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World Headlines; Apple Earnings; Plastic Outrage; Bright Red Salt Lake; Swedish Crown Jewels Stolen. Aired 8-9a ET

Aired August 01, 2018 - 08:00   ET

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

(COMMERCIAL BREAK)

[08:00:00] KRISTIE LOU STOUT, CNN ANCHOR: I'm Kristie Lu Stout in Hong Kong and welcome to "News Stream."

Remains returning home. Dozens of cases believed to be holding U.S. service members killed in the Korean War are sent to Hawaii.

Political interference. Facebook removes accounts and pages of that point to efforts to influence U.S. elections.

And grocery bag u-turn. Outrage grows in Australia after a supermarket reverses a ban on single use plastic bags.

Right now, 55 cases containing what North Korea says are the remains of American soldiers killed in the Korean War, are on the way back to the U.S.

Now earlier, a repatriation ceremony was held at Osan Air Base in South Korea.

North Korea handed over the cases last week as part of that agreement Kim Jong-un made with Donald Trump in Singapore. Paula Hancocks has more from

Osan Air Base.

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT (voice-over): A ceremonial and somber day. Fifty-five caskets leaving the Korean Peninsula for the

very last time, carrying the remains of what is believed to be people killed in the Korean War which finished 65 years ago. Now for the U.S.

military, for the United Nations command, today has been a day to honor those who made the ultimate sacrifice.

The departments for the Prisoners of War and Missing In Action say that the initial assessment that they have been making over the past few days shows

that the remains are likely from the time of the Korean war and many of them are likely American. They also cited a positive note that North Korea

had given these remains back to the U.N. command.

(BEGIN VIDEO CLIP)

JON KREITZ, DIRECTOR, DEFENSE POW/MIA COUNTING AGENCY: This is a great first step towards bringing a bunch of fallen Americans home and we look

forward to potentially pursuing operations in North Korea in the future and we are very hopeful, that again, this is just a great first step in

building some confidence and building a relationship.

(END VIDEO CLIP)

HANCOCKS (voice-over): A fighter (ph) led the first caskets to the C-17 plane that would take them on to Hawaii for identification. A flyover of

four F-16 known as the "missing man formation" followed. Fifty-five caskets in all, loaded unto those C-17. Although officials say there's not

necessarily 55 service members. It could well be after identification that there are a lot more service members that have been identified. That is

from previous experience they say.

One dog tag was among the remains that were given back by North Korea as well. We hear from officials that that particular American family has been

notified. So at least for one family they have some kind of closure from this repatriation of remains. Officials say also that other military

equipments and hardware was given back to the U.N. command.

(on-camera): They were helmets. There were boots, other equipments, and certainly that is going to help in Hawaii in trying to identify exactly

these remains they have, but is a process. We are being told time and time again that it could take just months, potentially years. Paula Hancocks,

CNN, at the Osan Air Base in South Korea.

(END VIDEOTAPE)

LU STOUT: Despite returning those 55 cases and assuming they really do contain the remains of U.S. war dead, there are still nearly 7,700

personnel unaccounted for. That's according to the U.S. Department of Defense. More than 5,000 of those are believed to be in North Korea. Since

the repatriations began in the 1990s, North Korea has returned the remains of 340 soldiers to the U.S.

And when Donald Trump met with Kim Jong-un in Singapore, they vowed to continue the practice and we'll was say it's a way for the two countries to

build trust with one another.

The man you are about to meet is a former longtime U.S. representative and a veteran of the Korean War. Charles B. Rangel fought as a member of the

503rd battalion in an all-black artillery unit. In the Battle of Kunu-ri, he was part of a vehicle column that was trapped and attacked by the

Chinese army.

He told the "Washington Times" that he was wounded in the back by shrapnel but he was still able to lead some 40 men from his unit out of the

encirclement and during three days of freezing temperatures. He later earned a Purple Heart and a Bronze Star medal and he writes this quote, "It

was by the grace of God that we were spared.

[08:05:00] It was later learned that nearly half of our battalion was killed in the overall battle. Since Kunu-ri -- and I mean it with all my

heart, I have never, ever had a bad day."

Joining me now is former congressman Charles Rangel. And sir, thank you so much for joining us here in the program. This is such an incredible moment.

We know American families -- American veterans they have waited decades for this to happen. As a Korean War veteran, what does the repatriations of the

remains mean to you?

CHARLES RANGEL, KKOREAN WAR VETERAN: It's a very, very mixed emotion that I have today. I cannot help but think of the thousands of friends that I

have joined the Army with, 1948-49, that was wounded, missing and killed in Korea. And then they come home and find out that they call it the Korean

Forgotten War.

However, for the that have lost their loved ones and wanted closure and had hopes that maybe, just maybe they might be alive, I think this is a day

closer to satisfying the needs to be able to say that they lost a loved one and to give them the proper respect that they deserve. But overall, I

think it should be a reminder for the world and especially the United States, no young person should be placed in harms way unless the security

of the United States is being threatened and that hasn't been approved yet.

LU STOUT: Yes, and certainly, this a reminder of that. As you said, this is a moment we're going to mixed emotions thinking of your friends,

thinking of family members who are trying to see some sort of closure. We know that right now 55 caskets are en route to Hawaii for identification.

We learned that only a single dog tag was provided by North Korea to help identify the remains. Do you think the families will get closure from the

loss of loved ones?

RANGEL: They have to have hope. Your husband, 55 years, is a very complicated scientific procedure and sooner or later answers to their

questions will be able to be given, but I don't know whether they'll be alive when they do reach a conclusion.

It's a whole idea, however, that collectively we all should mourn our loss and respect those who died and supported the flag of the United States of

America. And in this particular case, it was the first time that United Nations was tested and we met the challenge and we stopped the aggressors.

LU STOUT: We know that this moment, the fact that the remains are being returned is a result of what happened in Singapore, of President Trump's

meeting with the North Korean dictator, Kim Jong-un. Sir, you may have strong feelings about Donald Trump and other issues but for this, for the

repatriation, are you thankful for what President Trump did?

RANGEL: We don't know what has been accomplished except an idea that all human beings especially Americans have to support and any effort that's

positive that this president or any president that makes, they ease the pain of loss of our military relatives and friends has to be, well, it has

to be well-received and I do that.

LU STOUT: Got it. And thoughts from you on the prospects for peace on the Korean Peninsula. This year is of course the 65th anniversary of the

armistice that ended the fighting, do not technically the war in Korea. Do you think that there will be a lasting peace?

RANGEL: Well, it has to be. Korea is a country of thousands of years of history. They have the same blood, the same culture, and when you can see

what happened after 1953, when out of the ashes of South Korea, a great democracy was built. There is no reason to believe that North Korea doesn't

have the same potential.

But we have an ideological conflict between communism and democracy and that has to be worked out as we did in East and West Germany. It's a very,

very difficult task and one of the things we have to overcome is the severe poverty that exists in North Korea.

But I'd like to believe that when the final decision is made, democracy as usual wins out and I look forward and dream for a united Korea, North and

South, working together and making contributions to our great world.

[08:10:14] LU STOUT: Sir, we thank you so much for joining us to share us your reflections of the Korean War, your thoughts on prospects for peace

and to join us on this moment, this emotionally charged politically significant event in American history. Former U.S. representative and

Korean War veteran, Charles Rangel, live in Europe for us. Thank you so much and take care.

RANGEL: Thank you.

LU STOUT: Another story that we're watching this day, Facebook has taken down dozens of fake accounts with possible links to Russia saying that they

are being used to sway political opinion ahead of U.S. midterm elections in November. Now, the deleted pages had thousands of followers, and for the

details on the story, Drew Griffin filed this.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT (voice-over): Facebook calls it inauthentic behavior and though Facebook can't be sure,

it sure looks like Russia again. Thirty-two pages with names including Black Elevation, Resisters, Aztlan Warriors, being followed by 290,000

accounts. The fake accounts also setting up and promoting real events and protests aimed at further polarizing U.S. political discourse.

Many of the events did occur including this one last year in New York City attended by actual Americans who likely had no idea that the Resistors

Facebook page was probably run by Russians. Another event by the same group was supposed to take place in a couple of weeks. Resistors set up a counter

protest against white supremacists at the White House August 10th. Five other real groups signed on to participate.

As Facebook was announcing its crackdown on these potential Russian sites, the U.S. Secretary of Homeland Security was at a cyber security conference

saying there's no doubt Russia meddled in the 2016 election.

(BEGIN VIDEO CLIP)

KIRSTJEN NIELSEN, SECRETARY, DEPARTMENT OF HOMELAND SECURITY: Everyone and everything is now target.

(END VIDEO CLIP)

GRIFFIN (voice-over): And Russian actors may be added again, comparing the upcoming midterm elections to a looming storm.

(BEGIN VIDEO CLIP)

NIELSEN: Today, I believe the next major attack is more likely to reach us online than on an airplane. We are in a crisis mode. The Cat 5 hurricane

has been forecast and now we must prepare.

(END VIDEO CLIP)

GRIFFIN (voice-over): Facebook says these current pages all shut down, have the hallmarks of the activities the Russians did around the

presidential election, though there are some differences, this time the pages didn't lead back to Russian IP addresses and they used third-party

services to buy ads to boost their posts and encourage people to follow the pages.

(on-camera): As part of its new transparency policy, not only is Facebook announcing this publicly that it's shut down these 32 suspected Russian

sites, it is going to contact all 290,000 accounts that were in contact with these sites to let them know these were obviously fake Facebook

accounts. Drew Griffin, CNN, Atlanta.

(END VIDEOTAPE)

LU STOUT: And for more of what this means, let's bring David Kirkpatrick. He is the founder and CEO Techonomy. He is also the author of "The Facebook

Effect." He joins us now -- David, so good to see you. Thank you for joining us. Of course, as you know, Facebook has gone ahead and identified

another source of political manipulation there in the United States. You were a longtime watcher of Facebook, what is your reaction to this?

DAVID KIRKPATRICK, FOUNDER, HOST AND CEO, TECHONOMY: Well, the story is not that there is new -- that there is more political manipulation

happening on Facebook. The story that makes this newsworthy is that Facebook has proactively come out and told us about it while it's still

happening. The reality is, that political manipulation is a blight on Facebook globally in every country.

The Russians are expert and massive practitioners of it, but by no means are they the only ones. And I think -- but we do see here though, is that

Facebook is finally trying to get ahead of this really serious challenge to democracy globally, not just in the United States. But I don't think we

should be at all sooth (ph) by the fact that we've heard about this one set of events.

LU STOUT: Yes, and Facebook is showing agency (ph), it's going out of its way to say hey, we've identified this, we are banning this and shutting

this down. And these Russian-linked pages, they may have been banned and identified, but are there many, many, many more out there targeting not

just the United States but other governments and institutions around the world?

KIRKPATRICK: Well, there is no question that the answer to that is yes. It's very hard to prove, but for example, in the recent Irish elections

were the -- the referendum where they were voting on whether to allow abortion.

[08:15:02] That's one that hasn't gotten a lot of publicity, but in fact it looks like Russians certainly outside Irish actors were entering into that,

trying to defeat the referendum which actually ended up passing and it only really was prevented once the Irish Parliament got very involved and Google

actually shut down all ads relating to the referendum and Facebook shut down all ads coming into Ireland from outside sources on the referendum.

But the point is, that is happening everywhere and if you look at the kinds of elections we've had and so many countries, and the rise of certain kinds

of leaders like Erdogan in Turkey or Orban in Hungary, I think you can see the effects of this. It's having disastrous effects on global political

dialogue and I think that is exposing the world to the right quite dramatically.

LU STOUT: That concern about Facebook is a platform for manipulation that has been raised in places like, as you said, Ireland and also in France,

Malaysia et cetera. You know, we know that Facebook there in the United States in particular, has been under fire for not taking fake news and

election interference seriously. That's why we saw those congressional hearings of Mark Zuckerberg early this year. Do you feel that Facebook is

paying more attention to that market to the United States and ignoring the 190 other markets around the world?

KIRKPATRICK: This is the kind of good questions that we need someone outside United States who is an American like yourself, to ask because it

is in fact absolutely true. Facebook is utterly image conscious. They are more conscious. They are trying to do everything they can, but they put

themselves into this position by allowing their service to become essentially the town square for the planet without proper controls and

safety measures and they are frantically trying to backpedal to figure out how to address it.

Look, they don't want political manipulation. I'm not claiming that all, but in their -- they believe A.I. will be a huge tool to help combat this

and I'm sure they are right. But they need way more resources. They are putting tons more resources. The reason that their stock had a historic

plummet last week is partly because of the extraordinary expense they're applying to solving these problems. But are we close to having these

problems solved? Absolutely not.

LU STOUT: Yeah. We got to continue with this conversation and internationalize it as well. David Kirkpatrick, really appreciate talking

with you. Thank you so much. Take care.

KIRKPATRICK: Thanks for having me.

LU STOUT: You're watching "News Stream." And still ahead right here on the program, it is the first big legal test for Robert Mueller and his Russia

investigation. We got the latest on the trial of former Trump campaign chairman, Paul Manafort.

Also, Zimbabwe announces results of its historic elections amid reports of voting irregularities. The country is still waiting to find out who its

next president will be. We have a live report.

(COMMERCIAL BREAK)

LU STOUT: Welcome back. Now Iran is responding to the U.S. president's offer to meet without any preconditions and a tweet.

[08:20:04] Foreign Minister Mohammed Zarif writes, "The U.S. and Iran already had two years of talks which produced the multilateral nuclear deal

and U.S. can only blame itself for pulling out." Zarif went on to say this, "Threats, sanctions & PR stunts won't work. Try respect for Iranians and

for international commitments." And President Trump spoke about Iran at a rally in Florida on Tuesday and he didn't appear to have read Zarif's

tweet.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The Iran nuclear deal, it's a horror show. I hope it works out well with Iran. They're having a lot of

difficulty right now. I hope it works out well. And I have a feeling they'll be talking to us pretty soon.

(END VIDEO CLIP)

LU STOUT: The first trial stemming from Robert Mueller's Russia investigation is about to enter its second day and prosecutors are urging

the jury to follow the money in the case against former Trump campaign chairman, Paul Manafort. He could spend life in prison if convicted. Joe

Johns has the latest.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN SENIOR WHITE HOUSE CORRESPONDENT: President Trump's former campaign chairman, Paul Manafort, facing day two of his trial for alleged

financial fraud after both sides laid the groundwork for what's likely to be a dramatic showdown between Manafort and his longtime deputy and the

government's key witness, Rick Gates. If convicted, Manafort is facing a maximum sentence of over 300 years on 18 charges including filing false tax

returns, failing to report foreign bank accounts, and defrauding several banks.

Prosecutors portraying Manafort as a quote, "shrewd liar" who opened 30 bank accounts in three foreign countries to avoid paying taxes on $60

million of income from his work in Ukraine including helping former Ukrainian president and Putin ally, Viktor Yanukovych.

Prosecutors arguing that the money went toward supporting Manafort's lavish lifestyle including multiple homes, expensive cars and watches, even a

$15,000 ostrich jacket. The defense pointing the finger at Gate's arguing he was the mastermind behind the scheme who swindled Manafort. Gates is

cooperating with the special counsel after pleading guilty to conspiring to defraud the United States and lying to the FBI, a fact the defense plans to

use to discredit his testimony.

Gates also worked for the Trump campaign but neither the president nor the investigation into potential Russia collusion are likely to be addressed in

this case.

(BEGIN VIDEO CLIP)

KELLYANNE CONWAY, COUNSELOR TO PRESIDENT TRUMP: This trial obviously centers on matters that have nothing to do with the campaign.

(END VIDEO CLIP)

JOHNS (voice-over): The Trump administration continuing to distance itself from Manafort.

(BEGIN VIDEO CLIPS)

RUDY GIULIANI, ATTORNEY FOR PRESIDENT TRUMP: Paul Manafort does not know anything, nor could it be possible he did. He was with him for four months.

TRUMP: Manafort has nothing to do with our campaign.

(END VIDEO CLIPS)

JOHNS (voice-over): Despite praising his work during the three months he led the president's campaign.

(BEGIN VIDEO CLIPS)

TRUMP: Paul Manafort just came on. He's great.

COREY LEWANDOWSKI, FORMER TRUMP CAMPAIGN MANAGER: Bringing a professional like Paul helped us grow the campaign.

(END VIDEO CLIPS)

JOHNS (voice-over): Sources tell CNN that, publicly, the White House strategy is to downplay the proceedings, but behind the scenes the

president is keeping a close eye on the trial watching TV coverage and asking his legal team for updates. President Trump has repeatedly said that

his former campaign chairman is being treated unfairly, sparking speculation that Manafort may be holding out for a possible pardon.

(BEGIN VIDEO CLIP)

REP. ADAM SCHIFF (D), CALIFORNIA: He's going to be the last man defending Donald Trump and bet it all on a pardon. And that may be where, at least,

he's making his appeal.

(END VIDEO CLIP)

JOHNS (voice-over): Manfort's lawyers expressing confidence after day one of the trial.

(BEGIN VIDEO CLIP)

THOMAS ZEHLNE, ATTORNEY FOR PAUL MANAFORT: Feeling good.

UNIDENTIFIED FEMALE: Good. Any chance that he may decide to flip and cooperate?

ZEHLNE: No chance.

(END VIDEO CLIP)

JOHNS (on-camera): In the early stages of the trial, prosecutors appear to be painting a picture of Ukraine getting bipartisan help from political

consultants from the United States. On the witness list today, Daniel Rabin, a Democratic political consultant who worked there, and yesterday,

Tad Devine, who happens to be none other than the top political strategist for the 2016 campaign of Bernie Sanders. Joe Johns, CNN, Alexandria,

Virginia.

(END VIDEOTAPE)

LU STOUT: Zimbabwe is waiting to find out who its next president will be as the ruling Zanu-PF party wins a two-thirds majority in parliament. As

Zimbabwe's electoral commission started announcing official results for parliament in the last hour, the presidential winner won't be revealed

until later. The E.U. chief observer says the commission has at times appeared to show bias and is calling for complete transparency on the

results.

CNN's David McKenzie is in Johannesburg with the details. He joins us now, and David, as Zanu-PF, the ruling party wins a majority in parliament,

there been reports of angry opposition supporters, even riot police deployed in Zimbabwe. What's happening there?

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Well, what I can tell you is that just hours after the vote even closed, you have the leader of the

MDC, the Movement for Democratic Change, saying that they have won the election and that anything else would represent fraud.

[08:25:08] And so that has built up this tension. You have the scores (ph) of youth on the streets in Harare protesting -- celebrating the win that

hasn't yet been announced, of course. And moving on to the hotel where the observers have been giving their assessments of this election. Now, let's

bear in mind, this is the first time that the European Union observer mission has been even invited to Zimbabwe for 16 years.

They say that there is a greatly improved political climate there, but an unlevel playing field as they called it and the -- right up to the

election with a lot of focus from state media showing Emerson Mnangagwa and the ruling Zanu-PF. Now of course, this all comes after that dramatic coupe

in November that pushed out long time leader, Robert Mugabe. So we are entering the critical phase now, Kristie.

In the coming hours, all eyes will be on that election center whether they can put out those presidential results. They only constitutionally required

to do it over the next few days, but if they can do it without a big amount of fuss then it will be seen as a big democratic success, but we're

certainly not there yet. And the tension will be rising as these results fail to come up at this stage, Kristie.

LU STOUT: Yes, tension rising as well as some serious allegations about this election from the European Union, about media bias and voter

intimidation. David, what have you heard from your sources in Zimbabwe?

MCKENZIE: Well, as I said, the E.U. has said that one of the big issues here was a huge amount of focus from the state media for Emerson Mnangagwa

and Zanu-PF and kind of a virtual blackout as it were for the opposition. What you've seen is that two-thirds of majority of parliament going for

Zanu-PF. It shows that there is very strong support for the ruling party at the rural level especially.

But the presidential vote is a whole different ballgame entirely. Right after or before the election, the polls were extremely tight between the

two leading candidates. If it's very close, it could go to a run-off. But given that the opposition is saying that they have won before the results

come out, it's not so much the vote itself that could prove the issue here. It's the transmission of the results, the official results, from those

polls, because obviously these parties have official party monitors at these polling stations when the results are tabulated.

One of the key things that you use said (ph) is that if they can have a system to verify the results, then it will make everybody a lot more

comfortable with the outcome. That, with the water cannons and riot police on the streets, not to -- in huge numbers, but certainly significant, you

know. It's building up to a pressure point and at this stage, we don't know where that would lead, Kristie.

LU STOUT: Yes, and all foreshadowing to just say the immense challenge ahead for who will be officially named the next leader, the next president

of Zimbabwe. Dave McKenzie, reporting live for us. Thank you so much and take care.

Now, as U.S. President Donald Trump's trade war goes on, you might find that everyday gadgets or even your favorite T.V. shows will become more

expensive. We got the details on that, next.

[08:30:00] (COMMERCIAL BREAK)

KRISTIE LU STOUT, CNN NEWS STREAM SHOW HOST: I'm Kristie Lu Stout in Hong Kong. You're watching "News Stream" and these are your world headlines.

Fifty-five cases containing what North Korea says are the remains of American soldiers killed in the Korean War are on their way to Hawaii, and

there, they will be identified. Earlier, a repatriation ceremony was held. North Korea handed over the cases last week as part of an agreement Kim

Jong-un made with Donald Trump.

Facebook says it has taken down dozens of fake accounts with possible links to Russia, saying that they are being used to sway opinion ahead of U.S.

midterm elections. The deleted pages have more than 290,000 followers. Facebook says it has found evidence of connections to Russian troll

accounts from 2016.

Zimbabwe's ruling ZANU-PF party has won a two-thirds majority in parliament. That gives it the right to amend the constitution without

calling a referendum. Zimbabwe's electoral commission began announcing voting result in the last hour as European election monitors complained of

some irregularities. The presidential winner will be revealed later.

Now, the pricey iPhone 10 is paying off big for Apple and pushing it closer to a major landmark. The thousand-dollar phone was one of the reasons

Apple's revenue left to more than $53 billion in just the latest quarter. The net profit shut up to better than expected eleven and a half billion, a

rise of more than 30 percent.

Apple sold 41 million iPhones in the last quarter, about the same number as a year ago, but these days, consumers are opting to buy more expensive

models. Apple's stock soared in trading, pushing the company's valuation closer to the trillion-dollar market.

If that happens, Apple would be the first publicly traded company to cross that threshold. Apple's earnings come as reports emerge that Silicon Valley

could be under threat by U.S. President Donald Trump in his trade war. Samuel Burke joins me now now live from London with more on the story.

Samuel?

SAMUEL BURKE, CNN BUSINESS AND TECHNOLOGY NEWS CORRESPONDENT: Kristie, it's interesting because on the earnings call Tim Cook was asked about the

trade war and he did not criticize President Trump. He wants that stock to keep on going up. But he did say that he thinks calmer heads would prevail

and if they don't, tariffs could hit nearly every gadget under the sun.

(BEGIN VIDEOTAPE)

BURKE (voice-over): President Trump's trade war is barreling toward Silicon Valley.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We are demanding fair and reciprocal trade.

BURKE (voice-over): The latest round of proposed tariffs targets the Chinese hardware fueling the tech sector things like semiconductors and

electronic circuits.

JOSH KALLMER, SENIOR VICE PRESIDENT, INFORMATION TECHNOLOGY INDUSTRY COUNCIL: There are certain kinds of machines that you and I never come

into contact with but that underpin a lot of the high-tech products that people buy.

BURKE (voice-over): They are the key components that make smart devices, household appliances, and home security systems hum.

(on camera): Everyday items like the iPad could be hit. The tablet had a chip from Intel which could be a target. These routers have taken off this

year. Now they face a 25 percent tariff. Even your favorite Netflix series could be in the firing line. The streaming companies' videos are played

from the Amazon Cloud server and that equipment comes from China.

(voice-over): Missing from the list, the Apple iPhone. CEO Tim Cook told CNN in June, he thought the device was safe.

TIM COOK, CEO, APPLE: I don't think that iPhone will get a tariff on it, is my belief. Based on what I've been told and what I see, I just don't see

that.

BURKE (voice-over): Now the president says he is ready to tax almost all Chinese imports which would include the iPhone.

TRUMP: They went after our companies, and they stole our intellectual property.

BURKE (voice-over): The administration says the tariffs are meant to pressure China to fall in line. But experts say Olevia and the iPhone would

be counterproductive. Even though the device is assembled in China, it's designed and manufactured in the U.S.

KALLMER: Ninety percent of that tariff falls in value created by Americans. It is -- there is no other way to say it that to say that

literally the United States is taxing itself.

[08:35:00] BURKE (voice-over): And Apple may have the most to lose if China retaliates with tariffs of its own. Twenty-one percent of the company

sales are in China, leaving a clear target on America's most valuable company.

(END VIDEOTAPE)

BURKE: Kristie, what's fascinating to me is just last year, Apple was the envy of so many American tech companies because they have that huge

exposure in China. Keep in mind, Facebook, Twitter, Google have little to no presence in China. But now that very same exposure which has brought

them so much money could be a huge, huge disaster for Apple if those retaliatory tariffs from China ever happen.

LU STOUT: Yeah, China can very well be in Achilles heel for Apple but not the case for China's homegrown hero, Huawei. Huawei just surpassed Apple as

the second largest smartphone seller in the world. How did they do it?

BURKE: Well, it didn't do it by selling a lot of phones in the United States, and I think that is what is really incredible about the story.

They're locked out one of the biggest markets in the world yet they still manage not just to surpassed Apple to take that number two slot.

That gap between Huawei and Samsung is narrowing. So they are really doing well at the low end of the market. They are finding a lot of volume there.

And don't forget, when you talk to people anecdotally, they talk about the cameras on Huawei. Those cameras, the partnership they have with and I was

LEICA, has really pushed a lot of people to purchase these phones and keeps them ahead of Apple and innovation.

Any time you're ahead of Apple and innovation, you're not doing badly for yourself. Huawei is doing incredibly well in spite some of the economic

realities and the political realities it faces in the United States.

LU STOUT: Yeah, number two in the world despite being virtually locked out of the U.S. market. Incredible. Samuel Burke reporting live for us. Samuel,

thank you.

Single-use plastic is bad, isn't it? So, why is one Australian supermarket chain reversing its ban on plastic bags? We will try to explain, next.

(COMMERCIAL BREAK)

LU STOUT: Coming to you live from Hong Kong, welcome back. This is "News Stream." People around the world are slowly learning how damaging single-

use plastic like bags and straws can be for the environment. But a supermarket chain in Australia is reversing a plastic bag ban and letting

customers use them for free.

(BEGIN VIDEOTAPE)

LU STOUT (voice-over): The U.N. says eight million tons of plastic waste enters the world oceans every year and yet plastic is still being used

widely, including by Coles supermarket in Australia which is giving out these plastic bags for free after reversing a ban.

The chain says they phased out single-use plastic bags on July 1 but "some customers told us they needed more time to make the transition to reusable

bags, so we are offering complementary reusable better bags to help them complete their shopping."

Better bags refers to more durable plastic bags intended to be used more than just once. Some people are glad, many others are not.

UNIDENTIFIED FEMALE (voice-over): Happy they're giving them away?

UNIDENTIFIED MALE: Yeah.

UNIDENTIFIED FEMALE (voice-over): Why is that?

UNIDENTIFIED MALE: Save money.

UNIDENTIFIED FEMALE: You got to (ph) say something, you should do it, then people get used to it, and then there is no problem.

[08:40:04] LU STOUT (voice-over): But there is a problem. Plastic. A lot of which comes from food and drink packaging, isn't just getting into our

oceans in mass quantities, it's getting onto beaches, harming wildlife and heading right back into the food chain like in fish that we often buy from

supermarkets.

Greenpeace says Coles decision to indefinitely offer free plastic bags makes a mockery of stated commitments to reduce plastic waste and offering

them for free means they are far more likely to be used once and thrown away.

ZOE DEANS, MOBILISATION CAMPAIGNER, GREENPEACE: Most states across Australia now actually have statewide plastic bag ban. So we know that it

is something people want and something people really care about. People can go to Australia beach.

They can see the impact of plastic in the environment and in our oceans and actually after plastic bag ban (INAUDIBLE) being really supportive of them

(ph) and really see the benefits of that.

LU STOUT (voice-over): The United Nations wants to eliminate single-use plastic by 2022, and says more than 60 countries are taking steps to ban or

reduce plastics. Among them, Australia where other big supermarkets have successfully implemented a charge.

But when Coles tried to charge for bags, some customers were furious, (INAUDIBLE) bag rage on social media. Others had tongue-in-cheek responses

such as this Twitter user who complained about having to remember to put bags in the car saying, why is life so hard?

One environmental group went straight to the heart of the issue, sharing images of fake plastic Coles bags with very real images of what our plastic

trash does to our planet.

(END VIDEOTAPE)

LU STOUT: A simple but powerful protest against plastic there. Now, time to behold an incredible scene in Northern China, where this thousand-year-

old salt lake has turned bright red. The reason?

A surge in temperature has also led to a surge in algae and brine shrimp which are multiplying just in the warmer weather. And this is one of just

three great sodium sulfate inland salt lakes in the world. The others are in the United States and Russia.

And now finally to a royal heist in Sweden that sounds like something from a Hollywood movie. Now, police, they are looking for at least two men who

are believed to have stolen a royal orb and the two crowns you see right there. The thieves took them in the middle of the day from a display at a

cathedral near Stockholm.

Witnesses say that the men then escaped in a motorboat. The stolen jewels were the funeral crowns of the king and queen from the 17th century.

That is "News Stream." I'm Kristie Lu Stout. Don't go anywhere. "World Sport" with Christina Macfarlane is next.

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[08:45:00] (WORLD SPORT)

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