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Early Start with John Berman and Zoraida Sambolin

North Korea Threatens To Cancel Trump-Kim Summit; President Trump Administration Might Hold Children Caught Crossing Border On Military Bases; Deadly Storms Pummel Northeast, Killing Two; Haley Comes To Israel's Defense. Aired 5:30-6a ET

Aired May 16, 2018 - 05:30   ET

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

(COMMERCIAL BREAK)

[05:30:38] DAVE BRIGGS, CNN ANCHOR: Breaking overnight, the big summit with North Korea suddenly in jeopardy. North Korea threatens to cancel the meeting if the U.S. demands Pyongyang drop its nuclear program.

CHRISTINE ROMANS, CNN ANCHOR: The White House exploring using military bases to hold children caught crossing the border. The Homeland Security secretary defending the latest efforts that could separate families.

BRIGGS: A powerful storm hits the East Coast, roaring through Virginia and Massachusetts. Two people are dead in both New York and Connecticut. Late-night rescues in Maryland and more on the same -- more of the same on the way today, unfortunately, for all of us out east.

Welcome back to EARLY START, everybody. I'm Dave Briggs.

ROMANS: And I'm Christine Romans. It's 31 minutes past the hour.

And a reality check for the Trump administration this morning, courtesy of North Korea. State media declaring Pyongyang will not be pushed into a corner on abandoning its nukes, while threatening to cancel the summit with President Trump in Singapore next month.

BRIGGS: The Kim regime also suspending talks with South Korea that were scheduled for today. The reason, U.S.-South Korean military drills already scheduled that North Korea now considers provocative.

Let's go live to Seoul and bring in CNN's Ivan Watson. Ivan, good morning.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Good morning, Dave.

The South Korean president's office just put out a statement trying to play down this sudden U-turn from the North Koreans, calling them growing pains for what will hopefully be a process to lead to a better result.

But the fact is that we've got a couple of statements overnight here in Asia from the North Korean government which used the kind of rhetoric and tone, the likes of which we haven't seen in months, directed against both the U.S. and South Korea, really taking issue with the White House's national security adviser John Bolton, saying that it was awfully sinister of him to compare possible nuclear disarmament from North Korea to a previous disarmament process for Libya more than a decade ago.

Calling joint military exercises that North Korea -- South Korea and the U.S. are currently conducting -- calling them a military provocation.

Canceling talks that were planned today between the North and South Koreans and also saying that the U.S. has to think twice if it's going to continue along this path whether or not it wants to actually have a summit with North Korea in Singapore next month.

And all the more striking because less than 24 hours ago North Korea was inviting South Korean journalists to attend what it says will be a ceremony next week for the dismantling of its main nuclear testing facility.

The jury's still out. Is this a bargaining tactic or is this the sign that the diplomatic thaw we've seen in recent months may be coming to an end -- Dave.

BRIGGS: And once again, all eyes on the president's Twitter feed.

Ivan Watson live for us in Seoul, thanks.

ROMANS: Yes. Let's go live to Washington and bring in "CNN POLITICS" digital director Zachary Wolf.

The Twitter feed, indeed.

BRIGGS: Yes.

ROMANS: I mean, with the president up watching the news this morning, will he say something direct -- the counter-puncher in chief? Will he say something provocative about North Korea and this latest move?

What do you think?

ZACHARY WOLF, DIGITAL DIRECTOR, "CNN POLITICS": Well, we know the guy likes to tweet and this is clearly going to be what's in his -- what he's seeing on cable news, so I wouldn't rule it out.

But he's said so much already about North Korea -- about sort of raising expectations for this summit. It's something he essentially needs.

In canceling the Iran nuclear deal last week he kept pointing over to this and saying I'm going to make a much better deal, so he is extremely invested in making this happen. How he does that, we'll just have to see.

BRIGGS: President Moon, from South Korea, is at the White House the 22nd. How do we expect -- or what do we expect that North Korea wants out of all of this? Some type of negotiating?

WOLF: Well, I mean, there was some criticism when the -- when the -- you know, the beginnings of this were happening that what North Korea essentially wanted was the seat at the -- at the -- on the world stage with the White House, and they got that. So what next they might want, I think we'll have to let that play out.

ROMANS: Yes. The White House, yesterday, issuing a statement midday. So after the news of the cancellation of the North Korean-South Korean summit for say -- I think, for this week.

[05:35:04] The White House said this. "We are aware of the South Korean media report. The United States will look at what North Korea has said independently and continue to coordinate closely with our allies."

You know, since the sort of threat of backing out of the -- of the -- of the talks with the U.S. -- North Korea and the U.S. --

BRIGGS: Nothing.

ROMANS: -- there's been radio silence here, so one wonders what the response will be from the White House today.

BRIGGS: Yes.

ROMANS: Zach -- let's move on to that GOP luncheon yesterday, Zach.

The president holding forth, talking about -- it was a policy luncheon with senators, right? No mention of the stories that the media keeps asking about -- John McCain -- an apology for John McCain, and ZTE, which I found very interesting. This China --

BRIGGS: Yes.

ROMANS: -- trade issue.

What do you make of that?

WOLF: I think it says a lot about the Republican Party right now. They're very happy in public to criticize the president, but when they find the opportunity to do it in private -- to do it when they have him face-to-face when it might mean a little bit more, they were -- senators, it seems like, were unable to kind of bring that to his attention.

It was a luncheon. There were, you know, 50 -- more than 50 people in the room. Maybe it's the wrong venue. It's not like you're having a --

ROMANS: Yes.

WOLF: -- face-to-face conversation with the guy.

On the other hand, how often do they actually have him in the room where somebody can stand up and talk to him in that way? BRIGGS: It was described by "Politico" as a soliloquy -- a rapid-fire delivery from Trump. It almost sounds like that "FOX & FRIENDS" phone interview where Trump just talked and went from one subject to another.

But discussing this ZTE play by the president that shocked everyone in his administration, here's what Larry Kudlow says about the relationship between President Trump and President Xi -- listen.

(BEGIN VIDEO CLIP)

LARRY KUDLOW, DIRECTOR, NATIONAL ECONOMIC COUNCIL: A little bit of a bromance between President Trump and President-for-life Xi. Where this leads, I don't know. It might even lead to a trade deal, which would make me very happy.

(END VIDEO CLIP)

BRIGGS: How have bromances led to policy or trade deals with this administration thus far?

WOLF: Well, I mean, you'll recall that Trump and Xi have met before. They had that lovely piece of chocolate cake.

And so, it's something I think, clearly, Trump feels like the best deals are going to come from him and personal relationships, and he likes the pomp of meeting with world leaders. It's not clear that that always gets you something.

You were talking about Macron, his other --

BRIGGS: Yes.

WOLF: -- bromance buddy. France certainly hasn't gotten the U.S. back into the -- into the Paris Climate Accord. They certainly didn't keep the U.S. in the Iran nuclear deal.

But let's just think about a trade deal with China. That's quite a flip from a lot of the campaign rhetoric where President Trump -- then candidate-Trump was criticizing China at every -- at every rally, and saying he would stand up to them.

So, you know, he's keeping promises in some places, like on Iran, but then he's definitely flipping as bromances present themselves.

ROMANS: I just -- the ZTE issue is just -- gets more interesting by the day. It really does.

I mean, when you look at the national security community's concerns about ZTE and then the president seeming to use ZTE as a bargaining chip to get other things that he might want in trade, it's just -- it's just really fascinating.

BRIGGS: And saving 75,000 Chinese jobs, according to Matt Rivers.

ROMANS: Interesting. All right. Thanks, Zach.

WOLF: Right.

ROMANS: Nice to see you.

WOLF: You, too.

ROMANS: Also, the Trump administration exploring the use of military bases to hold children caught crossing the border illegally. It's the latest sign the White House plans to split up those immigrant families once they enter the country.

A Defense Department official says staffers from Health and Human Services are informally looking at three sites in Texas and another in Arkansas.

BRIGGS: Earlier Tuesday, Homeland Security Sec. Kirstjen Nielsen defended policies that will separate children from their parents.

(BEGIN VIDEO CLIP)

SEN. KAMALA HARRIS (D), CALIFORNIA: Your agency will be separating children from their parents and I would --

KIRSTJEN NIELSEN, SECRETARY, DEPARTMENT OF HOMELAND SECURITY: No. What we'll be doing is prosecuting parents who've broken the law, just as we do every day in the United States of America.

HARRIS: I can appreciate that. But if that parent has a 4-year-old child, what do you plan on doing with that child?

NIELSEN: The child, under law, goes to HHS for care and custody.

HARRIS: They will be separated from their parents. And so, my question --

NIELSEN: Just as they do in the United States every day.

(END VIDEO CLIP)

BRIGGS: Families crossing the border have previously been held together in family detention facilities.

Sec. Nielsen did agree with senators that more needs to be done to protect children who come to the U.S. illegally.

ROMANS: All right.

Pennsylvania one of four states holding primaries Tuesday, along with Idaho, Nebraska, and Oregon.

CNN projects Congressman Lou Barletta will win the Republican Senate primary in Pennsylvania and take on incumbent Democrat Bob Casey in November.

The race is one of 10 Democratic-held Senate seats on the ballot this fall in states President Trump won in 2016.

The news not as good for Republican state Rep. Rick Saccone. He lost his second House race in three months. This time, he was beaten in the primary for a seat in the deep red 14th district in western Pennsylvania.

[05:40:01] Also in the House, a big night for Democratic women. Seven are leading Pennsylvania races with others too close to call. One Republican woman also with a win.

Pennsylvania's congressional delegation, right now, all men with two women set to face off in November. That's certain to change.

This is the first set of election contests, though, with new boundaries created by Pennsylvania's Supreme Court ruling on gerrymandering.

ROMANS: The Senate Intelligence Committee votes this morning in a closed session on Gina Haspel's nomination for CIA director.

She is expected to be approved now that several Democratic senators announced they are backing her, including Heidi Heitkamp of North Dakota, and Florida's Bill Nelson. Heitkamp and Nelson are both up for reelection.

Virginia Sen. Mark Warner, the committee's ranking member, is also supporting Haspel.

The final confirmation vote on the Senate floor could take place by tomorrow.

BRIGGS: President Trump floated the idea on Twitter. Now, a source telling CNN Senate Majority Leader Mitch McConnell considering scrapping some or all of the August recess.

Senate Dems -- Republicans, rather, under mounting pressure to pass a series of spending bills ahead of the summer break in order to head off another messy year-end battle to keep the government operating.

Congress facing an October first deadline to pass 12 appropriation bills funding vital parts of government, like defense, homeland security, and agriculture. According to the Pew Research Center, Congress has failed to pass all 12 spending bills on time every year since 1997.

ROMANS: All right.

Deadly storms pummeling the northeast. An 11-year-old girl killed when a tree crushed her car in Newburgh, New York. A man in Danbury, Connecticut also killed by a falling tree.

(BEGIN VIDEO CLIP)

Hailstorm.

(END VIDEO CLIP) ROMANS: All right, that will leave a mark. That's hail pounding Ulster County, New York.

Governor Cuomo declaring a state of emergency in Putnam, Dutchess, Orange, and Sullivan counties.

Officials reporting more than 60 water rescues in Frederick County, Maryland. Cars stalling out -- look at that -- in the rising floodwaters.

Eighty-five people were trapped for hours on the top deck of a double- decker commuter train because authorities said it was unsafe for them to be on the bottom level.

All right, 42 minutes past the hour.

The U.S. and Israel increasingly isolated over the deaths of protesters in Gaza. Is there anything Israel could do differently to calm the criticism and still protect its border? We're live in Gaza.

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[05:46:47] (BEGIN VIDEO CLIP)

NIKKI HALEY, U.S. AMBASSADOR TO THE UNITED NATIONS: I ask my colleagues here in the Security Council who among us would accept this type of activity on your border? No one would. No country in this chamber would act with more restraint than Israel has.

(END VIDEO CLIP)

BRIGGS: U.N. Ambassador Nikki Haley defending Israel after its military killed 60 Palestinians at the border with Gaza.

Israel and the United States now facing harsh global condemnation, raising the question is there anything Israel could be doing differently along its border?

Let's go live to Gaza and bring in CNN's Ian Lee. Ian, good morning.

IAN LEE, CNN INTERNATIONAL CORRESPONDENT: Good morning, Dave.

Today, people in Gaza are taking stock of the past seven weeks. Over 100 people were killed by Israeli soldiers in those clashes along the border.

For the most part these protests, though, have been largely peaceful. Yes, there was rock-throwing, there were Molotov cocktails, and the Israeli army said that there were a number of IEDs thrown at them. But it comes down to that there were no rockets, no mortars, and no Israeli soldiers killed or injured.

And that's what the international community is pointing to when they say that there as disproportionate use of force against protesters, and they're urging Israel to exercise more restraint. Also use more non-lethal means like tear gas, as well as rubber bullets. And, Israel has been diplomatically isolated when it comes to the past protests, especially from key allies like France, as well as the United Kingdom which was called for an independent inquiry.

For its part, Israel has defended itself, saying that it was facing deadly riots -- or facing rioters and was preventing Hamas terrorist activity.

But when you look at the past seven weeks, the Gazans can say there are a number of achievements. One, the international community is talking about this coastal enclave again. And also, they've been able to diplomatically isolate Israel and the United States when it comes to the situation here -- Dave.

BRIGGS: All right. Ian Lee live for us just before 1:00 p.m. there in Gaza -- thanks.

ROMANS: All right, let's get a check on "CNN Money" this morning.

Asian stocks falling overnight, spooked by the news that North Korea has suspended talks with South Korea and North Korea threatens a future meeting with President Trump.

Wall Street closed lower. Stocks closed lower after bond yields rose to a 7-year high.

Consumers spent more in April but that sparked concerns about rising inflation and faster interest rate hikes ahead. That drove the 10- year Treasury yield to nearly 3.1 percent.

Bond rates, of course, affect borrowing costs for things like credit cards, auto loans, and mortgages. And already, you're seeing mortgage rates reflect this. They are at 7-year highs.

The benchmark 30-year fixed rate -- 4.88 percent we're looking at this week. That's according to the Mortgage Daily News. Mortgage rates started the year around four percent but have been rising since then.

For the average borrower, they're already about five percent. For very good credit you're talking about 4.88 percent.

Look, the housing market is really an interesting spot here. Supply is tight. A lot of people are struggling to find affordable homes, especially starter homes.

Home prices growing at the fastest pace in four years and they show no sign of easing up.

All right.

Prime members will get an extra discount at Whole Foods as Amazon's latest move in the grocery price fight. Whole Foods will offer prime members 10 percent off hundreds of sale items.

[05:50:07] Right now, the perk is just in Florida stores but they're going to roll this out nationwide this summer. Morgan Stanley says this could make Whole Foods cheaper than conventional grocers for prime members. And there are 100 million prime members, so that really could be a disruption in the $800 billion grocery industry.

Whole Foods has 463 stores in the U.S. but says it's been growing since the Amazon purchase last year.

BRIGGS: Is 10 percent enough to make it cheaper than a conventional grocery store? Not my experience at Whole Foods, but I --

ROMANS: Ten percent off sale items, yes.

BRIGGS: I'm going to start keeping track later today. OK.

A key prosecutor says he will no longer take up cases for smoking or possessing small amounts of marijuana. We'll tell you where and why.

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[05:55:08] BRIGGS: A Sichuan Airlines flight forced to make an emergency landing after the co-pilot was sucked halfway out of the cockpit. It happened when the windshield suddenly blew out 80 minutes into a flight at an altitude of 30,000 feet.

The co-pilot suffered scratches and a sprained wrist. A flight attendant was also injured. None of the 119 passengers were hurt.

The aircraft landed safely in southern China.

ROMANS: A deadly explosion at a California medical facility is being investigated as a criminal act. A law enforcement source telling CNN the incident appears to be intentional although it is early in the investigation.

One woman was killed, three others injured in the blast in Aliso Viejo. That's in southern Orange County.

This was a medical office building. The explosion blew out walls and windows. A witness says it felt like an earthquake with fire and smoke popping out of the walls.

Two people are in critical condition.

No indication of any threats made to this office building before the blast.

BRIGGS: Hawaiian officials raising the aviation alert to Code Red because of the ongoing eruption at the Kilauea volcano. The move prompted by the continuous emission of ash. The FAA putting a temporary restriction in place.

One plume of ash from the volcano rising 12,000 feet into the air before dropping onto sections of the Big Island.

Residents contending with sulfur dioxide emissions from 21 cracks in the ground being warned to stay indoors.

Iowa's attorney general refusing to represent his state in a lawsuit challenging its controversial new abortion law. Democrat Tim -- Tom Miller recusing himself because he disagrees with the measure and believes it undermines protections for women.

ROMANS: The so-called Heartbeat Bill would prohibit doctors from performing abortions if a fetal heartbeat can be detected. That can happen as early as just six weeks into a pregnancy.

Planned Parenthood and the ACLU of Iowa are suing to block the deal.

Manhattan's district attorney says his office will not take up cases for smoking or possessing small amounts of marijuana as of August one. Under D.A. Cy Vance's new policy, people who violate the law will be issued summonses. The D.A. said his office is discussing exceptions with the mayor and police.

New York's police commissioner saying the department will undergo an honest assessment to examine why a disproportionate number of pot arrests have historically involved minorities.

BRIGGS: Some sports news.

Mariners' all-star second baseman Robinson Cano suspended 80 games by Major League Baseball after testing positive for a banned substance. Cano acknowledged taking a diuretic which he says is not a performance-enhancing substance. He says the diuretic was given to him by a doctor in the Dominican Republic and is used to treat various medical conditions.

The Celtics with a furious second-half comeback, beating the Cleveland Cavaliers in game two of the NBA's Eastern Conference finals. Boston outscored Cleveland by 20 points after the half with a 107-94 win and a 2-0 lead in the series.

LeBron James was unbelievable -- 42 points in a triple-double.

Game three, though, Saturday in Cleveland.

And the big question on social media this morning, Laurel or Yanny? Listen closely and decide.

(BEGIN VIDEO CLIP)

Yanny, Yanny, Yanny, Yanny.

(END VIDEO CLIP)

BRIGGS: Oh, social media hopelessly polarized by the audio clip, bringing back memories of the dress -- a photo from 2015. No one could decide whether it was white and gold or blue and black.

I am team Laurel and blue and black, and we seem to be divided along those lines.

ROMANS: I am team Yanny and that is white and gold. I only hear Yanny.

To me, this is a metaphor for everything in America. People can see or hear the same thing and interpret -- and literally hear something different.

BRIGGS: That is terrific analysis. We are polarized on everything.

ROMANS: Thanks for joining us. I'm Christine Romans.

BRIGGS: And I'm Dave Briggs. "NEW DAY" starts right now. We'll see you tomorrow.

(BEGIN VIDEO CLIP)

ROMANS: North Korea threatening to cancel the upcoming summit with President Trump.

UNIDENTIFIED FEMALE: They're effectively saying that unilateral denuclearization is not what the North Koreans want.

SEN. RAND PAUL (R), KENTUCKY: I'm hoping it's a temporary setback and their way of protesting against the military exercises.

UNIDENTIFIED FEMALE: They're exercises that are legal. They're planned well, well in advance.

UNIDENTIFIED MALE: We weren't even at the 50-yard line yet and the president was practicing his end zone dance.

UNIDENTIFIED MALE: Republicans did not get a chance to ask them questions about the concerns over this Chinese firm, ZTE.

UNIDENTIFIED MALE: Make China great again? This company is a very serious problem.

SEN. MITCH MCCONNELL (R-KY), SENATE MAJORITY LEADER: I can't remember whether we discussed that issue or not. I don't think we did.

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.

CHRIS CUOMO, CNN ANCHOR: Welcome to our viewers in the United States and around the world. This is your NEW DAY. It is Wednesday, May 16th, 6:00 here in New York, and here's the "Starting Line."

North Korea threatening to abandon its highly anticipated summit with President Trump next month. The rogue regime says it will not be put in a corner on nuclear abandonment.