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Report: Trump Asks Officials to Draft Possible Trade Deal with China; Millions Desperate for Food Due to Yemen's Brutal Civil War; Girl in Iconic NYT Image Depicting Yemen Famine Dies; Girl Awed by Michelle Obama Portrait Dresses as her for Halloween; Oldest Victim, Rose Mallinger, to be Laid to Rest Today. Aired 10:30-11a ET

Aired November 2, 2018 - 10:30   ET



POPPY HARLOW, CNN ANCHOR: Bloomberg is reporting that President Trump has officially asked officials to begin drafting a potential trade deal with China ahead of his meeting with President Xi at the G20. Can you confirm that?

KEVIN HASSETT, CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: You know I can't confirm or deny stuff that is subject to executive privilege. You know I'm an adviser to the president, and you know the things that we do that stays internal.


HASSETT: The thing I can say is that the president had a very positive discussion on the phone with President Xi that they're looking forward to having a productive meeting you know down at the G20. And if the president were going to go have a meeting with you know any head of state, if they're going to talk about tiddlywinks, then you know the staff would be preparing the president to talk about tiddlywinks, right?


HASSETT: And so, I don't think -- I don't have anything to add to that.

HARLOW: I hear what you're saying there. Let's get to some of the long-term issues here, Kevin. And some concerns that a slowdown is coming. So if you tick through some of the numbers, new monthly home sales have fallen 22 percent since a year ago. Residential investment has declined for the last three quarters. Auto sales are down in the third quarter. Business investment dropped dramatically from 8.7 percent to just 0.8 percent. Is this evidence of a fading impact on the economy in a beneficial way from the tax cuts and a slowdown in 2019?

HASSETT: No, I really don't think so. I think -- let's go through the three components that you mentioned. So the residential sector, that is the sector that's been pretty weak for a while, and you're right to point to the continued weakness. Motor vehicles were down, and I think that's probably because that's a pretty intra sensitive sector, but we're at like model year change time and often interest rates plus model year change can cause autos to go on hold for a while.


HASSETT: But the capital spending numbers, you know don't forget that if something goes up a lot and then it goes up a little, that it's higher, right? And so, the capital spending numbers are way, way up from where they were at the beginning of the year, and all of the data we have is way more positive about capital spending than what you saw in the GDP release. So I look forward to seeing the revision to that. You know the nondefense -- of its orders and shipments, the key source data for that. They were up more than 6 percent.

HARLOW: I hear you.

HASSETT: Can I say one last thing, that even today, because I was really looking at this because I'm puzzled by the GDP data. In the jobs report today, we can actually look at job creation in the industries that make capital goods - and then now we have like the best data in the current quarter for that industry, and it was up something like 5.2 percent.

HARLOW: There is a lot of --

HASSETT: So there's 5 percent growth in employment and capital goods making industry. So therefore, the capital spending boom continues and GDP does too.

HARLOW: But there is concern about the impact of tariffs. You have the National Association of Business, economics survey 38 percent of goods producing companies say they delayed investment because of the trade war. "Wall Street Journal" polled economist, they say growth is going to slow to 2.5 percent next year, a lot of it because of the tariffs, right? And this is in the hopes that a deal can get done with China. When you look at that, do you have concerns that if growth slows in that way, right, or the IMF say that growth is going to slow to 1.8 percent by 2021, that's what the Fed is saying, are you worried about how you pay for the tax cuts if we see that slowing?

HASSETT: Well, first, that was a multipart question. So let me go, on trade, we made an enormous amount of progress basically with everybody but China. And it's because President Trump is, you know -- Peter Navarro says he works in Trump time. It's kind of true. He moves fast, he makes deals fast, and we have got the USMCA deal. We've got free trade talks with Europe and free trade talks with Japan. And so all of that stuff is moving in a direction that's very positive for growth, but you're correct to point to China as being you know the one thang that doesn't seem to make as much positive movement, but the fact that the president has talked to President Xi and the fact that they're meeting, you know, makes us hopeful that that story is going to end up having a happy ending that all of the other stories have had.

HARLOW: But are you worried, Kevin, if there is not a happy ending with China, and these tariffs continue to weigh on growth, you're not going to be able to pay for the tax cuts?

HASSETT: No, I don't think that the effect of us, on the -- of that not resolving the same way the USMCA did would be anything close to the effect on them. And you know because -- basically what happens is that if we put a tariff on a Chinese good, then you know our customers can just buy it from Malaysia or from the U.S. or someplace else.

And so, what you really have to do to find the economic damage is find the stuff that doesn't have a close substitute. And most of the things that we buy from China are kind of like generic manufactured goods. That you can buy from somebody else if the Chinese don't make a deal with us. So that's why, you know, you guys have covered it, I'm sure that if you look at Chinese markets, you look at the Chinese economy, then this trade dispute has had a much bigger negative effect on them than us because we could just go to alternative suppliers.

HARLOW: Let me finally ask you about immigration because the president is hammering on immigration four days ahead of the midterms. This is what you wrote in the "National Review." Quote, "If the U.S. doubled its total immigration and prioritized bringing in new workers, it could add more than half a percentage point a year to expected GDP growth." Would increased immigration in this country actually help with growth and help pay for the tax cuts?

HASSETT: Right, you know - and that was something I wrote a long time ago when I was at the American Enterprise Institute, not as an administration official.

[10:35:02] HARLOW: But do you still believe it?

HASSETT: Oh, no, no - yes, of course. So the point is that the president has emphasized that if we have skills based immigration rather than chain migration, then we could bring a lot more skilled workers into our country. And like, oh yes, you know we have more job vacancies than we have available workers. You know we could bring people in to fill those in places that we need to, that would definitely be a positive for the economy for sure.


HASSETT: If that's to analyze that. That's what I would say still.

HARLOW: Just on that point, do you wish he was out there on the economy four days ahead of the midterms talking about that instead of talking about invaders from a migrant caravan?

HASSETT: You know I'm not a political adviser. I'm an economist. And that fact is that the economy is about as strong as I have seen in my career. I mean the notion that we've got highest wage growth in more than a decade, that we've got people rushing back into the labor market. You know those 1.3 million people that has already given up that we have given new hope to. You know I think that's really a positive story.

And you know, I think that's a positive story that has legs because I think it's going to continue. (CROSSTALK) The last thought about it which is that if there's anyone listening and you're one of those people that sort of gave up because you kept applying for jobs, and they weren't giving you a job, you should get back in there. You know there are so many job openings that it's time to reconnect.

HARLOW: Good advice. Let's see if we hear more of it on the campaign trail in the next four days. Kevin, we appreciate the time as always. Have a good weekend.

All right, Jim.

JIM SCIUTTO, CNN ANCHOR: There are calls for a ceasefire three years after the start of the brutal civil war in Yemen, but beyond the fighting, new attention on the human toll of the crisis. Millions desperate simply for food and it may be getting worse.


[10:41:07] SCIUTTO: Her name means hope in Arabic. But this morning, we have a sad update to share with you. 7-year-old Yemeni girl who has become a striking symbol of the dire situation in her war-torn country, you see her there. She's died. Amal Hussain's mother says her daughter starved to death at a refugee camp just four miles from a hospital. But she simply didn't have the money to take her there. This haunting image of the starving girl in "The New York Times" last week drew international attention. Poppy, it reminds me of those images of Ethiopia in the '80s.

HARLOW: It does. It does. And it reminds me of Aylan Kurdi, the little - you know the little boy that was the image of the crisis as well in Syria. It's tragic. This is an image you have to keep looking at, as uncomfortable, but this is the reality. A week after the image was published, U.S. Defense Secretary Jim Mattis, Secretary of State Mike Pompeo, called on all sides to ceasefire in Yemen's civil war, but Amal's story, this little girl you see right here is just one example of the crisis, the three-year conflict has killed at least 10,000 people. The U.N. says 13 million Yemenis are in danger of starvation.

With us now, our senior international correspondent, Nima Elbagir, who has reported extensively on this crisis. Also joining us on the phone is Declan Walsh, the Cairo bureau chief for "The New York Times." He has been the one in touch with Amal Hussain's mother who just lost her daughter. Declan, Nima, thank you for being here. And Declan to you first, you're the one who brought the world the news that she had died. What do you want everyone to know as they look at this image of this little girl?

DECLAN WALSH, CAIRO BUREAU CHIEF, "THE NEW YORK TIMES" (via telephone): Well, as you said, this is just another shocking example, you know, the plight of Amal really represents the plight of so many young children in Yemen. There are 1.8 million children who are considered to be acutely malnourished in Yemen. About one fifth of those 400,000 are considered to be severely malnourished, in a similar state to Amal, the girl we met in a hospital ward a couple of weeks ago. And the U.N. says the situation is getting rapidly worse. They fear that if the fighting continues as it is now, and if Yemen's economic crisis continues to deepen, as it has over the last couple months, there could soon be as many as 500,000 children in a similar state to Amal. SCIUTTO: Nima, you spent so much time covering this war. The U.S. backed Saudi Arabia. Many of the weapons, as you have established in your reporting, have been used and sometimes in strikes that have killed civilians there. Do the people of Yemen view this not just as a Saudi war or a Yemeni war, but an American war? Do they hold the U.S. responsible for --

NIMA ELBAGIR, CNN SENIOR INTERNATIONAL CORRESPONDENT: Absolutely, absolutely. When you speak to people, they really describe these almost concentric circles of moral complicity because this isn't a natural disaster. This is an entirely manmade disaster. There has been a partial blockade on the port in Hudyadah. There's a stranglehold as the Saudi-led coalition's forces try to retake that port. And there have been very cynical decisions made around that. There has been targeted attack on grain silos, on markets, on fishing boats.

And I know Declan spoke about those 5,000 children that are at risk of also dying from starvation, but we need to take that a step further out. There are 22.2 million people in Yemen in need of humanitarian assistance. That's 80 percent of the country.

So we're at a point now where potentially if we tip over the edge, even going in with the U.N., even if people start trying to buy their consciences and funding the U.N. food program extensively, you will still not be able to stop people from dying.

[10:45:01] And we saw, as Poppy mentioned there, Secretary Mattis coming, asking for a ceasefire. It needs to go one step further. There needs to be leverage put behind that ceasefire. There needs to be consequences.

HARLOW: Let's put that picture of her back up on the screen. Declan, to you, final word. Mohammed bin Salman -- King Salman, what could they do right now so that more little girls and little boys like this don't die?

WALSH: There are two things they could do. They could stop the fighting, and as you say, there's been a call for a ceasefire within the next 30 days. And Mohammed bin Salman and his western backers, countries like the United States and Britain, could stop the fighting.

And secondly, there are a number of important economic measures that have to be taken urgently to stop the country's economic collapse, to stop the currency plunging, and those aid workers have told us that those are the factors that have put food -- the most basic food items beyond the reach of millions of people. And so it's a combination of both international relief aid, but also, measures to make sure that so many other people can just afford to buy the basics that will keep them alive.

SCIUTTO: U.S. officials now raising the possibility that the Khashoggi murder could be -

HARLOW: Right.

SCIUTTO: -- give the U.S. the leverage to end this war. We shall see. Nima Elbagir, Declan Walsh, thanks so much as always. We'll be right back.


[10:50:00] HARLOW: All right, good news story for you this Friday. Talk about inspiration for a Halloween costume. Take a look at this. This is little Parker Curry. OK. You remember this image that went viral. There she is mesmerized by the portrait of former first lady Michelle Obama. Well after seeing that photo, Mrs. Obama invited her to the White House, and they had a little dance - a little dance in Washington. So of course, that inspired little Parker Curry too, for Halloween be drum roll please, Michelle Obama. Parker went trick-or- treating complete with that gown that replicates the milly dress that the former first lady wore for her portrait, and in response, Michelle Obama tweeted, "You nailed the look, Parker. I love it!!!" 3-year-old Parker Curry, her mother Jessica joins me this morning. This is making my week, just to see you guys. Hi, Parker.



JESSICA: Thanks for having us.

PARKER: -- having us.

HARLOW: Thank you for being here. Parker, did you have a great Halloween?

JESSICA: Yes. Say yes.


HARLOW: And did you love dressing up as Michelle Obama?

PARKER: Say hi.

JESSICA: Hi. But Poppy said did you love dressing up -- is that you? She said did you love dressing up as Michelle Obama?


HARLOW: You did? How much candy did you get?

PARKER: So much.

HARLOW: Like this much, this much. My daughter says big. I got big candy, mom.

JESSICA: Big candy.

HARLOW: Mom, to you, Jessica. What did you think when she said to you, I want to be Michelle Obama for Halloween?

JESSICA: I was flabbergasted. I was so caught off guard. Like I thought maybe she'd say -- I know, I see the picture. I thought maybe she would say she wanted to be Elsa or Moana or some other princess that she likes. But I mean, I asked her, Parker, want to you want to be for Halloween. Half a second later, she was like, I want to be Michelle Obama. I want to be Michelle Obama. The next day, we asked her, hey Parker, what do you want to be for Halloween? Still, very adamant, I want to be Michelle Obama for Halloween.

HARLOW: Well, you know, Parker, after you want to Washington and did a little dance party with the former first lady, she wrote about you, keep dreaming big yourself.

JESSICA: Listen. Didn't Michelle Obama say keep dreaming big for yourself?

HARLOW: And maybe one day I'll look up at a portrait of you. So, maybe you will be, I don't know, president one day.

JESSICA: Poppy said maybe you'll be president one day. What do you think about that?

PARKER: I'm going to change the world?

JESSICA: You're going to change the world? You can if you want.

PARKER: I want to change the world.

JESSICA: You want to change the world. That is you.

PARKER: Michelle Obama.

JESSICA: It is Michelle Obama and you.

PARKER: Me and Michelle Obama.

JESSICA: Michelle Obama and Michelle Obama.

HARLOW: There you go. What has this been like for you, mom?

JESSICA: You know to have a child who went viral once was one thing. To have it happen twice has just been surreal. I thought maybe this time when things started to ramp up and we started getting press that, you know, maybe I would be desensitized because it already happened once, but it feels the same way. It feels surreal, feels unbelievable. I feel really honored that so many people are touched and inspired by her again. And you know, as a parent, I'm open to sharing her light with the world for as long as she wants to share and as long as she wants to continue to inspire people.


HARLOW: You, you.

JESSICA: Me and you.

HARLOW: You, girl. You enjoy the spotlight, little Miss Parker.

PARKER: Look - in the inside. JESSICA: Yes, we're on the TV.

HARLOW: Yes, we are, and Jessica, thank you for the job you do as a mom.

JESSICA: Thank you, Poppy.

HARLOW: And dad does the hardest, most important job every day. Thanks for being with us this morning. We appreciate it.

[10:55:02] JESSICA: Thank you for having us, really appreciate you.

HARLOW: You got it. We'll be right back.


SCIUTTO: The oldest of the victims murdered at the synagogue in Pittsburgh will be laid to rest today. 97-year-old Rose Mallinger was a beloved mother, grandmother, and great-grandmother. She will be remembered as a vibrant woman who loved her family. Her visitation is set to begin just a few minutes from now followed by a funeral service. Meanwhile, a new campaign is asking Americans of all faiths to visit synagogues for the Shabbat, the Sabbath services tonight, or tomorrow. Organizers of the "Show Up for Shabbat" say it's meant to be a show of strength and love against hate. I'd say we need that. We need that.