ever- elusive solution on North Korea.

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Together we are facing the threat of the reckless and brutal regime in North Korea, the nuclear and ballistic missile programs of that regime require a determined response.

HANCOCKS (voice-over): Saying the North Korean regime has no regard for the safety of its people or its neighbors, Mr. Trump says the two leaders are working closely on a range of diplomatic, security and economic measures but added emphatically the U.S. will always defend itself and its allies.

President Moon had a message for North Korea, "Do not underestimate the resolution of the two countries."

He said, "We urge North Korea to return as soon as possible to the negotiation table for the denuclearization of the Korean Peninsula."

And earlier what could be described as a televised lecture to South Korea, President Trump making it clear he sees their trade deal as unfair, calling on his Commerce Secretary and economic adviser to spell out some of its grievances, although he says he was encouraged by President Moon's assurances.

TRUMP: Fact is that the United States has trade deficits with many, many countries and we cannot allow that to continue.

And we'll start with South Korea right now.

REAR ADM. JOHN KIRBY (RET.), CNN MILITARY AND DIPLOMATIC ANALYST: He uses this tactic of embarrassment almost humiliation with some of

our best friends. And so far, it really hasn't come back to bite him yet but I suspect that over time it will.

HANCOCKS (voice-over): We can expect President Trump hearing South Korea within the year, President Moon said his invitation has been accepted.

Initial reactions on how South Korean media and pundits feel the summit went, less focused on trade and more on the fact that there appeared to be a rapport between the leaders, they say, a feeling that if they at least get on, then cooperation on North Korea will follow -- Paula Hancocks, CNN, Seoul.

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VANIER: But as this was happening, the president's meeting with the South Korean president was overshadowed by another issue: his ongoing Twitter feud with two TV journalists. CNN's Jim Acosta has this report.

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JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): Standing with the South Korean president, President Trump issued yet another dire warning on the threat posed by North Korea.

TRUMP: The era of strategic patience with the North Korean regime has failed. Many years and it's failed. And frankly, that patience is over.

ACOSTA: But as the president was leaving the Rose Garden, nearly all the questions shouted at him were not about national security --

QUESTION: Will you apologize to Mika Brzezinski, Mr. President?

ACOSTA (voice-over): They were about the president's tweets and his ongoing war of words with m MSNBC host Joe Scarborough and Mika Brzezinski, who now alleged White House aides made them an offer, go softer on your coverage of Mr. Trump and the president will kill a story about the TV host in the "National Enquirer".

JOE SCARBOROUGH, MSNBC ANCHOR: He said if you call the president up and you apologize for your coverage, then he will pick up the phone and basically spike the story.

ACOSTA: A White House official confirmed Scarborough did speak with the president's his son-in-law, Jared Kushner, but the official denied there was ever any offer of a quid pro quo.

Top White House adviser Kellyanne Conway said it was all about counterpunching critics in the media, critics Conway described as unpatriotic.

KELLYANNE CONWAY, WHITE HOUSE SENIOR ADVISOR: It doesn't help the American people to have a president covered in this light. I'm sorry, it's neither productive, nor patriotic.

ACOSTA: The president is also disrupting Senate negotiations over health care, tweeting, if Republican senators are unable to pass what they are working on now, they should immediately repeal and then replace --

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ACOSTA (voice-over): -- at a later date. That mirrors the suggestion from some GOP lawmakers who are growing frustrated with the logjam in the Senate.

SEN. BEN SASSE (R), NEBRASKA: What I'm recommending is that we give comfort to the American people by repealing the maximum amount of ObamaCare that we can, but add a one-year delay before that would be effective, so there is an action forcing event so that we get to work.

ACOSTA: The problem is, it's not what the president promised.

TRUMP: We're going to do it simultaneously. It would be just fine. We're not going to have like a two-day period and we're not going to have a two-year period where there is nothing. It will be repealed and replaced.

ACOSTA: Even some Republicans say splitting up repeal and replace won't work.

REP. ADAM KINZINGER (R), ILLINOIS: The problem is, we know how Washington works. You can't -- sometimes on deadlines, we still don't get things done.

ACOSTA: Now, as for health care, White House officials tried to clarify the president's stance today, saying they're looking at all options.

Asked whether the president now just favors an approach of repealing and not replacing, deputy press secretary Sarah Huckabee Sanders said the president's thinking has not changed on the issue -- Jim Acosta, CNN, the White House.

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VANIER: And Ellis Henican joins us now. He writes a column entitled "Trump's America" for Metro Papers.

Ellis, so, first repeal the current health care system and then replace it with something else.

What's the point of separating the two?

ELLIS HENICAN, METRO PAPERS: This is the "trust us" plan, Cyril, the party that, for the last eight years, could not come up with a plan said let us kill ObamaCare and then at some point in the indistinct future we will come up with a plan to replace it.

I got to tell you, I think this is going nowhere.

VANIER: But, look, they're not talking about totally getting rid of the current health care system in the first step, right, in the repeal step.

HENICAN: Well, yes, although I got to say we don't really know all the details of what might come. Listen, Senator Ben Sasse, Rand Paul and maybe no others think this might be the best answer because the Republican caucus could not --

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VANIER: Well, hey, Ellis, you're forgetting somebody, the president apparently.

HENICAN: -- oh, yes; him, too. I forgot -- although that's new. Give me credit on this because he hadn't previously been saying this. Although you're right; in the last 12 hours or so, he has decided that he, too, likes this idea. You're absolutely right, Cyril, good point.

VANIER: So -- but it sounds risky again to pare down the health care system to very bare bones, even though we don't know specifically what that would be and then hope that you're going to find the votes to replace it with one of your own making.

HENICAN: Yes. And let's talk the brutal politics of it, right. If you're a moderate Republican, which is really the group that holds the power here, you have constituents back home who are very, very nervous about what's going to happen with their health care.

So you're going to go home over the 4th of July weekend and explain to those folks, don't worry, just trust us. You know, I don't think you need to worry about what the Democrats think or what the public polls say, I don't see how you get this past moderate Republicans.

VANIER: But look, Republicans could still very well come away with a win on this. To some extent, there was a self-inflicted wound because they made it clear that they wanted a quick vote; they couldn't get to it because the Senate majority leader realized he didn't have the votes.

They could come back, not next week but the one after that, and get the votes.

HENICAN: That's true. And do not count Mitch McConnell out. He is a very crafty political operator. He knows his caucus well, he understands what little goodies to give this one and that one to swing a vote around. So no, no, I am not among those thinking that this is permanently dead. There is-- there are a lot of twists and turns left.

VANIER: Look, something else that I wanted to talk about with you, it looks like senators are frustrated with the lack of achievements -- Republican senators. And they wrote to their majority leader, Mitch McConnell, asking him to cancel their summer recess or at least shorten it to give them more time to work.

And, honestly, there is something I found a little funny in the letter, in the wording. At the end of their letter, they said -- I don't know if you saw this -- "We simply recognize that making America great again requires a certain time commitment."

HENICAN: Yes, right. This is from a group who usually works a two- or three-day week, right.

Listen, I -- you know, maybe they will. I think there is a lot of pressure on the Republican Party right now. I mean, they control all the branches of government. They've not yet been able to make a major legislative achievement with their new president.

So there is huge pressure there. It would not surprise me if they do what, in many years would be considered unthinkable, which was to give up that August recess.

VANIER: This is signed by 10 senators; that's almost 20 percent of the Republican senators.

Is there a precedent for this that springs to mind?

HENICAN: Honestly, I can't think of one. Usually they're itching to get out of town in the summertime.

But, again, think about it, how it looks from their perspective. If you're a Republican senator, you're in the majority, you want to be able to go back home. You've been telling folks, just give us that majority and give us that Republican president and we will get stuff done.

You know you got to find some way to put some kind of win up on the board.

VANIER: Yes, it hasn't really happened yet. All right, Ellis Henican, thank you much for joining us on the show.

HENICAN: Great seeing you, man.

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VANIER: Thousands of pro-democracy protestors are expected to march in the streets of Hong Kong on this day. The annual protest comes just hours after China's national flag was raised over the Hong Kong skyline to mark 20 years since the end of British colonial rule.

Chinese president Xi Jinping has now left Hong Kong but before he departed, he warned against challenging China's authority saying, that will cross a red line and that it would be absolutely impermissible. He also swore in Hong Kong's first female chief executive, Carrie Lam. She called for unity.

But there were clashes earlier Saturday, as police and pro-China demonstrators scuffled with pro-democracy protestors. So let's turn to Ivan Watson who is in Hong Kong, where that annual protest march is set to take place -- Ivan.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hi, there, Cyril. The gathering here in Hong Kong's Victoria Park, it's an annual tradition here and one that really distinguishes this former British colony from any other city in China.

And that's because you have an array of different political parties here that are allowed to gather and speak freely. It's one of the freedoms here that simply doesn't exist in China, where you have one party, Communist Party rule. And this crowd will eventually march through parts of the city.

And this is one of the issues that comes up now with Xi Jinping and his visit, which just completed, his first visit to the city. He made it clear that, while Hong Kong does enjoy freedoms, that there are limits to the freedoms. Take a listen to an excerpt of what he had to say

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XI JINPING, CHINESE PRESIDENT (through translator): Any attempt to endanger China's sovereignty and security, challenge the power of the central government and the authority of the basic law of the HKSAR or use Hong Kong to carry out infiltration and sabotage activities against the mainland is an act that crosses the red line and is absolutely impermissible.

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WATSON: So there, he is a very stark warning there, that certainly some of the fringe movements that are calling for independence of Hong Kong from Mainland China, that that simply will not be tolerated.

A lot of the people here are trying to call attention to issues like corruption. They're raising concerns about what they see as the central government's infringement on the democratic freedoms that the city is supposed to enjoy, according to an agreement that was signed some time ago.

This poster you see here is pointing out an alleged corruption scandal, involving the former leader, chief executive of Hong Kong, who was just replaced by the new Carrie Lam, who was just sworn into office.

There are deeper issues here that don't just involve politics. They may involve cultural issues and linguistic issues and questions of identity. According to a recent Hong Kong University poll, Cyril, some 62 percent of Hong Kongers responded, saying that they are not proud of being Chinese citizens.

And a minority said they are proud. And that gets to the core of a disaffection between, according to polls, a majority of Hong Kongers and Mainland China, basically people not feeling connected to it.

And those numbers, that disaffection and ambivalence goes up as you get to young Hong Kongers, the same poll showing some 80 percent of people under the age of 30, saying they don't feel connected to China. It's going to be an issue for the city and the central government going forward -- Cyril.

VANIER: Ivan, a quick question based on what you were telling us earlier, that Chinese -- I beg your pardon -- Hong Kongers want more rights and want more democracy in Hong Kong. The Chinese president says they already have as much if not more than they've ever had.

So how do you settle that dichotomy there?

WATSON: Well, you know, one man who just spoke was a bookseller, who worked for a company that published books that are deeply critical of the Communist Party and top leaders in China.

And, I think, some people were shocked here in this former British colony when a number of those booksellers were suddenly snatched and detained, some of them dragged across the border to Mainland China. And he spoke here.

And that was a moment that came as a surprise, I think, to many Hong Kongers. And for them -- an illustration of the fact that those democratic freedoms that are supposed to be protected under a basic law here, a mini-constitution, are not being protected and that China is increasing putting its pressure on this city.

Of course, the authorities here are celebrating July 1st as a return to the motherland, an end of British colonial rule 20 --

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WATSON: -- years ago, and Hong Kong's increasing integration with the rest of the country -- Cyril.

VANIER: Ivan Watson, reporting live from Hong Kong, thank you very much. Always a pleasure to speak with you.

We're taking a short break. When he we come back, Iraqi forces say they will retake all of Mosul within days. But that may not be the hardest challenge ahead. We'll discuss why securing the city could prove so difficult.

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VANIER: The Iraqi forces say they are going to declare victory against ISIS in Mosul within days. They are now engaged in a fierce battle with holdouts in the old city. CNN's Nick Paton Walsh has seen some of the most intense fighting first-hand and he has this update from Irbil, Northern Iraq.

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NICK PATON WALSH, CNN SR. INTL. CORRESPONDENT: It is clear, according to our sources on the ground, that in the overnight period, Iraqi forces have managed to secure the al-Nuri mosque, that great symbolic place for ISIS, where Abu Baker al-Baghdadi gave his one singular public appearance, announcing the beginning of the caliphate.

They appear to have moved past it and further deep into the old city of Mosul, hundreds of meters now potentially between them on the river that marks the end of ISIS territory.

But that's no comfort to thousands of civilians still caught in that area that ISIS control. We saw some of them emerging ourselves yesterday, talking of an absence of anything apart from war to being shelled constantly, some injured hobbling simply out of the rubble.

Before the question, though, it is simply a matter of trying days, says the U.S.-backed coalition and the Iraqi government until Mosul falls entirely.

The broader question is how does Iraq deal with the lingering insurgency that ISIS will become in the months and years ahead. They're already seeing parts of it reaching into Baghdad and elsewhere.

There are certain towns like Hawija that ISIS still have a substantial presence in. This isn't really over. Politically, the message may be out that they've defeated ISIS. But politically, too, they have to enter into room to reconciliation here. Remember the got of Baghdad is predominantly Shia; they've had a lot of Shia forces fighting against areas which are predominantly Sunni.

Remember the Sunni-Shia split in Iraq, the Sunnis were in control on the Sudan. Now the Shia are dominating control. The question is how do you get that Sunni part of the population, the extremists, of whom felt more affinity frankly with ISIS than anybody else here.

How do you get them to come together and for Iraq to heal? Well, the pace in which declarations of victory have been made suggest maybe reconciliation isn't on the top of people's agenda We'll have to see in the months ahead because, without a broader healing here, we may see something like ISIS rear its head again.

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VANIER: Our Nick Paton Walsh there reporting.

And I spoke to retired U.S. Army Lt. General Mark Hertling earlier. He reminds us that retaking the city is not the end of the story.

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LT. GEN. MARK HERTLING, CNN MILITARY ANALYST: LT. GEN. MARK HERTLING, CNN MILITARY ANALYST: Well, the next phase of the operation is going to actually more difficult --

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HERTLING: -- Cyril, and that's when the Iraqi government decides to reinforce with assistance, aid in rebuilding.

When my organization along with the Iraqis fought there in 2008, it was against Al Qaeda. They had damaged a great deal of the city. But it was nothing like what ISIS has done in the last two years.

They have destroyed the city and the fighting there with the artillery and the coalition bombing has destroyed it even more. So the Iraqi government from Baghdad, a Shia government has to support the rebuilding of this city while providing humanitarian aid for the close to 1 million people who live in the city.

That's going to take a lot of money. The last time they attempted to do this, corruption splintered away some of that money. It didn't get to the places it needed to go, the rebuilding did not take place. And it generated some ill feelings even more dire, ill feelings toward the Iraqi government.

So Mr. al-Abadi really has to make this happen in order to bring the citizens of Mosul back under the patronage of the Iraqi government from Baghdad. That's going to be tough.

VANIER: So rebuilding the city of Mosul is going to key.

But what about security because ISIS, even if it's defeated in its stronghold of Mosul, it won't be totally gone from Iraq?

HERTLING: It won't and there's a couple of places that I would name: Shirqat, Hawija, Al-Qa'im, areas in Kirkuk province, which is to the southeast of Mosul and even as far south as Diyala province, which is just north of Baghdad, still has pockets of ISIS fighters.

So the security forces in those areas have to continue to fight; at the same time, one of the biggest problems that we experience and I think the Iraqi security forces are going to continue to experience, the borders with Turkey and Iran and Syria are very close to the city of Mosul.

If those borders aren't controlled and they've always had difficulties doing that, then you're still going to have challenges with additional new fighters coming in and ISIS will try and rebirth themselves. That's a fact.

They may do it in Iraq; they may do it in other places but there's certainly going to be continued fighting in the northern Nineveh plains of the Iraqi government.

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VANIER: And while Mosul is by far the largest city where ISIS holds territory in Iraq, militants still occupy some smaller areas and attacking the capital, Baghdad.

As the political crisis deepens in Venezuela, the death toll increases.

On Friday new clashes between demonstrators and police killed two more civilians, bringing the death toll up to 83. And with a struggling economy many Venezuelans are also running out of basic resources. Our Rafael Romo takes a closer look.

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RAFAEL ROMO, CNN SR. LATIN AFFAIRS EDITOR: People that we've talked to on the street in Caracas, the capital, say that, in Venezuela, you don't thrive but barely survive.

For many people, a typical day in Venezuela involves standing in line for several hours outside a supermarket or a bakery to be able to buy anything they can. In many instances, they leave empty-handed after several hours of waiting.

There is also a big cash problem in Venezuela. The government promised last December that it would make available higher denomination bills and people have just started to see them at ATMs but only in the capital.

Why is there such a shortage of cash?

Well, the main problem is inflation. The International Monetary Fund forecasts inflation will rise to nearly 1,700 percent this year.

And, finally, the international community is concerned about an inquiry targeting Venezuelan attorney general Luisa Ortega Diaz.

Why is she being targeted?

Well, she broke ranks with President Nicolas Maduro and accuses the government of violating the rights of protestors and ignoring the constitution. The U.N. issued a statement Friday calling a pretrial hearing "deeply worrying" -- Rafael Romo, CNN.

(END VIDEOTAPE) VANIER: A city in southwestern Iran may have just tied the hottest temperature ever recorded on the planet.

(WEATHER REPORT)

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VANIER: Now Canada enjoying something of a moment on the world stage. Its prime minister, Justin Trudeau, is a social media darling. It has been applauded for its openness toward refugees and now it is celebrating a major milestone.

Security preparations are underway on Parliament Hill in Ottawa to mark Canada Day. It's the country's anniversary and this year it's extra special. Canada turns 150 years old.

Some royal visitors have already kicked off the festivities. Prince Charles and the Duchess of Cornwall started their national tour in the country's far north.

Two more things for you before we wrap up this show. One of the world's top football players is now off the market. Barcelona star Lionel Messi married his long-time girlfriend, Antonella Roccuzzo. The couple have known each other since they were little and they have two children together.

The ceremony at a hotel and casino complex in Argentina was, as you would expect, a star-studded event. Many football celebrities in attendance and it made a big splash in Argentina's press, one newspaper calling it "the wedding of the century."

And also this, some bad news, if you're a huge of Adele, the singer is hinting that she may never tour again. She says it's all due to medical reasons. The star wrote a letter to all of her supporters, calling herself really more of a homebody, adding that touring just doesn't suit her very well.

She also cancelled the final two performances of her current show. Don't be too afraid; Adele has taken breaks before, most recently making a comeback with the huge hit, "Hello."

So all is not lost. Thank you for watching CNN NEWSROOM. I'm Cyril Vanier and I will be back with the headlines in just a moment. Stay with us.