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Dow Tanks on Trump Trade Fears and The Arrest of Chinese Executive; Train Carrying Bush Casket on Journey to Final Resting Place; Bush 41's Attorney General is Top Candidate to Replace Jeff Sessions; Mueller Poised to Reveal Secrets About Manafort And Cohen. Aired 2-2:30p ET

Aired December 06, 2018 - 14:00   ET

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

[14:00:00] BROOKE BALDWIN, CNN HOST: The train carrying his hearse and family makes its way to College Station, Texas. Right now, the Dow is down 316 points. Two hours to go in this trading day. The delicate and ambiguous trade negotiations between the U.S. and China have been causing market volatility all week, but today a new complication. A top Chinese tech executive has been arrested in Canada at the request of the U.S. government. Her name is Meng Wanzhou. She's the chief financial officer of Huawei a Chinese company that produces more smartphones than even Apple does. Meng is facing extradition to the United States. Officials haven't said what charges she faces but we can tell you that the Justice Department has been investigating whether she violated American sanctions on Iran. Beijing is not happy with her arrest whatsoever. So, let's start with Allison Kosik there at the New York stock exchange, our CNN business correspondent. Allison, are fears of escalating tensions with China the solely to blame for the numbers we are seeing in the selloff today?

ALLISON KOSIK, CNN BUSINESS CORRESPONDENT: Brooke, I would say it is a reason you are seeing all of this volatility today. Right now, the Dow is down 310 points. It was much worse earlier. We saw it down as much as 780 points and we're seeing the Dow bounce off of those lows. Still those fears continue about what is going to happen with this U.S. and China trade war that is going to be protracted? You're seeing investors really dig in for the long haul because of that latest development of the Huawei executive being arrested in Canada and possibly being extradited to the U.S.

The worry is this was a provocative and bold move, this is kind of like arresting Tim Cook, Apple's CEO, in China. There's a lot of concern this is going to hurt relations between the U.S. and China even more. And this is after coming off those G20 negotiations where we had President Trump come out of those negotiations saying that China and the U.S. were going to go ahead and talk for 90 days. There was a lot of confusion about when that 90-day period would begin, when it could end, a lot of doubt about what would transpire in those three months because nothing came out of those talks. It doesn't give much confidence to how the negotiations are going to go. When you it comes down to it, you look at the stock market. The stock market is made up of companies. If you're going to have these tariffs continue for a longer period of time, you'll see CEOs concerned about costs they have to absorb or pass on to the consumer. Brooke?

BALDWIN: I want to stay on these negotiations and have a bigger conversation. Thank you very much. More on the arrest of this Chinese tech executive. She's the daughter of the company's reclusive of founder. Rana, you heard Allison say it. - she said Tim Cook, right? CEO of Apple, CEO of Facebook goes and gets arrested in China, is that something similar.

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Very similar. Huawei is a really big deal. It is a very strategically important company. It is a company that was founded by a man who used to be part of People's liberation Army. And this is where the rub comes in. Huawei has always been seen to have tight connections with the Chinese state and the Chinese military. And it has been under investigation for some time not just by the US but by our European allies, by Australia for cyber espionage. This is an interesting moment. It's fascinating that this is coming right after Trump said, hey, were going to have a truce now.

BALDWIN: The same day that Trump sits down with Xi down in Buenos Aries for this G20, is the same day that she gets hauled off and arrested in Canada. Already you have this tenuous relationship, and how much does this pour gasoline on the fire?

FOROOHAR: It's a lot of kerosene on this fire. To me it says two things. I think what you're seeing here is the struggle in the U.S. administration. We have always known that there are three different factions. There's Trump and what he's doing at any given moment. There's the Pentagon that views China as a long-term strategic threat. They would like to see no Western company doing business with Huawei. And then there are the sort of doves, the folks like Mnuchin want to go back to global business as usual, support and multinationals putting jobs anywhere and doing business with whoever they want. I think the back and forth is those camps fighting. This is an existential crisis. We're not getting over it in 90 days.

[14:05:00] BALDWIN: You said that before.

FOROOHAR: I'm back. I'm going to say it again. Let me hit pause on this and go to Texas. My colleague, Wolf Blitzer, is live in College Station. These are pictures of Bush 41's final journey. Wolf, to you.

WOLF BLITZER, CNN HOST: It is the final journey, Brooke, this train leaving the Houston Texas area heading towards where we are at Texas A&M College University at College Station, Texas, the George H.W. Bush Presidential Library and Museum where George H.W. Bush will be laid to rest. There will be first, John King, this 2 1/2-hour train ride, the presidential family, we saw President George W. Bush and his wife, Laura Bush, Jeb Bush, the other children. They are all aboard this train making the ride and they have an opportunity after a very moving ceremony this morning, a memorial service with at the Episcopal church to reflect on a great man.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: To reflect and exhale after a very emotional, trying ceremony today, for those who had to speak. Gloria noted earlier in the day, Laura Bush, some of the supportive members of the family helping prop up those otherwise. Here you have a much smaller group of family on this trip, across the state leaving the urban Houston area to make its way out here to where President Bush decided to put his library, the family spending a few hours together. After several days of celebration and processing and having to rally themselves, as their father would want them to do or their grandfather would want them to do, to say good-bye and attend the formal ceremonies, to do the Presidential part, the country part, the state part of the farewell. This is a family on a train now that, yes, it has the Presidential seal but I have to assume this is the toughest part because they know they're about to stand behind this library and say good-bye.

DANA BASH, CHIEF POLITICAL REPORTER: It's fitting that this blue blood from new England who did become a Texan, really did become a Texan, wanted his last journey to be a slow roll through this state. Never represented the full state. He tried twice to be a senator from Texas. Didn't win. But was a congressman for three terms and in the area representing Houston and its surrounding areas, environs. But he loved the state, he loved what it meant. It's evidenced by the fact that the library is right where we are, in college station and he wants this slow journey to go from point a to point b in his adopted home state. It's telling.

BLITZER: Mary Kate, you used to write speeches for President Bush. It's an emotional moment for you.

MARY KATE CARY, FORMER GEORGE H.W. BUSH SPEECHWRITER: I'm doing better now. I think he would appreciate it this for the office. On the other hand, as he got older, he always played speed golf and I noticed as the more immobile he got, the more speed he wanted. The sky diving picked up. He had 300 horsepower engines on the Fidelity.

BLITZER: You see the people standing on the sides. People will line up and salute and pay their respects to the 41st President.

CARY: If he was with us, he'd say can you pick up the pace? Let's go faster. He'd want to be behind the wheel.

KING: To the Texas point, my first national campaign was 1988. Michael Dukakis picked Lloyd Bentsen as his running mate from Texas. And Lloyd Bentsen had beaten George H.W. Bush and that race for Senate that Dana was talking about. And I remember talking to Lee Atwater during the Bush presidency when he went from helping on the campaign to the Republican national chairman. And he said that President Bush always liked that he finally got a chance to meet Lloyd Bentsen.

BASH: It's raining, it's raw. It's not pleasant outside.

CARY: Those kids will remember that the rest of their lives.

BASH: Exactly. The parents, the children, they want to have this moment in history. And this moment of reverence and to salute this commander in chief and this adopted son of Texas. BLITZER: They removed the drape from the window so they'll be able to see the flag-draped casket of this President of the United States. And Texans are there and I'm sure others have come as well to pay their respects. They'll be doing it where we are right now at the Presidential library.

[14:10:00] People have gathered already to see -- to get ready for this moment. It will be a sad moment. He will be laid to rest and he'll rejoin Barbara Bush, who was laid to rest your back in April.

KING: And this Presidential Library as Dana said we only have to do this when we're saying goodbye to presidents. But what great gifts they are across the country. The JFK Presidential Library is in my hometown. I interviewed Bob Gates who is also a giant fan of this President, at the Eisenhower Library, that's his other political hero. The George W. Presidential Library in Dallas, the L.B.J. Library. Bring your kid to Texas if you want to teach them history. You can see remarkable places. Mary Kate knows this much better. She's part of this library. Every President has conversations. It's a museum to me, which made this President uncomfortable to a degree. What will they be saying about my library ten years, 20 years, 10 year 30 years after I'm gone?

And that is why I think this one is interesting. It's been a few years since I've been in there but there is footage of him as a kid, black-and-white 1925 trying to learn to walk in Kennebunkport. There is a great piece about the Gulf War which is one of his signature achievements of course, the fall of the Berlin Wall and all that, his role on the international stage. But the public service part of it, we for lot in the last few days the word "service" is the mission of the school. I think George Bush has the same I'm idea, trying to keep the service part of your presidency going after you are not at centerstage anymore.

CARY: It's very interactive here and it's aimed at young people. I think a lot of them have a replica of the oval office. What this library also has is a replica of the situation room --

BASH: The real situation room.

CARY: Excuse me.

BLITZER: You mean there as another one?

Cary: The other one.

BASH: Sorry to break it to you, Wolf.

CARY: You can make decisions and see if you were right or wrong -- not right or wrong but whether President Bush made the same decision you did.

KING: So, you meant right or wrong.

CARY: Land on an aircraft carrier the size of the poster stamp that was in World War II. Not the current one. And it is much harder I tried it many times and can't do it. We are going to take Wolf in there and see how he lands on the aircraft carrier.

BLITZER: We are going to continue to watch this train make its way slowly but surely from the Houston area over to College Station, Texas and the Texas A&M campus, the George H.W. Bush Presidential Library and Museum where the 41 President of the United States will be laid to rest. We'll be back, we'll cover that. There will be full military honors. Complete military service, a ceremony as is due to the 41st President. In the meantime, let's get back to you, Brooke.

BALDWIN: Love it. Look at all these Americans on the side of the road, on the side of the train, on overpasses, as dana pointed out, in the rain saying their good-byes. We'll come back to you in just a little bit in college station, Texas. CNN has learned who is the top candidate to replace Jeff Sessions as the full-time U.S. Attorney General. That candidate has a direct link to former President George H.W. Bush. Details when we come back.

[14:15:00] (COMMERCIAL BREAK)

BALDWIN: We are back. You're watching CNN. I'm Brooke Baldwin. The man who served as Attorney General under President George H.W. Bush is emerging as the top candidate to hold the same job once again. William Barr could replace Jeff Sessions who was fired last month. With me now, Laura Jarrett, our justice department correspondent and, Josh, to you first. The line in your piece, "persons familiar with the discussions, quote, he's a serious guy -- this is Barr -- the President is very, very focused on a candidate looking the part and having credentials consistent with the part." Why may this guy be the best guy for the job?

JOSH DAWSEY, WHITE HOUSE REPORTER, "THE WASHINGTON POST ": The President has looked at a whole range of people for this job. He's looked at Chris Christie to Alex Azar to Matt Whitaker as the current interim, and he's settled on Bill Barr as the leading candidate. He has been telling people he may announce it in the coming days. With the President things are always a bit unsettled until he sends a tweet or until he says it. You always have to have those caveats. The search is in advanced stages and Barr is emerging as the most likely to be named as Attorney General. He was in the H.W. Bush administration as A.G. the President's legal team, Emmitt Flood are big supporters of Barr and people around the President are telling him he should go with him. It seems increasingly likely he might. Per usual, you never count your chickens until they hatch in Trump world.

BALDWIN: Never count your chickens until there's a tweet. Do we know how Trump and Bill Barr got acquainted?

[14:20:00] DAWSEY: My understanding is his lawyers are trying to steer the President towards a more conventional Attorney General, instead of a political one. There's a narrow confirmation in the senate. The President has expressed many times he wants someone who is loyal but also wants somebody who has credentials. My sense is they are telling him that Bill Barr will fit the criteria. My sense is they are telling him that Bill Barr will fit the criteria. BALDWIN: And then Laura to you, you had all these great reporting

this week on the interim AG Matt Whitaker, remind everyone what he has been up to this last month.

LAURA JARRETT, CNN JUSTICE DEPARTMENT CORRESPONDENT: Of course, this is his one-month anniversary on the day Jeff Sessions was fired the day after the midterm elections. And Whitaker as we know can stay on for quite a while under the Vacancies Act which is that little federal statute that was previously unknown to many of us. He can stay on for 210 days. It gives the President some wiggle room should the nomination of Barr not work out or whoever he chooses to pick. At the same time, if he had chosen Whitaker as he is permanent pick, he would not be able to be the acting A.G. he can probably steer the administration during the Mueller investigation and the Russia investigation. It could be a significant issue, Brooke.

BALDWIN: We know, Josh, how Matt Whitaker publicly opined how he felt about the Russia investigation and about Mueller. What has Bill Barr said publicly on Mueller and Russia?

DAWSEY: Well, Bill Barr has been a little critical of the make-up of Mueller's team, saying he should have been a little bit more balanced in doing that. He has defended the President at times and said the President should be briefed on an investigation. But he hasn't said a whole lot. He has not been one of the leading commenters. He obviously is a respected lawyer, at Kirkland and Ellis for his career, he was at Verizon, he was in the government, he's had decades of experience. He's not been one of the most vi virulent commenters on the probe one way or another.

BALDWIN: Thank you for all of your great reporting.

Major developments are expected to drop tomorrow from the special counsel Robert Mueller. We'll discuss what his court filings could reveal about the scope of this Russia investigation. Also, here's two words you may not want to hear in reference to the White House -- winging it. My next guest has insight into President Trump's legal team strategy and how they plan to respond when Mueller's final report actually drops.

[14:25:00] (COMMERCIAL BREAK)

BALDWIN: We're on the verge of a major shift in the Mueller investigation. Tomorrow the special counsel's office will release more court documents that could give us a peek behind the curtain as to what Mueller has been looking at and whether it sets off alarm bells for President Trump and his team. A sentencing memo for Michael Cohen could offer new details about how he's cooperating with investigators. But the one that could be the main event involves Trump's former campaign chairman Paul Manafort and the alleged lies that derailed his plea deal with Mueller's office. Alex Marquardt is here with a preview of the day tomorrow that will include an appearance by former FBI director James Comey. Alex, it's going to be a big day.

ALEX MARQUARDT, CNN SENIOR NATIONAL CORRESPONDENT: It is going to be a big day, Brooke. The Mueller team has been exceptional about keeping the inner workings so secret. First let's talk about Paul Manafort, the Trump campaign chairman who struck that stunning plea deal with Mueller three months ago only to now see it fall apart. This we expect to be the main event. The special counsel's office accusing him of breaching that agreement by repeatedly lying on range of issues. We expect Mueller to file a brief on what Manafort did to breach the deal. And then there's Michael Cohen, who Trump calls a weak person for flipping on him. Mueller's office has to submit their office by tomorrow afternoon. This has to do about Cohen lying to congress about the Trump tower Moscow deal. Cohen now admitting he was updating Trump about that deal far longer than he originally said, saying the President was aware of his Trump organization's business efforts in Russia while running for President. And finally, Brooke, FBI Director James Comey, famously fired by Trump, as Republicans are about to lose control of the House in January, the judiciary committee chairman has subpoenaed Comey one more time to testify about the FBI's handling of Hillary Clinton's e-mails and the Russia investigation. In that will be behind closed doors. Comey wanted it in public and he said he will talk about it afterwards. It will be a big, big day tomorrow on multiple fronts.

[14:30:00] BALDWIN: Who knows, with all the redactions we saw on the Flynn documents, I think we'll be scratching our heads quite a bit more on these others. Alex, thank you. Here is one big question, how is the White House going to respond when Mueller's final report comes out? According to a new report in the "Atlantic," no one knows, not even the people who work in the White House. The Trump White House is all but winging it, cites current officials as saying, quote, the administration has no plans in place for responding to the special counsel's findings, save for expecting a Twitter spree. So, with me the author of that piece, a staff writer for the "Atlantic." nice to see you. Let's start with a simple question. Why would the White House want to wing this?