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Trump Heads to Midwest Amid Trade Tensions; U.S. and E.U. Step Back from Brink of a Trade War; Interview with Senator Dick Durbin; Facebook Stock on Track for Its Worst Day Ever; Aired 10-10:30a ET

Aired July 26, 2018 - 10:00   ET

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

[10:00:19] POPPY HARLOW, CNN ANCHOR: Top of the hour. Good morning, everyone. I'm Poppy Harlow in New York. And we have a lot of news to get to as the president right now is en route to Iowa this hour with the November midterms in the backdrop of course. And a sudden truce with the E.U. in his back pocket.

The president calls it a breakthrough. An agreement to try to reach an agreement to zero out tariffs on the U.S. and European exports. This comes a day after the president declared, quote, "Tariffs are the greatest." I think he changed his mind. He is due to talk jobs and trade at a community college. And later, to tour an Illinois steel plant that added jobs in the wake of the new U.S. tariffs on China.

Let's go to the White House. That's where we find Joe Johns this morning.

So what is mission number one for the White House today in Illinois and Iowa?

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Well, there's a couple of missions, I think, Poppy. One of the things I think that's important to say is Iowa and Illinois are two of the largest soybean producing states in the country. And soybean producers have been hurt as a result of the president's tariffs. So he needs to go out and sell what he sees as the administration's high points on these back and forth trade issues with the European Union.

And the way the administration is progressing on that, number one, they have some news from just last night with the president of the European Commission, and that news essentially is that they are going to have no new tariffs at this time and try to agree to negotiate to stop the trade feuding and end the problems for some of the farmers out there.

The second thing, of course, the president going to Iowa has this $12 billion aid package that was just announced. They want to sell that. Even though it's clear the farm bureau does not like tariffs. They want to sell that even though it's clear the Farm Bureau does not like tariffs. We heard just this morning from Steve Mnuchin, the Treasury secretary, here at the White House telling reporters not to characterize this aid package as a bailout, even though that's what the headlines have been saying.

So then on to, of course, to Granite City and steel, that's a good news story there, the president essentially saying that they fired up the furnaces again and he is helping steel producers -- Poppy.

HARLOW: Always good to see jobs added. We're going to have Illinois Senator Dick Durbin on in a few minutes. We'll talk about that.

Joe Johns at the White House. Thank you.

So a makeup after a breakup? It happens. We've all been through it. This one between the president and the European -- the president of the European Commission. The president just called the E.U. a foe a few weeks ago. Now all is well with a hug and embrace and a kiss and a Rose Garden announcement after three hours of negotiations yesterday afternoon.

President Trumps writes, "Obviously the European Union, as represented by Junker, and the United States is represented by yours truly, love each other," so was there a major breakthrough on trade? Sort of. There was a deal to make a deal down the road.

Let's talk about it, with me now, Jackie Kucinich, CNN political analyst and Washington bureau chief from the "Daily Beast," Patrick Healy, CNN political analyst and politics editor at the "New York Times," and CNN's own Richard Quest is here.

Thank you all for being with me. Richard, let me begin with you. Lest we forget, this man, Juncker, called President Trump's tariffs stupid in March. And then he said we can do stupid, too. And now all is well on the home front.

RICHARD QUEST, CNN MONEY EDITOR AT LARGE: And he would maintain that they were stupid and that they are still stupid. And the question needs to be asked, what was this deal arranged? Is this another example of North Korea where you have got a lot of good sounding words but nobody is really sure what just happened.

And I think "The New York Times" summed it up beautifully on the front page this morning, this deal, when it said we're not sure whether this is actually a breakthrough or just the smokescreen.

HARLOW: Right.

QUEST: What it does do, from the European's point of view, and the Europeans won here, by the way. Because the Europeans --

HARLOW: They won?

QUEST: Oh, yes.

HARLOW: Europe won.

QUEST: Yes. Europeans won. Because they got the auto tariffs off the table.

HARLOW: Right.

QUEST: Off the table.

HARLOW: This was a threat -- this was a threat from the president.

QUEST: Right.

HARLOW: Jackie, to institute very high -- what could be crippling tariffs on European autos coming into the United States. When you look at who wins here, yes, this looks good for the president. But what does he really gain out of this if it doesn't materialize into actually zero tariffs back and forth?

JACKIE KUCINICH, CNN POLITICAL ANALYST: The appearance that something got done? I mean, that's -- unless something actually happens, which we don't know if it will, as Richard pointed out. We could just have a North Korea situation where the president could hold it up and say, look, I have these pictures of me and the E.U. making nice together.

[10:05:11] And yet -- you know, and just kind of go with that. Don't believe your eyes and your ears. Believe what I'm saying, which is essentially what he said this week. And also, it doesn't help farmers who are relying on China to buy their soy beans. That is going to cripple more farms than, say, what was going on with the E.U. because China is such a consumer of U.S. soy beans. So that still isn't fixed.

And so they're trying to fix that with this bailout, which members of Congress don't like. But they're trying to -- they're throwing up their hands and saying, I guess it's better than nothing. There's still a big mess here. And I have to say.

HARLOW: Right.

KUCINICH: He didn't say that those -- the auto tariffs are off the table. They're just paused for now. He could bring them back as a stick any time he wants.

HARLOW: And all the tariffs that were in place yesterday and a week ago are still in place, by the way.

KUCINICH: Yes.

HARLOW: Patrick Healy, one thing I find very interesting is that CEOs of the big American companies have been ringing the alarm bell on this for weeks, whether it's General Motors, Whirlpool, Coca-Cola just this week. But it's been the increase, I think, in what we heard from the farmers. I mean I had a Minnesota soybean farmer on here yesterday who was a big Trump voter who have been much more vocal about this in the last few days that seem to have turned the president more than all of these CEOs. What do you think?

PATRICK HEALY, CNN POLITICAL ANALYST: Right. No, I think the farmers are very upset. And these are states that Donald Trump considers to be his base. These are, you know, key states for him that he thinks of like Iowa, certainly, the Dakotas, you know, Ohio, Pennsylvania. But, you know, particularly these sort of soybean rich states that have really competitive Senate races this fall. So he's definitely paying attention to it. But what you're hearing from the farmers as well as from the CEOs is that they want more markets. They want more markets to compete in.

HARLOW: Yes.

HEALY: You know, they want sort of free trade agreements. They don't want things like bailouts or sort of short-term assistance.

HARLOW: Right.

HEALY: And, you know, and to Jackie's point, I mean, the -- sort of the deal or I guess sort of arrangement on soybeans to Europe is nothing compared to what the farmers can get and want to get from China.

HARLOW: In China. Right.

HEALY: So, you know, at least right now, it just feels like this is classic President Trump who believes that he wins when he sort of sounds tough week after week after week, he sounds so blustery, it sounds like he is standing up for America. And then he sort of slides into sort of these negotiations that, you know, maybe just negotiation to negotiate. But he sounds like he is a deal maker. Even though everyone outside he doesn't seem to realize that people looking at this just sort of shrug and sort of say it's just bluster.

HARLOW: What do we have to look for so --

QUEST: Yes.

HARLOW: -- the American people can really tell what's beyond the bluster, what the actual --

QUEST: What is the deal? What is the deal when it happens? I've only had about 30 years covering trade talks. And I can tell you -- I can tell you two things about trade talks. They are fiendishly difficult. They always go down to the last second. And nobody really wins until the last moment.

This -- yesterday was nothing more than smokescreen, whitewash and band-aid. And it solves the problems for the Europeans. It gives the president something to Trumpet to his base. And it doesn't advance the free trade agenda very far at all.

HARLOW: Jackie, so what's next? What's the next play here for the president? I mean, if you're Xi Jinping, and you're looking at what just happened, how does that, if it does, change your calculus when you look at this? I mean, as you guys pointed out, it matters a whole lot more to those farmers in Minnesota and in Iowa about their soybeans being sold to China and making money in that market than in the European market.

KUCINICH: I mean, if you're China, you're probably going to just grow soybeans, right? You can do it yourself and not import U.S. soybeans. The losers here really are these farmers. If you are President Trump, you just -- you talk a big game. He is good at that. And right now, people are believing him. But they might not believe their ears. They might not believe their eyes. They'll believe it when it hits their pocketbooks. And we're not seeing that. Trump is benefitting the fact that the average American isn't feeling this right now, beyond the certain industries that are being hit. That's not going to be forever. Once that hits -- we'll have to see. I mean, the midterm elections really are -- really a spot, a moment.

HARLOW: But they are feeling it. Right? I mean, you look at Whirlpool, Patrick. This company has most of its factories in Iowa and Ohio. And the cost of washing machines is up 20 percent from a year ago.

KUCINICH: That's true.

HARLOW: Average Americans are feeling it.

HEALY: No. That is true. Bu I think Jackie is right in terms of the farmers. I mean, right now they sort of -- they've known that this was coming for sort of for months. You know, they -- some farmers have adjusted production. Some are kind of in wait and see mode.

HARLOW: Yes.

[10:10:02] HEALY: But their like the big pinch at least on that end is still to come. But what's so interesting, Poppy, and we've seen this narrative play out again and again, is that for a lot of Republicans, they're still willing to sort of justify and rationalize what President Trump is doing because they still feel like at the end of the day, either culturally or identity-wise, that he is still kind of represents their interests. So, you know, unless it really starts having extreme damage, I'm not sure, you know, Mnuchin and the others would let it get that far. But really like powerful damage. It's been, you know, so hard to sort of see a Trump policy move Republicans, even farmers away from the president.

HARLOW: Yes. There you go. Jackie, Patrick, Richard, thank you.

KUCINICH: Thank you.

HARLOW: Still to come, Secretary of State Mike Pompeo goes toe-to-toe with lawmakers from both parties demanding answers on the president's one-on-one meeting with Putin. Did he really tell us anything, though?

Also, Michael Cohen's lawyer says his client wants to reveal the truth. But could his release of that secretly recorded audiotape just actually land the president's former fixer in legal trouble?

And Facebook fallout. The stock taking a dive this morning. Why this is happening. We'll explain.

(COMMERCIAL BREAK)

[10:15:37] HARLOW: President Trump right now in the air and Midwest bound. He is set to make a few stops as part of an effort to calm concerns over his controversial tariffs. He will be in Iowa and Illinois. And this trip comes as the administration reaches its deadline today to reunite families separated at the southern border.

With me now is Democratic Senator Dick Durbin of Illinois. Thanks for being here. I appreciate it.

SEN. DICK DURBIN (D), ILLINOIS: Good to be with you.

HARLOW: You are the minority whip. You are one of two Democrats in the Senate leading negotiations on immigration. And as I said, today is the deadline for these families that were separated to be reunited. I mean, beyond that, big picture, when it comes to an actual long-term solution on immigration in this country, has the Senate hit an impasse?

DURBIN: Well, it has under this administration. Just remember five years ago, we passed a bipartisan, comprehensive immigration reform bill. I worked on it with John McCain, with Jeff Flake, with Lindsey Graham, with Marco Rubio. It was a bipartisan effort. It passed on the floor with 68 votes and the Republicans in the House refused to even consider it. There's not even an opportunity now with this administration to do what needs to be done, comprehensive, bipartisan immigration reform.

HARLOW: You've said only three meetings in five weeks. I mean, what should the American people honestly expect? Nothing?

DURBIN: Nothing. All the work is being done by a federal judge in San Diego. And thank goodness it is. He is putting -- holding the feet of this administration to the fire when it comes to reuniting these children. Just think about this, a month ago the Department of Health and Human Services put out a press release and said, well, we know where all these kids are. This is a very well-coordinated response.

Earlier this week, they admitted there are hundreds -- hundreds of these kids that they still don't know how to reunite with their parents. Some of their parents have been deported. And the 37 kids that they just can't even find the parents. These kids are adrift in a bureaucratic sea.

HARLOW: And we will have a live report from the border a little bit later.

Let me ask you about the president heading to your home state Illinois today. He's going to tour a granite city steel factory there, where some jobs are being added, and that's good news. But you've also talked about the soybean farmers in your state whose crops are down 20 percent. They're being hit very hard by these tariffs. Hopefully things will get better for them. We just saw the deal to make a deal with the president and Jean Claude Juncker yesterday from the European Commission.

I mean, what is a win for the people of Illinois on trade?

DURBIN: Well, I stand with the steel workers. For 20 years, they've been exploited by dumping of cheap steel in the United States, Brazil, Japan, Russia, China, the list goes on and on. And we have not responded as we should have. I'm glad the steel workers are back at work. But make no mistake, this scorched earth policy when it comes to trade has gone way beyond fixing the obvious problems, the Chinese problems and the like. And what we have now is a threat to our export markets in many different areas.

Who would have identified Canada as the culprit as this administration has when it comes to the trade war? I wouldn't. We have our differences, but Canada is a major export country for the state of Illinois.

HARLOW: Let me ask you about Russia. So we heard from Secretary of State Mike Pompeo yesterday. And there was a bipartisan outrage at him for what senators believed was not getting answers to what the president and Vladimir Putin discussed behind closed doors. But here's is how Pompeo responded.

(BEGIN VIDEO CLIP)

MIKE POMPEO, SECRETARY OF STATE: President Trump believes that two great nuclear powers should not have a contentious relationship. He strongly believes that now is the time for direct communication. The president is entitled to have private meetings. I'm telling you what U.S. policy is.

(END VIDEO CLIP)

HARLOW: Does he have a point that the president, given his office, does have the right to conduct foreign policy as he sees appropriate?

DURBIN: Of course he does. But the obvious question raised by that committee over and over again, what do we do when the president's foreign policy is different than the administration or the nation's foreign policy?

HARLOW: Right.

DURBIN: And that was Pompeo's dilemma. Time and again --

HARLOW: I mean, he says it's not. But I hear you.

DURBIN: Well, it is. It clearly is. And just listen as the president was mesmerized by Putin, stood up and talked about his strong and powerful denial that he was involved in our last election campaign. We know better. And we know better because our intelligence agencies, Department of Defense and others have told us not only the Russians did it in the last election, they're going do it again.

I believe Dan Coats, my fellow Republican Senate colleague, he said the red lights are blinking. And I think they are. And this administration is not taking it seriously.

[10:20:06] HARLOW: Are you relieved to learn that summit 2.0, if you will, with Vladimir Putin is no longer happening at the White House in the fall as was discussed? If so, when is an appropriate time for Vladimir Putin to come to the White House? DURBIN: Of course I'm relieved. After that performance in Helsinki,

we better think long and hard about the next meeting between Vladimir Putin and Donald Trump. The president has to come into these meetings prepared. I can tell you, Vladimir Putin is prepared. The first meeting Putin had with Obama when he was elected as president, the first meeting, Putin opened the meeting with a 58-minute soliloquy. He didn't give the opportunity, the president, to even speak for 58 minutes. He is a domineering force at these meetings. And Donald Trump was bowled away in Helsinki. We can't let that happen again.

HARLOW: Let me ask you about the president's pick for the Supreme Court, Just Kavanaugh. And the pickle that some of your fellow Democrats in the Senate in red states are in right now. Would you advise your fellow red state Democrats to oppose Judge Kavanaugh's nomination even at the expense of their own seat, even if that cost them their Senate seat, even if it means a smaller Democratic minority in the Senate? Is that something that you believe they should stomach in order to oppose him?

DURBIN: It isn't a question of what have I believe. It's a question of what they believe. They believe this is an historic choice for the future of the Supreme Court for more than a generation. At issue is not only the future of "Roe versus Wade" and a woman's right in America to have access to the health care that she and her family need, it goes to more basic issues. We have a nominee in Brett Kavanaugh who has said things about the power of the presidency that are frightening at this moment in history. He needs to answer the hard questions.

HARLOW: Speaking --

DURBIN: And I can --

HARLOW: Speaking to them, speaking to Senator Heitkamp, speaking to Senator Manchin, speaking to Joe Donnelly, I mean, do you believe that they will oppose him even if it is at the expense of their own seat?

DURBIN: I can tell you, for sure, because I know each one of them. I respect them. They're going to vote their conscience. They're not going to be listening to the political pundits or even their colleagues. They understand this is an important moment in history and they're going to do what they think is right.

HARLOW: Senator Durbin, thank you for being here today.

DURBIN: Thank you.

HARLOW: Still ahead, Facebook stock plummeting this morning. The social media company says it is putting issues like our democracy and privacy ahead of profit. We're going to dive in next.

(COMMERCIAL BREAK)

[10:27:16] HARLOW: Facebook shares plummeting this morning on track for their biggest sell-off yet. $120 billion in market value wiped out at the open. Let's go to the floor of the New York Stock Exchange.

Cristina Alesci, you know, this is a company that had a 42 percent jump in revenue. The top line numbers look good. But investors are freaked out. Why?

CRISTINA ALESCI, CNN MONEY AND POLITICS CORRESPONDENT: They are freaked out. This is the single -- this is one of the biggest hits to market cap that we've seen in a single day.

Look, Poppy, it's no surprise that this company has faced controversy for enabling the spread of bad information, for enabling potential election meddling, and worst of all for violating user privacy. But investors did not have a window into how that would impact the bottom line until today. To your point, it missed both on sales and on a key metric, which is user growth. Making matters worse, the company executive said, look, don't expect things to get any better later on in the year.

Add to that the fact that Facebook's chief competitor Google reported results that beat expectations. And it's just bad all around for Facebook. That said, there are investors who say, look, the company has other products that have -- has potential for growth, like its messenger, like Instagram. So there are investors and analysts sticking by the stock. But certainly, a very rough ride for Facebook today.

HARLOW: I know also very quickly that a federal judge in Maryland has just ruled that a lawsuit against the president having do with potential conflicts of interests, the emoluments clause, it can proceed. How significant is that?

ALESCI: Well, from -- this is a very interesting case because at issue is whether or not the president violated an anti-corruption clause in the Constitution by accepting foreign payments through his companies. It is not significant, the ruling yesterday, the decision yesterday is not significant because it tells us either way whether the president may have violated the Constitution. It's significant because this case moves to the discovery phase now, if the government doesn't find a way to stop that from happening, which means that Trump may have to release some financial information about his operation, potentially his tax returns.

And that will reignite -- you know, despite -- in addition to the news value of all of that coming public, it will reignite the debate over whether or not he should be holding an interest in all of these businesses, Poppy.

HARLOW: And as you noted, it's hard for the government to fight off, you know, discovery demands in a case like this.

ALESCI: That's it.

HARLOW: Cristina, thanks for being there. She'll be there all day keeping a very close eye on Facebook, of course. A potential piece of evidence made public, catching prosecutes off

guard. We're talking about that secretly recorded conversation between the president and his former lawyer. What does that mean for Michael Cohen, though, legally? Next.

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