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Trump Tariffs Spark Retaliation Plans; Populist Italy Five Star Movement Has Lead ahead of Vote; Syria Conflict; Israeli Investigators Question Prime Minister Netanyahu; Trump Feuds with "SNL" Impersonator on Twitter. Aired 3-3:30a ET

Aired March 03, 2018 - 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. president says, "Trade wars are good and they're easy to win."

He may have a chance to put that theory to the test. Europe is preparing to retaliate against American tariffs.

In less than a day, Italians will vote for a new government. We'll be taking a look at the populist party leading the polls.

And streets turn to rivers as a bomb cyclone storm churns through the northeastern United States.

Great to have you with us. We are live from CNN HQ right here in Atlanta. I'm Cyril Vanier.

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VANIER: So countries around the world are planning to retaliate after the first salvo in a trade war appears to have been launched from the White House. It started when U.S. President Donald Trump announced his plan for 25 percent tariffs on steel imports and 10 percent on aluminum imports.

A plan that took everyone by surprise, White House aides, trading partners, international allies. The president has long been critical of what he considers unfair trade and he is not afraid to do something about it.

He tweeted, "Trade wars are good and easy to win."

The European Union is already preparing retaliatory measures, targeting some classic U.S. brands. Erin McLaughlin is in London with the details on this.

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ERIN MCLAUGHLIN, CNN CORRESPONDENT: The E.U. is hitting back at President Trump's proposed tariffs on steel and aluminum. E.U. sources telling me they prepared countermeasures targeting products such as Harley-Davidson motorbikes, Bourbon whiskey and Levi's jeans, $3.5 billion worth of U.S. imports.

According to an E.U. source, a list of products has been prepared. A third of the list comprised of steel products, a third of the list comprised of agricultural products and a third of the list comprised of industrial products.

A source declined to comment on the rationale behind the list, saying more will be divulged next week. The E.U. is also very concerned about aluminum and steel not going to the U.S., suddenly spilling into the European market.

They've prepared safeguarding measures to prevent that. A source also telling me they plan to consult with partners to take the matter to the WTO. E.U. leaders saying this is pure protectionism for the U.S. It has nothing to do with national security.

The source added that if President Trump formalizes his announcement, the E.U. will act on this within days.

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VANIER: Erin McLaughlin in Brussels there, thanks.

The European Commission says the E.U. will respond as a single bloc and discuss its response next week. Even as it gears up for a trade war, though, it says protectionism is just not the answer and it has a warning for the United States.

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ALEXANDER WINTERSTEIN, EUROPEAN COMMISSION: We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk. The E.U. will act firmly and commensurately to defend our interests.

(END VIDEO CLIP)

VANIER: Here is who else is calling the tariffs unacceptable: Canada. It's already tangling with Washington over NAFTA and other trade matters. Its trade minister has threatened retaliation as well. Canada's prime minister warns that, in the long run, American tariffs will backfire.

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JUSTIN TRUDEAU, CANADIAN PRIME MINISTER: The Americans have a significant trade surplus with us on steel, which means we buy steel from them; they buy steel from us. The integrated nature of our supply chains means that there would be significant disruption in Canada, obviously, but also in the United States.

But that's why we are impressing upon the American administration the unacceptable nature of these proposals that are going to hurt them every bit as much as they will hurt us. And we are confident that we're going to continue to be able to defend Canadian industry.

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VANIER: How would these American tariffs work if, indeed, they are implemented?

And what would they mean for workers in the U.S. and around the world?

CNN's Tom Foreman breaks it down.

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TOM FOREMAN, CNN CORRESPONDENT: Take a look at the numbers here. The United States imports about a third of all the raw steel it uses and more than 90 percent of all the aluminum it uses. And these proposed tariffs would push up the cost of that by 25 percent and 10 percent respectively.

That's money that would have to be paid by the foreign companies that wanted to get their products onto U.S. soil. So yes, if it became more expensive for them, it could help U.S. producers of steel and aluminum by making them more competitive, especially since they have complained for years about unfair practices overseas anyway.

But what about all the companies that rely on that raw material to make cars and airplanes and equipment and aluminum cans and appliances?

What about those companies?

Because now they would face a different supply chain where there may be shortages, there may be --

[03:05:00]

FOREMAN: -- higher prices. And that could affect an awful lot of people in other fields. One estimate has it that more than 80 times as many people work making stuff out of that raw material than in producing the raw material.

Those people would now potentially face uncertain wages, uncertain hours, maybe more offshoring, not to mention what would happen with consumers out there. One estimate says some products in some places could go up by 15 percent.

I don't think we really know that but we do know that there's uncertainty about the consumer market and what the impact would be.

Here is another question, though.

Does this actually get at the trade practices of other countries?

Does it strike a blow for that?

It depends on who you are talking about and how this would actually be applied because we don't have the details yet. This is where the United States gets its foreign steel, from Canada, the biggest supplier, then Brazil, South Korea, Mexico, Russia and so forth. You know who is not on the top 10 though?

China, the country that the United States, the president has said so many years is not being a fair trading partner out there. This is the one that President Trump has said he wants to get at.

Would this get at them?

It might but the numbers suggest only after it had an impact on a lot of long-standing trade allies and possibly unleashed a trade war with very uncertain outcomes.

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VANIER: Let's bring in Peter Matthews, he's a political analyst and professor of political science at Cypress College.

Peter, good to have you back with us.

Are trade wars really easy to win?

PETER MATTHEWS, CYPRESS COLLEGE: No, they're not. I think President Trump was way off when he said that. Going back to the 1930s, the Smoot-Hawley tariff, we find that very bad repercussions can occur internationally.

We don't need to have trade wars and to put tariffs up on these products. They have a globalized economy. The better way to do it is to do what China does. China subsidizes the steel industry there to make it less expensive to export the Chinese steel to other parts of the world.

The United States should actually have an industrial policy, where we would actually support the steel industry to export our steel to other the countries. Germany does the same thing. The countries are successful in having a balance of trade surplus, have their governments supported the industries much more actively and the bottom line in the end is also equalizing wages across the board.

That will help countries grow in a better way. This tariff idea is a terrible idea in my view and it will result in a trade war.

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VANIER: And not just in your view; essentially, apart from the U.S. steel and aluminum industry, I can't think of anybody who has voiced support from this -- for this, even within the White House.

Gary Cohen, Mr. Trump's chief economic adviser, is said to have been staunchly against this. He warned that he might leave if these tariffs were indeed imposed. Obviously we saw the rest of the world reacting to this.

So let's look at the politics of this then. We've addressed the substance. This is something on which the president has been remarkably consistent, starting from his days as a businessman to the campaign and now to the White House, this issue of trade.

Assuming he actually implements those tariffs, how do you think this plays out for him politically?

MATTHEWS: Politically, it will certainly solidify his base, which are the 32 percent of the super nationalists, who believe that America first is the best w to go. He'll get those people to vote for him again. But that's not going to win him the next election. And that's a problem politically. He thinks he's going to be able to do that unless someone -- and since there's a split vote in the opposition, there are more than two candidate, maybe three candidates running, he might be able to hang onto his base and win.

But this is a losing strategy politically as well as economically. I would advise him to actually change directions and work in a better way for fair trade.

VANIER: But the thing is, he'll be able to point to the fact that he kept his promise, right, as he's done on a number of important things, rolling back regulations, cutting taxes and imposing tariffs. Those were all parts of his campaign and he has kept his promise -- if he implements the tariffs, of course.

MATTHEWS: He will claim that, of course.

But the question is, what kind of rewards will he get for that?

Will that mean that more of America will actually support him?

And look at how many people are affected; 80:1 ratio in terms of how many workers there are in the industries that would be hurt versus the ones that benefit. So we saw those numbers in your earlier part of the report.

So I don't think that it's going to really help him get more political support than what he has right now, 32 percent, 33 percent, 34 percent. That's not a winning number in the end.

VANIER: Do you think he can be talked out of it?

MATTHEWS: You know something?

He flips and flops quite a bit on issues. He was just for gun control yesterday and today he's against it.

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VANIER: That's why I asked the question.

MATTHEWS: Yes. I don't think he can be talked out of it but he might make up his own mind based on some whim and fancy. That's quite remarkable to have a president do this, inconsistent. It's causing havoc and even the stock market is having trouble. His own supporters in the corporate sector are really upset with him for that. So I don't know what he intends to gain other than solidifying his 32 percent or so of the support that he already has. So I don't know how to answer that question, other than saying we really don't know.

He can't be talked out of it. It depends on what he wants to do on a whim and fancy, basically.

VANIER: Yes. And --

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VANIER: -- this appears to be something that's really close to his heart, something that he feels strongly about because he's been talking about it for years. Peter Matthews, thank you very much for joining us on the show once again. Thanks.

MATTHEWS: Thank you, Cyril.

(END VIDEOTAPE)

VANIER: Trade wars notwithstanding, it's been a chaotic week at the White House. Chief of staff John Kelly says the administration's handling of classified material was not up to his standards.

This comes as "The New York Times" reports another bombshell, that President Trump asked Kelly to help remove his daughter, Ivanka, and son-in-law, Jared Kushner, from the White House.

Mr. Trump is said to be upset that Kushner's security clearance was downgraded while officials from four nations discussed how to manipulate him. And the president was also unimpressed by Ivanka's trip to South Korea.

Campaigning has ended in Italy ahead of Sunday's general election and the field is deeply fractured. Disgraced former prime minister Silvio Berlusconi has made a comeback even though he is barred from running for office. He could emerge as a power broker if his center right coalition comes out ahead.

Currently leading in the polls is the populist Five Star Movement. Our Ben Wedeman takes a closer look.

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BEN WEDEMAN, CNN SR. INTERNATIONAL CORRESPONDENT: Few cities on Earth approach Rome when it comes to history, elegance and architecture.

But if you tune into Radio Roma Capitale, listen to the laments.

It is all about a city littered with garbage, streets full of potholes and substandard services.

There are two Romes. There is the Rome that tourists come and enjoy and then there is the other Rome, where people actually have to live and work. One is beautiful, the other is a mess. And few are the politicians who have been able to do anything about it.

The latest to try to turn the Eternal City around is Mayor Virginia Raggi of the Five Star Movement, a political party founded by the Beppe Grillo, comedian turned fire-breathing, curse-flinging critic of the status quo.

The latest polls ahead of Sunday's election give the Five Star Movement almost 30 percent of the vote, the largest share of any party.

But critics warn if Mayor Raggi and the Five Star Movement couldn't fix Rome, they won't be able to fix Italy.

Roberto voted for Raggi two years ago and now regrets it.

"She promised many things," he says, "but achieved nothing."

Rome was not built in a day and it won't be put right in a year or two. Five Star Movement leader, 31-year-old Luigi Di Maio, counters criticism of his party with a familiar phrase.

"I suggest you don't read Italian newspapers," he tells me, "because they tell a lot of fake news."

At the final rally in the capital's Piazza del Popolo, Di Maio has another message for his supporters.

"We are a step away from victory." -- Ben Wedeman, CNN, Rome.

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VANIER: We're going to take a short break. But when we come back, we'll tell you about this. The U.S. staring down another day of the powerful bomb cyclone.

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VANIER (voice-over): We'll have a check on the forecast to see if there's an end in sight.

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VANIER: Plus, Israel's prime minister and his wife are both questioned in a corruption investigation. What Benjamin Netanyahu had to say after the hours-long interrogation. Stay with us.

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VANIER: Welcome back. A powerful late winter storm is battering the northeastern United

States with heavy rain, snow and fierce winds. This is the second day of what meteorologists have been calling a bomb cyclone and this is not letting up yet.

Look at these pictures. We're talking about Massachusetts here. Emergency officials warn of astronomically high tides in the coming days. You already see what it looks like now. Boston and other towns nearby have already seen this heavy flooding. More than 1 million households are without power and five deaths, sadly, have been reported.

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VANIER: Now France is taking action in the wake of deadly attacks in Burkina Faso. A source from the Paris prosecutor's office says it is launching a terrorism investigation.

It comes after gunmen targeted the French embassy, a French cultural center and military headquarters Friday. The assaults took place in the capital, Ouagadougou, and killed at least eight people.

Authorities in Burkina Faso say all of the dead were security personnel as well as several attackers, who were shot and killed. France has troops in Burkina Faso as part of a wider operation against jihadists in that region of West Africa.

There may be a breakthrough in Syria following a U.N. cease-fire vote one week ago. UNICEF says the Syrian government may allow aid into Duma in Eastern Ghouta on Sunday. The area has been pounded by bombardments and they repeatedly haven't let up since the truce vote.

Here's what an official from the World Health Organization said on Friday.

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UNIDENTIFIED MALE: We are immediately ready to deliver on a very large scale medical supplies, surgical supplies, supplies for treatment of acute malnutrition, the full range of essential medicines and supplies.

We're ready to support water quality treatment monitoring. We're ready to work with partners to do medical and nutritional assessments as well. So we are on standby with the U.N. country team, with trucks loaded and ready to enter Eastern Ghouta as soon as the approvals are given.

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VANIER: And that aid is badly needed. The U.N. says Eastern Ghouta has seen widespread damage since the cease-fire vote and it has the pictures to back it up. These satellite images show the amount of destruction over just one week. The pictures on the left are from February 23rd, a day before the

Security Council adopted the truce resolution. The images on the right are from Friday. In that time, buildings were completely or partially destroyed and impact craters dot the landscape. This all happening during that period of time that the U.N. was calling for a ceasefire.

CNN and young people from around the world are fighting against modern-day slavery by taking part in a student-led day of action on March 14th. Ahead of My Freedom Day, we've been asking students what freedom means to them.

Here's what Baya, a 5th grader from the Atlanta International School had to say.

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BAYA, ATLANTA INTERNATIONAL SCHOOL: To me, freedom means having equal rights, having people to be able to go to school every day and to be able to have the freedom of speech, to speak what they should speak, what they believe is right.

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VANIER: Millions of people have already shared what freedom means to them through social media. We'd like you to join them and share your story using the #MyFreedomDay. Don't forget the date, March 14th.

Israeli prime minister Benjamin Netanyahu is once again denying any wrongdoing, this as investigators questioned him as a suspect in a third corruption case. CNN's Oren Liebermann has more from Jerusalem.

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OREN LIEBERMANN, CNN CORRESPONDENT: Investigators left the prime minister's residence in Jerusalem after a marathon five-hour questioning of Benjamin Netanyahu. The Israeli leader was questioned under caution, an Israeli official tells CNN, meaning he's a now suspect in a third corruption investigation.

Demonstrators protesting outside the official residence, holding signs that say "Crooks, go home."

Netanyahu was questioned in what's known as case 4,000, involving a relationship between the ministry of communications, then under Netanyahu, and Israeli telecommunications firm, Bezeq.

Prosecutors say Benjamin Netanyahu pushed regulatory benefits worth up to some $280 million for Bezeq and its controlling shareholder, Shaul Elovitch, also a suspect in the investigation.

In exchange, Netanyahu was to receive favorable media coverage in an online news site. Elovitch denies any wrongdoing.

As Netanyahu was questioned, his wife, Sarah Netanyahu, was simultaneously interrogated at a different location. She, too, was questioned under caution, meaning she's also a suspect in this growing case.

In a video posted to Facebook shortly after the questioning ended and shared by the family's spokesperson, Netanyahu speaking for him and his wife declared their innocence.

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BENJAMIN NETANYAHU, PRIME MINISTER OF ISRAEL (through translator): I feel certain because there will be nothing. And I want to tell you another thing. To millions of citizens in Israel, who express such a strong support in me, my wife and my family, you warm our heart. Thank you, Shabbat Shalom to all of you.

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LIEBERMANN: Netanyahu has been named a suspect in two separate criminal investigations. Pressure both political and public is growing on the Israeli leader. But he refuses to back down, denying those charges.

LIEBERMANN (voice-over): Netanyahu has the support of his government with key --

[03:25:00]

LIEBERMANN: -- political partners saying they still back him but they'll wait for the attorney general to decide whether to indict the prime minister, a process that could take months -- Oren Liebermann, CNN, Jerusalem.

(END VIDEOTAPE)

VANIER: Voting results are expected on Sunday on German chancellor Angela Merkel's quest to form another grand coalition with Social Democrats. And on this key question, a 28-year-old naysayer has become a major thorn in her side.

Kevin Kuhnert is a lawmaker's assistant in his day job. But in his free time, he's been traveling across the country, across Germany, urging Social Democrats to reject a grand coalition with Ms. Merkel's conservatives. So look out for that on Sunday.

Donald Trump is slinging insults on Twitter again. This time it's aimed at the actor who mocks him on "Saturday Night Live. Here's Jeanne Moos.

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JEANNE MOOS, CNN CORRESPONDENT (voice-over): Alec Baldwin has relentlessly...

ALEC BALDWIN, ACTOR, "DONALD TRUMP": If you need me, I'll be over here at my desk.

MOOS (voice-over): -- mocked President Trump on "SNL," from a kiddie desk to a shower scene. And now these two are showering each other with tweeted insults.

UNIDENTIFIED FEMALE: Mr. Trump, everyone can see your tweets.

"TRUMP" Really?

And I'm still in this thing?

MOOS (voice-over): Their latest blowup started when Baldwin described playing Trump to the "Hollywood Reporter."

"Every time I do it now, it's like agony."

To which Trump tweeted, "Alec, it was agony for those who were forced to watch."

Actually, in his original tweet, the president got a few things...

"TRUMP": Wrong, wrong, wrong.

MOOS (voice-over): -- calling Alec "Alex" and killing the English language with his spelling of "dying." That tweet was soon deleted and replaced with a corrected one.

MAX BOOT, COUNCIL ON FOREIGN RELATIONS: Trump is going on a tirade against Alec Baldwin but he has nothing to say about Vladimir Putin threatening the United States.

MOOS (voice-over): In response to the president's tweet about Baldwin being agony to watch, the actor fired back four times.

"Agony though it may be, I'd like to hang in there for the impeachment hearings, the resignation speech, the farewell helicopter ride to Mar- a-lago. You know, the good stuff."

These two treat each other like...

"TRUMP": Bad hombres, bad boys, bad boys, what you going to do.

MOOS (voice-over): Baldwin then imagined what would be in the Trump presidential library.

"A putting green. A little black book with the phone numbers of porn stars."

UNIDENTIFIED MALE: Ai, yi, yi.

MOOS (voice-over): In his tweet, the president said, "Bring back Darrell Hammond."

But Baldwin brought in Melania Trump and, "Mr. President, please ask your wife to stop calling me for 'SNL' tickets."

UNIDENTIFIED FEMALE: Donald, have you been working out?

MOOS (voice-over): Don't expect these two to work this out, no kissing and making up. "TRUMP": Thanks, sweetie.

MOOS (voice-over): And not even a remote chance of this.

"TRUMP": I deeply appalagize.

UNIDENTIFIED FEMALE: Are you trying to say apologize?

"TRUMP": No, I would never do that.

MOOS (voice-over): Jeanne Moos, CNN, New York.

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VANIER: Quick recap of your headlines right after this. Stay with us.