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China: U.S. Started "Biggest Trade War" In History; DOJ May Seek Extension Of Deadline To Reunite Families; Trump Mocks Bush 43 And John McCain, Praises Putin At Rally. Aired 11-11:30a ET

Aired July 6, 2018 - 11:00   ET



DANA BASH, CNN ANCHOR: -- while you were sleeping, the world's two largest economies went from taunting one another to actually throwing punches. You may be the one who gets bruised. Beginning at midnight, the U.S. and China slapped new tariffs on each other's products.

Beijing says President Trump has triggered, quote, "The biggest trade war in history." Meanwhile, this morning's new job numbers are stronger than expected. The unemployment rate inches up. But even that is a good thing, we know, we will see, though, what it means when you put the trade situation in the mix.

For that, let's go to CNN's Alison Kosik, who is on the floor of the New York Stock Exchange. Alison, let's start with this trade war. Talk us through and walk us through the economic impact, particularly what you are hearing from people walking the floor.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: OK. So, talking about stocks, look at the board right now, the Dow is up 47 points. Look, it seems like Wall Street is taking a wait and see approach, despite the fact that these trade tensions have literally ramped up overnight.

The thinking is that perhaps there could be some sort of compromise reached between the U.S. and China. Here is the thing. As this game of chicken plays out, these tariffs have been threatened by China, tariffs on high value American exports, cars, crude oil, cash crops like soy beans and poultry.

So, the reality is if demand drops for these American products that are sold in China, guess who will be hurt, U.S. companies and American jobs. So, you could see those sorts of unintended consequences take hold.

And of course, we are seeing China retaliate because the U.S. put those tariffs on high tech industries that China cares about. Industries like aerospace, robotics, manufacturing and cars.

Now we could see really how this trade dispute is affecting U.S. companies even better, because second quarter earnings season really ramps up next week. That's when we will really hear from the company CEOs as they report the earnings out how this trade battle, how this trade dispute which has been ongoing for months now, how it's affecting U.S. companies -- Dana. BASH: That's certainly going to be something to look for. Today, we did get the monthly jobs report. What do the numbers tell us about the strength of the economy as of right now?

KOSIK: Well, it certainly shows that the jobs picture is continuing to be bright, 213,000 jobs were created in June. Unemployment rate did go up to 4 percent, but for a positive reason, for a good reason because a half million people came off the sidelines, jumped back into the labor force to look for work.

The bad news of the jobs report, especially if you are an American worker, is wages really are flat. In fact, they are running below inflation. That's probably why you are seeing a lot of Americans say, I'm not feeling rich. I'm not feeling wealthy, because my wages aren't going up -- Dana.

BASH: That's really important. Certainly, something we heard on the campaign trail in 2016. Helped the president get elected. Alison, thank you so much for that.

Let's bring in our guests to talk more about this. Catherine Rampell, CNN political and economic commentator, a "Washington Post" opinion columnist, and our own Christine Romans, chief business correspondent.

Christine, let me start with these jobs report. It is better than expected. That is always a good thing. Overall though, pay increases are slow. Talk about that.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: That's been the real riddle here because we tell you that there are more job openings than there are people who are seeking jobs, right? That would tell you simply supply and demand would say wages should be going up. Businesses would have to pay more to get their talent.

That hasn't been happening. In this number, this report we saw 2.7 percent year over year wage growth. You'd like to see something more. I don't think we had 3 percent since like 2009. So, there's something holding back wage growth.

That's been a stubborn part of these job numbers. I don't want to underplay them. This was a good jobs report. It shows you that companies are hiring. It showed you a lot of people went into the labor market looking for a job. So, this is a strong job situation at the moment -- Dana.

BASH: No question about it. That's an important point to make. Meanwhile, we have these strong numbers, Catherine. The fear is that the trade war, which officially started at 12:01 this morning, will hurt or diminish the economic progress that we're seeing in these job numbers.

CATHERINE RAMPELL, CNN POLITICAL AND ECONOMIC COMMENTATOR: Right. Exactly. So, the tariffs that Trump has imposed on Chinese goods as well as the retaliatory tariffs that China has imposed on American goods, both of those things will have a drag on the U.S. economy and on the job market. The only question is the magnitude of the drag. At this point, the numbers are relatively contained. The real threat is escalation. Trump has said that he wants tariffs amount covering something like $500 billion worth of Chinese goods. It would be very hard to contain the damage in that situation.

But you are already seeing manufacturing companies complain about the fact that their input prices have gone up from the earlier steel and aluminum tariffs as well as things like semiconductors and other intermediate goods that they use to create products and jobs as well in the United States.

[11:05:10] The National Association of Manufacturers actually came out with a statement today saying, yay for the jobs report, but boo for the trade war essentially.

BASH: Christine, when it comes to what we're talking about here, we heard a little from Catherine, the Chinese targets are machinery, auto parts, medical devices -- the U.S. targets on the Chinese. China's targets, American SUVs, meat, seafood.

I want to read this to you from "The New York Times" today, it struck me as a good example to get down to the real-world impact, "As of Friday morning, companies like Husco International, a Wisconsin based manufacturing company that makes parts for companies like Ford, General Motors, Caterpillar and John Deer, now faces a 25 percent increase on a variety of parts imports from China.

Austin Ramirez, who is Husco International chief executive said that increase would immediately put him and other American manufacturers at a disadvantage to competitors abroad. These are classic American companies we're talking about that rely on this, headquartered in a state that the president barely won, surprisingly won, made him president, Wisconsin.

So, this is -- again, we see these numbers, we hear these numbers. This is the reality of what we're talking about.

ROMANS: And it seems as though the White House is betting that voters in those places are going to give the president a lot of leeway here as he goes about doing what he says should have been done years and years and years ago.

The president said he didn't start this trade war, China did, what is been so unfair. Look, there's a lot of agreement that some of the Chinese trade practices have really hurt the United States, have not been fair to the United States.

But how the president is going about it as you can see is going to hurt some smaller companies and some companies that are right in the crosshairs of this. Look, you are talking about soy bean farmers, for example, on your list, you had products, the revenge tariffs from the Chinese.

Soy beans are one of them. Soy beans farmers are saying, look, not only is this hurting us because our market is -- one in every three rows of soy beans is exported and 60 percent of those go to China.

But also, what they pay for equipment will go up because of the higher cost of the steel and aluminum that's going to be in the things that they are making. So, they are getting hit twice here. My question is, how much leeway do voters in those Trump districts give the president on his trade policy?

BASH: That's the question. I like you brought up soy beans, Miss Iowa native there. That was impressive. Straight to the roots there. Both of you, look at this map. Catherine, speak to this. This is what Christine was talking about.

I mean, it looks like kind of sea of red there. What we have done is put over the areas where the trade war and the impact of the China tariffs could and probably will affect American manufacturers and businesses.

That is over the red parts. The red parts are Trump country. They are directly related. So, this is what Christine was talking about here. It's why you are seeing and hearing Republicans who are huge Trump supporters getting very, very nervous.

Because they are hearing from their constituents, from their farmers, from their manufacturers, of course, we think China is being unfair, of course, the president was right when he said it at every single campaign rally that we want to make things right with China, but is this the right way to do it?

RAMPELL: No. It's absolutely not the right way to do it. The right way to do it would have been banning together with all of the other countries that have also been victimized by China's unfair trade practices particularly intellectual property theft.

I'm thinking about Japan, Canada, Mexico, lots of countries that we once had a trade pact with, explicitly to keep China in line. It was called the Transpacific Partnership. It was one of the first things that Trump did was to pull us out of that trade pact.

But you are exactly right that China's targeting of all of these various products that come from Trump country is no accident. They have levied their retaliatory tariffs with surgical precision, unlike the tariffs we have levied on them.

If you actually look at the tariffs that we put on China, almost all of them actually target non-Chinese firms that operate in China, including American multinational companies. It's American companies and Korean companies, they are the ones we are punishing.

The ones that China is punishing are also American firms. They are targeting areas that voted for Trump or that are otherwise Republican strongholds and that are going to complain to their local representatives, their senators, their local newspapers.

BASH: They already are.

RAMPELL: Yes, they already are. If you look at local newspaper coverage around the country, basically everywhere around the country there are stories about -- South Carolina is in the crosshairs --

[11:10:09] BASH: No question. Catherine, Christine, you are right. You laid out the reality of what we're dealing with perfectly. The question is whether once again this president's unorthodox approach to doing things just might surprise everybody. We will have to wait and see how it goes. Thank you so much for joining me.

I want to turn to a new twist on the drama of immigrant children separated from their parents at the border. The Trump administration is facing a court ordered deadline to reunite those families. A short time ago the government told a judge it may need more time to do that.

CNN's Boris Sanchez is in Bedminster, New Jersey where the president will spend a three-day weekend at his golf resort. Boris, what are you learning?

BORIS SANCHEZ, CNN CORRESPONDENT: Hey, there, Dana. Yes, in a legal proceeding in San Diego, the Department of Justice has essentially told a federal judge that they are in compliance with some of the orders that he made last month, that they are no longer separating families at the border and they are providing communication between some of the children who have been separated from their parents and their families.

However, the DOJ is postulating that it may need an extension to reunify the children with their families. There are two deadlines, July 10 for children younger than 5, July 26 for children older than 5. That is creeping closer.

The administration is on the clock here. They're saying that essentially the Department of Health and Human Services, because they are using DNA testing to reunify these kids with their parents, that will take some time.

Further, because there's a screening process to ensure that these children are not being reunited with people who may be a risk to their health or safety, that's screening process will present delays as well.

Lastly, the Department of Justice also wants clarity on whether they are responsible for reunifying kids whose parents have already been deported. There is a session this afternoon in court in San Diego, they may get some more clarity then -- Dana.

BASH: Boris Sanchez, thank you so much for that update.

Coming up, three U.S. senators, an ailing former president, and the entire "Me Too Movement." President Trump attacked them all at a campaign rally. Can you guess who he spared?

Plus, tragedy strikes rescuers in Thailand. A former Navy SEAL dies while helping to free trapped young soccer players. Inside the race against time as oxygen is running out.




DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: You know, all the redact you see in the thousand points of light, what the hell was that, by the way, thousand points of light? What did that mean?

John Tester voted no on repealing Obamacare. Even though we got a little surprise vote that evening, you all remember that evening, somebody came in with a thumbs down after campaigning for years that he was going to repeal and replace.

Let's say I'm debating Pocahontas, right? I promise you I will do this. I will take -- you know those kits they sell on television for $2? Learn your heritage. We will take that little kit and say -- we have to do it gently because we're in the "Me Too" generation. We have to be very gentle. We will very gently take that kit and we will slowly toss it.


BASH: Are you keeping track there? President Trump ridiculed a 30- year-old campaign slogan of George H.W. Bush. He went after Senator John McCain, a war hero who is fighting for his life. He's battling cancer. Two Democratic senators were in the mix. One person was spared, Vladimir Putin.


PRESIDENT TRUMP: You know what? Putin is fine. He is fine. We're all fine. We're people.


BASH: Joining me now to talk about this is Dan Pfeiffer, CNN political commentator and former senior adviser to President Barack Obama and the author of "Yes, We Still Can, Politics in the Age of Obama, Twitter and Trump," and Jack Kingston, CNN political commentator, former Republican congressman from Georgia, and former senior adviser to the Trump campaign.

Gentlemen, thank you so much for joining me. Jack Kingston, let me start with you. George W. Bush's White House press secretary, so Bush 43's press secretary, Ari Fleischer, he is usually much more likely to praise President Donald Trump than to criticize him.

He wasn't very pleased about what the president said about George H.W. bush. Here's what he said in a tweet," This is so uncalled for. Going after a 94-year-old former president's promotion of volunteerism. I don't mind POTUS being a fighter. I do mind him being rude." Do you agree?

JACK KINGSTON, CNN POLITICAL COMMENTATOR: I don't think he was being rude, but I don't think anything should necessarily be off the shelf, untouchable. I mean, he was taking a jab at it saying it wasn't an effective platform -- BASH: Like why? Where it come from? What's the point?

KINGSTON: You never know with this president. He grabs things out -- for example, in the same speech he talked about -- we broke Elton John's records, what does he mean?

BASH: He is obsessed with Elton John, but that's a different conversation.

KINGSTON: What I'm saying is he will grab something from the sky. I bet you 90 percent of the people don't know what points of light was. I do remember because I was in the state legislature running for Congress and you know --

BASH: Did you run on it?

KINGSTON: You know, I went to some awards where they would say so and so won a points of light. It was a good thing. It was reaching into the heartland of America. So, I don't think it was a bad program. I think it was kind of, why was he doing it?

Maybe he was taking a swing at the establishment saying why would you get behind that? Our platform can be summed up in three words, which he said later on, jobs, jobs, jobs.

[11:20:06] And when he is talking about the economy and less regulation and the optimism and the consumers, then he is winning. I think when he starts deviating, he starts losing.

BASH: Wow. I have never heard you say something like that. I'm actually --

KINGSTON: You have Dan on the phone. Dan is the expert on communication.

BASH: You usually are very supportive of him. Dan, I do want to ask you about the reason President Trump went to Montana. He went to troll the Democratic incumbent, Senator John Tester. He's on the ballot in November.

Trump won Montana, Dan, I'm sure you know this, by 20 percentage points. Tester is not the most endangered Democrat, but he is up there. So, this kind of targeted campaigning, rally the GOP base in a red state that could have an impact on the handful of Democratic senators, who are in Tester's camp, don't you think?

DAN PFEIFFER, CNN POLITICAL COMMENTATOR: Yes, of course. There are a lot of places in this country especially House races in suburban districts where Donald Trump will be holy unwelcomed because he is so polarizing and unpopular.

In these red states that he won, he is welcome. It is an open question as to whether he -- will his effect on rallying his base also have a related effect on rallying the Democratic base? You just don't really know. I would say for John Tester's case, he is a very -- he is an excellent candidate. He is Montana through and through. He has won in very tough situations before. I think it's a little harder than Donald Trump showing up and throwing a couple jabs around and being able to take out John Tester.

BASH: Yes. He is Montana through and through. His press secretary couldn't get him off his farm because he was planting peanuts. I'm with you on that.

KINGSTON: I would say, he is only Montana in his rhetoric but not in the voting record. That's what we had to deal with in the south for many years, Southern Democrats who talked a good game when they were home in Georgia but voted different in Washington.

BASH: It is a little bit different, right. I mean, it has more of a history of electing statewide Democrats, whether governor or senator.

KINGSTON: And being very competitive to the degree that you won't really know until the last minute. When you look at what he was saying about what he did to Jackson, Tester kind of torpedoed him. Trump outlined that.

When he talked about voting against taxes, immigration reform and things that I think are far more out of sync with the Montana voters, then Tester will have a problem. I do know that his personality and his campaign style, it's an on-hand -- it's a big county commissioner race.

BASH: I need to ask you about Scott Pruitt. The president was asked the fact that he finally resigned, the president was asked, was there anything about the accusations against him that troubled you? I know you are concerned about fiscal responsibility.

The president responded, that was one of those things, but he will go into great things and he will -- he will have a wonderful life I hope. He felt he did not want to be a distraction to the administration that he has a lot of faith in.

It's been very good. A distraction? If you look at the list of scandals, you would have been chased out of Congress for any one of the things that he is alleged to have done.

KINGSTON: Well, and I think that's what the president basically was doing in accepting his resignation. He was just saying, you got to move on. The president could have fought it if he really wanted him to stay there.

I think his records of accomplishment as somebody who has been suspicious of EPA overreach, I think he did a good job with things like clean water USA and Paris climate accord and power plant. A lot of stuff --

BASH: A lot of people could do that who weren't sending their staff to get special kinds of lotion. KINGSTON: You know, I think what we Republicans get tired of -- I will give it to Dan. Democrats get something done whether they're in office.

BASH: Let me get Dan in. I don't want to ignore you in San Francisco. I want to ask quickly about the president getting a lot of criticism about his comments about the "Me Too Movement." You know, you heard President Clinton struggled with answering questions about his history regarding this. Is this a generational problem do you think more than a political problem for men of a certain age?

PFEIFFER: It may be. I don't know. I think it is -- it ties together with what you asked Jack about his comments about George H.W. Bush, the comments about John McCain. There's a lack of empathy within Trump for victims, for people in need. It comes through with the idea that he would make fun of the movement, right?

Maybe generationally you don't understand it the right way you should. It shouldn't be that hard. Age should not require you to understand that sexism and sexual misconduct are wrong.

The fact that he simply swerved out of his lane to ridicule a movement of women who have come forward with great courage to talk about this is just -- it says -- it's such a window into his soul or lack thereof that I think it says a lot about the man.

BASH: And also maybe a reminder that he knows his base?

[11:25:08] PFEIFFER: Well, or that he -- this has been true of this White House because Donald Trump has been incredibly accused of sexual assault by 19 women, the posture of the president in the White House is to always defend Republican men, at least.

Never believe the victims. They are the antithesis of the "Me Too Movement." That's how they dealt with the Rob Porter allegations and how they dealt with the Roy Moore allegations and how they are dealing with the allegations that Jim Jordan, the congressman, knew about sexual abuse at Ohio state when he was the wrestling coach.

And always case it is defend the accused, attack the accuser. That is a real -- that is an unfortunate statement in what should be a better moment in time for this country.

BASH: Dan Pfeiffer, Jack Kingston, thank you so much for joining me this morning.

Coming up, a rescue mission takes a tragic turn. Oxygen levels run critically low for that soccer team trapped in a cave. A live report next.


BASH: The mission to rescue --