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CNN NEWSROOM

U.S. Deploys Carrier and Bomber Task Force in Response to Troubling Iran Actions; CNN Obtains Satellite Pictures of North Korean Missile Launch; U.S. Markets Set to Plunge as Trump Renews China Trade Threat; Duchess of Sussex Meghan Markle is in Labor. Aired 9-9:30a ET

Aired May 6, 2019 - 09:00   ET

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


[09:00:00] JIM SCIUTTO, CNN ANCHOR: A tariff threat against China.

POPPY HARLOW, CNN ANCHOR: Yes, this is a big deal, and all of this is just a few days before the next round of trade talks, but our negotiations are no go now. As all of this tension builds, let's go straight to the New York Stock Exchange. Our business correspondent Alison Kosik is there.

Look, Alison, on Friday, the president said things are looking with China and now he is threatening a massive increase in tariffs. Why?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, how quickly things can change. Look, the president over the weekend, yesterday, tweeting that he's going to ahead and ramp up those tariffs on $200 billion worth of Chinese goods. That tariff going from 10 percent to 25 percent on Friday, and then placing tariffs on an additional $325 billion in Chinese goods.

Why is it rattling the markets 30 minutes before the bell rings? Because the market had priced in -- there was a consensus that there was going to be a trade deal between the U.S. and China. And now it looks like that that deal is in jeopardy. Investors are running for the exits. Why? Because if you look at how the market said in the past couple of months, three months, it got up quite a bit. S&P 500 up more than 17 percent for the year. The Nasdaq up more than 20 percent for the year.

Well, now investors are getting nervous because they're holding stocks at high valuations and they don't know what the new landscape may be if this trade deal follows through -- Jim and Poppy.

HARLOW: Yes. OK, Alison, stay on it for us. The market opens in half an hour. We'll see if those futures are exactly what plays out here at the opening bell -- Jim.

SCIUTTO: No question. Here in D.C., we are a now couple of minutes this morning past the latest deadline for the Attorney General Bill Barr to give the House Judiciary Committee the full and unredacted Mueller report along with some, though not necessarily all, of the underlying evidence. That's what the committee is asking for now. If he refuses again, he could be cited for contempt. It wouldn't be the first time. And the standoff would then move to a courtroom, maybe several courtrooms.

HARLOW: Yes. That's right. Mueller himself may appear before the Judiciary Committee, the House Judiciary Committee as soon as next week for a public hearing that would surely draw analogies to the Watergate hearings. As recently as Friday, the president did not have an opinion as to whether Mueller should explain his findings under oath. But 48 hours later he declared, quote, "Bob Mueller should not testify."

Our Sunlen Serfaty is on the Hill. Good morning, Sunlen, to you. It's a big day of demands from the president, so far not complying with any of them. How endanger of being held in contempt do you think that the attorney general is this morning?

SUNLEN SERFATY, CNN CONGRESSIONAL CORRESPONDENT: I think very much in danger, Poppy, to put it simply. The chairman of the House Judiciary Committee, he has been very clear that if he does not hear back from Bill Barr, the attorney general, by 9:00 a.m. today, that they will move to hold him in contempt of Congress.

So the expectation is that he will not respond and certainly we have seen no signs of that yet. Now that we are within that 9:00 a.m. Eastern Time deadline, so very likely at some point this week we will see that committee possibly move to hold the attorney general in contempt of Congress.

And it's a good reminder to go back and say what we're fighting for here, what we're talking about. It's about the unredacted Mueller report and the underlying evidence, of course, he's in defiance of that subpoena. And there was a new offer on Friday from the chairman of the committee, Jerry Nadler, who says, look, we're willing to work with you on some parts of the evidence, prioritizing some parts like witness interviews, but saying he's not negotiating on his insistence that the members of Congress would be able to see those redacted versions of the report. So big deadline coming up here in the 9:00 a.m. hour -- Poppy, Jim.

SCIUTTO: So the other big question, Mueller testimony. Democrats on the House Judiciary Committee have now been floating this date of May 15th, that's next Wednesday, as something that they presented in negotiations. I guess the question is, does that mean that Bob Mueller has accepted that date? But I suppose more importantly, can the president and the attorney general simply stand in the way of it?

SERFATY: Yes, it's very unclear at this point, Jim. Certainly this date is being negotiated right now in Congress. Democrats want Robert Mueller up here in front of their committee. And they have circled May 15th on the calendar as the date that they're trying to work for, trying to negotiate. But it's certainly not set in stone yet at all. And certainly President Trump's statement over the weekend, he sent out a series of tweets basically throwing cold water on this saying that Robert Mueller should not testify.

That's a complete 180 from where he was on Friday when he indicated, of course, that this would be essentially up to Bill Barr to decide. But certainly right now the best way to characterize it, still very much up in the air.

HARLOW: OK. Also up in the air is whether Treasury, Sunlen, is going to turn over the president's tax returns. Another deadline, second deadline. This morning any movement?

SERFATY: That's right. A key deadline today. Another deadline as you know. No movement as of now. There's no expectation that the Treasury secretary, Steve Mnuchin, will hand over today what the Democrats are asking for. The House Ways and Means Committee has requested six years of the president's business and personal tax returns.

[09:05:05] You know, keep in mind, late last month Mnuchin asked essentially for a little more time. He said he wanted to consult with the DOJ before they get back. That was widely seen as them essentially dragging their feet. So no expectation that they will meet this deadline today. Potentially up next, subpoena.

HARLOW: OK.

SCIUTTO: Listen, you know, I know it gets exhausting for folks at home. Gets to a fundamental question, does Congress have the right to demand things from the executive branch. That's what's being debated him.

HARLOW: Yes.

SCIUTTO: Sunlen Serfaty, thanks very much.

Joining us now, Elie Honig, former federal and state prosecutor, and Jeff Mason, White House correspondent for Reuters.

So, Jeff, first with you, this is part of a broader strategy here because the White House is basically saying no to everything, right? And making a political calculation.

JEFF MASON, WHITE HOUSE CORRESPONDENT, REUTERS: For sure.

SCIUTTO: So the question becomes, how does the House response? I mean, is the Judiciary Committee going to take this all the way, declaring Barr in contempt? I mean, do we see the sergeant-at-arms marching up to the DOJ to drag him in?

MASON: Well, it seems like they're ready to go as far as they possibly can. I mean, this is something that Democrats really, really want, all of those things that we've been talking about, the tax returns, getting Mueller to testify. So their options are to go the legal route. And that seems to be the direction that they're moving.

SCIUTTO: OK. The question, Poppy, is --

HARLOW: Yes.

SCIUTTO: Is there political backing for it, right?

HARLOW: Totally. That's the question. Right? It certainly depends who you ask. But on the legal front, Elie Honig, to you, I mean, how ultimately gets to decide, not just if Mueller can show up before the House Judiciary on May 15th, but how much he can say? Meaning, how much say in that does the attorney general have and ultimately the president?

ELIE HONIG, CNN LEGAL ANALYST: Yes. The president and the AG really don't have much to go on legally here in terms of trying to restrict Mueller testifying.

HARLOW: OK.

HONIG: And then what he might say. Some of the other issues we've been looking at, the taxation issue, the Barr issues are a little more in play. They have more of a legal hook. But on Mueller, I just don't see a legal hook to stop him.

HARLOW: So no legal move, no exercise of executive privilege, et cetera.

HONIG: Right. There's no executive privilege, no statute. The best they can do is say he is a DOJ employee and hence we will not make him available. But I don't know what the legal support for that is. And also he's apparently in his final days as a DOJ employee. Once he leaves there's really nothing they can do.

HARLOW: By the way, you can always defy your employer and go?

HONIG: I suppose.

HARLOW: I suppose.

HONIG: He could get fired. He probably wouldn't care at this point given that he's in his last days.

HARLOW: Yes.

HONIG: Yes.

HARLOW: Jim.

SCIUTTO: You can hear him saying that. I mean, listen, Jeff Mason, again, the Trump administration seems very comfortable with this going through the courts, right? Fight it through the courts, hopefully play it out. I mean, but how long does this take? I mean, on the issue of, for instance, Barr releasing the full Mueller report on Mueller's testimony. On the taxes, is this -- do they want to play this out beyond 2020? Is that the strategy here, hope that it lasts that long in court?

MASON: Well, I think that -- I mean, I think in some ways, if you look at the risks and rewards of the strategy, it could help them going into 2020, continuing to say look, the Democrats don't care about governing, they only care about this witch hunt which the president has said. There are risks and rewards to Mueller testifying. I mean, on one hand, the president beforehand was saying it's up to the attorney general. The attorney general said it's fine if he testifies.

He might have been able to talk about the fact that he didn't establish that collusion which the president has said was a big success. On the other hand, he surely would have been pressed about his decision not to go to say that there was obstruction of justice. And that would keep that story in the headlines and on the airwaves.

SCIUTTO: Yes. I mean, it's a question, Poppy, what kind of witness would Bob Mueller be as well before a committee like that?

HARLOW: Yes.

SCIUTTO: Would he be tight lipped? Would he be James Comey? You know, that's -- probably not.

HARLOW: But just to you, Jeff, on the Democrats rolling the dice here with this. Right? I mean, you saw the latest CNN polling about a week ago that shows that 44 percent of Americans, you know, think the Democrats are pressing too hard on investigating the president. But like over 60 percent also want the obstruction issue explored. Right? So, I don't know. If you're a Democratic running for 2020, Democrat in Congress, how do you play this?

MASON: Well, I think you hit it right there in terms of there may be, and I think we're seeing a difference between Democrats who are either running for president, focusing a little bit more on what they have to offer, focusing some attacks on President Trump which Joe Biden has certainly done.

HARLOW: Yes.

MASON: But not focusing as much on the Mueller report. If you're in Congress, if you're the head of a committee or -- really emphasizing your oversight role, you're emphasizing that more, there is a little bit of a divide there and that is not 100 percent in line with the polls and where Democratic voters are.

HARLOW: OK .

SCIUTTO: Hey, Elie, just back to the law for one thing on the tax question here. I mean, isn't on that issue the law pretty clear that the House Ways and Means Committee shall -- I forget the exact language, but has the right to request the tax returns of anybody. Why isn't that straightforward?

HONIG: The law is clear there, Jim. You're right. The law says shall furnish. And there are plenty of ways that our law knows how to express if it's optional. There's may, there's within the discretion. But shall means shall. That's not optional, that's not negotiable.

The defenses that we've heard that have been floated out there on the IRS and the administration we have is well, this is an unusual request, it's rarely used and it's never been used for a president.

[09:10:03] But -- OK, but that doesn't really get you very far. The reason it's never been used for a president is because our last 50 years worth of presidents have turned their -- have turned their returns over. So I think they're grasping at straws and I think the practical strategy here, I don't think they can realistically, the administration, believe they're going to prevail in court but there may be some benefit to delay itself.

HARLOW: And you know when the statute has been used, not for a president -- specifically, Elise, but it has been used not that long ago under the Obama administration when Republicans were investigating whether the IRS was slow rolling claims for non-profit status by conservative groups.

HONIG: Right. And it goes to the core sort of constitutional duty of Congress. And that's why they may be able to move beyond the politics, maybe it's naive of me to think Congress will move beyond politics. But at some point Congress has to stand up for its core oversight ability. This is constitutional law 101. This is the kind of thing they teach you in law school. And if Congress is not willing to stand up for itself and fight, they're going to get steamrolled.

HARLOW: Except Mnuchin says, Jim, that there are, quote, "serious constitutional issues" with this request. So, I mean, it's going to be interesting if they lay out what those constitutional issues they think are.

SCIUTTO: Well, and whether there's a law to back that up. Right?

HARLOW: Right. Right.

SCIUTTO: I mean, they've been claiming that across the board with now every request now and even Mueller testifying, a request that the president and the attorney general initially said, what, how many days ago, no problem.

HARLOW: Right. Exactly. All right.

SCIUTTO: Anyway, not exactly a consistent position.

(LAUGHTER)

HARLOW: Not exactly. All right. Thank you, gentlemen, very much, Elie Honig, Jeff Mason, we appreciate it.

Of course we are following some exciting breaking news this morning. CNN has confirmed that the Duchess of Sussex, Meghan Markle, is in labor.

SCIUTTO: For some of us, no more important news this morning.

HARLOW: Exactly.

SCIUTTO: CNN royal commentator Max Foster joins us now from Windsor.

Max, the moment has arrived.

MAX FOSTER, CNN ROYAL CORRESPONDENT: Jim, you needed some happy news. This is the happy news you've all been waiting for. SCIUTTO: Yes.

FOSTER: I can tell you, but she went into labor in the early hours of this morning. Where are we now? We're currently 2:00 in the afternoon UK time. So she may well have had the baby by now. The next update we'll get is that the baby has been born. We'll have the time of birth, we'll have the weight of the baby, crucially the sex, and potentially the name as well.

The Duke of Sussex, Prince Harry, was by her side as she went into labor. We don't know where she's having this baby. So that's the interesting thing. We know that until recently at least the duchess was here down the road in Windsor at their new home, Frogmore Cottage. We don't know whether or not she had the baby there. We do know that Frimley Park Hospital which is some 10, 15 miles away was braced if there were any complications and she needed to go down there.

So we'll find out later on whether or not she's had the baby at home as I believe is her wish or whether she had to go to hospital.

SCIUTTO: First royal baby with dual nationality, right? U.S., UK citizenship.

HARLOW: There you go.

FOSTER: Yes. Absolutely. Yes. Because Meghan lived in the United States in the last five years, this baby will automatically gain American citizenship. It will be a joint U.K.-U.S. national and will be liable to U.S. taxes. So those gifts the queen might be passing on to Meghan and her child may well be taxed.

SCIUTTO: Interesting.

FOSTER: Opening up the royal accounts which will be interesting to have a look at, I'm sure, for the IRS.

SCIUTTO: No question. Max Foster, thanks very much.

HARLOW: All right. That's exciting news. We'll keep you posted here.

Meantime, on a very serious note, the U.S. has deployed a carrier strike group to, quote, "send a message to Iran." National Security adviser John Bolton says that is in response to troubling actions. We're on top of it.

SCIUTTO: Plus bracing for the opening bell. Is the president's tough talk on China about to tank U.S. stock markets? We're following the breaking news on Wall Street. Markets opening up in about 15 minutes.

And Senator Cory Booker unveiling a sweeping gun violence prevention plan. But does it stand a chance between any Republican support? We're going to speak to the candidate himself. That's just ahead.

(COMMERCIAL BREAK) [09:15:00] SCIUTTO: Right now, one of the most potent displays of U.S. military power is on the move. An aircraft carrier strike group led by the USS Abraham Lincoln headed to or near the Persian Gulf.

HARLOW: Yes, it's in what the White House is calling a clear and unmistakable message to the Iranian regime. National Security adviser John Bolton says quote, "any attack on the United States' interest or on those of our allies will be meant with unrelenting force."

Our Pentagon correspondent Barbara Starr is all over this along with our international diplomatic editor Nick Robertson. So Barbara, let me just begin by you know, calming any nerves out there. There's no indication that any action by Iran is imminent. But what is this about? I mean, why now?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, good morning, Poppy, Jim and Nic. Look, it was extraordinarily an unusual statement on the Sunday night here in Washington from John Bolton; the National Security adviser that the aircraft carrier strike group and the Air Force bombers were headed to the region.

And that is, we are told, because there were clear indications that Iranian forces, Iranian proxy-backed militias were making preparations for a possible attack on U.S. forces in the region. Now, look, Iran has been a consistent threat, the U.S. feels -- to its forces and to stability across the region. But they are sending this very public message, we know that this is a very widespread area.

We know there are a number of ships along with the Lincoln that are making that move from the eastern Mediterranean today own into the Suez Canal and around to the Persian Gulf. What this is all about is visible deterrence. There are no secrets there.

[09:20:00] The U.S. wants to send a very visible message, a very public message to the Iranian regime, pointing out to them one more time, if you are planning something, the U.S. has fire power in the region, overwhelming force and the price you will pay is not even worth thinking about it. They hope the Iranians are hearing that message.

SCIUTTO: Nic Robertson, I mean, to be realistic here, attacking U.S. forces in the region would be an alarming move by Iran and it would have to expect, no to expect an overwhelming response from the U.S. What's the view in the region? Is this viewed as a clear and present danger?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Certainly, if you're sitting in the gulf across the -- the Persian Gulf across from Iran, and you're Saudi Arabia or the United Arab Emirates who have got forces inside Yemen at the moment who are battling the Iranian-backed Houthis.

Then you're feeling that Iran is a very real threat to you right now. And of course, these countries I just mentioned, Saudi Arabia, United Arab Emirates are key allies of the United States, but it's not at all clear that U.S. interests working with those countries are at risk here.

So if you are Saudi or the UAE, then you're looking at this as a show of strength against Iran which is something that would generally be seen as positive right now. If you're looking yet from the context of the United States' European allies, let's say, this will be a worrying further shift and a split, if you will, between what is essentially European policy, EU policy if you will, towards Iran and the joint nuclear agreement that the United States along with those countries made with Iran.

And that this will be a further rift in that. So this would be something of a concern.

HARLOW: So Nic, this also follows several key moves that the U.S. has made declaring the Iranian Revolutionary Guard; a terrorist organization, and then just last week cracking down on countries that had those waivers, allowing them to buy oils from Iran. This is the next step, but this is a much larger step.

ROBERTSON: It is. I mean, if you look at what, for example, the Iranian ambassador to the U.K. had to say about the IRGC, the Iranian Revolutionary --

HARLOW: Yes --

ROBERTSON: Guard Council, being designated a terrorist organization. He said that any action against us would be -- would be reciprocated. So that threat is there. But if you look at the waivers that are now being denied on to -- you know, to countries wanting to buy oil from Iran, just this weekend, you have the EU Foreign Policy chief, the British Foreign Minister, the French and German Foreign Ministers as well signing a joint letter, saying they note this move with concern.

HARLOW: Yes --

ROBERTSON: So the rift you have, this growing rift since President Trump pulled the United States out of the JCPOA last year is of a concern. And of course, you know, when European allies and others look at the United States moves right now, they do it in a light, that knowing the United States is heading into an election cycle that President --

HARLOW: Yes --

ROBERTSON: Trump has had long rhetoric against Iran. And that's worrying.

SCIUTTO: So Barbara Starr, it's notable the country that's actually launched missiles in the last couple of days is North Korea. And CNN has an exclusive satellite photo of these missile launches on Friday into Saturday by North Korea which would seem to violate a promise that Kim Jong-un made to the president not to test missiles or nuclear weapons.

No movement of U.S. forces around Asia, the Korean Peninsula, there's that exclusive satellite photo, but you have a strong response to the U.S. In fact, you had the president on the weekend saying he stands with Kim. What's happening here?

STARR: Well, this is by all accounts North Korea testing some very short-range weapons, not an international threat, not even necessarily at the moment a threat to South Korea. It is Kim, however, very much making a statement, reminding, if you will, President Trump that negotiations are not going as President Trump had hoped.

And Kim is out there and he's got weapons and he's got a program. I think it's really interesting that he chose short range. He wants President Trump to get the message, but not to escalate too far.

SCIUTTO: Well, Seoul is not that far from North Korea. So within the range of those missiles. Barbara Starr and Nic Robertson, thanks very much. We're just moments away from the opening bell on Wall Street. Trade tensions heating up China and the market is set to plunge, we'll be live at the Stock Exchange.

[09:25:00] (COMMERCIAL BREAK)

HARLOW: All right, we're moments away from the opening bell on Wall Street, literally 30 seconds away. Wall Street is bracing for what looks like it will be, Jim, about a 500-point selloff at the open.

SCIUTTO: That's right, that's what the futures have indicated. That expected nose-dive triggered by a tweet from President Trump threatening China with new tariffs. Joining us now, business correspondent Alison Kosik and chief business correspondent Christine Romans. So Alison, first to the markets here, it's been quite a run for weeks now, and this would be quite a blip -- there's the opening bell.

(BELL RINGING)

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, here we go. The opening bell just like.

[09:30:00]