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Trump Escalates Trade War with China; Kim Jong-un Hosts Summit with Moon; Kavanaugh and Accuser to Testify; Trump Declassifies Documents; Residents Return to Homes; Refugee Cap Set; Interview With Rep. Ryan Costello. Aired 9:30-10a ET

Aired September 18, 2018 - 09:30   ET

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

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[09:30:00] JIM SCIUTTO, CNN ANCHOR: This morning President Trump is sharply escalating the trade war with China, threatening Beijing with great and fast economic retaliation. The president tweeting this claim, that China is trying to change the U.S. election by attacking farmers, ranchers and industrial workers, who Trump calls his loyalists, essentially warning China to leave those groups alone.

POPPY HARLOW, CNN ANCHOR: I mean it's a pretty stunning claim. It comes after the president announced new tariffs on $200 billion worth of Chinese goods. Well, China shot right back saying it will retaliate with countermeasures. Altogether, just to put this in context, because I know you hear about these tariffs a lot, this now combined with the tariffs earlier this year is roughly half of all goods that China sells into this country. They will be subject to tariffs.

Let's be clear, these are a tax. So, what does that mean? You will pay more for these goods.

Our chief business correspondent Christine Romans is here with more.

The significance of this?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: And this what a trade war looks like.

HARLOW: Yes.

ROMANS: The significance is we -- we're not going toward an off ramp. We keep moving forward here with confrontation with China over trade. You saw the president front of mind this morning that he says China has been taking advantage of the United States for too long and he is the man who is going to fix it.

Of those $200 billion in goods, there will be a 10 percent levy, tax, tariffs, in the -- you know, in the next few months. And then by the end of the year it will be a 25 percent tariff. And he said if China wants to retaliate, fine. There's another $267 billion that we can slap on there. Basically everything that comes in from China would have a tax. There are a few things that in this latest round that are excluded. I

noticed that high chairs and playpens are excluded. The iWatch is excluded. There are a few things that consumers would feel right away that are excluded. And maybe that's a political move to help consumers ahead of the midterms.

But when you look at Internet tech products, circuit boards, tires, chemicals, a whole bunch of things are all on this list.

SCIUTTO: Let me ask you, because if you ever look around your home, and if you stood at home, so much in your home is likely to be made in China.

ROMANS: Sure.

SCIUTTO: How soon and are consumers already seeing higher prices for things they don't expect? And not the ones, of course, that have been excluded here.

ROMANS: So Wilbur Ross, the commerce secretary, this morning said, look, he doesn't think consumers are going to feel this right away, and here's why. If you're looking at $200 billion of goods, you're looking at 10 percent tariffs, that's, what, $20 billion over the course of a whole year, spread out over 6,000 different items.

And the thinking inside the White House is, the U.S. economy is really strong here. The party with something to lose are the Chinese, not the Americans necessarily at this point.

SCIUTTO: Right.

ROMANS: But all the big business groups. The Chamber of Commerce. All the business groups are like, this is not a good idea. Consumers will pay this price.

HARLOW: Well, Romans, did the Trump administration, Wilbur Ross, I know he was out talking a little bit to the media this morning, I mean did they expect it to get to this point?

ROMANS: That's a really good question because they have said publically and privately that they thought the first $50 billion, you would start to see the Chinese change their behavior. This is supposed to be punitive, right? These tariffs are meant to send a message to the Chinese.

SCIUTTO: Right.

ROMANS: Remember, the American position for multiple administrations has been that the Chinese are the bad guys here on trade, not the U.S., right?

SCIUTTO: Democrats and Republicans, yes.

ROMANS: Right. That the Chinese are the bad guys here, stealing our stuff, you know, cyber espionage, all this other kind of stuff. They haven't seen the change in behavior yet. So in terms of using tariffs as, you know, as a stick, they haven't

seen -- we haven't seen the response yet.

HARLOW: All right, thank you, as always.

SCIUTTO: Thank you, Christine.

ROMANS: Good to see you.

HARLOW: North Korea state media is slamming the United States, calling it gangster logic that has slowed denuclearization talks. That's according to the North.

SCIUTTO: The accusations come as Kim Jong-un welcomes South Korea's president to Pyongyang for a high stakes summit between the neighbors. It is the South's latest efforts to push both the U.S. and North Korea back into negotiations which have hit an impasse.

CNN's Will Ripley, he joins us now.

Will, you've reported from North Korea 19 times. The fact that Kim and Moon, they hugged, what does that tell you? But also the importance of them meeting face to face between the Koreas with the U.S. excluded to some degree.

WILL RIPLEY, CNN CORRESPONDENT: Exactly right. I mean there's a couple of ways to look at it. On one hand it's a very positive development for North and South Korea that they're moving forward with some of the commitments that they made at the inter-Korean summit in April. They're trying to increase economic cooperation. The family reunions have resumed once again.

The big issues, of course, denuclearization, the complete denuclearization of the Korean peninsula. That obviously has not been attained or even started arguably, and the other issue being the peace treaty to formally end the Korean War. Now, they would need the buy in of the United States and China to formalize any sort of agreement. Could there be a bilateral peace agreement, a peace treaty, more ceremonial between the North and the South and could this new, you know, good relationship with Pyongyang be driving a wedge between South Korea and the United States? You know, Washington and Seoul would certainly deny that, Jim and Poppy, but if you look at the optics here, you know, things have not gone well at all in denuclearization talks with the U.S. And yet with not only South Korea, but China and Russia, things are going, frankly, swimmingly right now.

SCIUTTO: Yes.

HARLOW: Yes.

SCIUTTO: Yes, without a united front, a heck of a lot harder to get the pressure and the movement that you want.

[09:35:00] Will Ripley, thanks very much. The grand old party has a big problem. How do they handle the

Kavanaugh follow just weeks before the midterm elections? We're going to ask a Republican lawmaker, and that's next.

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SCIUTTO: Forty-eight days to the midterms and there is still no doubt the explosive sexual assault accusation against embattled Supreme Court Nominee Brett Kavanaugh is certainly raising the stakes of that election.

HARLOW: It is, with a consequential public hearing that is set for Monday. How will Republicans respond?

Joining us now with his take, Republican Congressman Ryan Costello of Pennsylvania.

Thank you for being here. We appreciate it.

A few yes or nos for you here and then we'll dive a little deeper into this.

But first, yes or no, should Judge Kavanaugh be the next Supreme Court justice?

REP. RYAN COSTELLO (R), PENNSYLVANIA: I believe that he's very well- qualified and that it's appropriate for him to reappear before the committee. That's -- I'm sorry I couldn't give you a yes or no.

HARLOW: All right. No, that's -- so that's a question mark.

Do you believe Ms. Ford, his accuser, and her account of what she says happened 36 years ago to her?

[09:40:05] COSTELLO: I have -- I have no way of knowing. It's very difficult to take an allegation from 36 years ago, coupled with a blanket denial by Judge Kavanaugh, and be able to extrapolate much from it. And that's why this is such a difficult issue, the timing of it. And by the timing I mean to say to have it come about midstream through a confirmation hearing makes it all the more difficult to evaluate.

And I need to say this. If you are Judge Kavanaugh, what are you supposed to do at this point? If this did not happen and he's issued a blanket denial, how are you supposed to proceed in a manner to have people believe you and to move forward? And that is not, in any way, attacking the credibility or the character of the accuser, who I believe wished to remain anonymous. And I don't believe that anyone on the Republican side of the aisle has sought to out her identity in this process. It is a political hot potato of the sort that I have never witnessed ever in my lifetime.

SCIUTTO: Congressman, because the questions you raised there they get to timing. Does there need to be more time to get to the bottom of this? Your party, you remember when P\president Obama was president, did not even consider his Supreme Court nomination with nearly a year before the election under the claim that let's let the American people pipe in on this before we move forward.

There is a midterm election less than two months away. The Senate's divided 51-49. You know, Senate control could conceivably flip here. Wouldn't that same argument hold here, particularly in light of new questions about the nominee, let the American people have their say on this?

COSTELLO: The hearings are -- have already taken place or were already midstream through the hearing. I understand your point. And certainly there is a lot of Democratic ire over the way this was handled. But Republicans do control the Senate. And Republicans have put this nomination forward. We're in the middle of hearings, and we've now extended, I believe, the committee vote by a week in order to hear from both of them. Not discounting what you said, at the same point in time the political reality is, we are here and now and we are midstream through a nomination process.

HARLOW: Sure. I understand that. But I think to Jim's point, I mean, 13 months is how long the Merrick Garland nomination was held up. There were eight justices on the court, on the high court, for months and months on end when it came to Merrick Garland. And it's completely up to the chairman of the Judiciary Committee, Chuck Grassley, to determine how fast or slow this should go. In the name of justice, for the American people, regardless of party --

COSTELLO: Sure.

HARLOW: Should time be valued here?

SCIUTTO: And this was an accelerated process, too, you'll admit.

COSTELLO: So if we are -- if we can agree that the confirmation hearing process thus far has afforded both sides the opportunity to have full time to ask whatever questions they'd like to ask, and at this point in time the sole remaining issue is now something that should have been handled confidently during the confirmation process, and --

HARLOW: Look, I think Democrats would take real issue with saying they had, you know, the time to fully examine this given the documents that they had been requesting, as you know.

COSTELLO: If I -- if I understand correctly, the documents that they are claiming that they didn't get to see were documents that passed through Judge Kavanaugh when he was White House secretary. If I'm also understand correctly, Judge Kavanaugh has issued or been a part of hundreds of decisions over the past ten years as an appellate judge.

HARLOW: Right.

COSTELLO: And, for whatever reasons, Democrats have not focused on a lot of those decisions. I actually felt the most probative, interesting part of the hearing was when Senator Leahy was asking about the role of technology in 21st century jurisprudence.

So Democrats have decided not to ask about his --

HARLOW: I mean we -- Jim, we watched the hearings. Democrats focused very much on his hundreds of decisions in the D.C. Appellate Court.

SCIUTTO: Let me, if I can, just while I have you, because we're short on time, on another issue.

You've seen that the president has ordered the declassification of a number of e-mails of current and former Justice Department and FBI officials, including James Comey, the FBI director, the FBI director that he fired. Unusual for a president to declassify these text messages, information contained in a FISA warrant here.

We should also note, this is, of course, an investigation the president himself has an interest in. Do you believe that that is undue interference in the Russia investigation?

COSTELLO: It's a little too early for me to render an answer to you. And I'm not trying to skirt the question in as much as I'm still. -- this Kavanaugh thing has really dominated -- I mean that's -- I've been reading a lot about that.

[09:45:03] I do think this, that, number one, it's highly unusual. Number two, I think we're going to hear from law enforcement as to what -- I'd really like -- be curious as to what Rosenstein and Wray have to say about this. I would anticipate that Mr. Schiff and others will speak to their ire over this. But I don't know at the moment.

I will continue to say this, though, for base Republican voters, they feel that this is a witch hunt. I do not agree with that. I believe it's a legitimate investigation. But I think in the coming days I'll have a -- we will have a much better understanding as to why they were released, what it actually means in the grand scheme of why he did it. I just don't have a good answer for you at the moment.

HARLOW: Before you go, on women, you have talked publically about it, in your words, a, quote, Republican suburban purge facing ahead of the midterms in 2020. You know --

COSTELLO: 2018, yes.

HARLOW: In 2018, but also, you know, for 2020 for the general. Are women -- I mean is this all dependent on how your party can do with women?

COSTELLO: I think it is even a little bit broader than that. College educated suburban voters, but in particular women, are looking at the Republican Party and they have concerns over the president's rhetoric and style. I've said this so much that people say -- you know, think that I don't support the president at all, although I do support many of the policies. But that is -- that is a real challenge for Republicans moving forward.

My feeling is that when Republican members agree with the president policy-wise, they should say that. But when they disagree, they also need to say that because in this day and age the president dominates just about every single news cycle. And if you're not going to lean in and say where you agree and also disagree, you're going to have voters feeling that that's -- you agree with some of the stylistic and rhetorical things that he says and does, which I don't think many suburban voters do, particularly suburban women.

HARLOW: Congressman Ryan Costello, appreciate you being here. Thanks.

SCIUTTO: Thank you.

COSTELLO: Thank you.

SCIUTTO: The floodwaters and the death toll both rising in the wake of Hurricane Florence. The storm leaving behind a dire situation in many parts of the Carolinas. It could get worse, if you could believe it. We're going to be live on the ground, next.

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[09:51:47] HARLOW: Well, Hurricane Florence is now blamed for 32 deaths. The latest in Virginia after a tornado collapsed a building right near Richmond.

SCIUTTO: Carolinas, meanwhile, are bracing for catastrophic flooding.

Our Kaylee Hartung is at the bridge heading into Wrightsville Beach there.

Kaylee, I mean some of these pictures there, you know, people think the storm is passed, but the flooding is nowhere near leaving.

HARLOW: Yes.

KAYLEE HARTUNG, CNN CORRESPONDENT: Yes, that's right, Jim and Poppy. Any cars you see coming up behind me, they will be crossing this bridge into Wrightsville Beach. People returning to their homes for the first time since this storm made landfall here on Friday.

We were just over on that beach with some residents returning to their home, and looks can be deceiving. First impressions can be deceiving.

When we first got to their home, it looked like the two feet of water that had flooded their area hadn't done much more damage than to the carpet of their stairs leading up to the second floor of their home. That first area, first floor area, storage, and a garage. But once they went up to that second floor, they realized that a hole in their ceiling had destroyed nearly everything that they owned inside.

Now, this bridge being open, so many roads within the state of North Carolina still closed, but we are just learning of two access points that are now available to get people into Wilmington and surrounding areas. One by way of I-40 East. Another by way of U.S. 421 West. So Wilmington no longer cut off from the rest of this state.

Nevertheless, the threat of flooding continues. We're expecting that to continue in some areas, like Lumberton and Bergal (ph), into the weekend. HARLOW: Wow. OK, Kaylee, thank you for being there. I'm glad it's not

cut off anymore, but I mean 32 deaths already blamed, and the flooding still a persistent problem.

SCIUTTO: Thinking of those families for sure.

HARLOW: We are.

Thanks for the great reporting. We appreciate it.

Ahead for us, the Trump administration is drastically slashing the number of refugees that will be allowed to settle in the United States. Arwa Damon with us on this, next.

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[09:58:08] SCIUTTO: The Trump administration is slashing the number of refugees the U.S. will admit to a new record low. The count for 2019 now set at 30,000 people. That's down from the previous record of 45,000 this current year, down from 110,000, nearly three -- four times as much, in 2017 during the Obama administration.

HARLOW: Yes. Our --

SCIUTTO: CNN's senior international correspondent Arwa Damon joins us now.

Arwa, you've met with the people most impacted by this policy. How are they reacting to this?

ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: You know, it's absolutely heartbreaking because these are populations, whether you're talking about those that are stuck festering in refugee camps inside Syria, inside their own country, to those who are even here in Turkey or scattered throughout Europe or even people that are trying to flee various different African nations and other parts of the world. These are among the most desperate of populations. And these are populations who really want to believe in this American dream, who really want to believe that America, at the very least, is going to be a country that lives up to its fundamental principles.

And to see that the United States is doing the complete contrary, just turning its back on these populations, look, we've had numerous conversations with people inside Syria who have been through things we can't even begin to imagine, who keep saying, why does America turn away from us? And I think the thing that perhaps the administration has not necessarily realized is that turning your back on someone who is that desperate can potentially be much more dangerous than holding out a helping hand and trying to actually lift them out of their circumstances.

And to that extent, we heard from the ICRC that said that the U.S. is not only abdicating humanitarian leadership and responsibility building in this worst global refugee crisis that we've seen since World War II, it is also saying that it's compromising critical strategic interests. And that's at the core of all of this. [10:00:09] HARLOW: It is at the core of all of this. And, Arwa, you

have lived this.