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James Mattis Has Quit the Trump Administration; London's Gatwick Airport is Now Open for Business; Brexit clock ticking down; Carlos Ghosn Detained for Additional Charges. Aired 2-3a ET

Aired December 21, 2018 - 02:00   ET

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


[02:00:15] NICK WATT, CNN ANCHOR: Hello, everyone. I am Nick Watt. And you are watching CNN Newsroom. Ahead this hour, pre-Christmas chaos in Washington, the U.S. Defense Secretary Jim Mattis is out. President Trump says Mattis is retiring. Mattis says he's resigning and why. Plus, more truth movement after President Trump announces a withdrawal from Syria.

We're now learning that he also wants a huge drawdown in Afghanistan. And across the pond, a nightmare before Christmas may soon be over. Britain's Gatwick airport is starting to reopen after mystery drones shut it down. Major developments and major chaos in Washington, first, the U.S. Defense Secretary Mattis quit.

In his resignation letter to the President, the four-star general calls out President Trump for not backing key allies and not doing enough to stand up to America's enemies. The catalyst appears to be Donald Trump's shock decision to withdraw those U.S. forces from Syria. And now this, a U.S. defense official saying that the U.S. military is now also been ordered by the President to begin planning the withdrawal of about half the U.S. troops in Afghanistan.

All of this comes as a partial government shutdown looms now less than 24 hours away. The key sticking point, billions of dollars for Trump's promised wall along America's southern border. Let's start with the Mattis resignation that looks like a turning point for this administration, this President, and maybe even this country.

First, Trump tweeted General Jim Mattis will be retiring with distinction at the end of February. General Mattis was a great help to me in getting allies and other countries to pay their share of military obligations. Notice there, Trump says that Mattis is retiring. That's not the wording Mattis used in his stunning resignation letter.

He said he is quitting over profound differences of opinion with the boss on just how to treat America's allies and enemies. Mattis wrote quote, because you have the right to have a Secretary of Defense whose views are better aligned with yours on these and other subjects, I believe it is right for me to step down from my position.

General John Kelly, Trump's Chief of Staff is also leaving. Both men were hailed by many Trump critics as the only adults left in the room. They now join a long, long list of those leaving or those who have left the Trump administration. CNN's Barbara Starr reports on how this resignation went down.

(BEGIN VIDEO CLIP)

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Defense Secretary Jim Mattis decided early Thursday morning he needed to go to the White House and meet with President Trump to talk to him about trying to change his mind about withdrawing U.S. troops from Syria. He then went to the White House about 3:00 in the afternoon, met with the President, and did not change his mind.

At that point, Mattis produced a resignation letter that said to the President, you deserve a Secretary of Defense much more aligned with your views. Mattis, very much on point trying to say that he believed it was essential to defend alliances and to defend U.S. interests around the world, something that the President has taken quite a different tack on, believing that there is no longer a role for U.S. troops in a frontline defense against ISIS.

Mattis had been very concerned that leaving Syria would also leave thousands of Kurdish forces that the U.S. had promised to support to the mercies of the Turks, ISIS, to a potential bloodbath. And as a former military man, to him, it would be a terrible thing to leave your friends behind on the battlefield that you had promised to support. Barbara Starr, CNN, the Pentagon.

(END VIDEO CLIP)

WATT: And here's some more from that Mattis resignation letter. He writes one core belief I have always held is that our strength as a nation is inextricably linked to the strength of our unique and comprehensive system of alliances and partnerships. He goes on to say my views on treating allies with respect and also being clear-eyed about both maligned actors and strategic competitors are strongly held and informed by over four decades of immersion in these issues.

[02:04:52] Now, there has been a chorus of fear coming from many directions today decrying the President's decision to pull troops out of Syria and bemoaning General Mattis' resignation. On Twitter, Senator Marco Rubio, he's a Republican. He writes we are headed towards a series of grave policy errors, which will endanger our nations, damage our alliances and empower our adversaries.

And John Brennan, former Director of the CIA, also on Twitter. OK, Republicans, how much long are you going to let this farcical Presidency continue? Are you waiting for a catastrophe to happen before acting? Disaster looms. Nancy Pelosi, Democrat and House Minority Leader, she says that she is, quote, shaken. And an anonymous House Republican and Trump supporter tells my colleague Jim Acosta the wheels may be coming off. And there's more.

(BEGIN VIDEO CLIP)

LEON PANETTA, FORMER U.S. DEFENSE SECRETARY: We need a sense that we have a President that who's going to take the time to make the right decisions and provide stability for this country. If the President doesn't begin to do that, then I think there's a real question about whether he's implementing the powers and duties of the presidency the way they're supposed to be.

WILLIAM COHEN, FORMER U.S. DEFENSE SECRETARY: The President has taken a wrecking ball to every pillar of stability we've erected over 60, 70 years.

ERIC SWALWELL, U.S. HOUSE DEMOCRAT: I hope the person that takes this job understands who our allies are and does not alienate us from them, and understands who our adversaries and stands firm against them as General Mattis warned in his letter that that must always be the case. And also presses upon the President about the rule of law and the human rights that we value in the U.N. convention we follow to make sure that the President's worst instincts don't materialize and that we slowly erode and slip into an authoritative regime.

(END VIDEO CLIP)

WATT: Joining me now retired Rear Admiral John Kirby who served as a Spokesman of the State and Defense Department's during the Obama administration. John, it is hard to keep up with the number of public figures in the U.S. on the left and the right who are coming out to express fear and concern now that General Mattis is taking his hand of the tiller and leaving the administration. Are they right to be quite this concerned?

JOHN KIRBY, CNN MILITARY AND DIPLOMATIC ANALYST: Yes. I think they are. And I don't want to sound hyperbolic about that. But Secretary Mattis has been a very stable leader there at the Defense Department. Very measured and pragmatic in the advice and counsel that he gives the President of the United States. He believes in strong military power, but he also believes as he wrote in that letter, the power of alliances and partnerships, and how important it is for the United States to fight alongside allies and partners in whatever region, whatever struggle that we're engaged in.

And I think it was principally that issue and the President's refusal to abide by our commitments to alliances and partnerships, particularly in and around Syria that led Secretary Mattis to this decision. So yes, I think they're very right to be concerned. I have known General Mattis now for many, many years. You're not going to find a finer, more upstanding, more honest, more driven leader in terms of character.

WATT: And if they're concerned about the safety of the U.S., should we all be concerned for the safety of the world?

KIRBY: Well, you know, I don't know that -- you know, I think that's a pretty long bridge to cross here that his resignation is going to have, you know, dramatic international security ramifications at least immediately. I don't know that I would go that far. But I do think that what I am worried about is whoever Trump gets to replace Secretary Mattis.

It is likely going to be somebody who is much more ideologically aligned with Trump's world view. One of the things that he and Mattis clashed over was, you know, America's leadership in place in the world. Whether it's the Iran, whether the embassy moved to Jerusalem, troops at the border, I mean Syria, and now Afghanistan. So you're probably going to end up with a new Secretary of Defense who thinks a lot more like Trump.

And that's not necessarily good for the United States. And I don't it's necessarily good for our allies and partners around the world, because now there will be no check on some of Trump's more strong and maybe more reckless impulses.

WATT: Yeah. I mean listen. Mattis made it very clear in this letter that he's resigning because he and Trump are not on the same page when it comes to how to deal with their allies and also how to deal with, I believe, he called them malign actors, was it, in the world. So yeah, I mean presumably, Trump will replace him with somebody who does agree with him, who does agree with America first. And Mattis from the inside of this administration clearly does not.

KIRBY: Yeah. Look, there's a line in Mattis' letter that gets to your question perfectly, where he says something of the effect that, you know, the President deserves to have a Secretary of Defense who is more aligned with your views. And while in the macro sense I think that is true, you know, all cabinet members are sort of, you know, supportive of the general vision of the Commander-In-Chief and the President they serve.

[02:10:09] You want a Defense Secretary particularly in these challenging times in some of the conflicts that we've been talking about who can stand up to the President of the United States that can speak truth to power, who can challenge those world views and try to sway the President into a better more sound way of making decisions. And so this is the concern I think that you have, is he's going to follow Mattis' final piece advice and get somebody that's much more aligned with his world view.

And that is not good for our allies and partners. It's not going to be good for NATO. And I think it's going to be just yet another signal to Putin and to Xi in China and even to Kim Jong-Un in North Korea that the United States not only cannot be counted upon, but we cannot be counted on to be leaders on the world stage.

WATT: And I just want to talk a little bit about how this went down, the letter. So on Thursday, President Trump tweeted that General Mattis was retiring. Now, Mattis could have gone along with that narrative. He could've gone quietly into the night. He'd been sort of undermined by his boss over Syria. It would have been understandable for him just to resign quietly and leave the administration and shake hands and go, but he didn't. He wrote this letter. Why do you think he took this pretty bold step?

KIRBY: This kind of maneuver is exactly what you're expected to do when you're a senior military leader. He has -- what he's done here is very much in keeping with our traditions. When you ethically and morally can no longer support your boss, in this case the Commander- In-Chief, President Trump, you have an obligation to resign, and to do so in writing and formally by explaining the reasons behind your decision. So he did something that four-star generals and admirals are all

taught to do. When it comes to that point, very much in keeping with military tradition, doesn't surprise me that this is the way he chose to do it. I suspect wisely he also chose to do this to get it out on the record so that it was clear why he left and that he wasn't being fired.

And that the President's notion of retirement was false. I can tell you that Secretary Mattis -- I have spoken to people that know him well. They'll tell you that the last thing he ever wanted to do was quit this job. He's not a quitter. He is a former marine. And marines don't quit. And he's never not accomplished the mission that was assigned to him.

This is the first time in his professional life where he's chosen to walk away from the task at hand. That is a big step for a man like Jim Mattis.

WATT: And listen, I mean he's supposed to be staying until February, until a successor if found. But surely after this letter, that his position is not tenable. I mean he has to go sooner than that.

KIRBY: Well, no. I think he'll actually stay until February. I mean I don't know that I would say it is untenable. It is certainly going to be uncomfortable and probably awkward for him in some of the national security meetings and some of the sessions that he'll have with the President and the rest of the cabinet.

And there -- it is possible that certainly some of our adversaries out there will consider him a bit of a lame duck and will simply not be willing to either meet with him or meet with him substantially on anything. So he might find his job a little uncomfortable and a little tougher to do over the next couple of months. But knowing Secretary Mattis the way I do, he will stay until the end of February just like he promised he would.

WATT: John Kirby, thank you very much for your insight.

KIRBY: Thank you.

WATT: And now there's more. We heard Wednesday about Trump's decision to withdraw troops from Syria. Now, we've learned that at the same time, the U.S. President also decided to begin planning the withdrawal 7,000 troops from Afghanistan. That's about half of all U.S. troops stationed in the country. CNN's Ivan Watson is in Hong Kong.

Ivan, you've been reporting from Afghanistan for years. I bumped into you there way back in 2001. How is this going to impact the fight against Islamic militants in Afghanistan?

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, we reached out to a spokesman for the Afghan President, and he said he's not ready to comment at this time on the reported plans for a troop withdrawal, saying that there had been previous discussions of a troop withdrawal. But it's a good point that you raised. It is since 2001 that the U.S. has been involved in the war in

Afghanistan. America's longest running foreign conflict, and it has not been going well. I'll rattle off some statistics. Afghan President Ashraf Ghani said recently that some 29,000 Afghan soldiers and police have been killed since 2015. The special investigator general for Afghanistan reconstruction is a U.S. official and accountant effectively says that Afghanistan government control or influence of its district has fallen to the lowest level, 55 percent.

The Afghan security forces are roughly 11 percent below their target strength and that 12 percent of Afghanistan districts are now under insurgent control or influence. Top U.S. commanders have referred to Afghanistan as a stalemate, among them, the Chairman of the Joint Chief Of Staff, Joseph Dunford. But they have also gone on to say that they are against troop withdrawal as recently as December 6th when he spoke to the Washington Post. Take a listen.

(BEGIN VIDEO CLIP)

[02:15:18] JOSEPH DUNFORD, CHAIRMAN OF THE U.S. JOINT CHIEFS OF STAFF: I have not recommended that we leave Afghanistan. Because again, in my judgment, leaving Afghanistan not only would create instability and (Inaudible) but in my judgment would give terrorist groups the space within which the plan to conduct operations against the American people, the homeland, and our allies. And that really is the problem we're trying to solve.

(END VIDEO CLIP)

WATSON: Nick, President Trump's choice to lead central command also earlier this month said that he didn't believe the Afghan forces would be enough to defend the country if there was precipitous U.S. withdrawal from Afghanistan. There's an added complication and is that the foreign troop presence in Afghanistan is a multi-national NATO-led operation, some 16,000 troops from more than 40 NATO contributing countries.

The U.S. makes up the bulk of that force. But cutting the U.S. forces in half would have major implications not only on Afghanistan, but the rest of the NATO contributing countries that have boots on the ground in Afghanistan, Nick.

WATT: And Ivan, I just want to ask you about this Mattis news as well. How was General Mattis viewed in Afghanistan and in the region?

WATSON: Well, I want to share this anecdote. I saw him speak in June of 2017 at this defense summit and called here in Asia called The Shangri-La Dialogue, where there was profound anxiety about where the U.S. was going given that it has played this enormous role in this region since World War II, providing a defense umbrella to its allies.

And Mattis on stage quoted, paraphrased Winston Churchill, saying at the end of the day, when the Americans have exhausted all other options, the U.S. would do the right thing, which was kind of a subtle dig at President Trump's America first approach, where he was talking about imposing tariffs on allies, pulling U.S. troops out of long time allied countries South Korea and Japan.

With his removal, with his resignation from the Trump administration, that removes a stabilizing figure that I think many close to U.S. allies here in the region and a number of mutual defense treaties here is substantial. Thailand, Australia, New Zealand, South Korea, the Philippines, Japan, they lose one of their strongest allies in the Trump administration, Nick.

WATT: Ivan, thank you very much for your time. And still to come, why some of President Trump's critics say he's abandoning a key ally by pulling U.S. troops out of Syria. Plus, travel chaos as thousands of travelers are stranded at Britain's second largest airport, the latest from Gatwick just ahead.

[02:20:00] (COMMERCIAL BREAK)

WATT: London's Gatwick Airport is open for business after a 32-hour shutdown. Flights have now started to arrive and depart. It should prevent ease the pre-Christmas travel chaos caused by drones flying around the airfield. All flights of the U.K. biggest airport were grounded, leaving tens of thousands of passengers stranded. CNN's Anna Stewart joins us now from Gatwick. So Anna, what is the latest? What's going on?

ANNA STEWART, CNN REPORTER: Well, as you said, there's some limited number of aircraft are now allowed to take off and land here at Gatwick Airport, which is thrilling for the passengers, some of whom have been waiting for over 30 hours now. However, there are huge knock on effects. Now, in teams of what we've seen today, Norwegian Airlines, they were able to take off.

We've been told British Airways got some aircraft in the air as well. And actually we just saw an easy jet flight land make landfall to tarmacs. And plenty of these passengers will be getting off of that. But there has been chaos. Let me show you how it all unfolded.

(BEGIN VIDEO CLIP)

STEWART: Runways were closed at 9:00 p.m. Wednesday after two drones were initially sighted. They were briefly reopened at 3:00 a.m., but only for 45 minutes. The drones were spotted again. Police say the devices are buzzing over the runways to intentionally cause disruption, impacting 120,000 passengers who are struggling to fathom why anyone would do this.

UNIDENTIFIED MALE: The ETA (Inaudible) misery. I am sure that's their intention in the first place.

UNIDENTIFIED FEMALE: I just don't understand why, why would they do it?

UNIDENTIFIED MALE: I feel like it is just a prank. I feel like people just wanted to be cool and be on the news.

STEWART: Some people have been stranded here since last night. UNIDENTIFIED MALE: This is a deliberate act. This is someone who is

seeking to disrupt those passengers. And it is so disappointing that you've got a perpetrator of a crime out there. I'm pretty sure that's five years imprisonment and who is now disrupting 120,000 passengers' journeys this close to Christmas.

STEWART: Drones present a major risk to aircraft. Flying in to an engine or a wind screen could have catastrophic consequences, which is why in the U.K., it is illegal to fly a drone above 120 meters and within 1 kilometer of an airfield or airport. But tracking the perpetrators is proving difficult.

UNIDENTIFIED FEMALE: So obviously, this is an ongoing investigation (Inaudible) number of sightings of a drone or drones to date, which we are investigation. We're working very closely with Gatwick, a number of resources deployed to try and find out who is responsible and bring this to a resolution effectively.

STEWART: Police believe the drones used today are of an industrial specification, which means they could have a long-range and may not even require an operator.

UNIDENTIFIED MALE: This is a huge problem for civil aviation authority. We have companies using the block chain fact and to create a live map of all drone flights in the U.K. But in the event of a rogue operator than some kind of physical interaction will have to take place -- the drone would have to be destroyed or captured, because you can use signal jammers. But they can't have flying by way points or have artificial intelligence, and so they just wouldn't work. So the only way to be sure would be to knock it out of the sky really.

STEWART: The U.K.'s aviation regulator like many around the world, have been looking to increase drone regulation. And for the passengers trying to travel to and from Gatwick today, that can't happen soon enough.

(END VIDEO CLIP)

STEWART: Well, although a limited number of aircraft are now allowed to take off and land here at Gatwick, Nick, they still have not found these drones. They have not tracked them down. They have not apprehended the perpetrators. And I have actually been asking some of the passengers I met today. You know, are they happy?

Do they feel safe in the air? And actually they were so frustrated that they actually don't care. They just want to get on holiday, Nick.

WATT: I mean there's got to be a lot of people waiting to go places for Christmas, people with children, horrific, horrific, right?

STEWART: Absolutely. Let me tell you. I got some figures here, 765 flights are scheduled for today. We know 100 have already been cancelled. In total, it is 125,000 passengers who were hoping to travel to and from Gatwick today. We know that already 120,000 were impacted from Wednesday night and yesterday. We really hope this gets resolved.

[02:25:03] Of course, there is chaos in terms of all the planes are in all the wrong places. So there will be a huge knock on effect. Some of the passengers I spoke to, Nick, I met a whole wedding party yesterday who meant to be heading to Marrakesh, including the bride and groom. They spent Wednesday on the tarmac for seven hours where (Inaudible) because they were too hot.

They then spent 3:00 a.m. onwards on the airport floor and they were here late tonight. I hope really hope those guys get off and get married.

WATT: And Anna, whoever is piloting those drones, I hope the police get him before those angry passengers for his own sake. Thank you, Anna.

STEWART: You too, Nick. Fingers crossed.

WATT: Meanwhile, the Brexit clock ticks relentlessly down to divorce state. But those charged with figuring out what on earth actually is going to happen, they're now on holiday. Parliament rose on Thursday, and MPs are now on Christmas recess until January 7th. Just two days after that, the heated debate about Prime Minister Theresa May's much unloved Brexit deal will resume.

There is no firm word yet on whether a vote will actually take place. Next on CNN Newsroom, can Kurdish-led fighters maintain their edge, now that President Trump is pulling U.S. troops, their brothers in arms out of Syria. Plus, we're learning new information about why the U.S. Secretary of Defense resigned from the Trump ad administration. Stay with us.

(COMMERCIAL BREAK)

WATT: Welcome back. I'm Nick Watt. Let's update you on our top stories this hour. U.S. Defense Secretary James Mattis will leave the Trump administration at the end of February. A senior U.S. official says Mattis resigned over President Trump's decision to withdraw U.S. troops from Syria, a move Mattis vehemently opposed. The U.S. is also planning a troop drawdown in Afghanistan.

A defense official tells CNN military leaders have been ordered to plan the withdrawal of about 7,000 troops from the country. The decision was reportedly made on Tuesday, the same day as the Syria decision. Operations at London's Gatwick Airport are finally starting to resume with a limited number of flights. The airfield was closed for more than day, stranding tens of thousands of passengers because of repeated drone sightings.

Police are searching for the drone operator. And Japanese officials are moving to keep Nissan's former chief in jail over Christmas. Prosecutors say Friday that they rearrested Carlos Ghosn over new allegations.

[02:30:00] NICK WATT, CNN NATIONAL CORRESPONDENT: They can now extend his intention by 10 days. Ghosn was arrested last month on financial misconduct charges. President Trump claims ISIS has been defeated in Syria. But Kurdish fighters are very much still at war with ISIS in the country. Dramatic video obtained exclusively by CNN shows that deadly fighting and it's fueling criticism from Mr. Trump's opponents who say his decision to pull U.S. military support away from the Kurds is a gross betrayal of a key ally. A warning our report from Nima Elbagir contains some disturbing images.

(BEGIN VIDEOTAPE)

NIMA ELBAGIR, CNN SENIOR INTERNATIONAL CORRESPONDENT: Heavy fire incoming. The cameraman whose voice you can hear takes shelter in the car. But someone has been left behind.

UNIDENTIFIED MALE: And go to the house here. Be in a car is danger.

ELBAGIR: The car itself a target. Nowhere is safe. Gabriel (INAUDIBLE) a freelance photojournalist imbedded with Kurdish forces in Syria sent this footage to CNN. These are the scenes at the front lines of the war against ISIS. As they push forward through town, the ISIS flag waves in the distance. Again, they're forced to shelter this time in a nearby building. A wave of suicide bombers can be heard detonating outside.

These are the Kurdish fighters waging war against ISIS supported by U.S. aerial bombardment. Today, they found an ISIS bomb factory and on the floor, the diary of an ISIS fighter. These are trip wires for improvised explosive devices. As soon as someone steps on them, they detonate. They don't have to go far to find more evidence of ISIS' (INAUDIBLE) with explosives. (INAUDIBLE) the suicide bomber in this attack, just a child.

Hajin in Eastern Syria is among the last ISIS strongholds. It's where U.S. commanders told us they always expected the fighting would be fiercest. What's clear from this rare glimpse of the frontlines of that fight is that it's far from over. Nima Elbagir, CNN London.

(END VIDEOTAPE)

WATT: Now, we are learning more details about Secretary of Defense James Mattis' resignation from the Trump administration. Two Pentagon officials tell CNN that Mattis was livid after reading reports that the Turkish minister of defense threatened to kill Kurdish forces and put them, "In ditches once U.S. troops pulled out of Syria." Mattis was also upset that the U.S. was betraying an ally due to President Trump's Syria decision.

The sources say Mattis offered his resignation after he was unable to change the president's mind about withdrawing the troops. CNN senior producer Gul Tuysuz joins us now from Istanbul. Gul, Mattis says this is betrayal of a key ally, is he right?

GUL TUYSUZ, CNN SENIOR PRODUCER: Well, those words coming from the Turkish defense minister basically saying let them dig ditches. Let them dig trenches. When the time comes they will be buried in the halls that they have dug. Those are very strong words. But it's not the first time that a Turkish official has come out and said this. From the beginning, Turkey has made it very clear that they want to go and expel those Kurdish forces which are the U.S.' main ally on the ground in Syria in the fight against ISIS from along their border, so this isn't a surprise.

It was always a matter of which ally the U.S. would pick. On the one hand, they had Turkey, it's NATO ally. And on the other hand, they had this Kurdish fighting force that has been instrumental in beating back ISIS' territorial hold in Syria. So this has been brewing for a long time. But there has been talk before of the U.S. withdrawing from that area and withdrawing its support for the Kurds. But this shocking development that came basically out of the blue really left the Kurds high.

And dry especially in a time as they're facing down the possibility of a Turkish operation into territory that they control in Syria, Nick.

[02:35:00] WATT: I mean listen I wonder what the Kurds do now. I mean do they continue their fight against ISIS or do they turn to the rear guard and defend themselves against Turkey? But listen as I understand that this is not the first time that the Kurds have been used, abused, and dropped. They're used to a level of betrayal.

TUYSUZ: Unfortunately yes. This is been a cycle of betrayal for Kurds in the region. During the U.S. led invasion of Iraq, you had the U.S. coming out and saying, you know, come help toppling Saddam Hussein and the Kurds were once again left on their own then. In this particular case, we knew that this was a very, very tough decision that was going to always come down to having to choose between U.S.' allies on the ground. But for the Kurds themselves, it's a matter of what they do next.

With the U.S. troop presence there, they had a level of security, and safety, and a blanket even though the number of U.S. troops was, you know, it was only around 2,000. But it really was a deterrent against any Turkish incursion. Now, the Turks are going -- the Kurds are going to be looking for other allies. The possibilities of course are limited. They have Russia, Iran. But of course, their main -- the main destination that they'll be looking to is Damascus.

And at this point, it might be that the U.S. having left the Kurds on the ground is going to have to try to make the Kurds and Damascus see eye to eye, so that that Kurdish force does not get completely decimated along the Turkish-Kurdish border.

WATT: Gul Tuysuz in Istanbul, thank you very much for your time. Moving further east, China is fighting back after the U.S. accused Beijing of being behind a hacking operation to steal global trade secrets. The U.S. Justice Department has charged two Chinese nationals with being part of a group that stole information from dozens of companies, the U.K., Australia, and New Zealand have condemned China saying it is behind the cyber theft of intellectual property.

But Beijing insists the charges are total fabrications. China of course is known as toymaker to the world. But if the trade war between China and the U.S. continues into next year, those playthings will become a lot more expensive for American consumers come next Christmas. CNN's Matt Rivers explains.

(BEGIN VIDEOTAPE)

MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: Santa's workshop China edition, no else but these workers are busy making sure American parents can spend their hard earned money on presents namely toys. The U.S. Toy Association says around 85 percent of all toys sold annually in the U.S. are made at factories like this one here in China. Billions of dollars' worth are shipped each year sold by companies in the U.S.

This particular factory makes foam figurines, Batman, Spider-Man, Darth Vader, footballs for the Tennessee National Guard, and Minions. But these guys and the rest could be more expensive next Christmas.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: China wants to make a deal and it's just not acceptable to me yet. China has taken advantage of the United States for many years.

RIVERS: The U.S. and China are locked in a trade war with negotiations ongoing after a meeting between Donald Trump and Xi Jinping at the G20 this month. There's hope for a deal but if it falls through get ready for more tariffs.

UNIDENTIFIED FEMALE: Quite simply tariffs are attacks on consumers.

RIVERS: The U.S. has already put tariffs on $200 billion in Chinese imports to the U.S. In other words, U.S. companies have to pay more to buy Chinese products. And the administration has threatened to tax $267 billion more. Toys have largely avoided that tax for now. But if the trade war continues, they will get hit too.

UNIDENTIFIED FEMALE: And if tariffs were to go into effect on toys sold to the United States, that would be devastating for particularly for small companies.

RIVERS: They would avoid those tariffs if they imported from somewhere else. But China is unique. The skilled labor here, the established supply chain, the same factories capable of making different toys depending on demand no other country can do that. So even if tariffs are put in place, experts say that moving all of this to another country like say the United States just doesn't make financial sense. Some companies will keep buying Chinese products even if tariffs make them more expensive.

And that extra cost will likely get passed on to the consumer, aka, you mom and dad. Imagine this he says, they need to spend $150 or $200 on what used to cost just $100. It is going to be tough especially for medium and low income Americans. The Trump administration says tariffs are a tool to force China to change. For decades, they have stolen U.S. intellectual property and best practices, and they have restricted market access for American companies. [02:40:04] That is a fact, but changing that behavior with tariffs has

a cost. Trump's policy was meant for helping the American people, but it's a double edge sword. It hit china, but it's also going to hurt American (INAUDIBLE) unless both sides can come to an agreement. So if you don't want next year's Christmas to cost more, you'd likely hope for a deal and for President Trump to turn his attention to some other pressing foreign policy issues. Matt River, CNN Ningbo, China.

(END VIDEOTAPE)

MATT: Meanwhile, back to this Christmas here in the U.S., many federal workers could find themselves furloughed over the holidays because the U.S. federal government is in danger of a shutdown and many are blaming President Trump. More on that when we return.

(COMMERCIAL BREAK)

WATT: Now to Washington, pre-Christmas budget chaos. Now, the House of Representatives has passed a revised spending measure that gives President Trump the five billion dollars he wants for his border wall. But the Senate still needs to vote on the measure and they will likely block the bill. That means a partial U.S. government shutdown kicks in less than 22 hours from now. Our man on the Hill Manu Raju reports.

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: The House nearly passing a bill to keep the government open, but also provide President Trump with his demands for five billion dollars in money for the southern border for his wall something that Democrats are rejecting. Now, it passed the House. It has no chance of passing the Senate on Friday where the Senate is expected to reject that measure. Then the question is, what's going to happen afterwards?

President Trump is signaling to his allies he's not going to give in. He will not sign any bill whatsoever that does not have money for his wall while the Democrats are saying they're not going to give any money for his wall. So which side will blink? Will there be a prolong shutdown and how detrimental will this be to the government, the U.S. economy? Roughly a quarter of the government could shut down if there's no deal by the end of the day on Friday.

That includes major federal agencies such as Department of Homeland Security, NASA, the Food and Drug Administration, and others, and roughly 400,000 workers or so could be affected. Now, what will happen after the Senate votes? That's a question that I put to the majority leader of the house, the Republican Kevin McCarthy who told me it's up to a compromise. The Senate has to compromise with the House and the president has to sign a deal. But getting all of that together by the end of the day, Friday, seems increasingly unlikely, which is why many people on Capitol Hill now believe a shutdown is almost certain. Manu Raju, CNN, Capitol Hill.

[02:45:19] WATT: And global markets are beginning to react after another brutal day on Wall Street. Let's see how Asian markets are looking. That's after a particularly bad day for the U.S. markets. The Dow dropped two percent, closing below 23,000 for the first time since October 2017. The Nasdaq was down as well but narrowly avoided closing its first bear market since the great recession earlier this century. The downward trend isn't being helped by the budget fight in Washington.

And joining me now is Scott Lucas, professor of International Politics at the University of Birmingham in England. Now, when Washington sneezes, does the world really catch a cold? Is that we're going to see on the global market, Scott?

SCOTT LUCAS, PROFESSOR, INTERNATIONAL POLITICS, UNIVERSITY OF BIRMINGHAM: It's not just a question of Washington sneezing. Washington appears to have a serious condition, at least that's the way global markets were reacting. Because this isn't just one event, it's a series of them.

You mentioned the imminent government shutdown. The Federal Reserve, however, on a wider economic front did not loosen monetary policy on Wednesday. In fact, it signals there will be gradual interest rate rises because it's having to protect against a spiraling federal government budget deficit fueled by the Trump administration's tax cuts that's got the markets shaky.

They are worried about the U.S.-China trade war. And how far that might extended -- expand. And then there's those variables beyond economics which is Trumps let's say erratic behavior this week culminating in the resignation of Defense Secretary Jim Mattis, who was considered the one adult in the White House playground.

WATT: Now, I want to talk a little bit more about this shutdown and Trump's erratic behavior. I'm going to play you Trump last week during his meeting with Democratic leaders Chuck Schumer. And then, a sound bite from today, from proxies' advisor Stephen Miller. Let's take a listen.

(BEGIN VIDEOTAPE)

TRUMP: And I tell you what --

SEN. CHUCK SCHUMER (D-NY), SENATE MINORITY LEADER: We disagree.

TRUMP: I am proud to shut down the government for border security, Chuck. I will take the mantle. I will be the one to shut it down. I'm not going to blame you for it.

STEPHEN MILLER, SENIOR POLICY ADVISOR TO THE PRESIDENT: The president never made any commitment to sign a government funding bill, absent border security. If Democrats don't want the government to shut down, support border security. If that's -- it's that simple. The Democrats, all they need to do is support border security and the governor will be funded.

(END VIDEOTAPE)

WATT: So, Scott, Trump said he wasn't going to blame the Democrats. Now, his advisor is blaming the Democrats. Is this plan going to work? Is Teflon Don going to manage to blame this on someone else?

LUCAS: Well, that may depend on whether you ask a Trump supporter or Trump critic. What I would say are probably two things. One of this is that the Trump administration is now in a corner because of Trump willing to go to battle, at least, at this point on all fronts.

This front he's chosen is to say, "You don't give me that magical wall with $5 billion." Even though he himself has said that border security is fine right now. You don't give me the wall. That's it. I'm going to take my toys, the government budget and go home.

Now is he willing to maintain that battle all the way through a shutdown on Friday night or will he back away at the last minute? What his advisors were preparing for is, as if Trump cannot be stopped, if he can't be deterred, they're going to scramble desperately to say that it's the Democrats were the bad people for not giving this $5 billion despite the fact that you could hear Trump say, "Hey, I'm the one, I'm the man that's going to take responsibility.

And all this remember is playing out when we are supposed to take a Christmas break. So what's going to happen over the weekend? Is everybody going to call a ceasefire or we actually going to have an unprecedented holiday battle in Washington, connected to as you -- we started off with. Really global shakiness about where we had next into 2019.

WATT: I mean, listen, you know, many Senators had already voted on the previous bill, they were heading home for the holidays. They were going to the airport and then they were struck with this news.

Now, I'm going to put you on the spot do you think the president will ultimately get this money for his wall or not?

LUCAS: Nope. Absolutely not. Because he's on the defensive. I mean, there are some Senators who are already peeling away from him. Remember, over the Saudi Arabia issue where they're upset with his position. They are peeling away with him over the proclaimer withdrawal from Syria which has led to Jim Mattis's resignation.

I think you're not only going to see Trump, not get the money for the wall, I think you're going to see a lot of Republican Senators stop showing up on a wide variety of issues. In other words, he's a lame- duck president.

[02:49:58] WATT: Scott Lucas, thank you very much for joining us.

Now, seeking refuge in the U.S. is becoming increasingly difficult for migrants. Ahead, how one refugee family from Afghanistan manage to beat all the odds. Now, celebrating their first Christmas here in America.

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WATT: An Afghan refugee family that fled the violence and uncertainty in their homeland five years ago, they're experiencing something they could hardly ever have imagined. Kicking off early Christmas celebrations here in America. CNN's Lynda Kinkade, reports.

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LYNDA KINKADE, CNN INTERNATIONAL ANCHOR: A Christmas party is underway. A first for this refugee family legally resettled in the U.S. just six months ago. 5 years after fleeing Afghanistan. The guests, an American family with small children just like them. The two families have never met but the spirit of this season of giving has brought them together.

DANIEL, REFUGEE FROM AFGHANISTAN: This got -- this got to be kidding me, this is a big jacket. Oh, yes, and I -- oh, yes!

KINKADE: The families were connected by the International Rescue Committee which helps refugees to start their lives in the U.S.

One program matches refugees with donors who try to make the holidays just a little brighter by providing gifts to the new immigrant families.

Yes, yes, that's right.

It's a merry moment now, but Ali and Akila and their two young sons, 7-year-old Daniel and three-year-old Martin, it's been five years of living in limbo since they fled Afghanistan. It was a dangerous journey that led them first to Indonesia, where they applied for refugee status with the United Nations, which eventually referred their case to the United States.

The application process for refugees to enter the U.S. changed when Donald Trump took office. So, the family had to redo some of the screening checks which delayed their arrival by another year.

Today, we settled as a refugee is so rare, it's like a Christmas miracle. Less than one percent of refugees around the world ever get that opportunity. Here in the U.S. under the Trump administration, refugee resettlement is headed for an historic law.

Next year, it will be capped at 30,000 people. That's a far cry from 1980 when 200,000 refugees came here to call America, home.

Ali, says the process was long and at times nerve-wracking.

ALI, REFUGEE FROM AFGHANISTAN: When there was like something was not happening, especially, for our family like people get really, really stressed. And we keep praying, we asked our friends to pray for us. And at the end, it was turned out to be wonderful.

A hammer.

KINKADE: So, a fine life for Ali in the U.S. is the American dream. He has a job as a plumber's associate. He's bought a car, and his oldest son is going to school. Something he dreamed about during the years of uncertainty in Indonesia, while the refugee claim was processed. ALI: He was watching one YouTube series that involved the yellow bus going to school, and he was like -- when he came, he saw the first line, I'm going with that yellow bus to the school now? I'm allowed to go to school about? Yes, he was very excited. Oh, I really need this.

[02:55:00] KINKADE: Ali is excited about his new home too and says he feels welcomed even in this political climate where not everyone shares his enthusiasm for refugees.

ALI: Our favorite places like Drift Town, going to Walmart, you know, people are amazing. You know, if they don't say, hello, if they are not smiling, if they're definitely, just say they don't know us.

KINKADE: He says, he feel sympathy for migrants traveling to the U.S.-Mexico border. But believes in the end, the legal path is the better option.

ALI: I hope there is a way that they come legally. Being illegal, life get even tougher and tougher. We don't have to worry about if I don't have this paper, I don't have this document, I don't have I.D., and how can I get a job. It was -- it was like my head, you're, your, you're ready to fly.

DANIEL: That's all my favorite. It's my favorite.

KINKADE: Spirit's add definitely soaring in Ali's family room. Now covered with toys and shredded wrapping paper, Ali, says one of the best gives this holiday did not come in a box.

ALI: This is the best present as soon as we touched down. We are free, we don't have to be afraid of living homes saying goodbye to family says, I'm going to work, and we don't know what happened by the time I come back home.

KINKADE: And it's the gift they will keep giving. Lynda Kinkade, CNN.

DANIEL: Here's my favorite.

(END VIDEOTAPE)

WATT: And now, for another good news story. Bear with me on this one. So, a young man in Taiwan got into a whopper of a fender bender, but he may be spared the half-million dollar repair bill. The restaurant worker apparently fell asleep at the wheel of his Mitsubishi SUV and crashed into a parked car. Not just any park car, a Ferrari. And that Ferrari hit another Ferrari, which hit another Ferrari and hit yet, another Ferrari.

Four expensive Ferraris in all. The honorable driver, says he will pay up what he owes once insurance companies figure out what they will cover. But here is the good news, dozens of good Samaritans are already offering cash to help him pay for the repairs.

Thanks for joining us. I'm Nick Watt. Remember to connect with me anytime on Twitter. And I'll be back with another hour of news in just a moment. You're watching CNN.

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WATT: Hello, everyone. I'm Nick Watt, and you are watching CNN NEWSROOM. Ahead at this hour, U.S. defense secretary James Mattis is stepping down.

END