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CNN 10

China Announces Tariffs on Certain U.S. Goods; Military Drills Begin in South Korea, Teachers in Several U.S. States Raise Their Voices in Protest

Aired April 3, 2018 - 04:00   ET


CARL AZUZ, CNN 10 ANCHOR: For CNN 10, I`m Carl Azuz. We are 10 minutes of world news explained.

That starts today with tensions over trade between the U.S. and China.

The Asian country announced yesterday that it was putting tariffs or taxes on about $3 billion worth of imports from the U.S. The tariffs are on 128

American-made products, ranging from pork and fruit to steel pipes. This will make it more expensive for America businesses to sell those products

in China. And China says this was done as a response to the tariffs that the U.S. recently put on imports of Chinese steel and aluminum.

Meanwhile, U.S. President Donald Trump says more tariffs, new ones worth as much a $50 billion are being planned by the U.S. on additional goods from


So, one big question is, will all this cause a trade war, when countries take turns putting tariffs on each other`s goods, causing prices to rise?

We don`t know yet. The U.S. and China ship hundreds of billions of dollars of goods back and forth every year. So, the tariffs we`ve seen so far are

a tiny part of that. And America`s treasury secretary says the U.S. and China are talking behind the scenes about how to prevent a possible trade


But a number of experts are concerned this could turn into one and so are some stock investors. The Chinese tariffs were a major factor in a drop of

the U.S. stock market yesterday when the Dow Jones Industrial Average fell 459 points. But just like it`s hard to tell if a trade war is on the

horizon, it`s also hard to tell what kind of effects one could have decades down the road.


JON SARLIN, CNNMONEY PRODUCER: What happens in a trade war?

Sometimes, all it can take is one single tariff to start a trade war. When a government imposes a new tariff, other countries sometimes tend to raise

their tariffs in retaliation. That can lead to further tariffs, which can lead to further tariffs and, well, you get the idea.

But let`s just talk about one tariff, the chicken tariff.

In the 1960s, the Europeans were being inundated with cheap American chickens. Demand for that cheaper chicken skyrocketed, and so Europe, in

order to protect their chicken farms placed a tariff on the American chickens. One thing is certain, though, trade wars bring unintended


So, it all started with the Europeans` humble chicken tariff. But then the Americans responded with their tariffs on Dexedrine and brandy and some

trucks and cargo vans. While the chicken tariff eventually went away and so did the retaliatory brandy and Dexedrine ones, the automobile ones

stuck. They remain to this day and they`re credited with the rise of American car manufacturers` dominance of the truck industry. But some

critics say that that tariff-supported dominance has sheltered and protected American companies who haven`t been forced to innovate. So, it

started with chicken, ends up inadvertently affecting automobile engineering five decades later.

Another trade war reality, loopholes. Companies and countries can creatively avoid some tariffs. This is the Ford Transit Connect. Now,

Ford is an American company, but his van is made in Turkey, so it would be subject to the cargo van tariff. But at least until a few years ago, Ford

figured out that if they imported these vans with seats in the back, they could just call them passenger vans and pay a much smaller tariff. Once

they made it stateside, they strip out the backseat, take out the window and sell it as a cargo van, and pay no chicken tax.

U.S. Customs have since crack down on Ford`s van shenanigans. But with every new tariff comes opportunities to get around them.

So, what happens in a trade war? Just give it like 50 years.


AZUZ: Foal Eagle is the name of military drills being held right now between the U.S. and South Korea, two countries who`ve been allies since

the Korean War ended in 1953 and whose common rival has been North Korea.

The war games have been held annually for years. They angered North Korea, which has called them practice for an invasion of the North. The U.S. and

South Korea say the drills are defensive in nature.

But with change in the air, with North Korea`s leader preparing for historic meetings with South Korea`s president and potentially with

America`s president, there are some differences in this year`s drills.


PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: It is a discreet and low key start to the joint U.S.-South Korean military drills this year, a very

different situation to what we usually see. But clear, South Korean and U.S. officials don`t want to provoke Pyongyang at a time when relations are

thawing, and, of course, there is that summit coming up between Moon Jae-in and Kim Jong-un dated for April 27th.

So, what we`re seeing at this point is the Foal Eagle field exercise military drills have started this Sunday. They`ll go for months, but

that`s half the time hat they usually last. Last year, for example, they went for two months.

We are hearing though from the Pentagon and from South Korean military officials, they`ll have the same scope, the same scale as previous years.

We know there are 11,500 U.S. troops within Foal Eagle. There`s 290,000 South Korean troops.

But one interesting thing we should mention is that we haven`t heard about any media day. Usually, we have heard about that by this time.

I`m hearing that potentially, we won`t be seeing very much. We won`t be invited to film very much as in previous years. We do film it. We show it

to the world, and, of course, North Korea sees the capabilities of the U.S. and South Korea militaries.

So, potentially, we will hear very little response from North Korea if they are not seeing exactly what these very visual and what they believe to be

provocative military drills are.


AZUZ: Schools are close today in Oklahoma City, the capital of Oklahoma, but not for spring break. Teachers there are among tens of thousands who

are protesting for more school funding and better pay. Their rallies have stretched across Kentucky and Arizona, too.

Oklahoma`s teachers who recently received their first raise in a decade said there were still an unacceptable lack of funding for things like

textbooks and school supplies. Kentucky`s teachers are protesting changes to their pension plan, what they rely on for retirement. Their state has a

tremendous shortfall in funding for teachers` pensions.

Arizona`s teachers recently rallied for a 20 percent pay raise. The state governor`s office said they got one of more than 4 percent from 2016 to

2017, but teachers there also want more funding for education in general. This is all happening within a month of strike by teachers and school staff

in West Virginia, which resulted in pay raises there. The largest funding source for schools is the government of the state they`re in.


AZUZ: For "10 Out of 10", going off the grid doesn`t necessarily mean keeping your feet on the ground. It also doesn`t mean avoiding taxes. The

couple you`re about to meet still pays them according to the Canadian Broadcasting Corporation. But they have seclusion like few others.


REPORTER: What do you say to people who just say this is not a normal way of living?

WAYNE ADAMS: Thank you very much.


SUBTITLE: Floating off the grid.

CATHERINE KING: I`m Catherine and this is my husband Wayne.

ADAMS: I`m Wayne and welcome to Freedom Cove.

We live in a secluded cove, the only options we have to get here is by water. There are no road accesses. The water is our highway.

KING: Everything that you see here in our home is floating. We are tied to shore with lines. We are not anchored. We have our main living house.

We have the dance floor. The lighthouse building, four green houses. As I started to grow the garden and make it larger, then we had to have more

space for that garden.

ADAM: Everything is done with a handsaw and hammer. No power tools. I know every board and nail by name.

It`s about 500 tons, a million pounds when I`m floating. I`ve been building tree forts since I was seven.

KING: Yes.

ADAMS: And I said, well, dad, I`m putting a tree fort in the ocean.

REPORTER: Do you ever get seasick?

ADAMS: No, when I go up town, I get land sick.

The thing about living in Clayoquot Sound on the west coast of Vancouver island, it`s the richest biomass on earth. So, the opportunity to fish for

dinner is big.

I just get in my canoe and paddle out, in 10 minutes I can catch a fish.

But when it`s windy and too rough out there, I lay on the coach and fish out of the house. I was hoping to make a lot more money as an artist. So,

subsistence living was our only opportunity to have anything as artists. We could never buy real estate. So we had to make our own.

It was a great opportunity to actually move away from the city, to see if we could prosper out here. Now, 24 years later, we`re still doing it.

I can`t imagine living any other way. I feel completely fulfilled.

ADAMS: Oh that`s good, huh? It`s really nice. I`m working on it.


AZUZ: You`ve heard the expression, whatever floats your house boat or is it a boat house? And does it a yacht of money to keep it afloat in ship

shape? They say no man is an island, but they didn`t exactly get roped in to living on a manmade island. I guess they just kind of lake that way.

I`m Carl Azuz, sounding off for CNN 10.