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Unemployment Rate Drops To 3.8 Percent, Lowest Since 2000; Trump's Controversial Pardons Under Scrutiny; Ford Chairman: Trump's Tariff Gets Us Closer To A Trade War. Aired 9-9:30a ET
Aired June 1, 2018 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN BERMAN, CNN ANCHOR: All right, time now for Newsroom with Poppy Harlow and Brianna Keilar. Take it away, guys.
POPPY HARLOW, CNN ANCHOR: All right. Good Friday morning everyone. I'm Poppy Harlow.
BRIANNA KEILAR, CNN ANCHOR: And I'm Brianna Keilar. And the breaking news, a powerhouse jobs report from May, numbers just out from the Commerce Department show the economy added 223,000 jobs last month, that's well above economist predictions of 188,000 and the jobless rate edging down now to 3.8 percent.
HARLOW: Yes. It is a stunning report. It is very good news, but many economists and lawmakers from both parties fear that future jobs reports, the economy itself, could face a major hit as the Trump administration levies the steep new tariffs on steel and aluminum from U.S. allies, Canada, Mexico and European Union. The head of the Chamber of Commerce estimates these tariffs could put 2.6 million U.S. jobs at risk.
Our Chief Business Correspondent Christine Romans is here to break it all down. Let's begin with the jobs report.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: It was a good number and that there are really good number here. When you look at 223,000 net new jobs created in the month across all kinds of sectors, this was good. A power house jobs report indeed that shows that companies are hiring. In fact, what we hear from many employers is they are looking for workers. There are about 5.5 million or 6 million open jobs in America right now. The unemployment rate continuing this amazing recovery.
Now, 3.8 percent, that's the lowest unemployment rate since 2000. But, Poppy, it matches the lowest since 1969. For many Americans, we are right here at the lowest unemployment rate in their lifetimes. And you can see what that trajectory has been like since the financial crisis. We finally have good momentum in the economy.
A hundred and seven months now of job creation, that is a record in the American economy. We saw jobs in retail. We saw jobs in health care. Every month I tell you this. These are jobs across the income spectrum.
And in manufacturing, 18,000 jobs in manufacturing. There has been a bit of a comeback in the manufacturing sector over the past few months, in fact, the past couple of years. The question is will tariffs start to wreak havoc with these numbers? We can't say that for sure.
Right now all we know is that these job numbers look good. Wages up 2.7 percent. That's a little bit better than we've seen lately, Poppy. So that means that employers are having to pay us a little bit for challenge (ph) in this tight labor market.
HARLOW: It's a good jobs report. The tariffs on our allies, I mean, you know, one of the most striking headlines this morning that I saw was that we have now levied higher, more tariffs against our allies than against China.
ROMANS: And that's what some folks are saying is misguided about the White House policy here. And the allies are heading back -- our allies are heading back here. That Mexico is saying that it is prepared to levy tariffs on pork, fruit and cheese. The E.U. is saying they're going to go after denim, bourbon, motor cycles, these great American products.
Canada, I mean, is saying that it will give the same kind of tariffs right back and the Canadian Prime Minister, Justin Trudeau, saying how can Canada be a national security risk to the United States when Canada is supplying the very products to make American tanks and bombers. They just don't understand that and quite frankly, our friends and allies are angry.
The Commerce Department -- I'm sorry, the Chamber of Commerce, not the Commerce Department at all, the Chamber of Commerce has this estimate that, you know, some say might is the worst case scenario. But if these trade actions all go through, these are the kind of jobs they say would be loss. If this NAFTA collapsed, the U.S. would drop NAFTA 1.8 million jobs there, 134,000 from a Chinese tariff, 470,000 for metal tariff, and from other the 157,000.
Remember, the President wants America first. He wants to protect American steel workers. But we have a huge manufacturing base in this country that imports these metals, and so that higher prices will be passed on to American consumers.
HARLOW: Romans, thank you. Stick around, don't go anywhere. There's a lot of economic news this morning.
The President, Brianna, tweeting about these numbers, right?
KEILAR: Yes, that's right. It seemed, Poppy, like this tip off. That numbers were going to be good and the question now is did he break protocol?
CNN Kaitlan Collins is at the White House. Kaitlan?
KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Well, Brianna, this is the President known for breaking protocol. And this morning he appears to have done so once again, foreshadowing the jobs report before it had even been released. At around 7:21 this morning, the President tweeted, "He was looking forward to seeing the employment numbers, foreshadowing essentially that is was going to be good news in that report that came out at 8:30."
And you may wonder what the big problem would that is but there is a rule, Brianna, from 1985 that prevents federal employees from commenting on the jobs report until one hour after it has been released. So that would be at least 9:30. Now the White House is skirted (ph) this rule before commenting on the report after it came out, before that one hour was up.
But the President here tweeting about it over an hour before and it even come out. And the reason that's so significant is because these jobs report can reveal significant data that can lead to massive trends on Wall Street. So the President they are doing something quite unusual this morning, giving a heads up essentially to what this jobs report was going to include, Brianna.
[09:05:07] KEILAR: Kaitlan Collins. All right. Well, hang out with us. We're going to see you again here in a few minutes.
And joining us now, we have the President of the American Action Forum and former Head of the Congressional Budget Office, Douglas Holtz- Eakin. And from the University of Chicago, we have former Head of the Council of Economic advisers under President Obama, Austan Goolsbee with us. So Doug, you know, you are someone who advised Senator John McCain, right? So you have certainly a perspective. I wonder from your perspective, do the tariffs in any way help American workers in the economy from your advantage point?
DOUGLAS HOLTZ-EAKIN, PRESIDENT, AMERICAN ACTION FORUM: No. I think this is just, you know, this is bad every way you look at it. The only question is how large it's going to be. I think the really devastating part about this is they just handed a gift to China. If the United States can say steel is a national security issue, China can say, hey, high tech is a national security issue, we can protect it and impose tariffs and technology transfers and all sorts of things.
So, in terms of the larger international trade culprit they've identified, they've really taken a step backwards in the fight to make china obey international rules.
HARLOW: So Austan, to you. I mean, the Commerce Secretary Wilbur Ross gave an interview to CNBC on this and he said, look, this is going to affect less than 1 percent of the U.S. economy, it will create American jobs, that's the White House vantage point. And I guess their push back would be can you argue, Austan, that the current system is working, that in no way is China taking us for a ride right now?
AUSTAN GOOLSBEE, ECONOMICS PROFESSOR, UNIVERSITY OF CHICAGO: Look, Doug is completely right that this is a total gift to China. I believe that this dramatically raises the chance that China itself goes to our allies, Canada, Mexico and Western Europe and asks them to join China in filing a grievance at the WTO against the United States. And I think there's a decent chance that our allies would go along with China and do that. It would be borderline catastrophic if we engage in an all-out trade war with our major trading partners.
No offense to Wilbur Ross, but it's clear from his statement that he has not read any of the economic research about what are the impacts on jobs from imposing tariffs in the United States and in other places. This is going to destroy hundreds of thousands of jobs if it is put in place. I actually think that there's a decent chance that as the push back rises among American workers and American business people against these actions, that like many of the previous twitter- type announcements, they just won't do them. They'll back away and say we're going to put these off for a few months.
HARLOW: Well as you know, Brianna, that's what's happened at least the ones against our allies today.
KEILAR: Yes. Doesn't sound like it's being put off. And, Poppy, it's so worth pointing out to our viewers. They may look at Doug and Austan and say, wow, they agree on this, right? We are unified in our opposition to this and it's actually -- it's difficult to find voices who are in support of this because when you talk to a lot of economists, they aren't. And you talk to lawmakers and they aren't.
I mean, if you guys look at this, Doug, Speaker Ryan he has said this is a bad idea. Republican Senator Orrin Hatch, he said it will have damaging consequences. Republican Senator Ben Sasse says very simply, this is dumb. And he is pointing to history, right? He is noting protectionism that led to the great depression, the smooth holly act of 1930. He says make America great again shouldn't mean make America 1929 again.
Doug, do you think that the tariffs could have that dire of consequences that we're hearing Senator Sasse warn against?
HOLTZ-EAKIN: I'd say two things about that. First of all, this isn't an exercise in theory. I worked in the Bush White House in 2001/2002. President Bush imposed steel tariffs. There was damage to the rest of the economy that exceeded any gains to the steel industry. It went to the WTO and the WTO ruled against the United States.
So, I've been mystified by this action because they know they will lose and they know that there will be harm. You just have to look back at that episode
The second thing I'd say is the tariffs in and of themselves are not large enough to dramatically damage the U.S. economy. It's the rest. It's the fact that we have retaliation by our allies that escalates the damage. It's the fact that you endanger the NAFTA negotiations. That, you know, exacerbates the damage.
It's the fact that you're now taking your allies and giving them the opportunity to turn to China as an ally and go to the WTO. All of that is far more frightening than the impact of the tariffs themselves. HARLOW: We're out of time, but I would just note there was really interesting analysis this morning that I was reading in the New York Times and the up shot. It just said, Brianna, you know, the economy -- as Doug just point out -- can sustain these tariffs, right?
[09:10:08] The negative may outweigh, the positive we can sustain it. What it can't sustain long term is the erratic nature of what seem like improvised moves on this front consistently because businesses can't plan and that affects jobs. So, guys, thank you for being here. We appreciate it.
GOOLSBEE: Thank you.
HOLTZ-EAKIN: Thank you.
KEILAR: And this morning the President, Poppy, is questioning why Samantha Bee has not been fired after the late-night host used a vulgar term to attack his daughter Ivanka at the same time critics are still questioning why he has not denounced Roseanne's racist remarks.
HARLOW: Also North Korea ex-spy chief on his way to Washington today, set to deliver a letter personally from Kim Jong-un to the President. The latest on the efforts to salvage that summit.
And a CNN exclusive, former White House Chief Strategist Steve Bannon says the President's wrong when he attacks his own Attorney General.
HARLOW: Well this morning serious new questions about how the President is using his power to pardon and who may be the next beneficiary of it, just hours after pardoning a vocal supporter of his, who pleaded guilty to a felony I should note.
President Trump says he may do the same for Martha Stewart and Rod Blagojevich.
What do all these people have in common? Let's go to Kaitlan Collins back at the White House for us this morning. So?
COLLINS: Well, Poppy, it does seem to be a good time to be a celebrity who has committed a federal crime because the president seems bent on wielding his pardon power here lately.
Now, this latest pardon, Dinesh D'Souza is this conservative author who has floated conspiracy theories before. But the president had never even met Dinesh or spoken with him before this week. And when he called Dinesh to tell him why he was pardoning him, here's what he said.
(BEGIN VIDEO CLIP)
DINESH D'SOUZA, PARDONED BY PRESIDENT TRUMP: The president said, Dinesh, you've been a great voice for freedom and he said that, I've got to tell you man to man, you've been screwed. He goes I've been looking at the case. I knew from the beginning that it was fishy, but he said, upon reviewing it, he felt a great injustice had been done and that using his power he was going to rectify it, sort of clear the slate. And he said he just wanted me to be out there to be a bigger voice than ever defending the principles that I believe in.
(END VIDEO CLIP)
COLLINS: So, after that pardon, the president also floating several other pardons, including Martha Stewart and a former corrupt Illinois governor Blagojevich.
So, that is the question here. It raises the question of who the president is pardoning here and if there is this pattern of the president's perceived political enemies and people that he believes have been treated unfairly by the United States justice system, something the president has also said he has personally been a victim of being treated unfairly by the justice system.
So, we'll look forward going forward who the president plans on pardoning next, Poppy.
HARLOW: All right, Kaitlan Collins. I think you're working this weekend if that happens. Thank you very much for being here.
BRIANNA KEILAR, CNN ANCHOR: Poppy, what she said, it's a good time to be a celebrity who has committed a federal crime. Our Kaitlan Collins is pretty funny.
HARLOW: Leave it to her for the one-liners.
KEILAR: Yes. All right, let's bring in CNN political analyst Margaret Talev and Caroline Polisi, federal and white collar criminal defense attorney.
So, Margaret, if you look at the president's pardons, Dinesh D'Souza being the latest one, we have a list of them, but I want to make sure we separate out Jack Johnson because his conviction was seen as a racist misuse of the law. His posthumous pardon was broadly championed. So, that's a different thing.
But when you look at some of these, what are you seeing in terms of a pattern?
MARGARET TALEV, CNN POLITICAL ANALYST: You do see two things. You see either people who are themselves supporters of the president or who are supported by supporters of the president.
Or you also see people who were prosecuted by either Jim Comey or Pat Fitzgerald who is a close friend and former associate of Jim Comey's. You see people who were connected in some way to either having a conflict with the Obama administration or conflict with some of the people who the president believes are his enemies or going after him now.
So, you certainly do see that pattern also. You also see a pattern in some cases of financial crimes, campaign contribution crimes or misdeeds or questions about lying or being honest under oath and that being kind of the trick.
And that's part of why you hear a lot of the speculation about whether the president was trying to send a signal to Michael Cohen, for example. I mean, it's impossible to know what's in the president's mind. But perceptions matter.
And the reason why this perception keeps being discussed because of some of these tentacles that run throughout these examples of pardons.
KEILAR: And he's not doing it at the end of his time as president, right? He's doing it now.
TALEV: That's right. And he's also bypassed what had long been sort of a traditional path for pardons. It's a path that still exists in this White House as it has in others. There's a section inside the Justice Department that is sort of the office of pardons and there's a formal process.
But this is a different process. The pattern here involves somebody who the president is close with or connected with going to the president, saying would you consider a pardon for this person. And then, the president going back to his counsel's office and saying, hey, take a look at this.
KEILAR: Caroline, what's your read on this?
CAROLINE POLISI, FEDERAL AND WHITE COLLAR CRIMINAL DEFENSE ATTORNEY: Well, Brianna and Margaret, it's absolutely right.
Let's look at who prosecuted Dinesh D'Souza. Preet Bharara. He's the former United States attorney for the Southern District of New York. Trump fired him.
But it is that office, the Southern District that is now prosecuting Michael Cohen and we know that that was based on referral from special counsel Robert Mueller's office.
So, I think the implication is clear here. He's thumbing his nose at Southern District prosecutors in this instance and he's sending a clear message to Michael Cohen.
Margaret, it's also right that many of these crimes have a lot to do with sort of the question swirling around Trump and potential witnesses in the larger Russia investigation.
What was Martha Stewart convicted of? Lying to federal prosecutors, lying to FBI agents. That's what Michael Flynn pleaded guilty to.
[09:20:01] So, people are defending Trump in this instance, saying that it's his constitutional right, he has sort of an unfettered right to pardon whomever he feels, but the fact is this is a clear message. It couldn't be more clear, Brianna.
KEILAR: Is he saying, in your view, Caroline, if you defend me, I'm going to be there for you?
POLISI: Yes. And, look, Dinesh D'Souza, his whole take on this prosecution is not - remember, he pleaded guilty to those campaign finance violations, OK?
It was a straw man donation. He repaid friends to donate to a campaign. He knew he was breaking the law. But his whole claim on this was that he was selectively prosecuted by Obama administration officials.
So, the word that President Trump keeps using is unfair, unfair, unfair and these are all sort of prosecutions by Obama administration officials.
So, yes, clearly, President Trump is saying that you could lie to federal investigators, you can lie to FBI agents about these crimes.
Martha Stewart, I will just say, she was convicted of lying to federal investigators about an underlying crime for which there wasn't any evidence at that time.
Well, that sounds a lot like there's no potential collusion here, but there is an obstruction of justice investigation. So, the connections are just so, so many that you can't say that this isn't a clear message.
KEILAR: Margaret, while I have you here, listen to this. It's sort of my favorite image and soundbite from recent day or so. This is the former House Speaker John Boehner.
(BEGIN VIDEO CLIP)
JOHN BOEHNER, FORMER HOUSE SPEAKER: There isn't a Republican Party. There's a Trump party. The Republican Party has kind of taken a nap somewhere.
(END VIDEO CLIP)
KEILAR: He's going to need a nap after that Bloody Mary, right?
TALEV: That looked like a fun time for him.
KEILAR: I know. It looks like they had a good time. OK. But he's saying, it's over, it's the Trump party.
TALEV: But he went on to say something else too.
KEILAR: That's right. He did.
TALEV: And what he said was that when you separate all of the tweets, which is very hard to do, as you point out, and all of the kind of bells and whistles and color attached to all of this, and you just look at what the president has done, he thinks that a lot of it, whether it's in the realm of deregulation or in some of the foreign policy realm has been good for the Republican Party and the Republican Party's ideals. KEILAR: But the rhetoric is a disservice maybe?
TALEV: What you see is John Boehner trying to reconcile in a much more direct way, a humorous way what the basically entire Republican Party establishment, like in Congress, in statehouses and governors' mansions, rank-and-file in chambers of commerce, in voting districts is also trying reconcile, which is should they embrace - continue to embrace President Trump even if they find a lot of what he's doing personally distasteful because they see the upside to some of the policies that are being passed or should they resist or try to turn him away.
And Boehner is talking about it, but he's not the only one who's thinking about it.
KEILAR: No, he's not. Margaret, thank you so much. Caroline, really appreciate you being with us as well.
And the president is firing back at Samantha Bee this morning after her very crude comments about his daughter Ivanka.
And we're minutes away from the opening bell. Unemployment hitting the lowest level in decades. How will markets react? We are on it.
[09:27:44] HARLOW: So, this morning a lot of head scratching about why the president decided to slap huge tariffs on US allies.
You even just heard a conservative economist on our show calling it a win for China. It's also sparking backlash from some of the nation's top business leaders.
Bill Ford, the executive chairman of Ford Motor Company, just told me yesterday why it is such a bad idea. Listen.
HARLOW: The Trump White House has slapped 25 percent tariff on $50 billion of Chinese goods. Is that good or bad for America?
BILL FORD, EXECUTIVE CHAIRMAN, FORD MOTOR COMPANY: Well, I think any time you get into a trade war, it's not a good thing.
HARLOW: Does this get us closer to a trade war.
FORD: Well, it gets us closer. It doesn't necessarily put us in it.
I still believe, on balance, that free trade is the right thing because we've all seen before in other parts of the world where you start this and then there's a retaliatory movement.
HARLOW: China has vowed to retaliate.
FORD: Well, and then starts to escalate, and that's really not good for anybody. HARLOW: You talk to the president a lot on the phone. Or at least
you used to.
FORD: Not so much anymore.
HARLOW: All right. He used to call you for advice a lot. Did he call you for advice on this?
FORD: Not me personally, but our people have been talking to his administration about NAFTA, about the EU, about China and really the thought that trade ought to be, on balance, free trade.
HARLOW: In addition to this news on China, we've learned that the US will slap tariffs on imported steel and aluminum from our allies from the EU, from Canada, from Mexico. Is that good for American jobs?
FORD: Well, depends what you - I mean, overall, I don't think so. And the reason I say that is I believe this number is right. Or at least it's directionally right. There are 80 times more jobs around people who use steel than people who produce steel.
And so, if that's directionally correct, I believe it is, then you're putting those jobs potentially at jeopardy as the price of steel starts to go up. And the price of steel inevitably will go up with this.
So, we're not in favor of that. No.
HARLOW: Of course, Ford, a huge US jobs provider.
All right. Breaking news. Let's get straight to Wall Street. We're watching the markets open on this day after these huge tariffs were announced. Christina Alesci on the floor of The New York Stock Exchange.
Good morning. What's it looking like?
CHRISTINA ALESCI, CNN MONEY AND POLITICS CORRESPONDENT: Good morning. Investors definitely in a better mood today after being spooked yesterday by those aluminum and steel tariffs.