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U.N.: 24 Million People in Yemen Will Need Aid in 2019; Special Counsel Recommends No Jail Time For Flynn; France Suspends Fuel Tax Hike for Six Months. Aired 12-1a ET

Aired December 05, 2018 - 00:00   ET

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

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JOHN VAUSE, CNN ANCHOR (voice-over): The Russia investigation heats up after a key Trump campaign figure sings like a canary to the special prosecutor, trying to avoid jail time, potentially implicating others and signaling more indictments to come.

The Dow takes a plunge and drops almost 800 points after President Trump calls himself "a tariff man" on Twitter. The Asian markets also in retreat this hour as well.

And a victory for the Yellow Vests as the French government gives in to protesters' demands on fuel prices but they still want a lot more from the French president Emmanuel Macron.

Hello and welcome to our viewers around the world. Great to have you with us. I'm John Vause. This is CNN NEWSROOM.

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VAUSE: We'll begin with a major development in the Russia investigation. Special counsel Robert Mueller says Michael Flynn has been so helpful, so cooperative, he's recommending no jail time for the former U.S. national security adviser. Flynn has been cooperating with prosecutors on at least three investigations.

We get more details now from CNN's Sara Murray.

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SARA MURRAY, CNN WHITE HOUSE CORRESPONDENT: President Trump's former national security adviser Michael Flynn has provided, quote, "substantial assistance to the Russia investigation and should get no jail time."

That's the big news from special counsel Robert Mueller's court filing on Tuesday night.

The filing, a sentencing memo, comes after Flynn has cooperated with Mueller's team for more than a year, sitting for 19 interviews with the special counsel and other Justice Department offices. Now the memo appears to show that Flynn helped the Justice Department

with at least three ongoing investigations. References to two of those investigations are almost completely redacted.

Flynn also cooperated with the special counsel's investigation into links or coordination between the Russian government and members of the Trump campaign, as well as interactions between the Trump transition team and Russia.

The Flynn revelations come amid this flurry of activity from the special counsel's team. Last week, Trump's former personal attorney, Michael Cohen, pleaded guilty to lying to Congress. And prosecutors accused former Trump campaign chairman Paul Manafort of lying to the special counsel and violating his cooperation agreement.

Now as for Flynn, he was a fixture with Trump on the 2016 campaign trail and even leading a "lock her up" Hillary Clinton chant at the Republican National Convention. But his turn as a White House national security advisor, that was brief.

He was fired more than two weeks after then acting attorney general Sally Yates told the White House that Flynn had lied about his communications with the Russian ambassador and that he could be blackmailed by the Russians. Flynn is set to be sentenced on December 18th in D.C. federal court -- Sara Murray, CNN, Washington.

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VAUSE: And CNN legal analyst and civil rights attorney Areva Martin is with us from Los Angeles.

OK, Areva, clearly Robert Mueller, the special counsel, very pleased, both with 19 interviews he had with Michael Flynn, very pleased with the information Flynn provided as well, all the documentation Flynn made available to Mueller.

So Mueller made this recommendation. This is what he wrote.

"Given the defendant's substantial assistance and other considerations set forth below, a sentence at the low end of the guideline range, including a sentence that does not impose a term of incarceration, is appropriate and warranted."

Boy, when they flip, they really flip.

I mean, you know, what are we looking at here?

If he says no prison time for Flynn, is that where the judge goes with this?

AREVA MARTIN, CNN LEGAL ANALYST: Well, the judge is going to take into consideration all of the substantial things stated about Michael Flynn by the special counsel. Not only did he talk about how cooperative Flynn was and that he's

helping with three investigations, he talked about the, you know, the 19 interviews that he participated in, not only with the special counsel but with other lawyers from the Department of Justice.

Now we don't know if those lawyers were in the Southern District of New York or what, you know, other area in the Department of Justice.

But we know Michael Flynn has been very valuable to the special counsel and the Department of Justice. The special counsel talks about his substantial time in the military, the fact that he's been -- you know, he's done more than 30 years in the military, served five years in combat.

So special counsel Mueller went out of his way to highlight the positives about Flynn's participation and cooperation with him. So I think the judge is going to give a lot of weight and credibility to the statements made by the special counsel in this memo.

VAUSE: Yes, you know, there's a lot of expectation about what it may or may not reveal. We kind of get what we expected but -- you know, because a lot of it was redacted citing the ongoing investigations.

But there was one part --

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VAUSE: -- of the memo which stated, "the defendant's record of military and public service distinguished him from every other person."

Notice every other person who's been charged as part of the special counsel's office investigation, that would be like Paul Manafort, Rick Gates, George Papadopoulos, the list goes on.

Then it goes on, however, senior government leaders should be held to the highest standards.

Senior government leaders: any ideas who Mueller might be referring to there?

MARTIN: You raise a really good point, John. We were hoping to learn more about what motivated Flynn to tell the lie that he told about his communications with the Russian ambassador, who might have been in on it and, you know, some other details about, you know, what led to him pleading guilty.

We didn't learn those things in this redacted memo but we did learn a lot about this investigation. And I think one of the more important things we learned is that it's not over.

Despite what the president and his legal team have stated over and over again in the media, it appears that there are many veins and many other lines of investigation that are being pursued by the special counsel. And we don't know if Donald Trump, Jared Kushner, Don Jr. or other

members in the Trump administration are the targets of those investigations. But it is very clear that Mueller is keeping close to the vest what those investigations involve and who are the people that are a part of those investigations.

VAUSE: You know, the investigation goes on. The pushback from Trump supporters goes on, almost as soon as the memo came out. Here's Trump friend and unofficial adviser Sean Hannity of FOX News. Listen to this.

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SEAN HANNITY, HOST, FOX NEWS CHANNEL: Flynn is a convicted felon, a victimless process crime based on evidence that is suspect. The FBI didn't think he lied. Now you can't get him on an actual crime so the old perjury trap always becomes the fallback in the Mueller camp of Democratic donors.

This is how America is going to treat a military hero?

This is a sad and pathetic moment for not only the special counsel but for the country.

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VAUSE: It's all a victimless crime. The man confessed, which seemed to suggest the evidence was not suspect. So I'll leave the last question to you.

Is this a sad and pathetic moment for the country?

MARTIN: Absolutely not. I think this is a proud moment for the country and this is a proud moment for the special counsel's office.

What we know about Robert Mueller, he has been impeccable. He's been methodical. There haven't been leaks from his office. He's been very strategic and he's been effective.

And that's one of the things that Trump and his supporters can't argue against: the facts are the facts, there are not only guilty pleasure but actual convictions of individuals involved in this investigation. Those facts cannot be disputed.

And you know, it's so interesting when you hear Sean Hannity, the president, Rudy Giuliani talk about Michael Flynn. They want to spin this narrative that somehow Flynn didn't lie to the FBI. Well, Flynn himself acknowledged that he told a lie.

So I don't know how you can undermine, dispute or somehow challenge the testimony from the individual himself.

So if you have respect for him as a 30-year military man, why not respect him to be intelligent enough to know when he told a lie?

So it's a quite ridiculous argument, John. It doesn't have a lot of credibility. We expected the president to try to minimize. We expect this kind of rhetoric from Sean Hannity.

But the reality is Robert Mueller is having a ginormous week when it comes to individuals involved in the Russia investigation.

VAUSE: And it was Tuesday. OK. Now it can wait. Flynn really seemed to rise to prominence during the Republican convention in 2016. That was when Donald Trump was officially nominated as the party's presidential candidate. And looking back now, oh, the irony, the irony.

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MICHAEL FLYNN, FORMER NATIONAL SECURITY ADVISER: Lock her up. That's right. Yes, that's right. Lock her up.

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VAUSE: Yes. Lock her up, Hillary Clinton, because of e-mail server. I mean, the twist here is that Flynn actually probably won't serve a lot of time in jail. That doesn't sit easy with a lot of people. Listen to one of Flynn's colleagues. Here he is.

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RALPH PETERS, RETIRED U.S. ARMY: I really have mixed feelings about this. As a former officer, I'd send him to jail for life. He betrayed his country. But as someone who's known Mike since 1985 -- and he has served this country well -- he's a superb officer.

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VAUSE: OK. So whether you like it or not, this is how the system works. Basically, you do a deal, you give up a bigger fish, you go free or you serve reduced time.

That's it, right?

MARTIN: And not only that, John. You go to the special counsel early. And I think when you look at what happened (AUDIO GAP), you stay on Team Trump, a pardon is all but guaranteed.

And now you have Robert Mueller saying, look, there's a new and different game in town. If you come to the special counsel's office with information that's credible --

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MARTIN: -- and you come early and you participate in cooperating with the special counsel, you may also be facing what Flynn is facing, which is a memo and a recommendation to the court that you not face any jail time.

So I can understand how, you know, colleagues of Michael Flynn have mixed feelings about this, because he was serving at the highest level of this country. And you do expect him to be held to a higher standard and you wouldn't expect him to be embroiled in any criminal, you know, wrongdoings.

But he was. And I think the good thing here is, he didn't deny, he didn't spin, he didn't, you know, try to run from, you know, the wrongdoing that he committed.

He went to the special counsel, he cooperated; he's cooperated throughout this entire year and apparently he's provided some very valuable information to Robert Mueller that, hopefully, is going to lead to the indictment and prosecution and conviction of other individuals who have been involved in criminal activity.

VAUSE: Yes. And if you heard Jeffrey Toobin earlier, saying if he was President Donald Trump, he would be very worried right now. Areva --

MARTIN: Absolutely.

VAUSE: Good to see you.

MARTIN: I think no doubt he's worried. Thank you, John. Always good to see you as well.

VAUSE: Thank you.

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VAUSE: Casting is underway for a fourth season of Amazon's "The Man in the High Castle." The hit series is set in the 1960s with a dystopian alternate history, which saw the Allies lose World War II.

Hitler is still alive, at least for the first season, and the defeated U.S. is divided between Nazi control of the East and Japanese occupation of the West.

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UNIDENTIFIED MALE: On this day in 1947, two years after the capitulation of the United States of America, the bloody struggle was finally and comprehensively won.

UNIDENTIFIED MALE: I want you to imagine a very different version of America. It's 1962. The United States no longer exists after the Allied defeat in World War II.

UNIDENTIFIED MALE: The first time on American soil since the war. Much has changed.

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VAUSE: So what would the world look like if Donald Trump hadn't won the election two years ago?

The result turned on less than 100,000 votes in three states but the outcome has had a profound impact on many of those who are closest to this president. Many call this "The Man in the Trump Tower."

We'll start with the former national security adviser, Michael Flynn, because, well, he's in the news today. He was a decorated war hero; rose to be a lieutenant general, had a reputation for developing effective counterterrorism strategies in Iraq and Afghanistan.

He was promoted to run the Defense Intelligence Agency in 2012. There was a stain on his record after being fired two years later by the Obama administration because of mismanagement and temperament issues.

But then a year ago, Flynn pleaded guilty to lying to the FBI, denying he talked about U.S. sanctions during a conversation with the Russian ambassador in Washington. It turns out he did.

Because of a plea deal with a Special Counsel, Flynn is unlikely to serve time. But that conversation with the Russian ambassador took place during the transition. If there was no incoming Trump administration, no appointment of Flynn as national security advisor, no conversation, no lying to the FBI. And now Flynn is actually expected to be sentenced in two weeks.

And then there is Michael Cohen, the once "I'd take a bullet for Donald Trump" guy, who's now cooperating with the Russia investigation. Just last week he pleaded guilty to lying to Congress about a Moscow real estate deal which then candidate Trump was actually pursuing through the election campaign, despite repeated claims by Donald Trump to the contrary.

And that's on top of Cohen's guilty pleas from earlier this year for eight counts of tax fraud, false statements to a financial institution, unlawful corporate contributions and excessive campaign contributions.

Now facing huge legal costs and feeling abandoned by the president, Cohen cut a deal and he flipped.

And then "The New York Times" reporting Mr. Cohen has concluded that his life has been utterly destroyed by his relationship with Mr. Trump and now his own actions are to begin anew, he needed to speed up the legal process by quickly confessing to his crimes and serving any sentence he receives, according to his friends and associates as well as an analysis of documents in this case.

It's possible that, at some point, Michael Cohen could have faced charges of tax fraud.

But would there be in the same level of scrutiny as there was after the 2016 election?

Though he certainly wouldn't have been charged with lying to Congress because chances are he would never have been called to testify in the first place.

Now to Paul Manafort, who rose from the son of a small-town mayor to international political consultant and the chairman of the Trump campaign and now a felon, guilty of five counts of tax fraud, two counts of bank fraud, one count of hiding a foreign bank account.

For decades he made millions advising autocrats, kleptocrats and strongmen around the world. But it seems he would not survive five months he served as the Trump --

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VAUSE: -- campaign chairman.

Manafort agreed to a plea deal with the special counsel's office but, last month, federal investigators accused him of repeatedly lying, an extraordinary allegation that could mean a long prison sentence and maybe potentially new charges as well. At 69, Manafort could die in jail. His one hope right now is the presidential pardon.

And then there's the president's eldest son, Don Jr., who could be facing an indictment over that Trump Tower meeting in 2016, especially if it turns out that his father's denials of no prior knowledge actually are not true. Similar legal problems are said to be hanging over Trump's son-in-law, Jared Kushner.

And remember the former White House press secretary, Sean Spicer?

Quit his job and his credibility now in tatters and it seems he's unemployable.

What about the former chair of the Republican Party, Reince Priebus, who once had a promising career.

Now, who knows?

And also, for a president himself, under siege, reportedly unhinged and lashing out, who takes little joy in the process of government, perhaps, he, too, is wondering, what if?

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VAUSE: What if?

Now China has confirmed a 90-day pause in the tariff war with the U.S. But there's been no let-up it seems in the Twitter attacks coming from the U.S. president, who sent markets tumbling Tuesday when he declared himself "a tariff man." That spooked investors a lot.

Let's look at how the Asia markets are doing right now. As you can see, right across the board, we see the Nikkei down by more than half a percent. Hong Kong's Hang Seng down by 2 percent. Shanghai down by a third and the Seoul KOSPI down by 0.6, almost 0.7 of 1 percent.

Look at the markets in the U.S. The Dow nosedived nearly 800 points. The S&P 500 and Nasdaq also hit hard, both shedding more than 3 percent. They are closed on Wednesday, a breather, and also for the funeral for the former U.S. president, George H.W. Bush.

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VAUSE: To Singapore now, where Margaret Yang, a market analyst with CMC Markets, is standing by for us.

OK. So Margaret, after taking Wall Street on Tuesday with a tweet, the president had a followup before markets opened in Asia.

This is what he wrote, "With this, we are either going to have a real deal with China or no deal at all, at which point we'll be charging major tariffs against Chinese products being shipped into the United States.

"Ultimately, I believe we'll be making a deal, either now or into the future. China does not want tariffs."

It would seem investors reading those tweets from the president, they're seeing that as a sign the trade war really is just on hold or on pause for 90 days and when those 90 days are over, it's going to get a whole lot worse.

MARGARET YANG, MARKET ANALYST, CMC MARKETS: Yes, hi. I think although the trade tariffs have been paused for 90 days but there are plenty of issues on the table between U.S. and China to negotiate in the upcoming three months.

And right now, I think the trade outlook is uncertainty, given the fact that there are nuance (ph) of the voters (ph) between the interpretation of the G20 outlook -- the outcome from the -- both the official statements from the U.S. and China.

And also the investors are getting more skeptical about this outcome, because there are still plenty of issues on the table, including intellectual properties for technology transfer and cyber securities. Those are persisting issues that is unlikely to be solved within a very short period of time.

And we have seen that all the three major U.S. indices tumbled more than 3 percent overnight. That is quite rare in a market and this is the biggest intraday losses we have seen since October, when technology shares tumbled.

I think there's no single reason could justify a big slump in the stock market like this magnitude.

So I guess the reaction was probably in response to a mixture of reasons, including uncertainties in the trade outlook and also a potential slowdown in the global economy next year, as well as Fed tightening the monetary policy.

VAUSE: The president will often use his Twitter account as a form of diplomacy or negotiation; in this case, to try to keep the Chinese off balance and guessing.

The other impact of that is the huge amount of uncertainty it creates for business and investors around the world.

How big a price are they paying right now for the president's tweets?

YANG: Well, based on President Trump's tweet, it seems like they still haven't found out a timetable and more details on how, when and who are going to be -- start these trade negotiations.

And we are lacking of details from -- especially from China's side, because there's lack of fresh updates on how China is going to respond on the trade negotiation and whether or not -- and when they're going to portrays (ph) the U.S. on the counter products (ph) as agreed on the G20 meeting.

And we have seen a temporary known response from China --

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YANG: -- following the G20 dinner.

So that creates uncertainty for the market. As we are getting investors' confidence about the cause of trade tariffs are quickly fading. So we have seen that sentiment quickly turn sour on -- from Tuesday on what's and global markets are suffering from a huge selloff. And we have seen that capital is fleeing to the safe havens, including U.S. Treasuries and go -- and Japanese yen.

Another interesting scenario we have observed is that the U.S. Treasury curve, a part of it has actually inverted for the first time in more than a decade. So the three-year and five-year U.S. Treasury curve are inverting, means the short-term rates are higher than the long-term rates.

This suggests an early signal of a potential economic recession, because we have seen the Treasury curves inverting in both the combattle (ph) as well as the stock prices. So investors are getting more and more nervous about the economic outlook and whether or not we are facing earnings of deceleration in growth and economy next year.

VAUSE: Yes, there's a lot out there, Margaret, a lot to be concerned about. It would seem the tweets from the president are just one factor, which doesn't help matters much at the moment. Appreciate you being with us. Thank you.

Well, death and consequences. Senior U.S. senators say they are more convinced than ever after a briefing by the CIA director that the Saudi crown prince ordered the murder of journalist Jamal Khashoggi.

But what's the punishment?

Also peace talks set to begin as the U.N. warned of a humanitarian crisis in Yemen, which could get even worse.

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VAUSE: Some of the most powerful lawmakers in the U.S. Senate say they now have no doubt Saudi Arabia's crown prince is the man responsible for Jamal Khashoggi's death. Tuesday, about a dozen senators were briefed by the CIA director, Gina Haspel, on what the agency knows about the murder of "The Washington Post" journalist.

Turkish authorities say Khashoggi was killed, his body cut into pieces with a bone saw at the Saudi consulate in Istanbul. Saudi officials have admitted the murder was premeditated. The classified briefing laid down intelligence surrounding Khashoggi's killing, which implicates the crown prince's ordering the killing, this despite the White House narrative that there is no smoking gun.

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SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: There's not a smoking gun, there's a smoking saw. You have to be willfully blind not to come to the conclusion that this was orchestrated and organized by people under the command of MBS and that he was integrally involved in the demise of Mr. Khashoggi.

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VAUSE: As a direct consequence of Khashoggi's murder, some U.S. lawmakers now want to stop arms sales to the Saudis. They're also talking about a limit to U.S. support for the Saudi-led war in Yemen. This comes as Sweden hosts U.N.-sponsored peace talks with the Houthi delegation that arrived Tuesday with the U.N. special envoy for Yemen --

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VAUSE: -- and mediators from Kuwait. The Saudi-backed Yemeni government is also set to participate.

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VAUSE: Samantha Vinograd is a CNN national security analyst. She served on the National Security Council during the Obama administration and she is with us this hour from Delaware.

Sam, thanks for taking the time to speak with us.

The Houthis and the delegates have now arrived in Sweden, representatives from Yemen's government expected in the next couple of days.

If they all get together and they have these talks, can they actually make a peace deal?

Or can they make, you know, sort of the framework for a peace deal when this is essentially a proxy war between Saudi Arabia and Iran?

You know, these are the two regional superpowers.

Ultimately won't they decide what happens?

SAMANTHA VINOGRAD, CNN NATIONAL SECURITY ANALYST: I think that's exactly right. I think that there are a lot of cooks in the kitchen.

But if you just look at this from a pure negotiating standpoint. If the Saudis and the Iranians are not on board to some kind of ceasefire or actually sitting down and negotiating and debate, this will go nowhere.

And that's why I think it is very important to note that the conditions have changed while the war rages on in Yemen and more children die and people get displaced and famine is about to occur. The Saudis are under more pressure today to make a deal than they were, let's say, three months ago before they brutally murdered Jamal Khashoggi.

And the U.S. Congress and elected officials around the world put even more scrutiny on Saudi activities in Yemen. So for that reason, I think that there might be a little bit more momentum behind the Saudis this time around.

VAUSE: Well, as you mentioned, the pressure on the Saudis continues to grow. The U.S. Senate expected to debate ongoing U.S. support for Saudi's military offensive on Yemen. As you mentioned, this is the end result of, you know, the death of "The Washington Post" journalist, Jamal Khashoggi, and allegations of the direct involvement of the Saudi crown prince.

Do you think that we'll get to a point where the United States will join Germany, Denmark, as well as Sweden and suspend arms sales to Saudi Arabia?

VINOGRAD: You know, I wish that we would because I think that will be an important step to prevent more murder down the road. But I think that this president, President Trump, excuse me, will do everything that he can to circumvent the U.S. Congress' authority to hold up these arms sales and to try to find some way to continue them.

The real question for me is what President Trump is telling Republican lawmakers he'll give to them in exchange for letting these arms deals go through. But there's also something that we haven't talked about much in the media and that is Saudi Arabia actually has to ask for these arms deals to go forward.

Today there has been a memorandum of intent that was signed between President Trump and the Kingdom but the actual deals haven't really materialized. So we have to wait and see if they for instance will come forward and then what President Trump does to pressure Republican lawmakers to allow them to go forward.

VAUSE: As you say there is a momentum on both sides of the conflict, on the Saudis to bring this to an end, coming from another countries, including the U.S.

But internally there's also this humanitarian crisis which gets worse. The numbers are pretty staggering -- 65,000 people killed or wounded so far in the war. Food remains to be in short supply. There's widespread malnutrition, thousands of children are simply starved to death.

Houses have been extensively damaged. Right now 22 million people in need of humanitarian assistance and the U.N. is expecting even worse to come.

This is Mark Lowcock, he's the U.N. secretary -- or undersecretary, rather, for humanitarian affairs.

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MARK LOWCOCK, U.N. UNDERSECRETARY FOR HUMANITARIAN AFFAIRS: The country with the biggest problems in 2019 is going to be Yemen. We think that 24 million people in Yemen, about 75 percent of the population, will need humanitarian assistance.

The U.N. is planning to meet the needs of 15 million of those people. Our appeal for Yemen is going to be for $4 billion dollars.

(END VIDEO CLIP)

VAUSE: So you know, despite the shortfall there and the numbers, obviously that they need more assistance.

If they don't get an agreement here to try to end this war in Yemen, what will be the ultimate result?

VINOGRAD: The ultimate result will be that 55,000 or 57,000 more people will die. It's important to remember that Yemen was a country in the worst state in the region before this war broke out.

And the real issue now is, of course, the United States has really touted the assistance that we've proffered to the Yemenis for humanitarian purposes over the last few months.

But as this conflict continues, the actual humanitarian costs are going to go up just from a financial standpoint both within Yemen and for those that are displaced outside of the country.

And part of the focus that I've seen the special envoy for Yemen is placing what kind of funding is needed is really reaching out to the Gulf countries to ask for them to put more money into the pot to help with this financial assistance while working on some kind of political solution.

VAUSE: What is really sad or depressing is that the U.N. has another seven countries along with Yemen which actually need a billion dollars or more in humanitarian aid next year.

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VAUSE: This is -- they are the worst of more than 20 humanitarian disasters playing out right now around the globe.

You know there is this record amount of money coming in to the United Nations through the nations but these disasters like the one in Yemen and in Syria, they just seem to be getting worse. They seem to be lasting longer than before.

VINOGRAD: They do. And from a private sector standpoint, I think that there are -- I know that there's donor fatigue. And these emergencies continue for years.

Private sector donors start to wonder whether their money in the first sense is having an impact. Then that private sector money dries up as well, which is why relief organizations and many that work with the U.N. as well are trying to diversify their donor pool so that there is a more diverse set of money that can come in as this conflicts last for years on end.

VAUSE: Ok. Sam, we'll leave it there. Appreciate you being with us. Thank you.

VINOGRAD: Thank you.

VAUSE: I hope this is the end to what we're seeing in Yemen.

Well, the French government gives in to -- gives in by delaying a hike in fuel taxes. But, that could be just the start, with a growing list of demands from this once in a generation protest, spreading across the country, a closer look, in just a moment.

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VAUSE: Welcome back to CNN NEWSROOM, great to have you with us, I'm John Vause. We'll check the headlines this hour. Breaking news in the Russia investigation, the Special Counsel says Michael Flynn, Donald trump's former national security adviser, has given substantial assistance and should not be sentenced to jail time. The court filing is heavily redacted to protect ongoing justice department investigations.

Concerns of the U.S.-China trade war spooked investors as the Dow fell nearly 800 points. The NASDAQ and the S&P 500 also tumbles steeply. China has reaffirmed its commitment to a truce reached between the U.S. and the Chinese president, including a 90-day pause in any tariff hikes.

U.S. markets are closed Wednesday for the funeral of Former President George W.H. Bush.

In a major policy reversal, the French prime minister suspended a planned hike in fuel taxes for at least six months. That's in response to weeks of protest which turned violent on Saturday. The Yellow Vest Movement has become a general protest against President Emmanuel Macron and his economic policies and a whole lot of other stuff as well.

For more now, CNN's European Affairs Commentator, Dominic Thomas, is with us from Berlin. Good morning.

DOMINIC THOMAS, CNN EUROPEAN AFFAIRS COMMENTATOR (via Skype): Good morning, John.

VAUSE: Good to see you. OK, keeping in mind, it was President Macron who has been determined to push ahead with this fuel tax all along. Here is the announcement from the government, this fuel tax hike, is now on hold (INAUDIBLE) listen to this. (BEGIN VIDEO CLIP)

EDOUARD PHILIPPE, PRIME MINISTER OF FRANCE (through translator): These decisions, effective immediately, must bring back peace and calm to the country. They must allow us to begin a real discussion on the main issues that have been expressed these past few weeks.

(END VIDEO CLIP)

[00:35:08] VAUSE: OK. A couple of things here, if you're looking really closely, that was not Emmanuel Macron, the president, that was actually the prime minister, who was sounding the retreat and giving in to the protesters here.

So, Macron has actually not spoken to reporters since coming back from the G20. He's kind of been, you know, skulking around the Elysee Palace. You know, these are not good signs that he actually understands the seriousness of the crisis he's facing because it's not just about the fuel tax.

THOMAS: No. I mean, first of all, the fact that his prime minister is doing this, in some ways, is normal. The prime minister is the head of the government. It's his responsibility to deal with policy issues, to bring those to the general public, and so on.

But you're actually right, when you say that Emmanuel Macron, what he really needed to do here was to step out and speak to the French people about what are some genuine grievances here. And what it ends up doing is further reinforcing the idea that he is a detached president who doesn't listen well to the people.

And it was really important for him to do this, at this particular moment, because you can see just how the tensions are so elevated in France, at the moment.

VAUSE: OK. We have actually heard from the, sort of, unofficial spokesman for the Yellow Vest protesters, and he told the Guardian newspaper, the French are not sparrows and don't want the crumbs the government is giving them. They want the baguette.

This sounds almost like, you know, the natural follow-on from the days of, let them eat cake. But, I think, what it says is that the anger and the grievance fuelling these protests were born long before Macron was elected president, taking a pause and try and talk about it for a couple of weeks, doesn't seem like they're going to get very far.

THOMAS: No. And I think this very likely to be, you know, too little too late. This has given an opportunity for many other organizations to come to the forefront. You see different political parties trying to exploit the potential here, of this uprising that still is polling very well in French society.

But you're absolutely right, that these grievances have been around for a very long time. If you just take the last two presidencies and the right-wing presidency of Sarkozy, the socialist government of Francois Hollande, during that 10-year period, minimum wages only went up approximately 200 Euros.

And so, these are grievances and pains that the people have been feeling for a long time in French society. And it seems that yet, again, this government has been unable to come up with a range of, kind of, policies that are moving France ahead in the new directions Macron spelled out, without appearing to be a, kind of, an onslaught on working people.

VAUSE: So, keep that in mind, because the U.S. president, ever helpful as always, retweeted this. There are riots in socialist France because of a radical leftist fuel taxes.

Media barely mentioning this.

America is booming, Europe is burning.

They want to cover up the middle class rebellion against cultural Marxism.

We want Trump being chanted through the streets of Paris.

There is actually nothing in that tweet, which is accurate. Macron has been governing as a centrist, if anything, leaning to the right. He's got a, sort of, right wing cabinet (INAUDIBLE) the fuel tax was a climate change measured in part. No one was shouting we want Trump in the streets of Paris (INAUDIBLE) but this is the problem that Trump -- that Macron has, it's very difficult to -- as a leader of a western democratic country, to lead from the center. And no one's going to work out how to do it yet.

THOMAS: Yes. I just think -- just very quickly on Trump's tweets, it's really interesting to look at the forensics of this because of course, he's both tweeting and retweeting here, and far right ideology, which he gets from Nigel Farage.

His comments on Brexit, 10 days ago, came from Farage, and this, sort of, you know, belief that the -- that the western system is being undermined by some kind of radical group that hell bent on destroying western civilization.

In fact, Trump's repeated attacks on the European Union and on the liberal democracies within the European Union are contributing to undermining that process. Now, on the question of, sort of, centrist rule and so on, that's a more difficult argument to make.

I mean, after all, Tony Blair is really the person in Europe to have inaugurated that kind of mechanism of from '97 to 2007, where for all intents and purposes, his government was a centrist government.

The bigger issue possibly that we're seeing with Emmanuel Macron, with other leaders in Europe today, is over the last few years, we've seen a diminishing of strength of main stream political parties. And Macron is at the head of the movement in the way that a very different movement is currently governing Italy and the guise of the five-star movement. And these different political organizations, yes, he's elected, yes, he has the parliament, but they don't have either the experience or one could argue the institutional framework or the understanding as to how these kinds of mechanisms are working, and we see this, and these kinds of challenges at the moment, particularly as Macron is going about in implementing these policies.

VAUSE: Dominic, we're out of time. We shall leave it there, but, good to see you, and thank you for getting up early and being with us. We appreciate it.

THOMAS: You're welcome. See soon. Bye-bye.

VAUSE: Still to come here, Theresa May gets ready for round two, after yet another bruising day of defeats in parliament over her Brexit plan.

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[00:40:00] VAUSE: The British parliament has started a five-day long debate on Brexit and it's already handed three blistering defeats to Prime Minister Theresa May. Lawmakers start to vote on her Brexit deal, and less than a week from now.

But, on Tuesday, May lost three critical votes now, it's including one, to hold it in contempt (INAUDIBLE) over refusal to publish legal advice on Brexit. The prime minister then opened for debate, insisting her deal is better than no deal at all.

In Washington, it is a time for some reflection as so many pay their respects to a man who dedicated his life to public service. Thousands have filed past the casket of former President George H.W. Bush inside the U.S. capitol building. Bush's family visited the capitol on Tuesday, and they paid their respects and took time to greet mourners.

President Trump and the First Lady Melania offered condolences to the Bushes at the president's guest house, the Blair House. They were greeted by Former President George W. Bush and Former First Lady Laura Bush. There was also a touching moment when former Senator Bob Dole, also former Republican nominated president, helped out of his wheelchair to salute the former president.

(INAUDIBLE) it was an end of an era as Bush was the last World War II veteran elected to the presidency, back in 2011 when Bush was briefed about his funeral and lying in state. He asked with his typical humility, do you think anyone will come?

The answer to that is clear. Thousands have already paid their respects. Please stay with us for extensive coverage of the funeral of Former President George H.W. Bush. It begins at 10:00 a.m. in Washington, 3:00 p.m. in London, 11:00 p.m. in Hong Kong, right here, on CNN.

Thank you for watching CNN NEWSROOM. I'm John Vause. Stay tuned, "WORLD SPORT" is next. You're watching CNN.

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