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HALA GORANI TONIGHT

Trump-Kim Summit Back On Track For June 12th In Singapore; Giuseppe Conte Sworn In As Prime Minister; Pedro Sanchez Becomes Spain's Prime Minister; Visa Card Network Crashes In Europe; The Brutalized Women Of El Salvador's Gangs; ; Allies Hit Back At U.S. Tariffs; Europe's Political Turmoil; Audiotapes Reveal Michael Cohen's Attack Dog Tactics; Evacuation For Parts Of Hawaii Due To Lava Threat. Aired 3-4p ET

Aired June 1, 2018 - 15:00   ET

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


(COMMERCIAL BREAK)

[15:00:16]

HANNAH VAUGHAN JONES, CNN ANCHOR: We begin with breaking news. The on- again/off-again summit between the United States and North Korea is now back on. That's the headline after a historic afternoon at the White

House. President Donald Trump met with a top aide to Kim Jong-un in the oval office.

They walked out just minutes ago as the cameras roll, even pausing for a brief photo op. Kim Yong Chol was sent to hand deliver a letter to Mr.

Trump from the North Korea dictator. These were the U.S. president's first words to reporters.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: We will be meeting on June 12th in Singapore. It went very well. It's a get to know

you kind of a situation. Mike has spent two days doing this. We've gotten to know their people very well. And we will -- you people are going to

have to travel, because you'll be in Singapore on June 12th. I think it will be a process. It's not -- I never said it goes in one meeting. I

think it's going to be a process, but the relationships are building, and that's a very positive --

(END VIDEO CLIP)

JONES: Let's get right to the White House reporter, Jeremy Diamond, for more on this. Jeremy, what was in that letter?

JEREMY DIAMOND, CNN WHITE HOUSE REPORTER: We don't know. Apparently neither does the president at this point. The president at the very end of

his remarks there saying that he actually had not yet opened the letter from Kim Jong-un. Instead, he spent more than an hour, almost an hour and

a half with Kim Yong-Chol, this very senior North Korean official, one of Kim Jong-un's top aides.

The president coming out and saying definitely we will be meeting on June 12th. Over the last few days, we have heard from the White House, expected

summit, possible summit. Today, the president is telling the press corps, you people are going to have to travel to Singapore, because we will be

there on June 12th.

So, it's interesting and we will have to see in the hours to come how much of that certainty comes from the meeting that he actually had just now with

that senior North Korean official, how much of it came from the other conversations that U.S. officials are having at the demilitarized zone in

Singapore to try and prepare for this summit.

What we do know about that letter is simply that it was positive. It gave U.S. officials the sense that this summit would be able to go forward. But

again, we don't know specifically what was included in that letter.

But the president really there making not only stunning comments in terms of the relationship with North Korea, the warmth that he believes is

developing between the U.S. and North Korea, but also the images that have come from meeting with this senior North Korean official, Kim Yong-Chol.

Both of them walking from the oval office out to the south lawn of the White House, shaking hands, posing for a picture there. It really is

stunning to see how much the relationship between these two countries have developed.

But it's also, of course, a sign of things that have happened before. In 2000, when Bill Clinton hosted senior North Korean military official at the

White House in the oval office and they pose for pictures.

There was also this talk of a potential warm, new relationship. So, it is important to kind of look back on those signs from the past as we look to

this. But again, I think it is notable that they did not have this photo- up inside the oval office.

It appears that that was a step too far that the White House did not want to hand that kind of a photo opportunity to the North Koreans.

JONES: Also, of course, all the cameras are outside. This is a made for tv moment, which President Trump is very much in favor of. Jeremy, do you

think this is PR coup for both sides, though?

I mean, we have seen the president throughout his administration meet and greet visiting dignitaries. Never have we seen him walk someone out to

their car, and pretty much strap him back into the seat.

DIAMOND: It's quite stunning. Again, I think that there's going to be a lot of analysis by people far smarter than me on the North Korea issue

determining who this is a win for. But I think we will determine that over the coming weeks and see where this actually goes.

If this actually does go in a substantive direction, then I think a lot of experts will say, look, the president did the right thing here. Clearly,

the North Koreans were serious, and he was right to offer them this kind of PR victory of having a photo op at the White House.

If there's no substance to these discussions and talks fall apart in the coming weeks, then I think the North Koreans are going to be looking pretty

good here as far as having a pretty substantial PR victory.

But again, it's just one of those many things that the North Koreans have gained over the last weeks and months since President Trump accepted that

invitation to meet with Kim Jong-un. They've met with the Chinese president twice now, Kim Jong-un has.

He met yesterday or two days ago with the Russian foreign minister. You know, all of these meetings would not have happened, and all of these photo

opportunities would not happen had the president not accepted this invitation in the first place.

[15:05:13] So really, I think we're going to have to wait and see where these talks actually head to determine whether or not it was a smart move

on the president's part.

JONES: Yes, and of course, now the summit is due to take place on June the 12th. It's 10, 11 days from now. There was so much concern beforehand

when it was first on the go that there wasn't -- there simply wasn't enough time for all of the diplomats involved to really, you know, create the

narrative for this particular summit.

The president very clear to say that he thought this was going to be the start of several meetings. Maybe that's significant, the fact that this

isn't just one summit. This is the start of a process.

DIAMOND: It is. I think what we're seeing from the president here is also a little bit of tempering of expectations. You know, he has done a really

bad job at that so far because he's really heightened the stakes of this, signaling that he could win a Nobel Peace Prize, signaling that peace could

be achieved almost in a single meeting.

Today, he was very clear in saying that this will be the first meeting in potentially a series of other meetings and it's kind of the beginning of a

conversation here with North Korea to normalize the relationship.

Also, what was interesting is to hear the president say he doesn't really love the term maximum pressure campaign anymore using that in the midst of

all these discussions.

That's something that U.S. administration officials have really emphasized, is the importance of maintaining that pressure campaign until North Korea

actually takes concrete steps toward denuclearization.

I don't think the president was signaling that he was going do away with any of that pressure campaign, but certainly, he was signaling at least a

shift in rhetoric which is going to be notable and something that other world leaders are going to look to.

JONES: Jeremy, thanks so much.

Let's get more on the stunning development from the White House. Jean Lee is the director of the Center for Korean History and Public Policy at the

Wilson Center. She joins me now from Washington.

Jean, great to see you. I want to pick up on what Jeremy was just talking about there about maximum pressure. Donald Trump in the past has talked

about imposing maximum pressure on North Korea. Now he says he doesn't want to use that term anymore. What does that -- what does that mean to

you?

JEAN LEE, DIRECTOR, CENTER TO KOREAN HISTORY AND PUBLIC POLICY: He did say that he mentioned sanction. He mentioned how powerful they are. He did

mention in his comments afterwards that he had a slew of sanctions that he warned North Korea that he was prepared to unroll if things don't fall into

line.

I think that this is a good thing that he is backing off discussion about Libya, for example. The North Koreans have been living with sanctions for

quite some time. They understand that language.

They understand that it's a diplomatic tool as well, but just the fact that he's backed off of the Libya model -- I should say the White House has

backed off the Libya model is a good step.

That is also a softening of language that we should take note of and that I think is a step in the right direction. Yes, trying to move away from the

language of maximum pressure and speaking in a language that the North Koreans understand is a good step as well. You have to be able to

communicate with them and give them something to work with.

JONES: What do you make of the length of this meeting as well? I mean, beforehand, we didn't know how this was all going to play out. We didn't

know whether he was just going to hand over this -- this North Korea diplomat would hand over a letter and then just walk out again.

But, they were talking there for some two hours and yes, it seems we don't know and certainly, well, perhaps the president doesn't even know what the

contents were of that letter from Kim Jong-un.

LEE: He says he didn't open the letter. I suspect he knows what the content is. I'm sure some of that information was relayed. I suspect that

some of that was relayed even before he agreed to meet with the envoy and he would be happy with the content.

But he just said that he hasn't read the letter. I think it's very clear that this is a president who operates on instinct. He operates from the

gut and perhaps when things are going well, he wants to stay with it.

He walked out of this meeting on a high. Clearly, it went well. He himself said, I expected to hand over of a letter and wasn't expecting a

two-hour conversation. But it certainly bodes well in terms of whether this summit will be back on or not.

JONES: And denuclearization, this has been the big sticking point for both sides over the last a couple of weeks at least, (inaudible) been trying to

work out whether this summit is going to take place or not. Do you think that in the two-hour meeting they just have, they find that out, both now

stand on the same side as far as denuclearization is concerned?

LEE: I think it's possible we will see both leaders saying yes, we support a nuclear-free Korean Peninsula. They can both embrace that concept. How

they're going to get there and what that actually means is still going to be very difficult for them to get on the same page about.

And I think that that hesitation that we saw on the president's language about how -- whether they would be able to unveil a big deal at the first

meeting reflects the fact that he is starting to understand how complicated this is.

JONES: And Donald Trump did make reference to the fact that Sergei Lavrov, the Russian foreign minister was in Pyongyang, I think it was a couple of

days ago. He said he didn't like that.

[15:10:06] Do you think that the negotiations going on now between North Korea and the United States are aimed in part at pushing out all of the

other players so that they don't interfere anymore, the likes of Russia, China?

LEE: When you are dealing with North Korea, it is always very complicated because North Korea is very good at shutting people out. So, when somebody

does have access, that does make all the other people -- partners in the region nervous, both allies and foes.

But I would say the smartest thing for all of the players in this region to do is to stick together and stay united and stay in communication so that

they can't be divided. They all have different interests. We need to recognize that. But it would work to their disadvantage if they were to

start competing for favor and access with North Korea.

JONES: Jean Lee, we so appreciate your expertise on this topic. Thanks so much for joining us on the program.

And for our viewers watching across the world right now, stay with us, because we will, of course, be staying across this story as things develop.

This has been happening in the last couple of minutes. So, we'll come back to this story about U.S./North Korea and new relations throughout the

course of the next hour.

But for now, let's turn to Europe where it seems seismic political changes are happening almost by the hour. Two of the continent's biggest countries

have seen sweeping changes to their government.

Just today, in Italy, Giuseppe Conte will head up a populist and euroskeptic government after months of crippling uncertainty. While in

Spain, Mariano Rajoy has been unceremoniously dumped out of office, replaced by the socialist leader, Pedro Sanchez.

Let's get you to Rome first where a head spinning political week has come to a conclusion. Delia Gallagher standing by for us there. Delia, Italy,

no stranger to political turmoil, but how confident is this government and the Italian people that this coalition can actually stick?

DELIA GALLAGHER, CNN CORRESPONDENT: That's an important question, Hannah, because in the coalition the two leading parties, you have the Five Star

and The League, represent quite different demographics.

The League, a sort of traditional anti-immigrant party from the rich north, and the Five Star, the rather new populist outsider party which has a lot

of support in the south. Let's take a look at just how this government was formed.

(BEGIN VIDEOTAPE)

GALLAGHER (voice-over): In a week worthy of its own Italian opera, protagonists of Italy's political scene entered and exited the presidential

palace to gain President Mattarella's approval for their new government.

The fate smiled on this man for prime minister, Giuseppe Conte, plucked from obscurity of his (inaudible) Florence and sent away at first by the

president because Conte's choice for finance minister was a euroskeptic.

But Conte came back with a new list of ministers and the euroskeptic had been moved to minister for European affairs. The president agreed. There

was a cry of impeachment of the president by the leader of the Five Star Movement, Luigi Di Maio -- who is now the minister for welfare. The

impeachment was called off.

Meanwhile, the European chorus and financial markets echoed a worrying refrain that Italy might leave the euro. The Italian lead sang back, the

euro was safe, Italy did not want to exit.

(on camera): And that was only act one. Now the curtain rises on a new day, one which sees Italy governed by a right-wing populist coalition that

wants to send 500,000 immigrants back to their homelands, raise public welfare spending and cut taxes. A large looming debt hangs over Italy's

head.

(voice-over): This man will be the one to watch rising to stardom from the wings. Mateo Salvini of the right-wing League Party, who just hours before

becoming minister for the interior posted this on his Facebook page.

"Go home," he says to the immigrant on Italy's streets. A victory for some is a defeat for others. So, we come to the end of our tale of Prime

Minister Conte and his court. An end which is really but a beginning.

(END VIDEOTAPE)

GALLAGHER: And beginning, Hannah, begins now for Italy. The prime minister and his ministers have been officially sworn in and will have a

chance now to put their campaign promises into action -- Hannah.

JONES: And we will be watching to see all the next developments there. Delia Gallagher live in Rome for us, thank you.

[15:15:02] Now if Giuseppe Conte is the quintessential political novice, then Mariano Rajoy was one of Europe's longest serving leaders but no more.

He was pushed out after a vote of no confidence. It's the first time it happened in Spain's modern democratic history.

It follows a raft of corruption scandals against Rajoy's party. Pedro Sanchez is the new man in power. He is the leader of the Socialist Party

in Spain.

Still to come on the program tonight, the trade war is on. We will tell what you products Europe, Mexico, and Canada plan to tax as retaliation for

U.S. tariffs.

And what's Trump got to do with it? Despite the new tariffs, U.S. employers aren't shying away from hiring. Stay with us for more.

(COMMERCIAL BREAK)

JONES: From shoppers to travelers, business owners to banks, Europe is struggling with major disruption this Friday night after Visa's payment

system crashed living many without access to their money.

The company says, quote, "we are currently experiencing a service disruption which is preventing some Visa transactions in Europe from being

processed. We are investigating the cause and working as quickly as possible to resolve the situation. We will keep you updated." But for

many as you imagine, that is simply not good enough.

Nina Dos Santos is here with more on this. Just how widespread a problem this is?

NINA DOS SANTOS, CNN MONEY EUROPE EDITOR: Well, it seems it's all over Europe and in particular here in the United Kingdom and also the Republic

of Ireland. We know that people are being badly affected by this. You are seeing tons of stories here.

People saying, I ended up at the supermarket with my trolley full, 300 pounds worth of goods, and I couldn't pay for it because none of my cards

are working. This is the key thing I want to point out. It's not just credit cards.

This one is Visa obviously is also things like debit cards as well because in the United Kingdom, 95 percent of debit cards actually are processed

through the Visa system as well. So, the problem is that even if your credit card isn't working, your debit card might not be working either.

There's some anecdotal evidence that cashless touch payments are working on debit cards. Some people are managing to get money out of ATMs through

their Visa debit card. ATMs are running out of money because the reality is we're just not used to carrying that much of this.

JONES: Well, you mentioned before about this blowing up on Twitter. We have a couple of tweets we can bring up now. One person saying, on holiday

in Sicily, (inaudible) has messed up and Visa down means card declined for trains. We owe our host 350 euro and need to get to Paloma from

(inaudible) for flights. Can you help?

Someone else, massive outage to Visa network, I never carry cash. Similar for so many of us. Angela saying, first time I've left without paying for

my fuel. Good job my local garage knows me.

[15:20:03] DOS SANTOS: Well, let's first of all point out that it's just Visa that seems to have been affected. So, if you have other cards like,

for instance, American Express, Mastercard, both of those two card companies are saying that their cards are working. That's the good news.

It is just one system it seems.

We have contacted the National Cyber-Crime Center in the United Kingdom, which says that they don't believe it's a hack here and instead it's been

the Bank of England that's responsible for the payment system here or policing the payment system of Visa that has come out and responded saying

that they too are aware of the situation currently affecting Visa and are engaging with the firm to try and resolve this situation.

But let's put it this way. It's about 8:30 p.m. here in the United Kingdom, so 9:30 p.m. across the European continent. We haven't had

another statement from Visa since the one that you mentioned. That's going to be concerning for many people because Visa is the biggest credit card

company anywhere in the world.

To give you an idea of the staggering size of the transactions here, it handles $1.2 trillion dollars' worth of transactions globally and that's

about 850 million cards out there.

JONES: And you talked before about this cashless society that we all moving into as well. There's a psychological impact on this as well, isn't

there? Because being cashless is good and well until technology fails you and then it's somewhat unnerving.

DOS SANTOS: Yes. A lot of our colleagues here, we are broadcasting to you from Central London. A lot of our colleagues, it's a big retail district

this is. Something like 77 percent of the total U.K. retail sales last year were done via things like Visa.

I can't get into the underground station because all of those payments as well swipe in, swipe out often done by a Visa contactless cards. The shops

are shutting doors across parts of London and that could potentially cost a number of retailers an awful lot of money.

It's not just hassle here for the consumers. Perhaps even difficult situations like your holiday being ruined and perhaps worse, it's also

potentially millions or hundreds of millions of dollars in compensation claims from some of those retailers as we head into the weekend.

JONES: Exactly. The weekend is just ahead. We'll see how Visa cards (inaudible). Nina, thanks very much indeed.

It is a statistic that's almost impossible to comprehend. A woman murdered every single day, often raped and abandoned. Imagine if that was happening

where you live. Tragically, the people of El Salvador don't need to imagine. That's the reality of gang violence there.

It is a reality our Nick Paton Walsh has exclusively been able to investigate, but I must warn you, Nick's report contains images that are

deeply disturbing.

(BEGIN VIDEOTAPE)

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): What you are about to see at the side of the highway on a very ordinary

morning happens to women in El Salvador every 19 hours. This is where Jennifer (inaudible) was shot eight times at dawn on her way to work, age

22, clothes surround her angles, scuff marks on her knees.

Her shoes are put to side, handed to her mother who heard the gunshots and found her daughter's body. Even police here fear to show their faces.

Nobody will talk. It was the gang Barrio 18.

Out here, far from the city, used to be safe from gangs. But now, Jennifer's wake is silent with only fear filling the stifling air. A daily

toll mounts and its graphic scenes follow.

One in every 5,000 women here is murdered each year, the highest rate in the world by some counts and only one in 20 crimes ends in conviction in El

Salvador. Gang culture is at its most twisted with women.

Gang raped as an initiation rite, or conversely, if their family are police or military, gang drug mules or sex slaves, forced foster parents to the

children of gang members and sometimes they are the assassins themselves.

Across town we gained rare access to where the gang's targets turned hit men end up. This women's prison is cramped, but this is comparatively good

for El Salvador.

(on camera): A jail is so rarely place for sympathy. Women are so often dragged in to barbaric gang culture and often find themselves on the

receiving end of a violent society.

(voice-over): Here we meet Roxanna, who belonged broadly to the gang that killed Jennifer. She's 37 and remembers how she murdered a male gang

member to end up here.

ROXANA, FORMER GANG MEMBER (through translator): Perhaps I was scared. Scared because it was the first time in my life something like that

happened. I was scared, but when I realize what I have done, the police had arrested me.

[15:25:09] WALSH: That's the name of her son, Rafael, 24, on her arm, a gang member killed in gang violence. He died four months ago on this day

she says.

ROXANA (through translator): It was very painful for me because I didn't want him to follow my very same path. But before I realize, he had become

a gang member already. I wasn't able to do anything for him.

WALSH: She remembers her initiation into the gang Barrio 18.

ROXANA: I got kicked and hit. That was necessary to be a part of it.

WALSH: How long did that last for I ask.

ROXANA (through translator): Eighteen seconds. Yes, there are women that go through worse. Sometimes they are raped, beaten up, mistreated.

WALSH: She was young when she joined. It wasn't her choice.

ROXANA (through translator): My father died, and my mother was an alcoholic who left us. I looked after my five brothers and that's how I

end, up on the streets and in the gangs. I thought it was a game and in the end it was. Well, I w inside here, I lost my son, my mom, all of those

I loved. Most people I knew when I joined are dead now.

WALSH: While they have victims of their own, they were likely once victims themselves. A cycle of brutality, that drags El Salvador deeper into

(inaudible) despair. Nick Paton Walsh, CNN, San Salvador.

(END VIDEO CLIP)

JONES: Coming up on the program this evening, much more on our top story. The U.S. summit with North Korea is very much back on.

Plus, political turmoil in Europe as a euroskeptic party takes the reigns in Europe.

And Mariano Rajoy loses his grip on power in Spain. We will unpack what that means for the continent coming up next.

(COMMERCIAL BREAK)

JONES: A reminder of our breaking news, Donald Trump has confirmed that he will indeed meet North Korea's leader on June the 12 in Singapore. That

was the summit the U.S. president had previously canceled. Mr. Trump seems to have changed his mind after meeting a top North Korean envoy over

the past couple of hours.

The president also received a letter, a letter from North Korea's Leader Kim Jong-un. He says he hasn't read that letter yet. Although, that does

seem to contradict what he told this reporter moments ago.

(BEGIN VIDEO CLIP)

[15:30:00] DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, this was a very good meeting. This was a meeting where a letter was given to me by

Kim Jong-un and that letter was a very nice letter. Oh, would you like to see what was in that letter? If you like it. How much? How much? How

much?

UNIDENTIFIED FEMALE: Could you give us a flavor of the letter?

TRUMP: It was a very interesting letter. At some point, I may be -- it may be appropriate. I'll be able to give it to you maybe. You'll be able

to see it. And maybe fairly soon. But really, this was a letter presentation that ended up being a two-hour conversation.

(END VIDEO CLIP)

HANNAH VAUGHAN JONES, CNN INTERNATIONAL HOST: Well, for more on all of this, let's speak to Joseph Yun the former U.S. special representative for

North Korean policy. He joins us from Washington. Great to see you.

So, Donald Trump says of this letter, it was a very nice letter, it was a very interesting letter. Do you think that they could have had that two-

hour conversation without the president having read that letter?

JOSEPH YUN, FORMER U.S. SPECIAL REPRESENTATIVE FOR NORTH KOREAN POLICY: I tend to doubt it. I think I'm sure he has read it. He's just not yet

prepared to share the contents of the letter yet.

JONES: And what compromises, if we assume there have been compromises, what are they that will have been reached on both sides of this in order to

get this June 12th summit on the go again?

YUN: Hannah, I think we have seen some historic development, I would say, over the last few months. And as you saw with Pompeo talking with Kim's

special envoy, both in Pyongyang as well as in New York, as the dialogue happens, you're going to change your expectations and this is exactly what

has happened. Gone is the talk of all in one denuclearization. Now, the magic word is process. Process means we're going to at least come

together, talk about it and build something that will get to a solution. You know, frankly, you can call it backtracking. But I think it is good

thing that certainly Washington is realizing the incredible difficulty about negotiating with North Korea. Similarly, North Koreans are realizing

that President Trump is serious. So both their Expectations are inching towards each other, but I would say they're still far apart.

JONES: Joseph, I want to know how extraordinary these picture were for you when you first saw this. This, of course, all happening in the last hour.

Donald Trump walking outside of the White House with a top, top aide to Kim Jong-un. I'm wondering how comfortable you felt and perhaps the rest of us

should all feel by being the leader of the free world cozying up to a brutal dictator while at the same time seeming to casually dismiss longtime

centuries old allies.

YUN: Well, you know, Hannah, this is a tough issue. Diplomacy is about getting together with those you don't trust, you don't like, you've not

liked in history. And getting together to see whether a deal could be struck. So in that sense, I can understand there will be some people who

feel that this is too much. You know? But at the same time, I think if you have to meet, you have to discuss. So why not be civil about it? So

in that sense, I personally would not be critical. But I can understand many people who may feel uneasy.

JONES: The president speaking very candidly after this meeting took place, speaking to reporters. He said when he was asked about U.S. aid, money

potentially going to North Korea, as part of these negotiations, he said he didn't foresee much American money going to Pyongyang. He thought that

South Korea would take care of that. What do you make of that?

YUN: Well, I think in tone itself private investment, direct investment in terms of big ticket items like infrastructure, there is a lot of interest

in South Korea. And, of course, South Koreans feel it more than anyone else that they want an opening, they want to have reconciliation, they want

to have better relations with North Korea. But I would imagine also Japan, there will be a lot of money going in. Remember, Japanese have never paid

reparations to North Korea as they did to South Korea somewhat 50 years ago. So I think North Koreans feel they are owed big reparation money due

to the war and before.

And also, investment from China will be significant. And Chinese investment are big there already. And I would also expect Russian

investment. Remember that North Korea, the tip of it touches on Russia. So in that sense, you know, a lot of private investment as well as official

investment you can expect from the region.

[15:35:21] JONES: Joseph Yun, fantastic to talk to you on the program this evening. We appreciate your time, sir.

YUN: Thank you.

JONES: Now, no one formally declares a trade war. However it appears the U.S. is now in one with its closest allies. European Union, Mexico and

Canada are all lining up their own tariffs in response to the U.S. implementing new steel and aluminum import taxes. The retaliatory tariffs

will target a wide range of U.S. products from cheese to blue jeans to beer kegs. The E.U. has also lodged a formal complaint with the world trade

organization saying the U.S. tariffs are unfair.

(BEGIN VIDEO CLIP)

FEDERICA MOGHERINI, E.U. POLICY CHIEF: We believe in global free fair trade and we will continue to do so. This is why we are multiplying the

trade agreements with our partners in the world. This is our clear position on global trade. Having said that, clearly the European Union has

to defend its interests. And this is why as announced by the president yesterday, the European Union will today proceed with the WTO dispute

settlements case and impose additional duties on a number of imports from the United States.

(END VIDEO CLIP)

JONES: Well, meanwhile in the United States, employers don't seem to be bothered by possible tariff backlash. In fact, America is seeing the

lowest unemployment numbers in 18 years. The labor department reports overall unemployment is down to 3.8 percent. The U.S. economy added

223,000 new jobs just last month. But the positive economic numbers aren't silencing Mr. Trump's critics. Some say he violated a 1985 law that

prevents officials from commenting on jobs reports until after they are released. Mr. Trump tweeted about the jobs report about an hour before it

was made public.

Well, my next guest says so-called Trumpanomics is indeed working. Stephen Moore is a senior economics analyst to CNN. He's also a distinguished

fellow at the Heritage Foundation and a former Trump economic advisor. Stephen, great to have you on the program. Thank you.

Let's talk trade war to start off. Donald Trump has said in the past that he thinks that they can be a good thing. Can trade wars ever be good as

far as diplomatic and economic relations are concerned?

STEPHEN MOORE, CNN SENIOR ECONOMICS ANALYST: Well, I don't think so. Look, I'm a free trade person. I don't think there's any question about it

that the huge expansion and world output over the last 25 or 30 years has really been no small part attributable to the reduction in trade barriers

across the world. So that's been a good thing.

I happen to think that some of these tariffs that Trump is talking about and the president knows that I disagree with him on some of this stuff. I

don't think it would made a lot of sense to have those auto tariffs or the aluminum and steel tariffs. They may actually end up costing the United

States more jobs than they say. I think what the administration should be doing is really concentrating on China.

Because there are a lot of problems with our trading relationship with China. They are stealing a lot of our technologies. They are -- they

don't give us access to their markets like we do theirs. But if you want to have a trade dispute -- I'm not going to use the word trade war. You

want to fight that fight at a time when you have your allies with you, not against you.

JONES: There's no doubt that the jobs figure are certainly looking good for Donald Trump at the moment. I'm wondering though based on what you

just said as well, could the tariff measures undermine that progress? Is Donald Trump sort of hedging his bets that the pain from any retaliatory

tariffs won't be felt on the American consumer until after the midterms, for example?

MOORE: Well, let me say this. I think one of the things that your audience has to understand about Donald Trump is that his best-selling book

is called "The Art of the Deal." This is a man who knows how to negotiate. I really do believe, talking to my sources at the White House that this is

an opening bid. This is his first poker chip that he's putting out there.

We'll see how the rest of the world responds. We're hoping that the response will be to lower tariffs, because after we actually have lower --

basically, the lowest tariffs in the world. There are a couple of countries that are lower than us, but not Japan, not Korea, not China, not Germany,

not China -- I mean, not Canada. So Trump wants these other countries -- they want a level playing field. They want these other countries to bring

their tariffs down to the levels that we have in the United States.

JONES: Donald Trump said just in the last hour. He said I like free trade but I prefer fair trade and went on to say that the E.U. can't believe that

they've got away for this -- for as long as they have. I mean, you're a believer in Trumpanomics. You think it's working. If it is working, how

reliant is Trumpanomics to effectively throwing your allies under the bus?

[15:40:07] MOORE: Well, the reason Trumpanomics is working is because we did a huge tax cut last year, which has been extremely pro-growth. We're

getting investment from all over the world in the United States, thanks to that. And also there's been a lot of deregulation, a very pro-American

energy policy that's added a lot to our growth rate. BY the way, today, we just had a report by our Atlanta federal reserve bank that tells us that

our economy is growing a 4.7 percent, which is enormous. We haven't grown like that in a long, long, long time.

And so those things are pro-growth. I think the tariffs could take a little the wind out of the sails of the economy. I think that this is a

bad time to be imposing tariffs, because for one thing, we have more jobs than we have workers right now.

JONES: You were saying before though that you hope that maybe tariffs would come down. If the rest of the world wants to get on board with

Trumpanomics and actually be a part of a game in and say Emmanuel Macron and France wants to get on board with his buddy in the U.S. How does

France play Trumpanomics? Do you just not respond to these tariffs?

MOORE: The goal is here to get every country to lower their tariffs. And I think if you were talking to Donald Trump right now, I don't want to put

words in his mouth. But I think what he would say is we don't have a level playing field. This is not free trade that we have right now. And I

talked to a lot of businesses, CEOs of major companies who say it's almost impossible for American companies to penetrate the China market. If China

puts so many restraints on American companies' ability to sell there. It's one of the reasons we have a $300 to $500 million trade deficit with them.

We've lowered our tariffs but they haven't lowered their trade barriers to us.

So I'm hoping -- this is early in the stage to the game that what Trump is trying to do is get every country to lower their tariffs and that would

make everyone better off.

JONES: Well, we wait and see. Great to get your perspective on this, Stephen. We appreciate it. Thanks very much indeed.

Now, still to come on the program tonight, what is next for Europe? As political change sweeps across the continent. We bring the state of Europe

into focus, next.

(COMMERCIAL BREAK)

JONES: Welcome back. A Euro skeptic government is now stilled in Italy sounding alarm bells from some pro-European leaders across the continent.

Throw in some political upheaval in Spain and expected reaction to President Trump's tariffs, plus the ongoing on the issue, of course, of

Brexit and there's suddenly a lot to the continent to think about at the moment.

So let's dig in to all of these issues. I'm joined by political commentator, Nina Schick. Nina, great to see you. Let's talk about Italy

to start off with. Giuseppe Conte has installed back as prime minister now. And we've got a euro friendly economy minister there. But where are

the other possible collisions that we could see this new Italian government hit as far as the E.U. is concerned?

NINA SCHICK, POLITICAL COMMENTATOR: Well, it looks as though we'd be heading to new elections. But the fact that Five Star and Lega Nord have

put forward a new cabinet means that we can finally form this government putting to end three months of turmoil. Nonetheless, this still sets the

scene for a big clash with Brussels, because both the Five Star movement and Lega Nord are very Euro skeptic. Even though the clash with the

president was about the Euro, per se. The Euro won't come into question immediately, but they'll be fighting Brussels on migration. They'll be

fighting on the E.U. budget and they'll also be fighting Brussels on the sanctions that the E.U. have put on Russia after the Ukraine crisis.

[15:45:23] JONES: How nervous is the E.U. as an institution going to be, not just at the idea of a populist party being in control in Italy and

being jittery about that, but even the phrase, the term, Italexit being coined?

SCHICK: Well, I think the E.U. will be very nervous. They'll be looking at the populist government that's been installed and even though they

haven't had a legitimate debate about leaving the Euro, they've made no bones about the fact that they want to renegotiate their position with

Europe and especially Lega Nord which got 17 percent in the elections in March and increasingly looks to do better according to opinion polls. They

are very Euro skeptic. The fact that they wanted to appoint a finance minister who has a plan b to leave the euro would de facto lead to a

sovereign debt crisis and Italy sleepwalking out of the euro. So although that has been put on ice for now, I think this has been a play out for a

long time to come.

JONES: Moving on to Spain then. Mariano Rajoy is now out. He said before the vote of no confidence against him, he said that if he went, it would

unleash a Frankenstein movement momentum against him. Are the mobsters now out or are they just now moving into the mainstream?

SCHICK: I think Spain is certainly not as in perilous water as Italy. The fact is that Rajoy has slowly brought his country back to growth. We had

three percent growth in the past two years. Spain is on task to get 2.7 this year. The new socialist prime minister had said that he's going to

keep to this fiscally conservative budget that's not an anti-E.U. euro skeptic kind of new government. Nonetheless, the new prime minister has

certainly have his work cut out, because he's going to be head of the smallest minority government since Franco last died in 1975. A lot of his

allies who came around him to kind of oust Rajoy will now be pushing for new elections. In particular, the center right and center left parties

Ciudadanos and Podemos who are Spain's populist parties, if you will.

JONES: It'll be interesting to see how long their anti-Rajoy sort of coalition can last for. But also given the fact that we've had all these

independence movements, particularly in Spain movement as well. What is this kind of like turmoil in Madrid mean for those kind of movements

elsewhere?

SCHICK: Well, it was really interesting that the Basque kind of separatists and the Catalan separatists actually gave the socialist PM the

vote he needed to oust Rajoy. Politically, especially Catalonia is going to continue to be a live issue, but I don't think at the moment that it's a

particularly perilous one, because the Catalonia in population is divided on independent. And as long as the leaders of this secessionist movement

do not want violence, I think that is going to rumble on. But for the moment, I don't think that's an actual ticket.

JONES: The E.U. is kind of fighting for its very survival at the moment in terms of Brexit and others potentially following suit with a kind of domino

effect. Even more important then for the E.U. as an institution presumably to stand up and fight when it comes to tariffs and the United States

president are certainly imposing them.

SCHICK: Absolutely. The E.U. is on an onslaught on every single angle right now. And it's almost is the crisis in modern liberal democracies.

So the fact that you have these trade wars with the U.S. particularly being ally. The E.U. stands for democracy and free and open market. So when

your ally start questioning that and then within the organization you have the third and fourth largest economy in such political turmoil, I think

that the E.U. has a lot of fires to fight going forward.

JONES: And what do you think -- Donald Trump has shown that he would flip on his policy positions quite lot. We've seen that and just what happened

with North Korea over the course of the last hour. Is there a chance that these tariffs might not be imposed and that maybe as we heard from our

previous guest, he hopes that Donald Trump's position will mean the tariffs actually come down across the world? And that will be the response from

the E.U., might it have the reverse effect all together?

SCHICK: Well, who knows with Trump what's going to happen? And of course, he takes a lot of pride and the fact that he's unpredictable. And in his

book "The Art of the Deal" he says to get what you want, you basically walk away and to threaten the nuclear option, then you come back to the table.

Nonetheless, I think the general trend is clear. With Donald Trump's America first protectionist rhetoric, this is not good news for Europe.

And particularly not for countries who are espousing free trade, free and liberal open markets. It's trying to clear and it's not good for the E.U.

He says he's all for free trade but prefers fair trade. But we'll see how that translates across the Atlantic. Nina, great to see you. Thank you so

much.

Now, more to come, including he's being accused of attack dog tactics when defending U.S. President Donald Trump. Well, you can judge for yourself

after hearing attorney Michael Cohen on tape.

(COMMERCIAL BREAK)

[15:50:05] JONES: He is known as the fixer for Donald Trump. The protector, even. Some say the pit bull. Now, Attorney Michael Cohen's

tactics are under new scrutiny after audio tapes emerged of him making threats to a journalist in 2015. Well, that journalist had written a story

about Donald Trump and his first wife, Ivana. Have a listen.

MICHAEL COHEN, LAWYER FOR U.S. PRESIDENT DONALD TRUMP: You write a story that has Mr. Trump's name in it, with the word rape, and I'm going to mess

your life up for the rest for as long as you're on this fricking planet. I'm going to turn around. You're going to have judgments against you, so

much money, you'll never know how to get out from underneath me.

JONES: Well, Cohen has since responded by saying he made an "inarticulate" statement based upon what he calls a horrific question posed by that

reporter. We definitely need a lot more details on this. Let's bring in Brynn Gingras who is live in New York for us. Brynn, just explain for us

the context of how these audiotapes came into being.

BRYNN GINGRAS, CNN CORRESPONDENT: Yes. It's first important to mention him that Michael Cohen apologizing for those statements. That was an

apology back from 2015 when this original article was written by this reporter. He hasn't apologized again most recently when that reporter, who

I spoke to yesterday, reached out to him saying he was going to release this audio and then also CNN reached out as well. So no response there.

So it's important to note that. But the context of this was this reporter was a reporter for The Daily Beast in 2015.

He now works for NPR. And he was reaching out to Michael Cohen in 2015 based on the story with Ivana Trump claiming that she was raped by her

husband. Those were in divorce proceedings back in the 1990s. Now, he was questioning about that as it was coming up, somewhat in the campaign, early

stages of the campaign and he wanted comments from Cohen. It's also very important to note, Ivana Trump has since backed down from that statement.

She also said the report by The Daily Beast was without merits. But still, that's the tirade that that reporter faced and then he dug up that audio

most recently and released it.

JONES: And why did he release it now? What does this reveal and why might that be relevant about Michael Cohen's character?

GINGRAS: Yes. Well, like I said, he was a reporter for The Daily Beast in 2015. He currently now works for NPR and he told me that NPR in their

newsroom, they were discussing about this series of threatening tactics that Michael Cohen exhibits. And they were just discussing about how they

could explain that story, or they could do that story and this reporter said, well, you know what? I actually recorded a conversation with him

back in 2015. And so they released seven minutes of that audio. A really explicit seven minutes. The reporter told me on the phone that, at first,

the conversation was cordial, it was fine and then it did escalate. But that was the reasoning behind the release most recently and it's very

compelling, because it's the first time that we're actually hearing Michael Cohen, his voice, in these threats, which have been wildly reported that he

would make on behalf of the president as his personal fixer and attorney.

JONES: Brynn, it's a complex story. We appreciate you for explaining it for us. Thank you very much indeed.

A mandatory evacuation order is in effect for certain parts of Hawaii. Officials fear some residents could be trapped by fast flowing lava from

the Kilauea volcano if they don't get out. There's no way to predict when it will stop. But scientists are getting a bird's eye view of where the

lava is headed. CNN's Scott McLean reports.

(BEGIN VIDEOTAPE)

SCOTT MCLEAN. CNN CORRESPONDENT: If there's lava on the move, so is drone pilot Rose Hart.

UNIDENTIFIED FEMALE: You guys ready? Clear props. Launching.

MCLEAN: Her small crew from the University of Hawaii at Hilo has been up all night, every night, since Kilauea first started erupting almost a month

ago. They're documenting the lava's movement using drones. Not for long- term research, but to inform hour to hour decisions.

[15:55:09] You guys are an essential service.

UNIDENTIFIED MALE: I feel like we are.

MCLEAN: As the lava moves, the group's routine stays largely the same. Fly.

HART: We're just about 100 meters altitude, currently 97 percent battery.

MCLEAN: Take photos. Upload the data.

UNIDENTIFIED MALE: So this is an esri base map.

MCLEAN: Analyze it.

UNIDENTIFIED MALE: It doesn't appear to have lightened here.

MCLEAN: And repeat.

HART: There you go.

MCLEAN: This week, they watched as a massive fast moving lava flow cut off highway 132, creeping down it for two miles, leaving a pile of shifting

lava some 10 feet high.

UNIDENTIFIED MALE: It'll be seemingly cool at the surface. There's actually still a lot of heat in there.

MCLEAN: Some of that lava is headed toward another highway, the only remaining escape route for some communities. Officials have now given some

neighborhoods an ultimatum. Leave or be prosecuted.

JANET SNYDER, HAWAII COUNTY SPOKESWOMAN: This is an order that is a formal order that does mandate that they leave.

MCLEAN: Fed by massive fissure shooting 200 feet into the air, the drone team calculates how quickly the lava is flowing. At times, it's been up to

600 yards per hour. A snail's pace for a person. But lightning fast for lava.

HART: You can clearly see that there's movement.

MCLEAN: Movement that virtually nothing can stop. Not homes, cars or even entire forests.

UNIDENTIFIED MALE: Trees don't do much to slow lava.

UNIDENTIFIED MALE: No, if the volume is there, there's not much that will.

MCLEAN: Scott McLean, CNN, Hawaii.

(END VIDEOTAPE)

JONES: Finally, this hour, the FIFA world cup is still two weeks away. But one of the balls is already being kicked around and it's being kicked

around about 400 kilometers above the earth.

Two Russian cosmonauts on the international space station played space football with one of the balls that will be used in one of the world cup

opening matches. Some members of the crew and, of course, the ball are due back on earth this weekend, just in time then.

Thanks so much for watching tonight. Stay with us here on CNN. "QUEST MEANS BUSINESS" is coming up next.

(COMMERCIAL BREAK)

END