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Trump's Lawyer, Michael Cohen, Breaks His Silence; Leftist Andres Manuel Lopez Obrador Wins Mexico's Presidential Election; Trump Administration Drafts Bill to Abandon Key WTO Rules; E.U. Threatens U.S. with $300 Billion in Tariffs. Aired 9-9:30a ET

Aired July 2, 2018 - 09:00   ET

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


[09:00:08] ERICA HILL, CNN ANCHOR: Good Monday morning, I'm Erica Hill. Poppy has the day off.

President Trump's longtime attorney Michael Cohen breaking his silence. Could he also be signaling the end of his days as the president's loyal fixer? Cohen has been tight lipped in the months since he's been under criminal investigation by federal prosecutors in New York. This morning, however, in an interview with "Good Morning, America," he made it clear his highest priority is his family, not the president, saying, "My wife, my daughter and my son have my first loyalty and always will. I put family and country first."

CNN national political reporter MJ Lee joins me now. He also said, MJ, that he feels like he's been made to look like a villain in this story. He was pretty candid on a number of points.

MJ LEE, CNN NATIONAL POLITICS REPORTER: Yes, that's right. I mean, Michael Cohen appears to be sending a clear message that he is no longer the guy who's just going to take a bullet for Donald Trump, his former boss.

He was asked more than once at the course of this ABC interview about loyalty. Will he go out of his way to protect Donald Trump? Will he put Donald Trump before his own family? And Cohen made it very clear that he's going to put his family and his country first but he went a step further than that. He said that he's not going to be used by anyone and that he is not the bad guy.

Here's a part of what he said. He said, "I will not be a punching bag as a part of anyone's defense strategy. I am not a villain of this story and I will not allow others to try to depict me that way."

Now it's striking because as you said he has been laying low ever since the authorities raided his home a couple of months ago and now we are seeing a clear tone of defensiveness.

HILL: It's also interesting he was, of course not surprisingly, asked about this now infamous $130,000 payment to Stormy Daniels.

LEE: Right.

HILL: He didn't have as much to say about that, though. LEE: Yes, you know, what is more telling I think than what he did

say, it's also what he didn't say. You're right that he was asked about the $130,000 payment that he made to adult film star Stormy Daniels back in 2016 very shortly before the election and keep in mind what he has been saying all along. He has always said, look, I did this on my own, this was action that I took on behalf of President Trump who was my boss. And he didn't have anything to do with this. He didn't even know about this.

Well, take a look at what he actually said to ABC this time around. He said, "I want to answer, one day I will answer, but for now, I can't comment further on advice of my counsel." Now to be clear, this is what he was asked, did President Trump ask you to make this payment? Did he promise that he would reimburse you? And he's now saying I actually can't go there. So very telling that he's refusing to answer that question when up until now he has said yes, I did this and I did this on my own.

HILL: The non-answers that say so much. As they always do.

LEE: Right.

HILL: It was also interesting that he does not seem to share the president's view when it comes to the FBI.

LEE: That's right. He appears to be distancing himself from Donald Trump and two areas where he did this I think is worth pointing out. One is the FBI raid of his home, his hotel room that we're all so familiar with now. Remember that when this happened Trump said that this was disgraceful, that this was an attack on our country in a true sense. He was clearly angry about it.

Michael Cohen is now saying, quote, "I don't agree with those who demonize or vilify the FBI. I respect the FBI as an institution as well as their agents. He said that the agents were actually very respectful and courteous when they raided his home.

The second area where he is now distancing himself from Trump is the Mueller investigation. Of course we know that President Trump has been calling this a witch hunt and being very skeptical about what intelligence officials have said about Russia meddling in the 2016 election. Well, Michael Cohen is now saying this. He said, "I don't like the term witch hunt. As an American, I repudiate Russia's or any other foreign government's attempt to interfere or meddle in our democratic process and I would call on all Americans to do the same."

He also added and this appears to be a statement directed at President Trump, "Simply accepting Putin's denial is unsustainable. I choose to believe our intelligence agency." So the substance of what he's saying, Erica, is very interesting but I think more importantly, the tone is very, very telling.

HILL: It certainly is. We're going to dig in to a little bit of that now.

MJ, appreciate it. Thank you. Joining me now, CNN Chief Legal Analyst, Jeffrey Toobin and CNN Senior

Political Analyst, Ron Brownstein.

I mean, Jeff, before we even dive into everything that was said and what wasn't said, I find it surprising that this interview happened at all, do you?

JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: I do. And I suspect that was against his lawyer's voice. Guy Petrillo is a very experienced lawyer, particularly a negotiator with the government. And that's just something that lawyers generally recommend against. It's better to let a lawyer negotiate with the prosecutors rather than do it through the news media. But, you know, people talk to the news media, especially famous ones like George Stephanopoulos, for all sorts of reasons to satisfy their own ego, to make themselves seemed important.

[09:05:05] Fortunately they do because we like when people talk to us. But I think it was bizarre of him to do this. And I don't think it's particularly helpful.

HILL: What about, though, in terms of timing, Ron? Do you think there's something more that we could read into that especially in terms of what seemed to be some sort of a signal to the president there?

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Well, yes, I mean, you know, if you -- the other option was to, you know, talk privately to the prosecutors. I mean I think, you know, one reason to do this in public is so that the president knows that you're doing it and exactly why he wants the president to know that he's doing it I think is another question.

I mean, this interview sort of reminded me a little bit of old time burlesque. It gave the impression that maybe more were shown that actually was. In that he made a lot of comments that were suggestive that he had things to say but he also went on to say that he was not aware of any collusion. He did not -- he was not involved in any collusion. He denied the allegations in the dossier that he went to Prague, as you'll recall from the -- you know, the dossier way back when.

So, you know, exactly what -- so often in the Mueller investigation we have been blindsided and I think the only cautious and prudent kind of approach to it is to recognize it is an iceberg where most of it is below the surface and exactly where this is going and what it means I think we will not know for many weeks.

HILL: Well, and Jeff, too, just remind us. This is -- we're talking about Michael Cohen being investigated by the Southern District of New York. I mean, what would the impact be on the Mueller investigation if anything here?

TOOBIN: Well, if he were to decide to cooperate, if he were to, say, plead guilty to some sort of offense in the Southern District, which was related, let's say, exclusively to his business career and agree to cooperate, he would have to cooperate with the entire Department of Justice and that would mean the Mueller investigation, too, even though the guilty plea would be through a separate set of prosecutors.

Once you agree to cooperate with the government you agree to cooperate with all of the government. You can't just say well, I'll talk to these prosecutors but not those prosecutors. One of the parts of a deal when you make a deal is that you give up your right to pick and choose which government investigators you're going to talk to.

HILL: The other thing that's interesting in terms of messaging the president tweeted I believe it was back in April, "Most people will flip if the government would let them out of trouble, even if it means lying or making up stories. Sorry, I don't see Michael doing that."

Now I guess you could read that a couple of different ways. He doesn't see him lying, he doesn't see him making things up, doesn't see him flipping.

But, Ron, is it also in some ways setting Michael Cohen up so that if he does decide to flip in the eyes of the president, well, he was just a liar anyway, he was just doing it to save himself?

BROWNSTEIN: Yes, look, I mean, I think the history of loyalty with the president is that he expects a one-way street. And I don't think anybody would suspect for a moment that he would hesitate about turning on anyone short of immediate family if -- maybe even immediate family if he thought they could hurt him.

I just continue to be more intrigued by what is the message that Michael Cohen is sending to the president if he is trying to send one. Is it fear me? Is that the message? Is the message fund me? Because as we know he has asked him in -- there have been reports in the past that he's sought, you know, financial help, or is the message fund me or fear me, right?

I mean, it's hard to know exactly what he is saying but I think the choice to do this and to not do it on FOX where he would be signaling kind of sympathy for the president, to go on ABC with George Stephanopoulos it is a shot across the bow I think at the White House but what his ultimate intent is I think is still too early to tell.

TOOBIN: And can I just say as a former federal prosecutor.

HILL: Yes.

TOOBIN: Just to respond to what the president said in that tweet. Federal prosecutors do not actually get people to lie. That is unethical, it is illegal. So the idea that prosecutors just allow people to lie when they cooperate, is just -- you know, it's something that not only a president of the United States shouldn't say, anyone who's informed about the way the American legal system works should know that that's just not how federal prosecutors work in this country.

HILL: I'd also like to thank you, Jeff, for answering my next question before I had to ask it. So thank you.

What's fascinating is what we didn't hear from him when it came to Stormy Daniels. Of course he's going to asked about that payment which he said from the beginning, you know, I just did this -- I did it out of goodwill for my client. I was just trying to help out here.

Jeff, is there anything in that answer that stood out to you?

TOOBIN: Well, what it was an non-answer. I mean, he said he would not really discuss what went on with Stormy Daniels. Michael Cohen's public -- public responses to the Stormy Daniels situation have varied a great deal over time. At first he said he paid the money out of his own pocket out of the goodness of his heart. Something that no lawyer in the history of American law has ever done. That -- that explanation has since been, you know, revised when Rudolph Giuliani said well, there was a reimbursement formula with the president where he repaid a certain amount per month.

[09:10:15] I don't think we know really what went on with the Stormy Daniels payment. All of that is I think very much influx. We'll see if the documents that the FBI seized shed some light on it. But that is something that obviously would be of a great deal of interest to federal prosecutors.

BROWNSTEIN: And you know --

HILL: Jeffrey Toobin -- we're going to have leave it there, guys. We're out of time.

BROWNSTEIN: OK.

HILL: Appreciate it. Thank you both.

BROWNSTEIN: Thank you.

HILL: Happening overnight, a landslide victory for Mexico's next president, Andres Manuel Lopez Obrador.

(BEGIN VIDEO CLIP)

ANDRES MANUEL LOPEZ OBRADOR, MEXICO'S PRESIDENT-ELECT: Viva Mexico. Viva Mexico. Viva Mexico.

(END VIDEO CLIP)

HILL: The left-wing former mayor of Mexico City vowing sweeping change and new a relationship with the United States. President Trump congratulating Lopez Obrador in a late-night tweet saying there is much to be done that will benefit both countries. What will the relationship look like? Kind of tough to say. Mexico's president- elect is considered a populist like Mr. Trump but the two disagree on big issues like the border wall and NAFTA.

Joining me now from Mexico City, CNN's Leyla Santiago. Leyla, good morning.

LEYLA SANTIAGO, CNN CORRESPONDENT: Good morning, Erica. Yes, Andres Manuel Lopez Obrador, over here he's known as AMLO, and man, it was a big party last night from supporters because his message really resonating with voters. They believe he is the man that will tackle corruption as well as violence. I mean, we're at an all time high when it comes to homicide here. And while those were the domestic issues, there is no doubt that this could really be a change in terms of the U.S.-Mexico relation.

Last year AMLO saying that he wants friendship, he wants cooperation in development with the U.S. and then he wants mutual respect for both sides. But here's the deal. I mean, there were some pretty big issues that could be a point of contention for the two leaders, the leaders of the -- the leader of the U.S. and Mexico. It starts with immigration.

AMLO wrote a book called "Oye, Trump," translated that is "Listen Trump," in which he really fights back against the idea of the wall and Trump's stance on that saying the wall is not a solution to anything.

And then there's trade. NAFTA, that free trade agreement between Canada, U.S. and Mexico. Much like Trump, AMLO is saying this is not a good deal for my country and I want to put Mexico first. A lot of the analysts here comparing Trump with AMLO saying that they're very similar in that sense. So this could be very much a change in dynamic in this relationship. But where it will go, that's something we'll be monitoring for a while I think.

HILL: Leyla Santiago, joining us live. Leyla, thank you.

Also with us, David Sanger, CNN political and national security analyst, who's also the author of the new book "The Perfect Weapon: War, Sabotage and Fear in the Cyber Age."

David, as we look at this, AMLO as he's known in Mexico, very clear, the wall in his mind is not the solution. He likes the idea of Mexico first when it comes to NAFTA, which obviously sort of on the heels of the thinking of President Trump but obviously different country. How do you envision this relationship playing out?

DAVID SANGER, CNN POLITICAL AND NATIONAL SECURITY ANALYST: Well, the first thing to note is that this was really more a vote against the establishment, against the PRI than it was against Trump. I mean I was surprised as the campaign played out the degree to which Trump was sort of in the background but was not the central issue.

I think it will now shift to become more the central issue because what the new president can do about violence will be slow if he's able to do anything at all. But his first encounters with President Trump will be pretty notable because they'll be coming at a moment where the president is making his decision about NAFTA, which he said he won't make until right after the election.

And it's because the president clearly is going to move ahead with at least the rhetoric of the wall and maybe some of the physical construction no matter what the Mexicans say.

HILL: When it comes to trade, how much leverage does Mexico have in these discussions at this point? SANGER: Not much. I mean, they have some leverage at the beginning

of this process because there are products that the United States relies on and car makers rely on and some electronics makers rely on. But in the end, the overwhelming size of the American economy gives President Trump almost all of the leverage here.

HILL: What about globally? So obviously we can talk about North America here but on a broader scale, what could this president-elect mean for Mexico?

SANGER: Well, you know, we're seeing more of the wave of populism and the question is, you know, what form it takes in Mexico where it's taken, you know, a left of center candidate. I thought it was sort of interesting that he moved more to the center in this election than he had in sort of previous bids.

But populism is the order of the day. And the problem when you get populism as the order of the day is it actually reduces the negotiating space for leaders because they get worried about losing a base to whom they have overpromised.

And that's President Trump's problem. And I suspect that will be the problem as well as Mr. Lopez Obrador begins to figure out how he negotiates with the U.S.

HILL: We'll be watching to see how it plays out. David, appreciate it as always. Thank you.

Sanger: Great to be with you.

HILL: Speaking of how things are playing out, getting a little uglier when it comes to Europe. The E.U. now threatening more tariffs if President Trump decides to penalize auto imports. What this trade fight means for you.

Plus, new satellite images from North Korea show construction at a missile plant. What does it say about North Korea's willingness to abandon its nuclear program.

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[09:20:20] HILL: A new window this morning into the White House's thinking on trade. The Trump administration drafting a bill that would give the president more power to change U.S. trade policy on his own.

A White House official says the bill would move the U.S. away from World Trade Organization's principles and allow the president to increase tariffs without - and this is key here, without going to Congress first.

Joining me now to talk about it, CNNMoney Chief Business Correspondent, Christine Romans and CNN Senior Economics Analyst, Stephen Moore, a former Trump economic adviser.

So, first, Christine, lay out for us here. Based on what we know, how would this actually work? Is it even realistic?

CHRISTINE ROMANS, CNNMONEY CHIEF BUSINESS CORRRESPONDENT: Well, I mean, look, people close to the president, some of them are saying it's not realistic and it's not very easily workable, but it shows you what the president has been thinking and how he feels as though these big huge sprawling collective organizations the United States is involved in, somehow are unfair to the United States.

Look, the whole principle of WTO is that there's no discrimination against trading partners and you can't set tariffs above certain rates that are set. It's about collective rules.

And the WTO more often than not, when the United States goes to the World Trade Organization with a complaint about other countries, the U.S. wins, right?

So, it's unclear exactly what kind of advantage the president wants to wrest from this, but it shows you where he's thinking and what his trade policy is, that he wants to - again, America first, maybe America alone, but he has suspicion of these global organizations.

HILL: Suspicion is one thing. But this could be a tough uphill battle, to put it mildly. See, there's pushback, we know, from Republicans already when we talk about tariffs.

As Christine mentioned, folks involved with the drafting of this reportedly saying it's unrealistic or even unworkable. Is it worth pushing forward on it?

STEPHEN MOORE, CNN SENIOR ECONOMICS ANALYST: This was a classic shot at the bow. Trump is very frustrated with the WTO because he believes that they are not siding with him when, in a lot of cases, I think, he has a legitimate trade gripe with some of our trading partners.

I've said it before on CNN and I'll say it again that the United States has lower tariffs than most of the other countries that we're in disputes with.

And I think Trump is frustrated that the WTO has not really sided with the United States and some of our legitimate grievances.

Now, that said, do I think the United States is going to drop out of the WTO? No, I do not. As Christine said, this is sort of the referee of trade disputes and I think Trump is just trying to say, look, I'm frustrated with you.

And one other quick point. We are a sovereign country. There's no reason that we have to abide by what the WTO says. And I think that's what Trump is declaring here, we're not going to be ruled by WTO.

HILL: It's also interesting that we're hearing this comes down what the president sees as being fair or unfair. And, Christine, this is a common word that the president used in terms of his messaging, it's all about fairness.

And that is a word that plays very well with the American public. ROMANS: Look, he's really confident that the economy is so strong

here and people around him think that the economy is so strong here that he can get tough and stay tough on trade here and that, ultimately, they think that worldwide tariffs are going to come back down to more like what the U.S. is paying, more fair along U.S. lines, U.S. rates. And that's what they want to see.

The escalation and retaliation is a real worry here. We already have Canada imposing tariffs yesterday on a bunch of stuff on the U.S., $12.5 billion. That's exactly the amount that was the steel and aluminum tariffs. Everything from steel products; 25 percent, steel products. And a bunch of other goods, including maple syrup, toffee and everything like that.

But that's one thing. But when you start talking about cars, which the president is also talking about, that's the real big game globally.

HILL: Well, and when we look at that big game globally, so you've got Canada we've got more coming from China at the end of the week, the European Union threatening even more.

This is really, Stephen, in a lot of ways, it's a high stakes game of chicken, right, and the president, we've been told, is negotiating, right, and he's not going to blink.

MOORE: I agree with that.

HILL: But yet, when do you get to the point where you may actually have to think about blinking? How far do you think President Trump will go here?

MOORE: Look, I agree with what Christine said. I would just add one thing to it. Having talked many times to Donald Trump about this over the last couple of years, he also believes that the United States has a leverage here.

Let's take Canada. Canada needs access to the American market. There's no question about it. The Canadian economy is so directly tied to the U.S..

Now, of course, we benefit from trade with Canada as well. But he believes that these other nations benefit more by having access to the American massive consumer market.

And this is a kind of a tit for tat situation we're in right now. You're seeing it from the Europeans. You're seeing it from Canada, Japan and China. But Trump, I think, ultimately, believes, look, these countries have more to lose than we do.

[09:25:09] One other quick point is that this was not widely reported, but I think it's important because I've been over at the White House talking to the trade team over the last week or two.

They really do believe that Donald Trump wants a reduction in global trade tariffs. He doesn't want a trade war. He wants these other countries to bring the tariffs down and he put on the table, by the way, in Canada three weeks ago the idea of a zero tariff. Why doesn't every country - let's have a real level playing field and cut to zero.

HILL: Which is fascinating. I hear you. I feel like you want to jump in on that.

ROMANS: The question is, Stephen, there's always the risk of escalation or the risk of something going wrong and I -

MOORE: That's true. No, this is a dangerous game. That's right.

HILL: I mean, if it were clear what the strategy is, I think maybe the markets and people in the markets will be a little more comfortable.

MOORE: I agree.

ROMANS: I mean, you're going to have some trouble with the stock market. The stock market - the Dow for the year is a little bit flat, after being up 30 percent since the election. There's some worry that the president is going to slam the brakes on some of his progress if this trade dispute gets out of control because history is rife with good intentions on trade that have just blown up, right?

MOORE: Look, you're exactly right. The stock market has dropped to, what, about 800 or 1,000 points since this trade tiff began. You're right. This is a rocky time for the stock market and for the future of trade.

The president really believes that he's going to win here, that he's going to be able to use this leverage to lower the tariffs worldwide.

And by the way, if that happens, you're going to see that stock market go through the roof, but it's going to be some rocky weeks ahead.

HILL: We'll have to watch, especially as we see - we know that, on the other side, the tariffs that are coming back at the U.S. specifically targeted in many ways to hit areas where President Trump has done very well politically.

Christine, Stephen, always appreciate it. Thank you both.

MOORE: Thank you.

HILL: One week from today, the president says he will announce his pick, his nominee for the Supreme Court. Already some Republicans are leery of who that nominee may be to replace Justice Anthony Kennedy. We're live at the White House after a break.

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