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Dow Plunges after China Retaliates on U.S. Tariffs; Intel Chief WH has Made Decision on Syria Withdrawal; Trump says he's willing to Stay in Syria Short-Term. Aired 10-10:30a ET

Aired April 04, 2018 - 10:00   ET

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

[10:00:19]

ERICA HILL, CNN ANCHOR: Good morning, I'm Erica Hill in for John and Poppy.

The Dow plummeting over fears of an all-out trade war with China. Take a look right now at the Dow, down about 1.5 percent. It has been in the red since the bell rang this morning. This, of course, on the heels of China retaliating with its own proposed $50 billion in tariffs on American goods. We're covering this out of Wall Street, also in Beijing.

I want to begin with CNN's Ivan Watson. Ivan?

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hi there, Erica. That's right. Hours after the Trump administration announced it was imposing a 25 percent tariff on $50 billion worth of Chinese goods, Beijing has responded in kind, saying, it's got the same plan laid out for $50 billion worth of U.S. goods and the sectors that are targeted are soybeans, aircraft, cars and chemicals, 106 products in all but two of those are pretty important. Soybeans and aircraft because they are the largest export sectors for the U.S. to China. Two $14 billion worth of soybeans sold to China in 2016. Another $14 billion worth of planes sold to China in 2016 as well. And notably, eight out of the 10 top soybean producing states in the U.S. voted for President Trump in 2016. So, some suggestion that China may be targeting the demographic that has voted for the current administration.

Now top Chinese officials have also made it clear, that there's still a way out of this. That they could still negotiate that the tariffs have not been imposed yet and they will wait until the U.S. tariffs are finally imposed on Chinese goods. The Trump administration has made it clear that may have to wait until a public hearing takes place on May 15th. But there is definitely the threat of an escalation here. China already imposed other tariffs earlier this week on $3 billion worth of U.S. goods which includes pork and wine and fruit and nuts and anybody working in those industries exporting to China is likely feeling the pinch right now. Erica?

HILL: Ivan, thank you.

Cristina Alesci is at the New York Stock Exchange. Cristina, as we look at this, we're hearing conflicting messages. It could lead to negotiation as Ivan is pointing out here and likely that's what business leaders may be hoping for in the end. The president saying we're not in a trade war but Congress Secretary Wilbur Ross just saying even shooting wars end in negotiations, there's a lot of uncertainty here and that obviously is fueling these fears. Cristina?

CRISTINA ALESCI, CNN MONEY AND POLITICS CORRESPONDENT: That's right. And what President Trump may be finding out is the market won't have it both ways. You can't launch a trade war and then tell everyone that it's not a trade war. But right now, we're actually pairing some of the losses. It keeps fluctuating but no doubt about it, we're still red and investors are very concerned about this escalation. This was China counter punching us really for announcing 25 percent tariffs on $50 billion worth of goods.

China responded late overnight and as soon as China responded we saw an immediate response reaction from the stock market, really across the board. And what's interesting here are the specific industries that are being hit. It's 106 different categories of goods that includes aircraft and soybean and autos. But what's very interesting here, if you look at a map of the top soybean producing states, the 10 of them, eight of those 10 actually voted for Trump. It went in Trump's direction. So, it seems like the Chinese are trying to send Trump a very strong message and trying to hurt his base. You know whether or not that changes things for Trump, it seems like the administration is digging in and trying to essentially message otherwise, but investors are clearly unnerved. And remember, this is happening against the backdrop of potential interest rate hikes. So the market is already poised to go lower. The question is, when does the market feel reassured? And my guess is it's not going to be reassured for next couple of weeks. Erica?

HILL: All right. We'll continue to watch it. Christina and Ivan, thank you both.

Also want to get to this breaking news in terms of the U.S. plan for Syria. Director of National Intelligence Dan Coats telling reporters this morning, the White House made a decision yesterday and that the statement is coming soon.

Joining me now, Pentagon correspondent Barbara Starr and senior national correspondent Fred Pleitgen who's in Syria. Barbara, I want to begin with you. You're in this breakfast there this morning when we hear this from DNI Coats, what more do we know about this decision?

[10:05:02] BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, it was a surprising comment from him at this breakfast with reporters, Erica. He said that yesterday the White House had made the decision. When asked, yes, they've made a decision about withdrawal of U.S. troops in Syria. He would not say what the decision was. So, clearly, that opens the door to the question of timing. The president has made it clear he doesn't want U.S. troops there forever. Do they go soon? Do they pack up and go further down the road? That's what we expect to learn more about later today. The timing of when troops could be in the future coming out of Syria.

The director of National Intelligence would not go there. All he would say is that a decision -- a determination in his words had been made about the withdrawal of U.S. troops from Syria. There are about 2,000 U.S. troops there and the big question on the table of course is ISIS really defeated in Syria, defeated enough that U.S. troops can come home. And even as in discussion was going on at the White House yesterday.

The top U.S. Commander General Joseph Votel was speaking downtown Washington and he was talking about the need to stay longer in Syria, the need to engage and help with rebuilding and help with security. Because the big concern of course is it's not just the defeat of ISIS, but if they can't secure these areas of Syria, the fear is that ISIS will return and ISIS will go back into Iraq and then you're back where you were in 2014 potentially. Erica?

HILL: And that would be a lot to take in. Obviously, Fred, you have spent so much time in Syria, you're there right now. There's also the very important question of what this could potentially mean for the people in Syria.

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: For the people in Syria, and especially in light of that also Erica for the credibility of the United States here on the ground. I think there's one interesting thing that President Trump said, I think it was two days ago. He's been talking about this for a couple of days in a row. He said that he believes America doesn't necessarily need to be in Syria. He thinks that others should be in Syria and taking charge in Syria.

And I can tell you, the three nations that have said that they would be glad to oblige, Turkey and Iran and especially Russia. Those certainly are the countries that currently wield the most power here in Syria right now. If you look for instance the area that I'm in right now here in and around Damascus, the Syrian government forces loyal to Bashar al-Assad and working together with the Russians have made massive gains here. The opposition is basically nonexistent here in the Syrian capital.

If you look to the north, the Kurds were fighting with the Americans against ISIS, getting squeezed by the Turks up there. The country that at this point in time has very little clout in the diplomatic field is the United States. Right now, today there was a meeting between the Turks, the Russians and the Iranians that took place in Turkey where they were essentially deciding of what they want the future of Syria to be.

The United States was not at the table and with that they are also deciding on things that doesn't factor in the U.S. at all. If you look at America's allies on the ground here, especially the Kurds, many of whom, again, have fought together with the U.S. against ISIS, many of them are pretty angry and are saying, look, we thought that it would be in it in the long run and eventually, those will have to start to try to cut the Turks as well. Erica?

HILL: Fred Pleitgen, Barbara Starr, thank you both.

Also want to bring in now Lieutenant General Mark Hertling. As we listen to all of this and everything that is unfolding here, Fred brought up two really important points here. He brought up the credibility of the United States and also the fact that Turkey, Iran and Russia, who as he pointed out, were all meeting will be more than happy to step in. How damaging could this be on a diplomatic front?

LT. GEN. MARK HERTLING (RET), CNN MILITARY ANALYST: CNN It's hugely damaging, Erica. And it's deja vu all over again. You know we have said multiple times in the last 15 years that the number of forces on the ground is not a strategy. And yet we're talking only about the number of forces on the ground to determine what our strategy or our policy is.

And in fact, the military has done magnificent in northern Syria. They have performed gloriously with some of the allies that are in the area, especially the Kurds. And when you're talking about the potential for pulling up -- pulling out, don't know if that was the decision, but if it is, it kind of neglects all of the fighting that has been done to stabilize that area but also General Votel, that Barbara Starr mentioned, has been repeatedly saying along with Brett McGurk, the ambassador at large has been traveling all over these countries for the last five years have said repeatedly this is the last thing you want to do is pull out just about the time when you've got things stabilized.

There's no after the fight policy. There's no after the fight strategy. And we are seeding the field if we don't commit, we're seeding the field, as Fred Pleitgen said, to the Russians, the Iranians and the Turks. And our allies who have fought with us are going to be very upset and we have done this to the Kurds in the past on multiple occasions and truthfully from the people I've talked to that were friends when I was in Iraq have told me that the Kurds are about finished with the United States.

[10:10:12] HILL: To hear that, the Kurds are about finished with the United States, I mean, just layout for us what the broader implication of that statement is. It's not just about Syria.

HERTLING: It certainly isn't. This is a long-term policy. You have so many complex issues all centered in this part of the world. You have the combination of Iran and Russia controlling the state that is Syria. You have the potential for Turkey, a NATO ally invading into the Kurdish -- what the Kurds consider their territory and again playing exclusively almost with Russia in Iran. You have the Turks two days ago were denigrating the French government for what they were attempting to do and they've said the same things about us.

So there's this disconnect within NATO in terms of our Turkish alliance. So there are multiple things that could happen over the long term. This isn't just an issue for today. This is a long term strategic implication for not only the Middle East but potentially even Europe.

HILL: And really quick before I let you go in terms of long term impact that are happening today, yesterday, we've heard from National Security Adviser H.R. McMaster who said, I'm quoting here, "We failed to impose sufficient costs on Russia." How much more needs to be done there. Is he right?

HERTLING: He is right and H.R. has been saying that for a very long time. In fact, I was on a conference call with H.R. about four months ago when he was introducing the National Security strategy and that was a big part of the written document. It is a big part of the written documents that represents the Trump administration and yet there seems to be disconnect between the paper, what we say we're going to do versus the action, what the president and administration are doing.

And I think we're going to see more of those disconnects as we have an entire new team coming into the National Security Council as well as some of the other administration -- administrative positions that President Trump is naming. So there's going to be continued disconnect between how tough we are as the president said yesterday, which everyone sees versus what's really going on between the United States and Russia, which is almost nothing.

HILL: Lieutenant General Mark Hertling, always appreciate your insight. Thank you.

HERTLING: Thank you.

HILL: Still to come, new reports Special Counsel Robert Mueller has told President Trump's legal team the president is a subject but importantly here, not a target of his investigation. The word choice, what does it all mean for the Russia probe moving forward?

Plus, police searching for a motive after a woman opens fire at YouTube's headquarters in California. We're live at the scene.

(COMMERCIAL BREAK)

[10:16:52] HILL: This morning, a major development into Russia investigation. According to the "Washington Post," Special Counsel Robert Mueller telling the Trump legal team, the president is not a criminal target after this investigation. Also, this morning, former Trump Campaign Manager Paul Manafort in court where he's asking to have some of the charges against him thrown out. ChIt's starting to get a better sense of what we might hear from the White House. President Trump told his national security team in a meeting on Tuesday, he is willing to keep U.S. troops in Syria in the short term, made it known however that he doesn't want U.S. troops to exit soon.

I want to bring back our Lieutenant General Mark Hertling, and just to get your reaction here and for folks who just joining us, I want to set it up too that this comes on the heels, as we learned from our Barbara Starr this morning the Director of National Intelligence Dan Coats have said there had been a determination on Syria and there would be an announcement soon. It sounds like that announcement will involve troops staying in Syria for the short term.

HERTLING: I'd almost suggest to you, you might see a slight uptick because that's what General Votel has asked for along with General Thomas. They know that the toughest part of the fight is after the fight is over when you're trying to stabilize the communities and that's what they are experiencing right now - as well as some of the potential for conflict between Turkey and our partner Kurds.

So, I think many people have been recommending that to the president. I think he gave a surprise to quite a few people yesterday when he said we would be coming out soon because we didn't know what soon was. But you gave General Votel, who's the head of the Central Command and the overseer of this area. General Thomas, who's the head of Special Operations Command who has been carrying much of this fight with his special operations soldiers in this area. You have Brett McGurk, who's the traveling ambassador, if you will, who has been coordinating between Iraq and Syria and other places in the Middle East to try and make sure we're stabilized.

And you have Secretary of Defense Mattis who has also said we need to keep forces there longer. So, I'm sure there was an interesting primary committees meeting yesterday with all of the new DNI and CIA director and new State Department and all of the folks in that meeting yesterday while you saw folks like McMaster leaving. You had probably an interesting dynamic between the new incoming hard core, the military who have been in this area for the last couple of years. And President Trump who has his own way of doing business.

HILL: Now we're seeing how that all played out apparently, at least getting a preview of what we'll be hearing. Thanks for sticking around. Appreciate you weighing in on that one, Lieutenant General Mark Hertling.

In the meantime, at this hour, Nikki Haley is speaking live on the floor at the U.N. addressing the crisis in Syria. I want to listen in.

(BEGIN VIDEO CLIP)

NIKKI HALEY, U.S. AMBASSADOR TO THE UNITED NATIONS: It's a sad fact, just a few years ago, a single chemical weapons attack would have united us in shock and anger. It would have been enough for us to take immediate action. Now we have a regime that uses chemical weapons practically every other week.

Our lack of action has consequences when we let one regime off the hook, others take notice. The use of nerve agents in Salisbury and Kuala Lumpur proves these points and reveals a dangerous trend. We're rapidly flooding backward, crossing back into a world that we thought we left.

No one wants to live in a world where chemical weapons are used. No one wants to live in fear that a colorless shapeless gas will suddenly seep into our lungs and leave us gasping for air. If we do not act and do not stop and change course, this is a world we could be fast approaching. Even as security council has remained deadlocked, some have stood up to demand accountability for the use of chemical weapons and the general assembly overwhelmed the creation of the international and partial and independent mechanism on crimes committed in Syria, which is collecting evidence for future prosecutions.

The United States also fully supports France's international partnership against impunity for the use of chemical weapons. These efforts are vital. But we must not forget that while we sit here debating chemical weapons, there are people on the front lines in Syria who are facing the terrifying reality of those heinous weapons. People like Dr. Mahmoud Murad.

(END VIDEO CLIP)

HILL: You're listening there to U.N. Ambassador Nikki Haley speaking about the crisis in Syria. We will continue to monitor that speech and we'll be right back after a short break. Stay with us.

(COMMERCIAL BREAK)

[10:25:52] HILL: This morning, a major development in the Russia investigation. According to the "Washington Post," Special Counsel Robert Mueller telling the Trump legal team the president is not a criminal target of his investigation. Also, this morning former Trump campaign manager Paul Manafort in court where he's asking to have some of the charges against him thrown out. Charges that were brought against him in the Russia probe.

CNN's Kaitlan Collins is live at the with more. So, Kaitlan, the president is not a target we're learning but he's still a subject we're told of the investigation.

KAITLAN COLLINS, CNN WHITE HOUSE REPORTER: That's correct, Erica. A lot to unpack in the new report from the "Washington Post." the biggest being essentially that the Special Counsel Robert Mueller communicated to the president's legal team that although he is still investigating the president he does not consider him a criminal target but instead, considers him to be a subject of this investigation.

Now, folks at home might be wondering what exactly the difference in those two terms is and according to the Department of Justice, a subject is someone who's conduct falls within the scope of the grand jury's investigation, while a target is someone where there is substantial evidence linking that person to a crime.

Now, a subject can easily become a target but right now that is what the Special Counsel Robert Mueller told the president's legal team, that at some point he does not consider him to be a target of this investigation. Now that's really significant. This came during discussions about whether or not the special counsel was going to interview the president, something that he during this meeting the "Washington Post" said, expressed interest in continuing to do. We know this has created a lot of problems here in the White House. The president himself has expressed interest in sitting down with Robert Mueller because he feels that he has nothing to hide. He feels that he can clear his name if he does sit down with the special counsel.

But his legal team has expressed some hesitation about that, some concern about what exactly the president could say during that interview because a lot of the problems and a lot of the guilty pleas and what not we've seen come from this, a lot of issues that these people have when they do speak with the special counsel's investigators and if they do lie -- and of course this is a president who's known to exaggerate and make false statements. So that is a concern there. But one more thing that I want to point out from this Erica, is that Robert Mueller told the president's legal team that he is preparing a report on the president's actions in office, including potential obstruction of justice. So we've got that here. But also, the biggest takeaway will be whether or not the president does agree to sit down with the special counsel, clearly something that he's definitely still interested in here, Erica.

HILL: We'll be watching for any developments there. I also just want to get a little bit more from you this morning. The president tweeting -- slamming U.S. border laws calling them very weak and he also said in the tweet he was taking strong action, Kaitlan, today. Do we know what or when that action is?

COLLINS: That's the question here, Erica. There's nothing on the president's public schedule today that they sent to reporters that is listed. He has nothing until a private dinner with potential donors tonight. So nothing there so far but the president did tweet that border laws are very weak and those of Mexico and Canada are very strong. He said action will be taken today. We know that this comes after the president has said he's going to deploy the national guard to the southern border.

He did have a meeting with the Defense Secretary James Mattis, Attorney General Jeff Sessions and Department of Homeland Security Secretary among several others here at the White House yesterday. We do know that's there but right now the president doesn't have anything on his schedule. Congress is not in town I should note as well. The president says some kind of action is coming today so we're waiting to see what exactly that is.

HILL: We'll wait and see. We know you will let us know as soon as you hear anything, Kaitlan. Thank you.

We want to dig a little deeper now about what we're learning in terms of the Russia probe. Joining me, CNN legal and national security analyst, former FBI special agent, Asha Rangappa. Asha, so we heard Kaitlan layout there this important distinction between a target and a subject for the Department of Justice. Could part of this be Robert Mueller's team trying to ease any concerns of the president's legal team about the president sitting down for an interview.

ASHA RANGAPPA, CNN LEGAL AND NATIONAL SECURITY ANALYST: Well, Erica, I think that Mueller's team is always going to be careful before they publicly state that the president is a target. He's the president of the United States, and unless they are actually willing to bring charges and indict him, they are not going to use that term. And I think there's a very big constitutional question whether the president could even be indicted. It's against DOJ policy as it currently stands.