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U.S. Intel: North Korea Has No Intentions of Full Nuclearization; 12 Kids, Coach Found Alive, Not Yet Rescued After 9 Days Trapped in Cave; Scaramucci Warns Against Trade War as Canada Strikes Back; Strzok Attorney Blames Republicans for Leaking Testimony, Setting Trap Democratic Division as Calls Grow to Abolish ICE;; . Aired 2:30-3p ET

Aired July 02, 2018 - 14:30   ET

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

[14:30:00] JIM SCIUTTO, CNN ANCHOR: Welcome back. New concerning evidence from North Korea possibly restarting their nuclear program.

I want to bring in Duyeon Kim, a visiting senior research fellow at the Korean Peninsula Future Forum in Seoul.

Thank you for joining us today.

We now have one of America's own intelligence agencies, the Defense Intelligence Agency, saying in its view North Korea has no intention of fully denuclearizing. As you look at the results of the Trump/Kim summit in Singapore just a couple of weeks back, is there evidence now that North Korea deceived Trump at that summit?

DUYEON KIM, SENIOR RESEARCH FELLOW, KOREAN PENINSULA FUTURE FORUM: Thanks for having me Jim. So far no, we haven't seen any steps that North Korea is taking to denuclearize. Unfortunately the Singapore statement did not contain any details that commit the north to any sort of denuclearization measures. So. Unless -- unless there's a side confidential agreement between Trump and Kim Jong-Un. We don't know that. But there's nothing in the statement that events North Korea from conducting business as usual.

Also, North Korea, before the Singapore summit, they announced that they will no longer test their nuclear devices and no longer flight- test missiles. OK, but that's nothing to applaud, because they can still produce fissile materials, they can still produce nuclear weapons even though they are not testing. Again, there's nothing in place that holds them accountable. And even though, you know, the latest news, of course, if they are true, they are not -- they do not help the negotiations in good faith. But that apparently seems to be something that Pompeo needs to work out going forward.

SCIUTTO: Right. No small thing going forward. So the DIA saying that its assessment, North Korea does not want to give up its nuclear weapons. You also have these new satellite photos reported first by the "Washington Post" that shows that there has been additional construction at at least one of these nuclear facilities, a missile plant where they make at least parts of missiles that could strike as far as the U.S. It was interesting in that piece to note that that construction seemed to be taking place on the same day that Trump was meeting Kim. How concerning a piece of evidence is that in your view?

KIM: Oh, this is very concerning. Again, this does not help the good faith measures in this diplomatic negotiating process going forward. But also it's not a surprise. Again, there's nothing in place that prevents them from doing this. That is what we need to negotiate. Now, there will be forces that will try to derail the negotiating process going forward. And as risky as the process is and as skeptical as I am about North Korea's intentions, negotiations really are the best option we have if they are allowed to function properly.

Now, also, you know, Kim Jong-Un, we need to remember that Kim Jong-Un in his New Year's Day address he ordered his scientists to mass produce nuclear war heads and ballistic missiles.

So, again, the bar should not be -- whether we applaud or not is whether North Korea is testing anything. It should be whether they are testing and whether they are producing fissile materials and nuclear weapons.

SCIUTTO: And whether they are truly dismantling those facilities going forward. Still no evidence.

Duyeon Kim, thanks for taking the time.

KIM: Thank you.

SCIUTTO: Just in to CNN, inside really just a dramatic rescue. A youth soccer team found alive deep in a cave nine days after they first vanished. But the mission to get them to safety still not over. They are still down there. They still need to get them out. We are getting the first pictures from inside that cave. We will bring those to you, next.

(COMMERCIAL BREAK)

[14:37:53] SCIUTTO: It's our privilege now to bring you some happy news. A miracle playing out in northern Thailand. After nine days of frantic searching through dark flooded caves, you are looking at brand-new images. These are the first images the boys inside the cave. They are tired, scared, but they are alive. All 12 boys from the Thai soccer seem have been found, and their coach. International rescue teams, including Navy SEAL divers had joined the search. The boys range in age from 11 to 16 years old. That's the first video of them inside that cave.

They went missing in an afternoon outing. It was thought they became trapped as flood waters inundated the cave they were in. They are now undergoing medical evaluation. They haven't been brought out of the cave yet. It's going to take a lot of work to get them out of the cave. But they are alive, receiving care, and are seeing doctors.

I want to bring in Butch Hendrick, a rescue diver, and president and founder of Lifeguard Systems.

Butch, thank you for joining us. You've got a lot of experience. I know you have been developing rescue procedures for rescues just like this one. These guys were two miles into this cave system obviously under threat from the water. I understand they are now pumping out 1.6 million liters an hour just to make rescue possible. How hard was it getting to these kids? And how much danger were they in in there?

BUTCH HENDRICK, PRESIDENT & FOUNDER, LIFEGUARD SYSTEMS: Just getting to the boys would have been incredibly dangerous because the majority of the individuals going in, like the SEAL team or not trained for that type of a mission. If you think of taking a glass cup of coffee and trying to look through it, that's the minimum how that water was after the flood. They couldn't see where they were going. So there wasn't a standard get in the water and look in the locations. They are feeling their way in black blindness all the time. Then trying to figure out how many different arms there are in the cave and where they might be specifically. They have also got to work in extreme time window. We think of our air in, one third out, and a third left for emergencies. When we look at that, they would have been bringing tanks in so they could continue to get forward. It was simply a monumental project.

[14:40:16] SCIUTTO: You have not -- these boys in there, they are teens, some as young as 11 years old. How would they have been able the survive in there for nine days. There's a lot of water. The kind of water you describe, I don't know how drinkable that is, but how would they have been able to make it that long.

HENDRICK: They would not, in my opinion, have been able the drink that water. Any fluids they had, they brought in with them. They had to be extremely hypothermic, dehydrated, and obviously everybody sustaining at some point. I would think that possibly their coach simply, like a good commander for a military group, kept them going and kept the nucleus, saying we have only got to go a few more hours, one more day. He wasn't looking at how long they had been there. He had to be looking at positive attitude all the time.

SCIUTTO: No question. I can imagine.

Now, I imagine it's still going to be quite a feat getting them out of there if you have got to extract this much water just to access them. There's still a risk going forward?

HENDRICK: Without a doubt. We also don't know that it's not going to rain again. But they have got to move the water and assure that the water is not going to find its way back in. I would be looking and thinking that every one of these individuals, these boys are non- swimmers. They have to think of how they are going to be capable of coming into the water to get them out and medically treat them because they are barely alive. They have to be triaged first.

SCIUTTO: The fear factor, I imagine, as well, after all they went through.

Butch Hendricks, thanks very much for taking the time.

What a relief for those boys and their parents. Happy news.

HENDRICK: Thank you.

SCIUTTO: Coming up next, is the U.S. trade war becoming a reality? Canada, of course, one of America's strongest allies, is now striking back with its own retaliation.

Also, new details about a July 4th terror plot foiled on U.S. soil. The FBI revealing the intended target.

(COMMERCIAL BREAK)

[14:46:45] SCIUTTO: Canada is now retaliating against U.S. steel and aluminum tariffs by slapping its own penalties on American imports. Europe may hit back ever harder. The Canadian government imposing tariffs on U.S. exports worth percent than $12 billion. More than 40 U.S. steel products will face tariffs of 25 percent. Eight other American items, including, coffee, maple syrup, coffee beans and beans and strawberry jam will be taxed 10 percent. The European Commission is warning that nearly $300 billion worth of U.S. goods could be affected by count measures if the Trump administration goes ahead with tariffs on imported cars and imported car parts.

Joining me now too discuss, Leigh Gallagher, assistant editing manager for "Fortune" magazine.

Big picture. People have been discussing for weeks how we are entering trade-war territory. When a country is imposing $300 billion worth of tariffs, this is not easily lost in the wash. Are we in a trade war?

LEIGH GALLAGHER, ASSITANT EDITING MANAGER, FORTUNE MAGAZINE: We are. That's what they do, they escalate. There's a tit for tat. You do it to me, I do it back to you. The whole world suffers.

We've seen today, a few pieces of news. Canada imposed the tariffs it first announced at the end of May when we first announced our tariffs against them. Prime Minister Trudeau said we are going to do it against you beginning July 1st. At the same time, President Trump has floated the idea of a 20 percent tariff on imported automobiles from Europe. Now Europe has come out in a sharply worded letter saying that this is going to result in $300 billion in counter measures. Basically, the counter-measures are always in proportion to what the initial measure was.

SCIUTTO: Reciprocity.

GALLAGHER: Yes.

SCIUTTO: Let me ask you this. I know that the Trump administration early on, they purposely targeted products that consumers would not notice very easily. Up the supply chain somewhere so it doesn't pop out when they are buying tough of stuff at the store, et cetera.

GALLAGHER: Beer cans. SCIUTTO: Beer cans. Now when you are talking about 20 percent on

cars, that's a significant number. And a car is something where someone sees that price tag clearly.

GALLAGHER: Yes. That's why we saw G.M. last week come out strongly and say this is going to impact us. It's going to mean we are going to have fewer jobs, we are going to have to raise prices and we may have to move our own manufacturing. It has reverberations here. The irony is we have many European car makers operating huge facilities in the south, in Trump country. And estimated 500,000 jobs or more.

SCIUTTO: It's not as simple as Germany makes all of their cars here and send them here.

GALLAGHER: No.

SCIUTTO: They make some here and, for instance, send them to China.

GALLAGHER: This is the thing about trade. Trade is no longer -- it's like President Xi last year said at Davos, it is a global ocean and we finally learned how to swim.

SCIUTTO: An iPhone has pieces and parts that are manufactured in several different countries.

GALLAGHER: Supply chains, everywhere, everywhere.

SCIUTTO: The market, the stock market, that is, cruising along thinking not going to get too series.

It was interesting, Anthony Scaramucci, he tweeted today, "Spent the day reading, I'm worried the trade rhetoric is going too far. Signs are there. Capital is starting to withdraw from stocks. The markets are signaling a lot more risk. The second quarter reporter may be a one-time moon shot followed by the big unwind. Change tactics now."

He seems to be signaling the president there. Do you see evidence in the markets that, OK, this is real now?

[14:50:19] GALLAGHER: We do. You are seeing the markets react a little bit today. You are seeing factory confidence react both here and in Europe. You know, he's right. This is what is going to happen. This is why markets are really on edge about this. Last week, also, it came out that the president has been talking again about withdrawing from WTO. That would be much more disruptive. I mean, that would just undo decades of world order.

SCIUTTO: The trade organization that the U.S. helped create, right?

GALLAGHER: Yes.

SCIUTTO: To help improve trade around the world.

Leigh Gallagher, thanks very much, from "Fortune" magazine.

GALLAGHER: Thank you, Jim. SCIUTTO: Appreciate it.

We have news coming in. An update on the FBI agent who has come under fire for sending anti-Trump text messages before the 2016 election. Peter Strzok's lawyer is slamming House Republicans for leaking closed-door testimony. His lawyer says they are now trying to lead him into a trap.

CNN's Laura Jarrett joins me with more.

Laura, what are we learning?

LAURA JARRETT, CNN JUSTICE REPORTER: Hey, there, Jim. Peter Strzok's lawyer is firing back against the House Judiciary Committee. What he is saying here is that they have twisted his client's testimony while also selectively leaking part of it. He issued a blistering e-mail to the House Judiciary Committee staff obtained by my colleague, Jeremy Herb.

This is his lawyer, a former federal prosecutor. He writes, in part, "Having sharpened their knives behind closed doors the committee would now like to drag back special agent Strzok and have him testify in public a request that we originally made and the committee denied."

What's being asked of special agent Strzok is to participate in what anyone can recognize as a trap. He goes on to explain that Strzok is willing to testify. He's even willing to talk to about the Russia investigation. You will remember he was a lead investigator on the Russia investigation as well as the Hillary Clinton e-mail probe. He's willing to testify, but his attorney is essentially saying here, you have to make the testimony from last week public. Now, other committees have signaled interest in him. A lot of lawmakers are looking to talk to him. So it remains to be seen whether he will in fact testify in public.

The president has tweeted about it, saying that they want to see him in public. We will have to wait and see what happens there -- Jim?

SCIUTTO: Laura Jarrett, thank very much, with that news from the Justice Department.

Coming up, should President Trump be concerned? His former lawyer, his former fixer, Michael Cohen, is now breaking his silence, making it clear where his loyalty may lie. And did Trump order him to pay off Stormy Daniels?

(COMMERCIAL BREAK)

[14:57:23] SCIUTTO: In the battle to thought Trump administration's zero-tolerance immigration policy, some Democrats have adopted a new rallying cry, abolish ICE. That may become a litmus test for Democrats running for office. ICE stands for Immigration and Customs Enforcement. It's an agency formed under the Homeland Security Act of 2002 after the 9/11 attacks that raised concerns about who was getting into the U.S. and how they were getting here.

Today, not all Democrats are on board for abolishing the agency.

President Trump himself took to Twitter to support ICE. In a weekend interview, he warned Democrats would be, quote, "beaten so badly," if they campaign to abolish the agency.

I want to bring in now CNN politics senior writer and analyst, Harry Enten. He specializes in data-driven journalism, focusing on poll numbers and how they reflect on how people feel about these issues.

Had he we talk about President Trump this is a base play for him. From the Democrats perspective, this is a base play about highlighting the immigration issue?

ENTEN, CNN POLITICS SENIOR WRITER & ANALYST: I think it absolutely is. If you look at the candidates or the Senators and the members of the House who are saying we should abolish ICE, they are all on the left side of the party, Elizabeth Warren, Kirsten Gillibrand, Ocasio- Cortez. These are people on the left versus those arguing against it, say, Tammy Duckworth, they tend to be more in the center of the party. They are liberal but not as liberal as those calling for abolishing it.

SCIUTTO: You have this rift in the party and, frankly, the Republican Party, on a whole host of issues. As we come into a sensitive and highly contested midterm election, is this dangerous for Democrats to go after ICE? It has an immigration function and a counter-terrorism function?

ENTEN: It has both. When you look polling, what it suggests is when you talk about immigration at large, Democrats are safe on that. But when you asked about illegal immigration, that's where Republicans pick up their edge. If we are talking about illegal immigration and terrorism, those issues play into the Republicans' hands. That's why you are seeing the president tweet what he tweets.

SCIUTTO: Before we get to that point, in the wake of what the family separations, and so on, is this issue trending more in the favor of the Democrats? Do you see that in the numbers?

ENTEN: I see that immigration is trending more in the favor of Democrats. And that's a different issue than talking about illegal immigration. When you are talking about children and separating them from their parents, that's one thing, but when you are talking about abolishing a federal agency like ICE, that's something different. And Trump would rather play on that ground than talk about separating parents from their children.

SCIUTTO: Understood.

Harry Enten, thank you very much.

ENTEN: Thank you.

[15:00:07] SCIUTTO: It is the top of the hour now. I'm Jim Sciutto, in today for Brooke Baldwin.

An allegiance with the president possibly fumbling.