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Sen. Elizabeth Warren (D) Massachusetts Rolls Out $100 Billion On Plan To Combat Opioid Crisis; U.S. Hikes Tariffs On $200 Billion Of Chinese Goods From 10 Percent To 25 Percent; Crucial U.S.-China Trade Talks Resuming After Tariff Hike; Trump Was Very Surprised By GOP-Led Panel's Subpoena Of Son; New York Times Says Trump Lawyer Rudy Giuliani To Travel To Ukraine To Dig For Dirt On Biden's Son In A Bid To Help Trump Win Re-election. Aired 10-10:30a ET

Aired May 10, 2019 - 10:00   ET

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

M.J. LEE, CNN POLITICAL CORRESPONDENT: -- sent over around 3 million prescription pills to one single pharmacy here over a course of ten months.

[10:00:06]

And that is especially stunning if you think about the fact that this is a small town of a population of around 400 people.

So, yes, Senator Elizabeth Warren is here today trying to use this as a backdrop to promote her new opioids plan. This is an issue that a lot of the 2020 candidates are talking about, including Senator Amy Klobuchar. She told voters recently that this is an issue that she gets asked about way more than something like the Mueller report. Poppy?

POPPY HARLOW, CNN NEWSROOM: Yes. You know what? I have been in those towns too, M.J., and I'm so glad that they are getting the attention they deserve. Thank you very much for the great reporting on both fronts.

All right, good morning, everyone. Top of the hour. I'm Poppy Harlow in New York.

JIM SCIUTTO, CNN NEWSROOM: And I'm Jim Sciutto in Washington, where talks are still under way trying to avoid a trade war that is growing bigger and more costly than ever, including for you. U.S. and Chinese negotiators going head to head just hours after President Trump sharply increased tariffs on some $200 billion worth of Chinese exports. Those tariffs are effectively a tax on you. You pay those costs. By sharply, I mean tariffs that stood at just 10 percent yesterday now 25 percent.

HARLOW: That is a really big deal. Again, this morning, the President is wrongly, falsely claiming that the tariffs are a big fat windfall for the Treasury when, in fact, the cost is born by American importers and, therefore, American consumers. And now, the President has added the completely unfounded claim, Jim, that, quote, tariffs, his words, tariffs will bring in far more wealth to our country than even a phenomenal deal of the traditional kind. It's just not true. Let's be clear. It's a tax, as you said, Jim, paid by the American people, not the countries doing the exporting.

Our Business Correspondent, Christine Romans, is with us this morning to talk about all of this. So this is what everyone was worried about, and it happened.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Yes, it did. I mean, the President was not bluffing here. That's what we know for sure. The President wasn't bluffing, and those taxes are going to go into effect here very, very soon on dishwashers, frozen fish, baseball caps. Right now, about half of the products China sells to the U.S. carry an import tax.

So how did this all happen, how did we get here? Well, you've got three rounds of tariffs that happened here in the last year. First, the U.S. put tariffs on all foreign steel and aluminum, including from China. But then in July, the U.S. singled out China further and put tariffs on $50 billion worth of high-tech chinese exports. China hit back with tariffs to the U.S. on $50 billion in goods. And this is mainly Ag products, that has been devastating for American soybean growers.

But the biggest round was $250 billion in September. This includes consumer goods, then luggage, handbags and hats, and then Beijing hit back with $60 billion worth of U.S. exports in response. Now, that $200 billion there in September, that was originally taxed at 10 percent. Now, as Jim said, it is 25 percent as of midnight.

Now, remember, it's not U.S. importers -- it is U.S. importers, not China, that pay all of those tariffs. This acts like a tax on American consumers. And experts warn that there could be a hit. It will disrupt smaller American companies. This analysis finds it could cost the U.S. about 900,000 jobs, raising prices for the average family of four by $767 a year.

And this trade war is not over. There's a lot more the President can do here. He says he has started the paperwork for 25 percent tariffs on another $325 billion in Chinese exports, virtually, everything you put in your shopping cart.

And here's another date to keep in mind. He has until May 18th to decide if he wants to put tariffs on autos. He could declare that car imports are a national security risk. This is a fight as well, especially with the E.U. at the moment.

HARLOW: So, Romans, given all this and given the huge implications, negative implications for the economy, and I get they're trying to hold China accountable for its bad acts on this front, I get that, it's important, but the question is why is the market not in tailspin? Dow is off 136, but it's not worse.

ROMANS: So it's the worst week for stocks in, well, the whole year, basically, and they've erased three weeks of gain, but they still are close to record highs. Look, a couple of things, goods that are already in transit that tax won't apply to them. There's a little bit breathing room. Maybe there could be some last-minute negotiations. Also, there's this feeling that something could happen. There's optimism that perhaps something could get done here. But, overall, you know, I don't think that the markets have factored in the fact that if you were to tax everything, that could be pretty detrimental, overall, to the economy.

The President with all of these Tweets today that I think are very interesting, one of them is a mystery that kind of the money minds are talking about this morning. Is he talking about a big public welfare plan for farmers to bail out farmers further, because his trade policies --

[10:05:01]

HARLOW: It's hurting them.

ROMANS: -- are hurting them. We need to see more clarification about what he means about farmers.

HARLOW: If that's true, it's antithetical. We're going to talk to a farmer in just a minute, so we'll ask him about that. Romans, thank you very much. Jim?

SCIUTTO: So China is promising to hit back, to retaliate, after the U.S. raised tariffs on its products, but President Trump does not sound too concerned. Let's speak to Abby Phillip.

So, Abby, the President is sticking to his belligerent tone this morning. He believes that he can browbeat China in effect to an agreement and feels he has the economic upper hand. What though is the White House strategy if China does not bend here, which it does not appear to be doing?

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Well, Jim, things really do not look good for a deal today. And even as talks continue as of this hour, there is still a sense among officials here that the Chinese are not in a position to actually make a deal. And officials are also preparing to put the blame on President Xi Jinping, saying he has simply come to the table without the ability to make some of the structural changes that he would need to make in order to strike a deal with the United States on trade. And if that is the case, certainly passing the blame is one option there. But the reality is that these tariffs have already gone into place. And as Christine pointed out, the President is eager to place additional tariffs on the table.

And President Trump's Twitter feed this morning really revealed a president who seems to be perfectly comfortable with where things are right now. This is a man who has called himself the tariff man. He likes tariffs as an economic strategy. And he believes that it is working for the United States by bringing money into the U.S. Treasury.

He also, as Christine pointed out, suggested that the damage that is being done to U.S. farmers could simply be solved if the United States bought products from American farmers to compensate them for the loss in the Chinese markets.

And so you're seeing President Trump really doubling down on this strategy and sending a message to China that basically if we don't get a deal today, we will be okay. The problem though is that I think a lot of people here in Washington and on Wall Street do, in fact, want a deal, and there does not seem to be a lot of hope today that that will be accomplished.

SCIUTTO: Big question, what next. Abby Phillip at the White House, thanks very much. Poppy, to you.

HARLOW: Okay, great reporting. Let's talk more about this because the trade war blew up last year. When that happened, American farmers paid a steep price. China slapped high tariffs on U.S. soybeans, among other items, and our next guest was forced to plow under a crop he could not sell. Richard Fontenot joins me now.

$300,000 is what you were faced with here, sir. You grow soybeans, rice, you have crawfish farm in Central Louisiana. And I just want your reaction as a supporter of the President, as an American farmer, to what he is suggesting. Good idea?

RICHARD FONTENOT, RICE, SOYBEAN AND CRAWFISH FARMER: Poppy, there's a lot, of source, to that particular question to it. 2016 was definitely a unique situation. We had a perfect storm as it relates to the tariffs that got imposed, the original trade sanctions and the fact that South Mississippi River was inundated with inventory. And, unfortunately, with that inventory, it prevented us from harvesting our crop and had a delay in harvest. The delay in the harvest allowed the weather to come in and deteriorate the crop to a unique condition that was unmarketable.

So it was weather, inventory, tariffs, lag in exports, a combination of things resulted in my brother and I leaving a thousand acres of crops unharvested in the field last year, definitely. And it was a very dynamic impact.

HARLOW: Okay. So speaking about the tariffs specifically, because, now, we have increased tariffs on China, which China has said overnight that they will retaliate for, what does it mean for you as a farmer? What is it going to mean for your soybean crops?

FONTENOT: As it goes into the soybean crop, it provides uncertainty into the market, into our planning schedules. It's probably the biggest immediate issue. There's definitely -- we're faced with some economic deterioration in prices. As you can see on the boards today and since these discussions have deteriorated, about a 20 percent reduction. But the administration is looking to support us. You alluded to it earlier with some type of measure.

Last year, they used a market facilitation program, which is an older program the USDA and Secretary of Agriculture, Sonny Perdue, were able to put in place and pick up the economic impact last year. If I'm not mistaken, I saw somewhere where the Vice President this past Thursday alluded to the fact if we need to, and we do have impacts, they're looking at trying to provide something as well. I'm not familiar with the purchase of the products directly.

[10:10:00]

But there's a market facilitation program they used last year and it might be the tool they anticipate using this year to support some of these offsets and of the economics based on these tariff issues.

HARLOW: So the President this morning, you're right, I mean, there was that $12 billion aid package to farmers, essentially buying up the goods from you guys that China was no longer buying because of the tariffs. The President is now promising to do that again or suggesting to do that again, quote, in larger amounts than China ever did. I mean, is that what you want? Is that a long-term solution, Richard, to basically have the U.S. government become your biggest customer, because these tariffs are cutting off your ability to sell to big markets like China?

FONTENOT: No, Poppy, definitely not. I mean, we grow the safest, most abundant food supply in the world. And we're competitive economically and production-oriented. We have the product to export. The problem is we are not able to export on the level playing field. And that's why I believe in my opinion the administration is trying to do and the fact that China is -- they're not a very good trading partner, as you have seen and you have discussed earlier today.

To give you just a little bit of synopsis, rice is another main commodity of mine down here in Louisiana. And in 2001, China came into the WTO and was supposed to come in and open barriers and allow for trade. Well, it's 2017, and we just got a final sanitary clearance to trade with China. And as of 2019, we still have not moved a grain of rice to China. China consumes about --

HARLOW: I just have -- the final question to you, sir, on that, and we have to make it quick, is the President said this morning, quote, there is absolutely no need to rush to reach a deal. Same time, his income doesn't depend on the crops that he can sell, yours does. How long can you wait?

FONTENOT: I do agree with the timeliness of it to a certain degree. But at the same time, I can't put a crop in the field because it's raining today. I've got seven inches of rain over the last several days. And I got my whole soybean crop in a warehouse in a seed bag and I have been unable to plant it. So, unfortunately, the weather is giving me a bigger hindrance than the tariffs are at this stage of the game.

We live in cycles and, unfortunately, we have some limitations, and the tariffs and exports are one part of the entire equation. We look at long-term, you talked about long-term, we're a cyclist economy in terms of agriculture. We look at five to seven-year investment plans, we look at five to seven-year issues as it relates to the production cycle. So things evolve, things transpire. And I believe today, what we're going through is we're taking some medicine to cure us for the situation that we're in today.

HARLOW: All right. Richard Fontenot, we have to leave it there. We wish you luck, you and your team, and I appreciate you joining us this morning. Thank you.

FONTENOT: Thank you, Poppy. I appreciate it.

HARLOW: You got it. Jim?

SCIUTTO: Still to come, Rudy Giuliani reportedly headed to Ukraine to try to dig up alleged dirt on the son of 2020 democratic candidate Joe Biden. Could that move help or hurt the Trump re-election campaign? We'll discuss.

HARLOW: And as tensions rise between the U.S. and Iran, former CIA Director David Petraeus has a warning for Tehran. Starting a war with the U.S. would be, quote, suicide. You'll hear from him.

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[10:15:00]

HARLOW: All right. Welcome back. Despite heavy criticism from his own party, the republican chairman of the Senate Intelligence Committee, Richard Burr, is not backing down from his decision to subpoena the President's eldest son, Donald Trump Jr.

SCIUTTO: A tough thing to do in the face of a lot of republican opposition. The Senate's investigation into Russian interference in the 2016 election has been touted as operating with little or no public drama, a rare example of bipartisanship in Washington. Now, some battling within the Republican Party.

CNN's Senior Congressional Correspondent, Manu Raju, joins us now. So, in a way, you have Burr here out on a limb to some degree by himself but standing firm.

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: No question about it. He's getting significant amount of backlash from Trump allies, even most republican senators are saying that he should back off. Now, he is not talking about this publicly, but he is trying to make the case internally to his colleagues why he's moving forward of the subpoena that republicans and democratic leaders of the Senate Intelligence Committee have been frustrated by the lack of cooperation of late from Donald Trump Jr. They have follow-up questions from his initial 2017 testimony and they have learned a lot since then. And, of course, the Mueller report has also come up that has raised questions about some of the things he said, particularly in the run-up to the 2016 Trump Tower meeting.

Now, I just had a chance to talk to Adam Schiff, the House Intelligence Committee Chairman, who said that there are also questions he has about Donald Trump Jr.'s past statements.

(BEGIN VIDEO CLIP)

REP. ADAM SCHIFF (D-CA): We have a lot of concerns about the veracity of his statements about the Moscow Trump Tower meeting. We know that, publicly, he misled the country about that meeting and the character of that meeting, just as his father, the now president, misled the country about that.

[10:20:07]

And we are also concerned about the veracity of his testimony regarding the Moscow Trump Tower deal. After all, this was a deal they were pursuing during the campaign. They were trying to get the Kremlin's help while the President was denying any of this was happening.

(END VIDEO CLIP)

RAJU: And we also just caught up with House Judiciary Chairman Jerry Nadler who warned that Don McGahn, the former White House Counsel, could be held in contempt if he does not comply with the subpoena to appear by May 21st. So a lot of moving parts here in the House, democrats pushing forward and getting some resistance, of course, from the White House. Guys?

SCIUTTO: Yes, to say the least. Manu Raju on the Hill, thanks very much.

Meanwhile, President Trump's personal attorney, Rudy Giuliani, has a new 2020 plan to get his client re-elected. And get this, it involves digging up dirt on the current democratic frontrunner by seeking help from a foreign country. Sound familiar?

HARLOW: This is really striking. So this is according to The New York Times. They did an interview with Giuliani and he talked about planning this trip to Ukraine, quote, in the coming days with two missions in mind. First, digging up potentially damaging information about Joe Biden's son and trying to discredit the origins of the Russia investigation, Jim.

SCIUTTO: CNN Reporter Michael Warren has our reporting this morning, plus Jackie Kucinich, Washington Bureau Chief of The Daily Beast, is with us too.

But, Michael, first, walk us through what we know about Giuliani, what he's up to here and what his intentions are.

MICHAEL WARREN, CNN REPORTER: That's right, Jim. I just spoke with Giuliani just a few minutes ago. He confirmed he is going to Ukraine some time soon. He would not confirm when that is. He also says he plans on meeting with the President-elect Zelensky, who has just won that presidential election and will be taking office at the beginning of June.

Rudy Giuliani says that he's going in his capacity as Trump's personal lawyer. He wants to find out what's going on, both on the supposed conspiracy he says happened during the 2016 election between democrats and certain Ukrainian officials and also to look into the relationship between Vice President Joe Biden and his son, Hunter Biden, who sat on the board at the time of a large natural gas company in Ukraine that was under investigation.

Rudy Giuliani says he simply wants this to be investigated. He's going to the Ukraine to follow up on interviews he's done with Ukrainian officials over the last several months. But asked if there's any proof of any sort of conspiracy, he said he hopes that the Justice Department looks into it.

HARLOW: All right. So a few more really interesting important nuggets from your reporting, Michael. Just to add on to that, is that it was Biden who was pushing Ukrainian government to oust this top prosecutor who was looking into this company that Joe Biden's son was on the board of. He's no longer on the board of that company. And by the way, as I understand from your reporting, the Ukrainian government's case against that company had been dormant since 2014, two years before Biden made this push to get the prosecutor out. I mean, those both seem really relevant here.

WARREN: That's right. Now, there is a lot of dispute about these details from officials in the Ukrainian government, particularly the current prosecutor general, a man named Lutsenko, who is expected to be on his way out under this new President Zelensky.

And there is some concern among some people that CNN has spoken with in Ukraine that Lutsenko is essentially trying to save his job by engaging in some diplomacy with the President's personal attorney, trying to convince him of these things.

It is true that Hunter Biden was on the board of this company at the time that Vice President Biden was sort of leading the administration's effort to root out a lot of corrupt politicians in Ukraine. But Vice President Biden was joined by a lot of western governments at that time, the IMF as well, were all supporting the ousting of this particular official, so that's what we know.

HARLOW: All right. So, sorry to jump in here, but, guys, I'm just told in my ear that they have some sound just in from the House Judiciary Chairman, Jerry Nadler, just spoke with our Manu Raju about this topic. Let's listen to it.

(BEGIN VIDEO CLIP)

REP. JERRY NADLER (D-NY): We have come to a very sorry state when it's considered okay for an American politician, never mind an attorney for the President, to go and seek foreign intervention in American politics.

(END VIDEO CLIP)

SCIUTTO: So, Jackie Kucinich, tell us about the political risks here. Of course, the Trump administration -- the Trump campaign, rather, came under enormous scrutiny for seeking out possibly, well, being interested in accepting help from a foreign actor in the 2016 campaign. Does this have echoes of that?

JACKIE KUCINICH, CNN POLITICAL ANALYST: It does, except it's so blatant. Giuliani himself in The New York Times report said that some might think this looks improper, but I'm going as the President's lawyer.

[10:25:00]

My favorite quote though was in Mike's story, where Giuliani says, the President has no particular interest in the Biden part of it. It's just something that should be investigated. Of course, this has everything to do with Joe Biden.

And I think, politically, this elevates him. This shows just how concerned President Trump is about the Biden candidacy to the extent that he has his personal lawyer, Rudy Giuliani, going to Ukraine to try to gin up this controversy, or not even controversy, this thing that Giuliani said happened that he's trying to connect the dots on. And Mike's reporting shows that there are a lot of holes in that, but that's not stopping them. And that in and of itself is striking.

HARLOW: Yes. It's all very striking. And add on to it that The Times here says that the President has suggested he would like the Attorney General, Bill Barr, to also look into this, so we'll see what happened.

Thank you, Michael Warren, great reporting. Jackie, good to have you, thank you.

KUCINICH: Thank you.

HARLOW: Coming up for us, former CIA Director, General Petraeus, now weighing in on the trade negotiations as the U.S. and China try to reach a deal. And he has a warning for the President on this front.

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[10:30:00]