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Dow Set to Drop; Migrants Travel Toward Border; National Guard to Border; Sandberg on Protecting User Data; U.S. Imposes New Sanctions. Aired 9:30-10a ET
Aired April 6, 2018 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:30:00] ERICA HILL, CNN ANCHOR: As we try to figure out where stocks are headed today. CNN's Cristina Alesci joins us from the exchange floor. Also with us, Monica Mehta from the investment firm Seventh Capital.
Cristina, first to you.
What are we hearing? What are we seeing there?
CRISTINA ALESCI, CNN MONEY AND POLITICS CORRESPONDENT: Well, the traders here are expecting a down market, at least at the open today.
Look, markets and traders and investors are clearly nervous after Trump escalated tough talk with China overnight, floating the idea of another $100 billion of tariffs on goods from China.
This is the problem. Even the cooler heads here who I was speaking to earlier this week who thought that this was a negotiating tactic, they're starting to get nervous. They're saying, you don't provoke China because there are other levers China can pull. And it seems like to many smart investors and economists that Trump is basically playing Russian roulette with our economy for political reasons to basically appease and rally his base. And that's a fairly risky strategy because, as I said, China could pull a couple of different levers.
Even if they don't put the same amount of tariffs on U.S. goods, they could, for example, make it more difficult for U.S. companies to operate in China. That's just one example. There are other things China can do.
Look, not helping things right now is the jobs report that came out at 8:30. It missed expectations by about 80,000 jobs. So that was not great. But, you know, overall, I don't want to overhype this, that the foundational economy, the foundation of the economy is still pretty strong. You're looking at 90 straight months of consecutive job growth here. So, for the average person, it seems like the economy is still holding up. It's just this market reaction over the uncertainty of what the administration will do in this, you know, very tough talk, escalation and fear of trade wars, Erica.
HILL: Those big question marks. That uncertainty, as you point out.
Monica, as we look at this, the president, in an interview this morning, said, look, Wall Street may have to take a hit. The markets may have to take a hit. But, in the end, he said, he will be stronger in the end.
Monica, do you agree?
MONICA MEHTA, MANAGING PRINCIPAL, SEVENTH CAPITAL: I do agree. And I actually find a statement like that to be a bit refreshing. The president of the United States should not be beholden to the markets. The markets and the economy are dislocated and have been for a long time. If you look at the past 20 years and the trajectory of the Dow, it really is -- it just shoots to the sky, whereas you look at GDP growth and with the economy itself, we've been barely even able to get close to 2 percent GDP growth over the past 20 years.
So to see a president that's willing to take a stand and recognize that there are multiple stakeholders in the markets and multiple stakeholders in the economy, corporations would love to see outsourcing be business as usual. But workers, it doesn't work for workers. So I think it's great that, you know, he's taking a risk in this regard, but it is a risk, and, you know, we'll see how this works out.
HILL: Well, there's -- and in terms of that risk, as we just heard from Cristina, part of that is the concern about provoking China and what else could come to bear. The president's chief economic adviser, Larry Kudlow, earlier this week saying -- before this, you know, proposed $100 billion in additional tariffs -- on Wednesday, Larry Kudlow saying, look, this is just the president negotiating with all the tools here, all the tools in his arsenal.
Monica, is this still looked at, though, as a negotiation at this point?
MEHTA: I think it is, just a lot of bluster. You know, you can also say that these very carefully curated, diplomatic approaches to trade have led to agreements that have been great for corporations and not so great for workers.
We are negotiating from a place of strength. Two-thirds of the U.S. economy is reliant on U.S. consumers buying goods here. China needs us very much because we are their biggest customer. You know, it's not to mention that there have been a lot of activities over the past several decades with trade in which IP (ph) theft and, you know, it's estimated between $200 billion and $600 billion of intellectual property theft have taken place every year with China. And that's only seeming to get worse. So to be negotiating and trying to address this I think is something that a lot of voters actually do care about.
HILL: To pick up on that point, real quickly, Cristina, there is this -- I mean all of this is started, obviously, by theft of intellectual property, concerns over U.S. technology, and yet you have the Information Technology Industry Council, which, of course, represents Amazon, Apple, IBM, using words like "irresponsible," "destabilizing," and saying these words and actions have global consequences, Cristina.
ALESCI: That's right. And a lot of investors and people in the c suite, to Monica's point, do see this as an irrational way to get to the negotiating table. I don't think anyone in the c suite or even on Wall Street believes that we shouldn't be negotiating with China, that we shouldn't be perhaps taking a tough stand, but is this the right way to get there? Those are the kind of questions that they're asking.
[09:35:02] This seems like a very messy way to get to the negotiating table. And it seems like a lot of bluster perhaps again to reassure his faith and for political reasons rather than getting to the right result. That's the criticism right now.
HILL: Cristina Alesci, Monica Mehta, thank you both.
President Trump says he's ready to send thousands of National Guard troops to the southern border as a caravan of immigrants heads closer to the U.S. Critics say the president, though, is trying to solve a problem that doesn't exist.
HILL: President Trump sending 2,000 to 4,000 National Guard troops to the southern border, warning a horde of illegal immigrants is on the way and planning to cross into the United States. Critics, however, say the situation simply isn't that dire. The group that the president was referring to has splintered and shrunk since it started out. And, remember, this is actually an annual event. And it's expected to get even smaller.
CNN's Leyla Santiago is with part of the caravan that has stopped for a few days in Puebla, Mexico, and joins us now live.
[09:40:06] Leyla, where do we stand at this point?
LEYLA SANTIAGO, CNN CORRESPONDENT: Listen, there are actually still people from that caravan coming this morning. I've seen about 20 people. And most of them are families. It's interesting because I talked to one woman and I said, hey, President Trump says that this caravan is dangerous. And she said, I am armed with my children. And she showed me three little kids that she came to Puebla with waiting for the rest of the caravan do arrive.
So, where are we right now? Well, yesterday, one bus arrived, about 70 people. They were in Juahaka (ph) before, several hours south of where we are. And they are making their way up to Puebla.
But as you mentioned, this is a group that's getting smaller. Typically that happens every year. They've been doing this for more than five years. And typically they do get smaller. The organizers are telling us that they are delaying things a bit, they are taking their time on this because of this extra attention. Surely they are overwhelmed and they want to make sure that as these Central Americans who have come up with this caravan make their way are -- make their way up, that they are protected.
So when they will arrive to the U.S., we still don't know. Many have decided they will stay here in Mexico. But organizers are telling us that they believe about 200 will make it up to the U.S.-Mexico border to seek asylum.
Why seek asylum? I was speaking to that exact same woman and she sort of echoed what many here have said. They've said, yes, the conditions in the -- in Central America, so El Salvador, Guatemala, Honduras, they're not great. Yes, they are dealing with poverty. But even more so, they are talking about the violence that they are facing. The woman I spoke to said that her family members have been killed because gang violence is such a problem in the neighborhood that she is in, or she was in, rather, from El Salvador.
So this is a caravan that continues, albeit in smaller numbers, and takes issue with being labeled as dangerous or not qualifying for someone who needs to seek asylum given the violence that they say they are fleeing.
HILL: Well, and to that point, Leyla, part of what we heard from the president yesterday was that -- and these are his words, that female migrants were being raped at levels nobody has ever seen before. Is that what you're hearing from people?
SANTIAGO: I have now spoken to -- I have now, Erica -- I have now spoken to three women and directly asked them, have you been raped, are you seeing this, using the words that President Trump said? And all three of them have said to me, we have had no issues with that.
Now, let's keep this in context because I've covered quite a bit of immigrants in Mexico, as well as on the U.S. side of the border, and that is always the concern. This is a very dangerous journey. People are raped along the way. But that is why the caravan is so important to them because they are finding safety in numbers. If they go together, they can protect themselves against some of these threats that are very common along the journey.
HILL: Leyla Santiago with the latest for us from Puebla, Mexico.
Leyla, thank you.
Joining us now, John Sandweg, former acting director of U.S. Immigration and Customs Enforcement, and former acting general counsel for Homeland Security.
As we look at all this and we hear what the president is warning about, we hear from Leyla in terms of the caravan and all the folks she's met there and the reality on the ground, you've said the issues that the president lays out are not things that are going to be solved with National Guard troops on the border. That this is largely symbolic. So what is the larger issue?
JOHN SANDWEG, FORMER ACTING DIRECTOR, U.S. IMMIGRATION AND CUSTOMS ENFORCEMENT: Well, as Leyla indicated, what we're seeing now, it's dramatically different than what we saw four years ago. We're seeing large numbers of Central Americans who are fleeing gang violence and horrific conditions in their home countries. They're not coming into this country and crossing our border and trying to evade capture. That's historically what we've seen along the border. What this population is actually doing is trying to surrender to the U.S. authorities and seek protection and political asylum.
So, you know, it's funny, the president wants to order the National Guard. And where the National Guard can provide some utility is in detecting illegal intrusions into the United States. But we've never had a border patrol that's better staffed, better equipped and facing, frankly, less activity at the border than we are right now.
So the problem really is in the officers and the officials and immigration judges who sort out these asylum claims and kind of weed out the legitimate claims from the false claims. And the National Guard, unless we're going to make them immigration judges, they're not going to help us with that problem.
HILL: So that's where you're saying we need a little bit more attention. Are there any risks to sending these troops to the border?
SANDWEG: Oh, absolutely. I mean, look, the use of force protocols for guardsmen and military officials are dramatically different than civilian officials. And I think in some way it's almost demeaning to the border patrol to suggest we could just take a National Guardsman, who's trained for other activities, and just put them in a border patrol's position.
Border patrol agents go through extensive training. There's a specialized law enforcement academy for the border patrol. And it's months, months before they're ever able to patrol and do their job alone on the border.
[09:45:02] So, yes, sure, you could have -- you could see a situation where somebody gets hurt and you can also see a situation where international tensions with Mexico, you know, something goes wrong and things get kind of heated and -- as it relates to our foreign relations.
HILL: This is a -- you bring up the word "heated." I mean this is a heated conversation, not just internationally, but domestically as well. People have very clear ideas of what they feel needs to be done. What are we missing from the conversation?
SANDWEG: Well, I've got to tell you, that's the problem. You know, I've worked on immigration enforcement issues for a long time. And there's no other issue where the -- where politics drive bad policies than in immigration enforcement. You know, from across the board, from interior enforcement and ICE and sanctuary cities to what's going on at the border, unfortunately I think the debate is far too often not informed by fact. And as a result, because of the heated politics, we end up with bad policies. You know, there's no other law enforcement agency, other than DHS, that's as, you know, subjected to the pushing and pulling of politics than as, you know, ICE and CBP.
HILL: John Sandweg, really appreciate your time today. Thank you.
SANDWEG: Thank you.
HILL: FaceBook's COO now admitting the company failed to do enough to protect its users personal information. An update on the company's apology tour, next.
[09:50:41] HILL: Facebook's apology tour continues. This time it is the social media giant COO Sheryl Sandberg.
(BEGIN VIDEO CLIP)
SHERYL SANDBERG, FACEBOOK COO: We were very focused, for the last ten years, on building social experiences. And those were important. Those are why your friends know it's your birthday, why you can share play lists. But we were not focused enough on the possible misuses of data.
We know that we did not do a good enough job protecting people's data. And I'm really sorry for that and Mark's really sorry for that.
But what we weren't focused enough on was protecting.
I think we were very idealistic and not rigorous enough and then there's the possible misuse.
(END VIDEO CLIP)
HILL: All of this comes as FaceBook's CEO Mark Zuckerberg is set to testify before Congress next week about the company's misuse of data.
CNN's senior technology correspondent Laurie Segall joins me with the details.
I have to be honest, I watch all of that and not only does it feel robotic, and it feels like there's a very clear message that's being given to everybody from the communications team. But to hear Sheryl Sandberg come out and say, oh, yes, by the way, we just weren't focused on possible misuses, you almost let that slide with Mark Zuckerberg. Sheryl Sandberg seems a little too smart for that.
LAURIE SEGALL, CNN SENIOR TECH CORRESPONDENT: Right. It's interesting because we're hearing a lot of this. And the question, I think, for FaceBook users, for lawmakers next week when Mark goes to testify, is it's too little, too late. And I don't mean, you know, why just now. I mean I think this is a company that has 2 billion users. Data protection should be one of the most important things at its focus. So, yes, it is --
HILL: And from the beginning.
SEGALL: From the beginning.
And it is great that they're coming out and talking about this. But the big question is, where were they before now? I, you know, I think the other question is, will there be more data breaches? What else will we find out? Sheryl was asked that. Listen to what she said.
(BEGIN VIDEO CLIP)
SHERYL SANDBERG, FACEBOOK COO: We're doing an investigation. We're going to do audits. And, yes, we think it's possible. That's why we're doing the audit.
This week we announced we're shutting down some of the ways groups, events, pages, other parts of our product use data.
Now, a lot of these have quite good use cases. But we're making a big shift here and it's a shift we're making to make sure that we are more protective.
(END VIDEO CLIP)
SEGALL: We'll see.
On Monday, you'll find out if you were part of the Cambridge Analytica scandal and your data was used for that. There will also be an opportunity for users to see what kind of data their apps are sharing and kind of delete that.
I think the larger question is, you know, where was a lot of this before?
SEGALL: And you're hearing a lot of the same company lines. When you have Sheryl and Mark talking, you're hearing a lot of, I'm sorry, we're taking a different viewpoint on this, and it all is sounding very similar. So I think there is going to be frustration as to why this wasn't done before.
HILL: To your point, the questioning will be fascinating next week. And, as you know, I started out my career covering technology too. And I have to say, even 20 years ago, security was a focus for companies. And it's shocking to hear her basically say, you know what, we just weren't as focused on that part of it.
SEGALL: Yes. And, by the way, they're saying, you know, it's an arms race. No matter what you do, there are always going to be bad actors. But -- you covered tech for a long time. I covered tech. We know that it is always an arms race. That is why it's so important to be proactive about this.
SEGALL: Not take a step back a year later and looking at the weaponization of your platform wondering how it will impact democracy. These questions, you wanted them to questions all along. You wanted them out in front of it all along.
HILL: Well, we will see what changes Tuesday and Wednesday.
Appreciate it, as always. Laurie, thank you.
SEGALL: Thank you.
HILL: Puerto Rico, we're learning, is closing more than 280 schools because so many students have left since Hurricane Maria devastated the island. The schools have lost more than 38,000 students in the last year. The education secretary of Puerto Rico says students first began leaving because of a financial crisis. But the loss became much worse after the hurricane hit in September.
New this morning, UFC star Conor McGregor charged overnight with three counts of assault and one count of criminal mischief. This after allegedly attacking a bus with rival fighters on board at the Barclays Center in Brooklyn. McGregor and his entourage reportedly crashed the press event and then attacked a mini bus using trash cans and metal barricades. UFC President Dana White says one fighter -- one fighter suffered head and facial cuts from broken glass. White says McGregor had a beef, apparently, with one of the fighters on the bus. McGregor is due to appear on court later this morning.
[09:54:52] Still to come, the breaking news of the morning, the Trump administration issuing new sanctions against Russian oligarchs. Stay with CNN for the latest.
ANNOUNCER: This is CNN breaking news.
HILL: Good morning. I'm Erica Hill, in for John and Poppy.
And we do begin with breaking news.
The Trump administration imposing new sanctions on Russian oligarchs with ties to Vladimir Putin, along with companies they own or control.
CNN's Michelle Kosinski joins us now with those details.
Michelle, good morning.
MICHELLE KOSINSKI, CNN SENIOR DIPLOMATIC CORRESPONDENT: Hi, Erica.
Right, these sanctions just out of bag (ph) from the administration. So we are looking at new sanctions now imposed on seven Russian oligarchs, 12 companies that they either own or control, including a bank and an arms trading company, as well as 17 senior Russian government officials.
[10:00:07] So among this bunch, we are looking at the head of the huge state-owned gas company, Gazprom.