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Melania Trump Visits Ghana; Trump's New Trade Agreement; Rescuers Race to find Survivors; Aired 9:30-10a ET

Aired October 2, 2018 - 09:30   ET

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


[09:30:00] DAVID MCKENZIE, CNN CORRESPONDENT: In many ways, but there has been criticism from the current Ghana leaders and others of the private comments that President Trump has made, derogatory comments about the continent. But the first lady will try to push her own agenda, which in this case is her -- this similarly to her domestic agenda, the Be Best campaign, on an international stage. Very much hand in hand with the USAID, the development agency of the U.S., pushing the health programs that the U.S. is working on throughout the continent.

Jim.

JIM SCIUTTO, CNN ANCHOR: And the president, beyond the comments, has made policy decisions here that have limited, even eliminated, foreign aid for some countries. Does that contradict, to some degree, the efforts that she's making here, because the Be Best campaign, you know, there's substantial things here of great importance to Africa, disease prevention, health care, education. And how does that gel with the president's own policies?

MCKENZIE: You're exactly right. As you will well know that the policies of the U.S. are very robust when it comes to health care progress in Africa. But it has been undercut. So many NGO leaders over the last few days I've been speaking to by the reinstatement of the Mexico City policy by President Trump, which, in effect, bans U.S. funding from groups that give any kind of advice or advocacy on the topic of abortion. That's something that's come in during Republican administrations. But it's been expanded dramatically under President Trump. And a lot of the charities I've been speaking to in the countries that the first lady is visiting have said they potentially could lose millions in funding that could affect real world situations for people.

So while she is pushing the -- the will be real impact of U.S. funding on the ground, there are these other issues because of President Trump's policies, particularly that of the Mexico City policies that could undercut her message as she goes through with her trip.

Jim. Poppy.

POPPY HARLOW, CNN ANCHOR: David McKenzie reporting for us. Thanks for being on the ground. We appreciate it.

Ahead for us, the president says his revamped version of NAFTA, the new trade deal with Canada and Mexico, is an historic win. We're going to speak next with the Council of Economic Advisers chairman, Kevin Hassett. He joins us to talk about specifically how this will help the middle class and whether or not the goal is to use it to take on China.

(COMMERCIAL BREAK)

[09:36:30] SCIUTTO: It was being touted as a major win for the Trump administration, a modernized NAFTA trade deal dubbed the U.S.-Mexico- Canada Agreement, or USMCA. It is now paving the way for a major new trade showdown with China.

HARLOW: And we get into all of that with the man who chairs the president's Council on Economic Advisers. But we wanted to ask him first, what does this mean for you at home? Why is this good for the average American? He makes his case. We asked him moments ago. Watch this.

(BEGIN VIDEOTAPE)

KEVIN HASSETT, CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: Right. Well, I think the way to think about it is, is that we've got a new 21st century trade deal that makes it so that we now have agreements about, like, the Internet and drugs and even things like environmental rules. And so it absolutely affects American families in a million different ways.

But I think that the -- the basic --

HARLOW: But how about just three for the folks that --

HASSETT: Sure.

HARLOW: For the folks at home who are wondering what it means for me.

HASSETT: Well, yes, so -- so as an example, if you have like a bio pharmaceutical, like the drug Neupogen or Epogen or something like that, then they -- there are these complicated proteins, and it's been really hard for countries to agree like exactly, how are we going to have a generic version of that so we can cut the costs of drugs for people. And the trade deal basically accepts the U.S. standard for generics for bio pharmaceuticals so that they can start to have them in Canada and Mexico and the U.S. And that --

HARLOW: Right.

HASSETT: That will help lower drug -- drug prices. And so there's that.

There's the stuff that's going to move a lot of auto production back into North America that makes it much harder to trans-ship from China through Mexico or Canada.

HARLOW: Right.

HASSETT: And that's really good for American workers. You know, eventually for American consumers as well.

HARLOW: One of the question, though, on that, the follow-on, that you know economists this morning are worried about is, is that going to mean that auto prices are going to go up? I mean there is an interesting, important part of this. By 2023, 40 percent of cars imported to this country have to be made by workers making at least $16 an hour. That's about three times the average factory wage of an auto worker in Mexico. You know, you do the math. You look at what logically could happen. That could mean that parts prices and car prices go up in this country. Can you guarantee that's not going to happen?

HASSETT: Right. Well -- well, I mean, in negotiations there are no guarantees. But I think that you have to understand that the objective is -- which what you see in this deal -- that we've moved towards a fair and reciprocal trade deal that lower tariffs and makes our markets accessible to people who make their markets accessible to us.

And one of the problems that we have is that there are countries like China that have really high tariffs on U.S. exports into China. And when we try to, you know, do something that puts more pressure on them so that they have to come to the table, and like Canada and Mexico did, negotiate the better deal, then they could have, in the past, just trans-shipped their stuff through Mexico and Canada. And so then they don't have an incentive to lower their tariffs --

HARLOW: Right.

SCIUTTO: Yes.

HASSETT: On our product, right because they were n -- you know, coming in the back door.

And so I think that this deal is a really important first step in getting everybody around the world to adopt what, you know, President Trump said at the G-7 meeting is his objective, which is zero tariffs and zero nontariff barriers for everybody. And so -- but, you're right. In the meantime, you know, one of the ways that President Trump has gotten people to the table -- and he said this yesterday at the press conference out in the Rose Garden is that he's threatened tariffs and the threat of tariffs has brought people to the table.

SCIUTTO: But let me ask you a question on China specifically. I spent a lot of time in China. A close issue of mine.

HASSETT: Yes.

SCIUTTO: A lot of the details of this deal that you mention struck folks as very familiar because they were included in the Trans-Pacific Partnership, the TPP, a deal that President Trump pulled out of. He called it a terrible deal at the time.

[09:40:09] I wonder if that is a signal -- we should read that as a signal that the administration -- that you and the administration and the president are open to revisiting the TPP --

HARLOW: TPP.

SCIUTTO: Perhaps renamed but revisiting a deal along those lines.

HASSETT: Well, I think that you -- you're exactly right. You hit the nail on the head, that this deal is the model for other deals. I've heard the president say over and over since I've been here, you know, almost, what, 15, 16 months, that what's going to happen is that we're going to show people what a good deal looks like and then we're going to just knock them down, one after the other.

And, you know, we've got the Korean deal done now. We've got this new NAFTA version of the USMCA done. And we're negotiating with Europe and Japan.

And I think the president expects that everybody's going to sort of fall into line and adopt this as a model for -- for a new deal.

HARLOW: So that sounds like a maybe.

HASSETT: Yes, but the point is --

SCIUTTO: But -- but let me ask you about, everybody --

HASSETT: Can I just add one thing, though?

SCIUTTO: Sure, sure. Quick follow-up (ph).

HASSETT: But something that the president emphasizes all the time when you talk about this is that he doesn't want to negotiate with 20 countries at once. He likes -- he thinks that a bilateral trade deal, or in this case remember we negotiated with Mexico. Then we made a deal that was pretty attractive to Canada. And after a couple of weeks of haggling, then they joined it. So President Trump wants to not have these big things where 20 countries meet and then we have a trade deal. He'd rather negotiate with one person at a time.

SCIUTTO: I -- listen, I hear you on that and you talk about everybody falling into line. But let's be fair. You know this as well better than me. China has its own domestic politics.

HASSETT: Sure.

SCIUTTO: They do not like to be pushed around by any country, the U.S. or by President Trump. There is a drive there to dig their heels in. The idea that China would say, OK, listen, let's go to the table here. You know that that's a high bar to cross here. How do you get over that resistance in the country there to be seen as giving in to President Trump and the U.S.?

HASSETT: Right. Well, I think that there was a lot less pressure on China before because they could use the back door into America through -- by trans-shipping through Mexico. And now that we're very close to deals with Japan and with Europe, I think that we're all going to look to China and say, hey, guys, can you just start by, you know, playing by the rules. I think, you know, we've been bring WTO cases against them and winning, but, you know, it takes five or six years to get -- to get through to them, right?

HARLOW: Yes. And -- and though --

HASSETT: And so I think that we, as a collective front, are going to go to China and say, hey, just start playing by the rules. And I would expect that they will have to do that when we, you know, collectively put pressure on them.

HARLOW: The issue is those WTO deals, as you well know, you know, they don't really have the teeth that you need.

Let me ask you about tariffs because I know you and the president have said we want to see a world with -- with no -- with --

HASSETT: Which is why we're standing up to China, by the way. Like, that's exactly your point, right? So the reason we're standing up to China the way the president's doing it is that we win cases in the WTO, but it doesn't have much effect. And so we're pursuing another strategy.

HARLOW: So here's -- here -- here's a problem in the middle. If you want to get to that ultimate goal of no tariffs, ultimately, you say the way to get there is to instill these very tough tariffs, OK. But the problem is, what happens in between that, right? Because you've got major corporations, like Walmart, like Macy's, like Target, all of their executives have come out and warned that this -- these tariffs on China are going to mean higher prices for consumers heading into the holidays. That's not a good look. How do you reconcile the two? What do you do about that when the biggest retailers in this country are saying, we are raising prices because of your tariffs, Mr. President.

HASSETT: Well, I mean, you guys know a lot about China. You know, I know from watching you talk about China on the show. And the fact that is, you know, at CEA we estimated last year that China is stealing about 1 percent to 3 percent of our GDP every year through intellectual property theft. And so we're starting from a really bad spot where China's been misbehaving for a long time and the other presidents have wanted to do something about it and failed.

And President Trump has this very hard line approach that gets people to the table. I think if you look at the NAFTA success, you can see that there's hope that it works. But when we start from a case where they're taking, you know, a big share of our GDP every year, that -- then, you know, we --

HARLOW: Right.

HASSETT: You know, if we put a tariff on them, it's not like that's the first move, right? We're trying to get them to the table.

HARLOW: So it's --

SCIUTTO: But folks refer to that as the biggest theft in modern history.

HARLOW: Right. And --

SCIUTTO: You know, tens of billions of dollars a year in lost business.

HASSETT: Sure.

HARLOW: Exactly. And so it sounds like Americans are going to have to deal with that pain, that, you know, price tag pain in the interim and hope that you reach the goal that the White House wants to reach.

Final question. Goldman Sachs, you saw the note I'm sure, it came out in the last few days, and they warned that all of the benefit we've seen in the stock market and the earnings per share of companies could go down to zero next year if a 25 percent tariff is instituted on all products imported from China.

Are you concerned about dealing a blow to the stock market as a result of these tariffs?

HASSETT: You know I -- so I haven't read that report, but the Goldman Sachs economic team, it almost, at times, looks like they're the Democratic opposition. You know, if you go back and look at their analysis, the tax cuts, right, they basically said it would be really harmful for the economy practically or have almost no effect at all. And then after the tax cuts were passed, they jacked up their forecasts.

HARLOW: So you're saying Goldman is being partisan here. I don't need to remind you how many Treasury secretaries have come from Goldman Sachs.

HASSETT: I -- I'm just saying, I'd have to go -- yes. You know, I'm just saying that id' have to read the analysis to assess it. But when -- you know, if it's basically -- yes, so think about it this way, that when you put a tariff on a Chinese product, then it has a big effect on the U.S. if there's no alternative supply, right? And we've analyzed the effect. And we don't find it anywhere close to being, you know, something that reverses all the benefits we've seen this year from other policies. So -- so I'd really have to see it.

HARLOW: OK.

[09:45:18] HASSETT: But, again, you know, their analysis of the tax cuts was really, really wrong and timed in a partisan way. So maybe they're just trying to make a partisan point before the elections.

HARLOW: All right, well, we'll go back to them on that.

HASSETT: Yes.

HARLOW: Kevin Hassett, thanks for being here.

HASSETT: Or -- OK. Thanks.

HARLOW: Come back -- come back soon.

SCIUTTO: Thank you, Kevin.

HARLOW: Thank you.

HASSETT: Yes, bye-bye now.

SCIUTTO: There are chilling new satellite images of the aftermath of the earthquake and tsunami in Indonesia. Areas entirely wiped out. And so far more than 1,200 people dead. That count expected to climb. Look at those images there. We're going to have a live report from one of the hardest hit areas, next.

(COMMERCIAL BREAK)

[09:50:20] HARLOW: All right, welcome back.

Happening right now, rescuers in Indonesia are racing against the clock, searching for any sign of life after they dig through what's left of the town's destroyed by Friday's earthquake and the devastating ensuing tsunami. More than 1,200 people have died. That is the death count now, up significantly from just what we saw yesterday morning. Still, though, you have rescuers searching for anyone who may be a survivor.

SCIUTTO: To get a sense of the scale and look of this, take a look at these before and after satellite photos.

HARLOW: Wow.

SCIUTTO: That on the left, the prior to the earthquake, afterwards, and what you see here is the effect of what's called liquification (ph). Basically the earthquake turned the soil into something like a liquid, like a flood, and it washed entire communities, structures, buildings away, erasing them. That's the beach there, erasing them from the map.

CNN's Matt Rivers is in the town of Palu, one of the hardest hit areas.

You know, I get the sense that as rescuers are just getting in here, it's taking time even to get to some of these areas. Probably haven't been to many of these areas. Really this death toll, sadly, is going to rise.

MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: Yes, there's no question, Jim. I mean we said it yesterday and we say it again today, the death toll will continue to go up. I mean these are really remote areas.

I'm in kind of the middle of the city, if you could call it a city. You know, it's certainly not like New York or anything. But, you know, there's remote areas that as rescuers continue to work their way out, they find new bodies, new victims as they go out. So, yes, that death toll is going to continue to rise.

You know, the other thing that we're experiencing here is just a lack of basic services for people. You know, it's one thing for rescuers to go and try and find victims, but what about the people that are left behind? Sixty-six thousand homes so far have been destroyed by this. And so, as a result, you've got a whole bunch of homeless people that don't have water, don't have food, a lack of electricity, lack of health care, a lack of just real basic services. So it's a really desperate situation, Jim and Poppy.

HARLOW: When you look at the government response, I mean, you told us yesterday, Matt, how long it took just you to get there, two days from Bangkok, right? How difficult it is to get outside aid in. Talk to us about what more outside aid is needed and how the government response has been so far.

RIVERS: Well, if you're judging how much outside aid is needed based on the domestic government response, then you're going to need a whole bunch of international aid. I was hesitant to say this yesterday because we hadn't been on the ground long enough, but today we spent our entire day talking to people affected by this. We were in those homeless camps talking to people who are without -- without -- they've lost everything, and they are angry at the government response. It has been slow. It's been inefficient.

Five days on and some places still don't have electricity in government-sponsored camps. It's one thing way out in the remote areas for no electricity, but in government-sponsored camps. I talked to a camp director, employed by the government, who says, our government is not giving us enough rice, the electricity is spotty, the bathrooms are horrendous, and you've got babies in there who can't take formula because there's not enough water to go around. So if you can't get the smallest, the most vulnerable, the most basic necessity of life, which is water, then I don't think your response is all that great.

HARLOW: Right. OK. Matt, thank you for being on the ground, for bringing us all of the facts, helping where you can. We appreciate it very much. We'll check in with you in a little bit again.

Meantime, the White House says now the FBI can talk to anyone it wants for the background investigation into Judge Brett Kavanaugh. It seems like everyone now in Congress and beyond has an opinion about who the FBI should to (ph). We'll get into the facts, next.

(COMMERCIAL BREAK)

[09:58:25] SCIUTTO: Welcome back.

It is just 35 days, five weeks, until the midterm elections.

HARLOW: That's it?

SCIUTTO: It's coming fast.

HARLOW: Wow.

SCIUTTO: And, listen, a lot can happen in that time. We want to hear about what will drive you to the polls. This is a special segment we started it yesterday. We're going to do to every day until the midterms. We want to know what you're hoping will happen and how your vote will make a difference.

HARLOW: Right. This is not about your voice or pundits' voices. It's about your voice. And we're talking to people all over the country. We're airing it every day at the end of the 9:00 a.m. hour, right here, "Why I'm Voting." Here's what you told us today.

(BEGIN VIDEOTAPE)

CARTER CHAPMAN, REPUBLICAN VOTER: I'm voting because it's your civic duty, honestly. People don't think that politics has a big impact on their life or they think their vote doesn't matter. But, I mean, we had elections here in Anathespa (ph) County that came down to 12 votes. So your vote really does matter. And especially in local elections like that where that has a great impact on your everyday day-to-day life. So people think national politics is all there is, but your vote counts to wherever you're voting.

SALINA PATEL, REPUBLICAN VOTER: The economy, definitely. My parents are small business owners, so I really like think that the economy is important to me. I value the Republican like platform on taxes and that whole deal, and it does a lot for my family. So that's why we get out to the vote -- or to the polls and vote.

KEVIN CHANG, DEMOCRATIC VOTER: I really want adults. I want adults in the room. And I just don't think we have adults in the room right now.

BETTY REID, DEMOCRATIC VOTER: I'm voting to put -- to bring back civility back into the White House. I'm voting because I feel as though we need real change and to make America really great again.

(END VIDEOTAPE)

HARLOW: All right.

[09:59:55] SCIUTTO: Well, will you be voting for the first time in November? Post a video to Instagram telling us what is motivating you to vote for the first time. Use the hash tag #whyivotecnn for a chance to be featured on our show, as well as on CNN's Instagram.