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CNN NEWSROOM

Trump Repeats Debunked Claim Amazon Costs Post Office Money; China Ready for a Trade War?; White House Sends Mixed Messages on Syria; Turner Execs Questioned for Hours Over Past Negotiations. Aired 10:30-11a ET

Aired April 3, 2018 - 10:30   ET

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


[10:30:00] ERICA HILL, CNN ANCHOR: -- giant cost the Post Office, money. Are the president's tweets now costing Amazon?

Alison Kosik is on the floor of the New York Stock Exchange, CNN Money editor-at-large, Richard Quest also with us.

Alison, first of all, how is it looking there on the floor?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, you asked the question of whether President Trump's tweets attacking Amazon are costing Amazon and the answer is yes. You look at that tweet just now, where President Trump says I am right about Amazon, costing the United States Post Office massive amounts of money for being their delivery boy.

Amazon should pay these costs plus and now have them borne by the American taxpayer. Many billions of dollars. Post office leaders don't have a clue, or do they? So interestingly enough, Amazon shares were up 2 percent before the president tweeted this. And guess what? Amazon shares are now in the red.

In fact the entire Nasdaq is in the red, so with one tweet, he literally moved the markets. And that's why the, quote, "bounce back" that we're seeing today with the Dow up 86 points, the question is, will it stick? Because a lot of the issues that plagued the market yesterday when we saw that massive sell-off continued to plague the market.

Number one, will the president continue tweeting and accusing Amazon of things that just aren't true. Let me tell you why. The Post Office -- Amazon does pay the Post Office for the Post Office's services. Amazon pays a bulk rate, like every other bulk shipper, it doesn't get special treatment. It's not the taxpayers bailing out the Post Office. The Post Office is having money problems because it has to -- it has lots of retirement obligations that it's unable to pay.

So we've got this Amazon issue floating out there with the president having direct impact on the stock and the Nasdaq at this point. And then we have the issues of trade. Will the president go ahead and unleash that second phase of tariffs on China? Because then if that happens, China could then retaliate in a bigger way.

You know, you look at the bigger picture of how the president has impacted the market, the president impacted the market in a good way since he was elected in November of 2016. We saw the Dow jumped 8,000 points. Well, since then, since the end of January, we have seen the Dow lose 3,000 points -- Erica?

HILL: Alison, thank you.

Richard, I want to bring you in here on this point because as we heard from Alison and as we've seen just the last 24 hours, the impact that a tweet from the president can have on one company, what about other companies? Is there a concern that they could soon become target and face a similar fate?

RICHARD QUEST, CNN MONEY EDITOR-AT-LARGE: I wouldn't worry about other companies becoming a target. I'm much more concerned with Amazon. Let's have a reality check about this company. I've just checked. Amazon has over 500,000 employees in the United States at the moment. It is one of, if not the largest single private employer.

The U.S. government has 1.9 million employees in the United States. Now that makes Amazon just about 25 percent of the size of the U.S. government. And here you have the president of the United States choosing to launch an all-out attack on one of the most successful companies in the United States in the last 20 years.

Now you've got to ask yourself, what is the purpose of such an eminent attack against Amazon? If your goal is to start a proper serious discussion about Post Office taxation, then do it in a policy speech or a document or a white paper. But you don't do it in 280 characters or less. Not without destroying value, which is exactly what's happening at the moment.

HILL: As we know, the president does tend to deal more in 280 characters, to your point, Richard. When we look, though, at the China issue, which we just heard about from Alison and I want to dig a little deeper on this with you, the real possibility of a trade war, how much is that also weighing on the markets?

QUEST: The whole market is -- this whole place is terrified at the prospect of a trade war. Just look at the components of the Dow Jones Industrials. Caterpillar. You've got McDonald's. You've got Boeing. These are all three aim. You've got large cap stocks that have predicated their future growth on China. And now in the last 24 hours, all right, you have the first few -- if you like tariffs that were just basically a teaser from the Chinese, but now they're saying you bring more tariffs in the United States and we will match you one for one.

Now, remember, we're now talking about the second largest economy in the world, with huge potential, that also invests vast sums of money in U.S. government bonds. This is not picking a fight with Luxembourg. And the reality is that what the president is doing, and what the administration is doing, however justified their complaints against China, they are now playing with dynamite. And at some point, one of these sticks of dynamite is going to explode and this market, which is tottering and teetering at the moment because of its rise over the last two years, will take a firm fall. [10:35:13] HILL: Richard Quest, Alison Kosik, appreciate it, thank

you.

President Trump says U.S. troops may be leaving Syria very son. CNN, however, has learned Defense officials are working on a plan that is quite different than what the president is talking about.

(COMMERCIAL BREAK)

HILL: President Trump is scheduled to meet with his National Security Council today just days after saying U.S. troops could leave Syria very soon. That apparently comes, though, as a surprise to his Defense officials who tell CNN they have been working on plans to send more troops to Syria.

Joining me now is retired Rear Admiral John Kirby, CNN military analyst, former State Department spokesman and former Pentagon press secretary.

So what is your take on this? We know there is this meeting today obviously with the National Security Council, and this large disconnect between what we're hearing from the president and what Defense officials are working on.

[10:40:04] REAR ADM. JOHN KIRBY, CNN MILITARY AND DIPLOMATIC ANALYST: So today is a National Security Council meeting, which means that the president will be presiding over it. They're going to discuss Syria policy and strategy.

I think that's a healthy thing. You always want to dip your toe in that stream and check and see how your strategy is doing. I think that the State Department and the Pentagon, I hope anyway, will have some tough words in terms of what they see as the potential prospects for a precipitous pullout of all troops from Syria in the very near future.

And the State Department, too, is invested in this because the president is now threatening to hold up stabilization funds. This is money that the U.S. provides to local communities after ISIS has been kicked out that they need for security, for governance, for services. All that is really important to try to eliminate the ungoverned spaces and the safe havens that ISIS can still find in Syria.

You know, Secretary Mattis talked about the strategy not being one of attrition, which he blamed the Obama administration for pursuing, but one of annihilation. In other words, we're going to take ISIS completely off the map. Well, they're not completely off the map. They have been severely damaged in Syria and Iraq, of course, but they're still there. And they can still reconstitute if there is a precipitous pullout of U.S. troops anytime soon.

HILL: So as that gets worked out, there is also the question about the messaging that we see here, not just to the U.S. military but obviously to the world, to our allies.

I want to get your take on this. Michael Gerson writing in "The Washington Post," "The final victory of Iran, Russia and Assad would send a number of clear messages that mass murder works, that use of chemical weapons works, that the poor starvation of civilians works that the rules of war and condemnation by the United States can be ignored with impunity and the slow motion betrayal of Syria has sent a message to every refugee I met and every potential friend of our country. It can be dangerous to trust in America."

Is that what's really at stake here? Trust in this country?

KIRBY: It's one of the things at stake. That's a very eloquent way of putting it. Mr. Gerson did a nice job with that. I think that is certainly one serious outcome of a continued sort of muddling Syria policy and no clear direction on where we're going.

And look, I mean, Syria was a mess even before Trump took office and the Obama administration struggled to get things right as well. So this is a long-standing problem. This distrust in America goes back quite a few years since basically the onset of the Civil War.

But, Erica, one of the things I hope they do talk today in this NSC meeting is a diplomatic strategy going forward. The U.S. troop presence there is all about getting rid of ISIS, it's never been about getting involved in the civil war and I think everybody understands and appreciates that.

But what -- under President Obama, we did try when I worked for Secretary Kerry, it was a very robust effort U.S. leadership of the diplomatic process diplomatic process to try to get both sides of this conflict to the table and work out a peaceful, stable, future for Syria that is decided by the Syrian people.

This administration, under President trump, has basically ignored that process altogether and handed over leadership of it to Russia, who obviously doesn't have the best interest of the Syrian people at heart. So what I really hope they talk about, in addition to troop presence and the counter ISIS fight is a path to get back on to some sort of political outcome and some sort of diplomatic future here, diplomatic process, to develop a better future for the Syrian people.

HILL: You brought up Russia. I do want to ask you quickly about this. President Trump and Vladimir Putin, we had heard, talked about a possible meeting at the White House.

KIRBY: Yes.

HILL: The White House says it was a casual mention. Is there any benefit, though, that you see to the president and Vladimir Putin meeting state side in the U.S.?

KIRBY: Not right now. Look, I'm always about bilateral discussions and we certainly -- the U.S.-Russia relationship has a long way to go to improve, and there's absolutely nothing wrong with the two heads of state talking and having a dialogue. But now is not the time for that.

President Putin is finally starting to feel the sting of his overreach here with this chemical agent attack in the UK. The international community is aligned against him. Many countries have expelled diplomats. He's starting to feel that pressure and that isolation in ways that he hasn't felt in many recent years. And I think it's important for him to continue to feel that.

Look, he's turning Russia into a pariah state. Against the will of many Russians I would add. And now is not the right time for the president of the United States to reward him for this incredible criminal egregious behavior by sitting down and talking to him one on one. At some point, in the future, obviously yes, but now is not the right time.

HILL: Rear Admiral John Kirby, always appreciate your insight, thank you.

KIRBY: Thank you, Erica.

HILL: Oklahoma teachers ditching their classrooms to help their students. They are rallying at the state capitol again today. What they want, next.

(COMMERCIAL BREAK)

[10:48:57] HILL: Hundreds of Oklahoma teachers are protesting at the state capitol right now. Walking off the job for the second day in a row, prompting schools in Oklahoma City and Tulsa to shut their doors again.

The teachers say they're doing it for their students. They want more funding for everything from textbooks to smaller classes. They're also asking for a $10,000 raise saying that $6100 pay hike approved last week simply doesn't pay their bills.

John Schooley, the designer of the Kansas waterslide that killed a 10- year-old, arrested. Schooley is facing several charges including second-degree murder, aggravated battery and endangering a child.

In 2016, 10-year-old Caleb Schwab was killed in a raft he was riding down that slide went airborne. A recent indictment shows park officials knew about the issues with the ride and were aware other riders had been injured.

It took more than 12 hours, 100 firefighters, and sanitation workers, but eventually they were able to free a 13-year-old Los Angeles boy and reunite him with his family. Jesse Hernandez was playing in Griffith Park on Easter Sunday when he fell and got stuck in a dense maze of sewer pipes. Take a listen to him describe what happened.

(BEGIN VIDEO CLIP)

[10:50:05] JESSE HERNANDEZ, RESCUED FROM SEWER PIPES: I was playing and I didn't see a little piece of wood and I stepped on it and I just fell and the current took me. The tunnel started getting smaller so I just stood up fast. There's this brick drifting, and I just went up.

(END VIDEO CLIP) HILL: The firefighters and sanitation crews worked through the night to pluck the teen to safety. He's a little bruised and scratched, but otherwise OK.

Happening now, AT&T and Time Warner's $85 billion megamerger trial back in court. Government lawyers questioning Turner executives for hours yesterday on past negotiations with distributors. The Justice Department has argued if the merger is allowed, the new company would have more leverage in deals involving Time Warner content.

Joining me now outside the U.S. district court in Washington is CNN politics, media and business reporter, Hadas Gold.

Hadas, good morning.

HADAS GOLD, POLITICS, MEDIA AND BUSINESS REPORTER: Good morning, Erica. So actually on the stand right now is a Turner executive, and Turner obviously owns CNN. And he's on the stand right now to talk about how Turner negotiates with these distributors to get their content on air because these distributors, like your local cable company, negotiates with Turner networks on how they carry -- how much they pay and how many networks they carry, networks like TNT, TBS, CNN or HLN.

And what the government is arguing is that AT&T and Time Warner together, as Time Warner owns Turner, would have increased leverage over other distributors. And that they would have an incentive to go dark which to pull their channels from these other distributors to try and attract more subscribers over to AT&T. The government lawyers are going through internal e-mails between Turner executives and Time Warner executives about their negotiating tactics in the past distributors, trying to show that they're always willing to go dark because they know that they have this leverage, especially over big events like March Madness, which just happened, which is partly carried on Turner networks, it's also shared with CBS.

However, Turner executives are pushing back and they're saying, listen, when we go dark, we lose millions of dollars. Turner executive yesterday Coleman Breland said that when they went dark with Dish in 2014, they lost $30 million in ad revenue for that month. So it's not in their incentive to go dark on any sort of distributor and that's not something that they would want to do even when they're owned by AT&T because they say they would lose ad revenue and they potentially be blamed by subscribers for going dark.

The real question here is how the judge sees all of this because this is a bench trial, meaning the judge is the only one who will decide how this merger will affect the competitive landscape. AT&T is arguing that they're now competing with places like Facebook, Google, Amazon, Netflix, saying people are switching off from cable, they're cord cutting and they need this deal in order to innovate and to be more -- and to compete in this new marketplace.

Judge Leon has a lot on his plate. He said that this court decision could be upwards of 200 pages because he knows how valuable it is. But it really all just comes down to him -- Erica. HILL: All right. We'll be watching for that and for your continued

coverage.

Hadas, thank you.

Villanova is victorious, new champion sits atop the college basketball championship. That's next.

(COMMERCIAL BREAK)

[10:57:55] HILL: After a March full of upsets, it is the number one seed dominating in April. The Villanova Wildcats, national champs once again.

Andy Scholes was at the game in San Antonio and joins us now with more.

You know, you look pretty good for a man who probably hasn't slept yet.

ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Did not get a lot of sleep, Erica. But it's definitely worth it to be at the National Championship game. And I'll tell you what, Villanova sure does love the state of Texas. They won it all in Houston a couple of years ago and they did it again last night here in San Antonio. They're just the fourth team in the past 40 years to win two championships in a span of three years.

Now Michigan gave them all they could handle in the first half of this game, until red shirt sophomore Donte DiVincenzo came in off the bench, absolutely on fire. He usually averages about 13 points a game. He had 18 in the first half alone. Finished with 31, which was a record for a player off the bench in the championship game. Villanova just rolled in the second half, beating Michigan 79-62. And I caught up with DiVincenzo after the game and asked him about his epic performance.

(BEGIN VIDEO CLIP)

SCHOLES: Donte, how amazing is this moment right here?

DONTE DIVINCENZO, VILLANOVA GUARD: Indescribable, honestly, because we've been through so much, this team. A lot of ups and downs this year. And we've competed every single day in practice. And we're sharing it -- we're going to share this for the rest of our life.

SCHOLES: Is this a moment you dreamt of since you were a kid?

DIVINCENZO: Yes. Since I was born, honestly. Yes. And the biggest thing for me is sharing this with these guys.

(END VIDEO CLIP)

SCHOLES: This was the scene near campus at Villanova, students taking to the streets, setting a couple of fires to celebrate their second national championship in three years. And Erica, there is something about Philly fans when they see street

poles after winning a national championship where they just want to climb them, as you can see, that was happening again last night just like after the Eagles won the Super Bowl.

HILL: Andy Scholes, appreciate it, thank you.

Thanks to all of you for joining us today. I'm Erica Hill. "AT THIS HOUR" starts right now.

BRIANNE KEILAR, CNN ANCHOR: Hi, there. I'm Brianna Keilar, in for Kate Bolduan and we begin with a thunderous Tuesday morning tweets --