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Trump And First Lady Makes Surprise Visit To Iraq; Trump Doubles Down On Border Wall As Shutdown Continues; Dow Posts Biggest Daily Point Gain Ever; Trump "Looking Forward" To Second Kim Summit; Tech Companies' Controversies In 2018. Aired 1-1:30a ET

Aired December 27, 2018 - 01:00   ET

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

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[01:00:00] ROSEMARY CHURCH, CNN INTERNATIONAL ANCHOR: Surprise visit. President Trump travels to Iraq to meet with U.S. troops and his message on the fight against ISIS changes slightly. 1,000-point surge after a Christmas Eve debacle for stock prices. The Dow makes a stunning comeback. But will the course-correction last given the volatility of the global markets?

And the U.S. and North Korea jockeying for political position as the stalemate over a second summit between President Trump and Kim Jong-un lingers.

Hello and welcome to our viewers joining us from all around the world, I'm Rosemary Church and this is CNN NEWSROOM.

Well. he has been in office for nearly two years. And on Wednesday U.S. President Donald Trump made his first visit to a war zone. Her and the First Lady spent about three hours in Iraq at a U.S. base near Baghdad. He thanked troops and military leaders and defended his pullout of troops from Syria.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We're respected again as a nation. Were respected again. America is safer and peace is more possible because of the incredible courage and devotion of every patriot here tonight. Some people say well maybe somebody comes from the area and they hit us on a homeland. If that happens, they will suffer consequences over here like nobody has ever suffered before.

(END VIDEO CLIP)

CHURCH: Mr. Trump also met with U.S. troops during a refueling stop in Germany. One country keeping an eye on Mr. Trump's moves is Russia. Our Fred Pleitgen reports from Moscow.

(BEGIN VIDEOTAPE)

FRED PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Certainly, the Kremlin will be watching very close to as to some of the things that President Trump did and President Trump said when he was on the ground there in Iraq. Of course, one of the things that the Russians were very clearly listening for is to whether or not President Trump would defend his decision to pull out of Syria.

Of course, we now know that that is something that President Trump has done. It's been interesting because over the past couple of days the Russians have been saying they aren't sure or weren't sure whether or not President Trump was going to stick to his decision. In fact, Russian President Vladimir Putin only a couple of days ago this year in a press conference said, look, the U.S. has said so many times that it wants to pull out of Afghanistan and has never done so that the Russians really want to see whether or not the U.S. is really going to follow through.

Now hearing from President Trump being on the ground in Iraq with American troops saying, yes, he stands by his decision and that he believes that others will come around to his way of thinking is certainly going to reassure the Russians that this is really going to be something that is going to happen.

The Russians for a very long time have been saying that they believe the U.S. should pull out of Syria because they believe first of all the U.S. is there illegally and then also, of course, it is something that will give the Russians even more power there on the ground in shaping the future of Syria. In fact, one of the things that they have said is that they believe that the U.S. presence on the ground is negative.

And of course, the Russians now are going to be the main power brokers on the ground shaping not only the future of the Assad government but indeed of large parts of that region. Of course, the Russians do have relations with the Israelis. They have the relations with the Turks as well. And one of the things that we're already hearing is that there is already chatter going on for instance between Moscow and also Ankara as to how to shape the future of that nation once and if the United States really does pull its troops out of Syria. Fred Pleitgen, CNN Moscow.

(END VIDEOTAPE)

CHURCH: It was only last week President Trump declared that ISIS had been defeated. In Iraq, he seemed to walk that back a little bit calling it a near defeat. Take a listen.

(BEGIN VIDEO CLIP)

TRUMP: The other reason I'm here today is to personally thank you and every service member throughout this region for the near elimination of the ISIS territorial caliphate in Iraq and in Syria.

(END VIDEO CLIP)

CHURCH: Joining me now to talk more about all of this is CNN Military Analyst, Retired Air Force Colonel Cedric Leighton. Always good to have you on the show.

COL. CEDRIC LEIGHTON (RET.), CNN MILITARY ANALYST: It's great to be with you, Rosemary. CHURCH: Well, we just heard President Trump thank the troops in Iraq

for nearly defeating ISIS. First is that true? Have they nearly eliminated ISIS and what was your take on this presidential visit to a war zone, Mr. Trump's first since being in office?

LEIGHTON: What was certainly good, Rosemary, that he went to the war zone, and I think that the fact that the First Lady accompanied him was also good. As far as you know, whether or not ISIS has been almost eliminated, I -- certainly it is true that the territory that ISIS has -- had controlled for you know, a few months I has greatly diminished in size.

[01:05:24] But that fact is just one aspect of everything. ISIS is not only a territorial issue but it's also a hearts and minds issue. And that is something that is far more nebulous and to say that what has defeated ISIS in the absence of say the elimination of their leadership like al-Baghdadi for example. That really is being a bit too optimistic about what has actually happened. So we have not eliminated ISIS. We have not defeated them. We are on our way to doing so. But the movement from Syria, the movement of U.S. troops from Syria is coming in a bit too early a point in this equation I would say.

CHURCH: A critical distinction to make there. And President Trump's visit to Iraq came just after he announced plans to withdraw U.S. troops from both Syria and Afghanistan. Here's Mr. Trump's response to a question about what might come next. Let's bring that up.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Do you have any plans to pull forces out of Iraq as well?

TRUMP: No plans at all. In fact, we could use this as a base if we wanted to do something in Syria.

(END VIDEO CLIP)

CHURCH: All right. So using Iraq as a base if they want to do something in Syria, how will that work exactly and what's your reaction to Mr. Trump's military and political strategy in regards to Syria, Afghanistan, and Iraq.

LEIGHTON: Well, I think this is something that we've done before we have actually used Iraq as a base against operations in Syria against ISIS as well as other elements that we were going after there. However, I think it's a very difficult strategy to implement. It was only partially successful. The real successes that we achieved were when we were able to be in contact with our Allied forces and when we let our adversaries of all types know that we were actually present in that country.

So to use Iraq as the sole base for mounting operations in Syria is I think a not a very easy thing to do and it's also somewhat dangerous. Because in many respects the Middle East is really based on personal relationships whether there's a relationships with allies or relationships with adversaries. It is very important to maintain a real presence on the ground there, and that's I think what will be lacking in this particular case.

CHURCH: So why do you think Mr. Trump is taking troops out of Syria and Afghanistan?

LEIGHTON: Well, because he, in essence, promised to do so on the campaign trail. And Rosemary, I think that's -- you know, it's one thing to promise these things politically, it's quite another thing to look at the geostrategic implications of doing these things. So if you take Syria first, what you have there is, in essence, the seeding of that country to a Russian Iranian sphere of influence. That is something that you know, kind of happened at least as far as the old Soviet Union was concerned back in the 1970s and 80s.

But I -- we are living in a completely different time now and we are actually willfully ceding -- the U.S. is willfully ceding Syria to Vladimir Putin and to the leaders in Tehran. And as far as Afghanistan is concerned, we're basically doing something like that with the Taliban. We have not really succeeded in getting concessions from the Taliban. There have been peace talks that have been going on usually in Qatar and Oman. But those talks, it can only bear fruit if the Taliban and other parties know that the United States is going to put pressure on them and continue to put pressure on them for the long term.

We're in essence not very good at the long term. And that is what our adversaries will be seeing in all of this. And I think as far as Afghanistan is concerned, withdrawing troops at this point in time is also the wrong signal to send. Eventually, they should all come home but we should come home on a much more positive note for the United States than what we are currently seeing.

CHURCH: Before you go, I do want to just very quickly get your reaction to President Trump's signing campaign hats during his visit with U.S. troops in Iraq. What did you think of that?

LEIGHTON: Well, it's not appropriate from a U.S. military perspective. The U.S. military is an apolitical organization. The types of hats, they are campaign hats. They are not slogans of the United States government. They're also not slogans that have been approved by the Department of Defense for any reason. And in essence, it shows a degree of partisanship on the part of some of the members of the military there. And that is something they should most definitely avoid whether they feel favorably or unfavorably towards President Trump.

[01:10:13] CHURCH: Thank you, sir, for being with us. We appreciate it.

LEIGHTON: You bet, Rosemary. Any time.

CHURCH: Well President Trump's Iraq visit comes as uncertainty looms in the United States. A partial government shutdown is now into its sixth day and there are no signs that either the President or Democrats in Congress are willing to budge. Mr. Trump is standing firm on his demand for $5 billion for the border wall.

(BEGIN VIDEO CLIP)

TRUMP: Whatever it takes. I mean, we're going to have a wall. We're going to have safety. We need safety for our country even from this standpoint. We have terrorists coming in through the southern border. We have the terrorist also coming in from the southern border.

(END VIDEO CLIP)

CHURCH: All right, joining me now from Los Angeles, CNN's Senior Political Analyst and Senior Editor at the Atlantic Ron Brownstein. Good to have you with us.

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Good evening.

CHURCH: So President Trump had originally told Democrat leaders, Nancy Pelosi and Senator Chuck Schumer, that he would take full responsibility for this government shutdown over the border wall but he's now trying to shift the blame back on the Democrats. How long do you think this shutdown will last? Who will blink first? Who will ultimately get the blame and what damage will be done in the meantime?

BROWNSTEIN: Well, first of all, the you know, the history of the shutdown is fascinating because it's easy to forget that last year there was a deal on the table for the President in which he would have received his full funding that he's requesting for the border wall in exchange for legal protections for the so-called DREAMers, the young people brought to the country illegally by their parents. That deal seemed to be on track until the hardliners on immigration and the White House demanded that Democrats also agreed to the largest cuts in illegal immigration since the 1920s and then it all fell apart.

And so here we are now with the President, in essence, demanding from Democrats the money for the wall without anything on the other side. The longer-term history of this is that twice both in 2006 to 2013, the Senate passed legislation that included substantial increases in border security as part of a comprehensive package, however, that included a pathway to citizenship for the roughly 11 million undocumented immigrants in the country presently.

Again, each time Republicans said no. Given that history, I think it is very unlikely the Democrats are going to agree to this border wall without getting some of the changes that they want to see in the immigration assistant particularly given that there has never been a majority in public opinion for building the wall. The last CNN poll only a couple weeks ago, only 38% of the country supported building the wall and that dropped to 33 percent if Mexico was not going to pay for it which is, of course, the condition we're in.

CHURCH: Right. Now, we'll just have to see how long the shutdown lasts. So President Trump made a surprise visit to Iraq Wednesday and this is what he had to say in reply to criticism from Republican Senator Lindsey Graham and others about the President's plan to pull U.S. troops out of Syria. Let's take a listen.

(BEGIN VIDEO CLIP)

TRUMP: I think a lot of people are going to come around to my way of thinking. It's time for us to start using our head.

(END VIDEO CLIP)

CHURCH: OK. So with every military expert advising against the withdrawal of U.S. troops from Syria is that even possible that everyone will suddenly agree with Mr. Trump's strategy here on Syria.

BROWNSTEIN: Probably not obviously. But in any way, is the process of this decision. It was more alarming than the -- or at least as alarming as the outcome of the decision. There is a legitimate debate about how long American forces need to be in Syria on this mission but I think no debate I mean, really from all points on the political spectrum, that this was a process in which not only the advice of allies was short-circuited but the input of the military was preempted.

And it was an example of the volatility that the President has introduced into really all aspects of national policy-making by doing this so abruptly, so unilaterally and not only in terms of international alliance but within his own government. And at the same time that he has precipitated these other kinds of circles of instability around the government shutdown and what has been happening with the turmoil and financial markets. So I think the process here was at least as alarming as the conclusion.

CHURCH: Right. And you mentioned the markets, and of course after they experienced the worst Christmas eve in history us stocks soared Wednesday to their best day of the year. The Dow Breaking a record adding more than a thousand points. And this happened while President Trump was on his way to Iraq silent and not tweeting. How big a role did politics play in this market rebound do you think?

[01:15:05] BROWNSTEIN: Yes, I think -- well, I don't think this is the end of the gyrations of the market. I don't think anyone would expect that this is the last word and we are back to the clear sailing.

I mean, it has been striking to see how many financial analysts and strategists and traders in the last month has said something to the verdict -- to the version of -- you know, in the past we treated the president's Twitter tirades and his press conference remarks and his attacks on the Fed as background noise behind policies that we like. And now we see that there is a concrete consequence.

But to them, and I think that is -- I mean, the market may be the most powerful force that we have seen so far that has the capacity to force -- that to pressure him to temper his behavior. But I don't think anyone expects that it will be powerful enough particularly because congressional Republicans have been continued -- really, since the election (INAUDIBLE) to striking extent.

After a midterm election, which they lost 40 seats lost the popular vote in the House by more than Democrats did in 1994-2010. Really no concerted pressure on the president to change the way he is behaving some rumbling about the Mattis departures, and grumbling about Syria.

But a real kind of party-wide reluctance to face the implications of that decision for the broader way the president is operating. And as long as that is the case, I think the markets are going to have to brace themselves for more what they have seen in terms of the distort their behavior of President Trump.

CHURCH: Ron Brownstein, always great to get your analysis. Thank you so very much.

BROWNSTEIN: Thanks for having me.

CHURCH: And a record-breaking rally on Wall Street is carrying over to Tokyo. But not all of the markets in Asia feeling the enthusiasm. Let's take a look at those numbers right now. So, you can see, the Nikkei up nearly four percent, but Hong Kong's Hang Seng down nearly half a percent. Also down in Shanghai, and Australia was up nearly two percent.

Now, in New York, the Dow set a record for the biggest point gain in a single day. Blue chips soared more than a thousand points or five percent. Tech stocks helped the Nasdaq to a nearly six percent gain.

So, let's go to Hong Kong now, and CNN Sherisse Pham, good to see you. So, of course, we witness that record market rebound in the U.S. after a dismal performance Christmas Eve. And now, as we saw some Asia markets are following suit not all. But what are those numbers tell us?

SHERISSE PHAM, CNN INTERNATIONAL TECH AND BUSINESS REPORTER: Well, it tells us that the U.S. markets miracle is carrying over and lifting some of the gloom off of the Asian markets here. Particularly, as you say on the Nikkei. The Nikkei is up just about -- just under four percent there and that helped lift that index out of the bear market that it had entered just two days ago.

We are seeing some more modest gains and movement in the Hang Seng and the Shanghai Composite. We can see Shanghai Composite almost flat there, and the Hang Seng down just about half a percent. Earlier in the day they were posting gains of about one percent.

So, what we're really seeing is this investor enthusiasm and it's investor optimism that happened in the United States carrying over into Asia. And, of course, this all happened on a day when Trump was away from Twitter, and not tweeting, and no news at this point out of the Trump administration, can be good news for stocks that have been -- and investors that have really been rattled by all these movements that came out of Washington over the last week.

So, also, the other thing that's contributing to this is investors are doing what a lot of us do after the Christmas holidays, which is, they are bargain hunting. So, they're picking up stocks that are oversold, you're seeing that happen over in Japan with the Nikkei, a little bit less so in Hong Kong and Shanghai. Rosemary.

CHURCH: And we'll see how long it all last, right? Sherisse Pham, thank you so much. Appreciate that. Well, President Trump says he is preparing for a second summit with the leader of North Korea. But conflicting messages on the North raised questions about another meeting. Coming up, we will explain what both sides are now saying and doing. We're back in just a moment.

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[01:21:16] CHURCH: Well, no date has been set for a second summit between the United States and North Korea. Yet, U.S. President Donald Trump, apparently expects it to happen. Despite conflicting signals from Pyongyang. CNN's Will Ripley has our report.

(BEGIN VIDEOTAPE)

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: In a matter of days, Kim Jong-un is expected to make his biggest speech of the year. A New Year address that could reveal new clues into the North Korean leader's mindset as he prepares for what could be a game-changing second round of diplomacy with President Donald Trump.

On Christmas Eve, Trump tweeted this photo from the Oval Office, taken during a briefing with his North Korea team. "Looking forward to my next summit with Chairman Kim." He said. But more than six months after Trump and Kim's historic summit in Singapore, many observers fear U.S.-North Korea diplomacy is falling apart.

Satellite images show work continuing at North Korean missile sites, weapons factories, and its main nuclear reactors. On Monday, North Korean state media continued its increasingly sharp criticism of the U.S. Warning that America must stop provocative and malicious acts.

North Korea has expressed growing anger with the U.S. for keeping sanctions in place. Sanctions over North Korea's nuclear program and U.N. allegations of widespread human rights abuse, an issue Pyongyang has repeatedly called, non-existent.

Within hours of Trump's tweet, a U.S. federal judge ordered North Korea to pay more than half a billion dollars to the family of Otto Warmbier, the U.S. college student died last year of severe brain damage just six days after North Korea released him. The family says he was tortured. Claims North Korea has denied.

The Warmbier's unlikely to collect the full amount of damages, Pyongyang has few assets in the U.S. the parents could make a claim for.

In recent months, Pyongyang has not ruled out a possible return to the tensions of more than a year ago, when North Korea last test-fired an intercontinental ballistic missile.

Despite rising tensions with the U.S., a new sign of diplomatic progress this week between North and South Korea. A groundbreaking ceremony to modernize roads and railways in the North and connect them with the South. And perhaps, more diplomatic maneuvering by Kim Jong- un's government. North Korean media while criticizing the U.S. has praised President Trump. Blaming Trump's opponents for the breakdown in denuclearization talks. A move experts say could be an attempt by Kim to play to the president's ego in hopes of getting a better deal if that second summit ever happens. Will Ripley, CNN.

(END VIDEOTAPE)

CHURCH: A challenging year comes to an end. Still, to come, Facebook is one of several tech companies that face controversy in 2018. We'll have that for you when we come back.

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[01:25:17] CHURCH: Well, 2018 brought plenty of controversy to the tech world. The year was littered with data breaches or data misuse that shook user's confidence in the security of their personal information. Tech investors didn't have it much easier. Samuel Burke has a look back.

(BEGIN VIDEOTAPE)

SAMUEL BURKE, CNN BUSINESS AND TECHNOLOGY CORRESPONDENT: In the tech world 2018, will without a doubt be remembered as the year of Cambridge Analytica? There wasn't much known about the British firm until journalists banded together to expose the company's links to Donald Trump's 2016 presidential campaign and how it misused the data of up to 87 million Facebook users.

The social network experienced the biggest single-day loss in the history of the stock market. When it shares fell 19 percent as the company advised investors, it would spend more on security and user privacy. The sell-off vaporized about $119 billion in market value. That was just one of many falls from grace for the tech sector in 2018, including Bitcoin.

In December of 2017, one single Bitcoin was worth nearly $20,000. But by the first few months of 2018, the cryptocurrency bubble had burst. Hundreds of billions of dollars in value had disappeared by the end of 2018, and a single Bitcoin had plummeted to a worth of around just $3,300.

A star of the tech world also fell in 2018. The Securities and Exchange Commission alleged Elon Musk misled investors when he tweeted he'd secured the necessary funding to take Tesla private. Causing the company stock to soar.

He had not secured the funding the SEC said. In September, Musk agreed to step down as chairman of Tesla and pay a $20 million fine in a deal to settle charges without admitting or denying the allegations of the complaint.

As much as 2018 will be remembered for its falls, it will also be remembered for the rise of the E-scooter. Just as quickly as they took off in popularity, the dangers of zooming down the street at 15 miles an hour quickly caught up to local authorities, and bans in various cities followed.

That didn't stop tech giants like Uber from jumping on the scooter craze with hundreds of millions of dollars in investment. Helping E- scooter startups like Bird hit valuations of $2 billion. And that is how tech took off in 2018. Samuel Burke, CNN, London.

CHURCH: Bye-bye, Samuel. Thanks for watching CNN NEWSROOM. I'm Rosemary Church. Stay tuned now for stay tuned now for our powerful special "MUSIC THAT MAKES A DIFFERENCE". You are watching CNN.

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