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Trade War Talk And Russia Sanctions; Bollywood's Salman Khan Awaits Decision; Facebook Moves to Provide Transparency; Caravan Travelers North to Mexican Border. Aired 2-2:30a ET

Aired April 7, 2018 - 02:00   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): Wall Street tumbles over fears of a trade war between the U.S. and China. And U.S. President Donald Trump's admission that there might be a little pain.

Plus the U.S. goes after the Russian president's inner circle with new sanctions on Russian oligarchs.

And we will take you inside Eastern Ghouta, a district outside the Syrian capital, in ruins after weeks of government shelling.

Thank you for joining us, everyone. I'm Cyril Vanier at the CNN NEWSROOM here in Atlanta.

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VANIER: The U.S. president is raising the rhetoric of a trade war, threatening China with even more tariffs in the latest round of t4r retaliations. Plus the Trump administration is slapping sanctions on several Russian oligarchs with ties to Russian President Putin.

But let's start with trade. U.S. markets were nervous again on Friday and they closed down on fears of a trade war between the U.S. and China, perhaps with your money as collateral damage.

The Dow index in New York lost 572 points on the day. At one point, it fell 767 points, wiping out gains for the week and putting it back in correction territory. The volatility started Thursday night when President Trump threatened to hit China with another $100 billion in tariffs. Now that comes on top of the $50 billion he threatened last week.

The president's new economic adviser, Larry Kudlow, tried to tamp down the fears, saying that were was no trade war and all talk on tariffs was only negotiating proposals. That eased the fall somewhat but only until Treasury Secretary Steve Mnuchin said on TV, quote, "There is potential of a trade war." That was after President Trump said in a radio interview that a drop in the Dow, well, that's OK.

(BEGIN VIDEO CLIP) TRUMP: The easiest thing for me to do would be just to close my eyes and forget it. If I did that, I'm not doing my job. So I'm not saying there won't be a little pain but the market has gone up 40 percent, 42 percent, so we might lose a little bit of it. But we're going to have a much stronger country when we're finished.

(END VIDEO CLIP)

VANIER: Richard Quest explains more in detail what is driving the markets.

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RICHARD QUEST, CNNMONEY EDITOR AT LARGE: The chart shows the sorry situation of the day, not one of the Dow stocks was positive during the Friday session and those that suffered most, Caterpillar, Boeing, 3M, Nike, all -- and General Electric -- all stocks that have exposure to China and possibility of detriment if the trade war gets under way.

Look at the way they actually progressed and you'll see just how vicious it was, a sharp fall just after 10:30, another just after 1:30. And you can time those falls to either a presidential tweet or some statement by an administration official, whether it be Larry Kudlow, the director of the National Economic Council, or Steve Mnuchin, the Treasury Secretary, who actually said there was the possibility of a trade war.

The reality is, you and I have said this many times, markets like certainty. They like to know what's likely to happen next. The reality here is, they've got anything but. Confused messages from an administration with an end goal that would be tariffs with the second largest trading partner to the United States.

Put it all together, it does not bode well and that is why you're seeing the market down 572 points -- Richard Quest, CNN, New York.

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VANIER: Eric Schiffer is chairman of Reputation Management Consultants and CEO of Patriarch Equity. He joins us now from Los Angeles.

Eric, there was some idea, some notion going into Friday that perhaps the Trump administration, the president was dangling these threats of billions of dollars of tariffs as a tactic to get China to the negotiating table and essentially get them to change their ways.

But that myth has been debunked now. We get the sense that the president is serious about these tariffs.

ERIC SCHIFFER, CEO, PATRIARCH EQUITY: Well, I think he likely will be serious to the extent that China does not step up and get to the table. There is no question right now; we're in a bit of a battle between the president of China and President Trump.

But whether this is going to really turn into a full-blown trade war is to be seen. China doesn't benefit from a trade war, especially when they are --

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SCHIFFER: -- selling roughly about $506 billion into the United States and the United States is really only selling back about $130 billion. So I think what's happening is Donald Trump is attempting to leverage and he will continue to.

And with the understanding -- with the strategy to get China to the table. And China is being very tactical in the sense that the way in which they're orienting their sanctions, their tariffs are focused at the Sun Tzu-like supply lines of the president, meaning political lines.

They're looking at who elected Donald Trump and they're targeted right at those types of jobs, which is a very smart countertactic.

VANIER: Yes, which is something that all the countries that have been hit by Trump tariffs have done or threaten to do. I remember a couple weeks back, Europe was threatening also most Republican states with Harley-Davidsons and other things that were built in Republican states.

What's the worst-case scenario here?

What are the markets afraid might happen?

SCHIFFER: I think they're afraid that this will turn into a full- blown trade war. And to the extent that that would happen --

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VANIER: But what does that look like?

SCHIFFER: -- well, I think what it looks like is thermonuclear meltdown for stocks. You're talking about the market that will become incredibly volatile. I think you're going to see that kind of volatility for some time relative to this issue, as this issue continues to come up.

But at the end, neither side benefits. And I think that the Chinese certainly don't want to see America's economy be affected in a material way, certainly from any type of tariffs, when, in fact, that will just make things even worse for an economy that has such a big portion of what they sell into the United States, some 20 percent.

I do think you're going to get them to the table. I think you'll see both sides eventually get to the table. You're already seeing overtures of it. In fact, there were comments about -- from the premier of China last week that they were open to more access, they were open to looking at perhaps not requiring the technology companies to turn over the source code.

So those are good signs for investors. But hold on for some time, because there will be more and posturing. I don't think this is going to just resolve itself quickly. But I do think you're going to get a deal like we saw in other situations where Trump negotiated with countries where there was some saber rattling, not to the extent that there is here -- for instance South Korea, where there was a deal that was made.

VANIER: All right, Eric Schiffer, you think there's going to be a deal. Let's give it some time and let's see how develops. Let's see if the posturing, as you say, works. Eric, thank you for joining us.

SCHIFFER: Thank you very much.

VANIER: Vladimir Putin's inner circle is now feeling the sting of new U.S. sanctions. Among those targeted on Friday by the U.S. Treasury is a man who married the Russian president's daughter. And he is not alone.

A total of seven powerful Russian oligarchs with close ties to Mr. Putin are on the sanctions list. Also named, 12 companies that those oligarchs either own or control and the sanctions also target 17 senior Russian officials.

All of this is meant to punish Moscow for what the U.S. considers hostile actions around the world, including meddling in the 2016 U.S. presidential election. Of the seven oligarchs targeted for sanctions one name in particular stands out. Matthew Chance explains.

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MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: These are sanctions that were designed by the U.S. Treasury Department to punish a wide range of activities that the Russian have undertaken, including the occupation of Crimea, the violence that say they've instigated in Eastern Ukraine, the supply of weaponry to the Assad regime, which is used then to bomb Syrian civilians and the attempts by Russia to subvert Western democracies, including through means like cyber activity.

So this goes far beyond the idea that it's just about punishing Russia for alleged meddling in the U.S. presidential election. There are seven oligarchs or Russian business leaders that are listed on this U.S. Treasury Department list. They're all very close to Vladimir Putin, the Russian president.

So the department has made it -- been very careful to pick people who are part of Vladimir Putin's inner circle. Seven names but one of them really springs out. That's Oleg Deripaska. He's one of Russia's richest men. He's perhaps Putin's favorite oligarch and --

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CHANCE: -- we tried to approach him in Vietnam last year to question him about his links with Paul Manafort, who, at one point, was the chairman of the Trump campaign. It's alleged that Manafort owes Deripaska millions of dollars and offered Deripaska private briefings in order in part to alleviate some of that debt.

UNIDENTIFIED MALE: Get lost, please. Thank you. CHANCE: The Treasury report, sanctions report paints a very unsavory

picture of Oleg Deripaska, saying that he has been accused of illegally wire tapping a government official, taking part in extortion and racketeering. It says that there is also allegations that Deripaska bribed a government official.

And get this: allegations that he ordered the murder of a businessman and has links to Russian organized crime. So as I say, a very negative portrayal of Oleg Deripaska in this Treasury report.

And the report, even though it names other individuals and targets other people's assets, it specifically homes in on Deripaska because of the 12 oligarch-owned companies that have been sanctioned by this Treasury report, eight of them are either owned or controlled by Oleg Deripaska.

And so this is a broad sanctions list, relatively speaking. But it really does focus in on just that one individual, Oleg Deripaska. The foreign ministry has issued a response, saying that there will be a hard response to this latest round of American sanctions -- Matthew Chance, CNN, Moscow.

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VANIER: Through a spokesperson, Deripaska rejected the U.S. sanctions as, quote, "groundless, ridiculous and absurd."

And here's the reaction from the Russian foreign ministry. It was equally dismissive.

"Washington continues to frighten with the rejection of American visas and threaten Russian businesses with freezing property and financial assets, forgetting that the seizure of private property and other people's money is called robbery.

"We would like to advise Washington to get rid of illusions that we can be spoken to with the language of sanctions."

Besides Russian election meddling, sanctions on Moscow by Western nations have been tightened since a former Russian spy was poisoned in England. Doctors treating Sergei Skripal now say that he is no longer in critical condition and that he is improving rapidly.

His daughter, Yulia, is in stable condition after the nerve agent attack last month. Moscow denies that it has anything to do with this chemical attack.

In an exclusive report, CNN has learned that Donald Trump's lawyers are preparing him for a potential interview with special counsel Robert Mueller. That's according to a White House official and a person familiar with the situation, who add the preparations are in a very early stage.

The lawyers are reportedly going over topics that Mueller may choose to raise with Mr. Trump. All of this comes from Mueller's investigation into Russian election meddling. But remember, President Trump has not yet agreed to an interview with Robert Mueller.

Still to come of the show, CNN goes inside Eastern Ghouta, a first- hand look at the war-ravaged Syrian region. Stay with us.

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VANIER: Brazil's former president Luiz Inacio Lula da Silva is now officially a fugitive. The 72-year old was supposed to turn himself in on Friday to begin a 12-year prison sentence. But instead of that, he is now holed up at the headquarters of Brazil's metal workers' union and he is surrounded by supporters there.

Lula was convicted of corruption and money laundering related to the state-run oil company but he denies any wrongdoing.

And one of the world's highest paid actors is in jail. Bollywood superstar Salman Khan is behind bars, waiting to hear if he is going to be granted bail. He was convicted of killing a rare and protected antelope some 20 years ago and he was sentenced to five years in prison. But he's appealing that sentence.

Journalist Liz Neisloss is in New Delhi.

Liz, Salman Khan is a very popular figure. This is not an ordinary trial by any stretch of the imagination. Tell us more about the whole reaction surrounding this in New Delhi.

LIZ NEISLOSS, JOURNALIST: Well, he is, by most tallies, one of the most popular stars in India, by some tallies the highest paid actor in the world. So there is reason for a lot of attention on this particular actor being in jail.

But this isn't the first time Salman Khan has spent time in this particular jail. He was tried on two previous cases of poaching. He was acquitted in those cases but that period of time, he did spend a few nights in this jail. Right now the court is in break and we do expect a decision on the bail application by the lawyers just after lunch.

After that point, Salman Khan's lawyers will move to a higher court with their appeal -- Cyril.

VANIER: You mentioned there is a lot of money involved, indirectly in this, because he is a very highly paid actor. And Salman Khan, as you explained to me, he is also a brand.

How does this impact the Salman Khan brand?

NEISLOSS: Well, Brand Salman, as it's known here, could get dented on the advertising side. He is a big representative of brands, like most actors here in India. It's hard to say, sometimes that does affect product endorsements.

But it's not expected to affect the movie side of Salman Khan and that is enormous. He has one movie currently wrapping up. He has three more in the pipeline. By some estimates, if he were imprisoned and those movies couldn't be made, that would more cost more than $75 million and thousands of people their livelihood -- Cyril.

VANIER: Liz Neisloss, thank you, reporting from New Delhi there. We'll see what happens with the trial and with the appeal. Thank you.

In Syria now, pro government troops are assaulting the last rebel enclave in Eastern Ghouta. Aid and monitoring groups say dozens were killed on Friday as airstrikes and shelling rained down on Douma. War has left much of Eastern Ghouta in ruins but some residents are nonetheless trying to rebuild. CNN's Fred Pleitgen has more in his report from inside Eastern Ghouta.

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FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): A drive into the wasteland that used to be the Damascus suburb of Eastern Ghouta. Years of siege and fighting have laid waste to what was once a thriving business district.

Amid the ruins, some are trying to return, praying, like Sahil al- Kalish (ph), that businesses like his tomato sauce factory will come back to life.

"God willing," he says, "we will try and rebuild this factory in a fairly short time and then start producing again."

Eastern Ghouta, an area with nearly 400,000 inhabitants, was under Islamist rebel control for around six years. After a fierce offensive Syrian government forces managed to take back most of the territory, displacing tens of thousands of civilians.

PLEITGEN: Much of Eastern Ghouta looks exactly like this, buildings either completely flattened or at least badly damaged. But even in this situation, people are trying to come back and bring back some semblance of life.

PLEITGEN (voice-over): An almost impossible task, as fighting continues in areas nearby.

Yasar al-Hajj (ph) says he is lucky his apartment is still somewhat intact.

"Life was difficult beyond description," he says, "but we had to adapt to it. For instance, we had inedible barley but we had to eat it anyway."

The vast majority of Eastern Ghouta's residents remain displaced in shelters around Syria --

[02:20:00] PLEITGEN: -- while those who have been able to come back face a long and tough road, trying to rebuild their district and their lives -- Fred Pleitgen, CNN, Eastern Ghouta, Syria.

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VANIER: Still ahead, they're tired, hungry and desperate for a better Life. We'll be hearing from the migrants crossing Mexico in a caravan. Stay with us.

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VANIER: Facebook is making changes to try to stop the Russian trolls. Mark Zuckerberg says it will not everyone from trying to game the system but it will make it harder.

Zuckerberg announced the new rules just days before he is scheduled to testify before Congress. CNN Laurie Segall goes through the change and what it means for your Facebook page.

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LAURIE SEGALL, CNNMONEY TECHNOLOGY CORRESPONDENT: Hey, there. Well, Facebook announcing a number of changes to come about election meddling. It's a push for transparency around advertising and the social media company will now actually begin labeling all political and issue ads.

And there also is a part of this going to show who paid for those ads and require anyone who wants to run a political or issue ad to verify their identity and location so they'll have to be approved in order to do this.

Now this is an expansion from Facebook's prior moves. These measures would have applied to political ads. So as mentioning candidates. But this expansion also covers issue ads, which if you think about issue ads, they cover hot button issues that don't even mention candidates -- so think gun control or education.

As part of this, the company also announced a searchable database where users can actually see how much the ads cost and also what kinds of people advertisers are targeting. so this is all about more transparency.

And one more move which is actually pretty interesting, the company is going to start verifying the people behind pages if they have a big following. So think about pages like the topics or organizations that you like on Facebook.

And then think about 2016, Russian trolls actually used pages to pose as Americans on different sides of the different political spectrum to create division in America. Facebook found out about this after the fact.

This news is coming as Sheryl Sandberg made the media rounds. She was asked a lot of tough questions. One question she was asked about will the company find more issues when it came to user data. Listen to what she said.

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SHERYL SANDBERG, FACEBOOK: Well, we weren't focused enough was protecting because that same data that you enable to use social experiences can also be misused.

UNIDENTIFIED FEMALE: Do you think there could be other breaches like the one we saw in Cambridge Analytica, where tens of millions of people's status was accessed improperly?

SANDBERG: 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.

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SEGALL: And all of this is coming before a monumental week for Facebook. The CEO, Mark Zuckerberg, will be testifying before Congress on Tuesday and Wednesday. He'll have lawmakers posing very challenging questions to Mark about the company's use of data in light of the Cambridge Analytica scandal and everything that's come out.

And also the weaponization of the platform for political purposes -- back to you.

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VANIER: The National Guard troops have started moving to the southern U.S. border to support a security mission ordered by President Trump. The chief of the National Guard Bureau says 500 troops plus vehicles and helicopters are on their way.

The U.S. Defense Secretary authorized as many as 4,000 troops. Federal law prohibits the soldiers from enforcing immigration but they can provide air support and help with intelligence gathering and construction.

Now --

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VANIER: -- all of this is to beef up security. And this was triggered by a caravan of Central Americans traveling through Mexico toward the U.S. border. They say that they are fleeing violence and poverty in their home countries. Leyla Santiago has more from Puebla, Mexico.

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LEYLA SANTIAGO, CNN CORRESPONDENT: This is the caravan at the center of some of Trump's tweets. It is the caravan that started on the southern part of Mexico and it is heading north.

When they started, there were about 1,000 to 1,200 people and now a much smaller crowd. This is about a total of 500 Central Americans making their way north.

Now President Trump has said that this is a dangerous caravan. So I want to sort of show you the volunteers here in Puebla have welcomed them, providing meals for many of them. The priests and the Catholic Churches have provided shelter and some of the shelters have also taken in some the Central Americans who are heading north.

Again, this is annual event. So every year, it sort of starts off big and then they break off into smaller groups. President Trump has said that the group has dispersed and while it has gotten smaller, you can see behind me there are still hundreds.

I'm actually going to see if I can speak to this woman.

(Speaking Spanish).

UNIDENTIFIED FEMALE: De Guatemala.

SANTIAGO: She is from Guatemala.

(Speaking Spanish).

UNIDENTIFIED FEMALE: (Speaking Spanish).

SANTIAGO: She says because of the delinquency and the violence she left Guatemala.

(Speaking Spanish).

UNIDENTIFIED FEMALE: (Speaking Spanish).

SANTIAGO: So she is going to stay here in Mexico. She says that she is going to Tijuana and from there -- gracias -- from there she wants to stay there, make money and send that back to Guatemala to help her children that she left behind there.

This is actually not the first time I have heard a story like this. The people here tell me they are fleeing violence from either Guatemala, El Salvador or Honduras; they are fleeing corrupt government or they are just trying to find a better life because they can't find a job in their own country.

Now, what is the next step for them?

These Central Americans say that they will, some of them, again, stay here in Mexico; some of them heading to the U.S.-Mexico border. From here they are heading north to Mexico City and from there, the organizers say that many of them will break off into smaller crowds.

Again, some of them, they say about 200, according to the organizers, will be making it to the U.S.-Mexico border but we will have to wait to see exactly how many make it there and if they will be able to seek asylum -- Leyla Santiago, CNN, Puebla, Mexico.

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VANIER: And that's it from us this hour. Thank you for watching CNN NEWSROOM. I'm Cyril Vanier. I'll be back as ever with the headlines in just about two minutes. Stay with us.