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U.S. More Than Doubles on Chinese Imports, China Vows to Retaliate; Trump: 'Very Surprised' by GOP-Led Panel's Subpoena of His Son; Flood-Ravaged Texas to Get More Rain This Weekend. Aired 6-6:30a ET

Aired May 10, 2019 - 06:00   ET

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

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: If U.S. tariffs have kicked in, China will now have no choice but to retaliate.

[06:00:18] DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: I'm representing the USA. And we're not going to be taken advantage of anymore.

UNIDENTIFIED MALE: Nobody is going to get off lightly. At the end of the day, the consumer in the U.S. is going to feel most of the brunt of it.

ANDERSON COOPER, ANN ANCHOR: You think the evidence is there to prosecute?

JAMES COMEY, FORMER FBI DIRECTOR: Sure looks like it's there.

UNIDENTIFIED MALE: With the president's supporters, it doesn't make any difference. Comey has been tarnished and discredited.

UNIDENTIFIED MALE: We have to take his word and his weight here seriously. He's not out of line.

(END VIDEOTAPE)

ANNOUNCER: This is NEW DAY with Alisyn Camerota and John Berman.

JOHN BERMAN, CNN ANCHOR: Welcome to our viewers in the United States and all around the world. This is NEW DAY. It's Friday, May 10, 6 a.m. here in New York.

The breaking news this morning: you are waking up to a trade war. It's on, and it's bigger than when you went to sleep. And it has the potential to explode over the next several hours.

So at the stroke of midnight, the president raised tariffs to 25 percent on $200 billion worth of Chinese goods. Talks between the U.S. and China, they went late into the night, and those talks are scheduled to resume today. For what it's worth, those tariffs, which do hurt the Chinese economy, are not actually paid by China. They come out of your pocket in the form of higher prices. ALISYN CAMEROTA, CNN ANCHOR: So China says that it regrets President

Trump's decision, and they vow to retaliate. But Chinese trade representatives may be extending an 11th-hour olive branch. They are offering to meet the U.S. halfway to strike an agreement. We'll tell you how those negotiations are going.

So how are financial markets responding to all of this? CNN has it covered around the globe for you. So let's begin with chief business correspondent Christine Romans. She is here in New York.

What's happening at this hour, Christine?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Alisyn, it wasn't a bluff. President Trump jacked up tariffs on thousands of goods. We're talking dishwashers, frozen fish, baseball caps. Right now about half of the products China sells to the U.S. now carries an import tax.

How did we get here? Three rounds of tariffs last year. First, the U.S. put tariffs on all foreign steel and aluminum, including from China. Then in July, the U.S. singled out Beijing, slapping tariffs on $50 billion worth of high-tech -- high-tech -- Chinese exports.

China hit back, of course, you'll remember, with tariffs on $50 billion in U.S. goods, mainly ag products, devastating American soybean farmers.

But the biggest round yet, September 2018, $200 billion in Chinese goods. This included consumer goods like luggage, and handbags and hats. Beijing hit back: $60 billion in goods to the U.S. exports to China.

Now, that 200 billion back in September, that was the big, big nut. That was originally taxed at 10 percent. Today at midnight, it's 25 percent.

Now, remember, as John said, it's U.S. importers, not China, that pay these tariffs. And that's why so many are warning that Trump's tariffs will disrupt especially smaller American companies.

This one analysis finds it could cost the U.S. about 900,000 jobs and raise prices for the average family of four by $767 a year.

But wait, there's more. This is not over here. The president yesterday said he has started the paperwork for 25 percent tariffs on everything else, $325 billion in imports from China. And he also has until the 18th of May to decide whether he wants to put global auto tariffs on, if he decides to declare that car imports are a national security risk. So there's lots more leverage here.

Global markets, as you guys know, don't like a trade war. So let's check out here. You had mixed reaction in Asia. The European markets up a little bit. But U.S. futures, still a little bit lower here, guys.

BERMAN: Yes. The fact that they're still talking, that they haven't --

ROMANS: That's right.

BERMAN: -- blown it up completely seems to be, at least, encouraging or keeping people mildly settled for the moment.

Christine Romans, thanks so much. She'll be back in just a moment.

China promising to hit back at the United States as this trade war escalates. Let's go to Matt Rivers, live at a port in China with the very latest from there.

Matt, what are you hearing this morning?

MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: John, that they're going to retaliate. Chinese's commerce ministry saying that they are not going to take this lying down.

And so you could see those retaliation come -- those forms of retaliation come in a lot of different ways. We don't know exactly what they're going to do. They could announce it in the next couple of hours, maybe tomorrow. But it will be in short order.

And one of the ways that I think it's certainly possible is China doing what the U.S. did. So basically, China has already put tariffs on most American imports that come through ports like the ones behind me here in the city of Tianjin (ph). They could raise those rates from 10 to 25 percent. They could also make market issue -- market access issues more difficult for American companies here. They will make life harder for American businesses.

Now that said, the commerce ministry, in a brief statement earlier today, said that they want to meet the U.S. halfway. They want to work together to try and solve their differences.

But what does meeting halfway mean? And do both sides even agree on where a halfway point could be? I think that a lot of people would tell you they aren't.

So yes, they're meeting again today. The negotiations will continue. But could a deal with struck, John and Alisyn? Maybe. I think most experts would tell you the odds of that happening today are pretty small.

CAMEROTA: OK, Matt, thank you very much for the view from China.

Christine Romans, we want to bring you back to help us understand all this. Also joining us is Margaret Talev, senior White House correspondent for Bloomberg news; Catherine Rampell, "Washington Post" opinion columnist.

OK, great to have all of you. Catherine, the talks are ongoing. If they don't work -- let's look at that scenario first -- what does that mean for consumers today?

CATHERINE RAMPELL, CNN POLITICAL COMMENTATOR: Well, one thing to keep in mind is that the tariffs that went into effect last night are only for things that left China today. So anything that's in transit right now will not be tariffed -- will not get these higher tariffs, in any case. So it's sort of a soft deadline. There are a couple of weeks before these actual 25 percent rates go into effect.

BERMAN: Or we'll feel them.

RAMPELL: We'll feel them, right. So which gives negotiators a little bit of time to work out their differences, whatever those are.

If, in fact, they don't work out their differences, you could imagine that we will see higher tariff rates on goods that will be passed along to consumers despite Trump's assertion that China is paying billions of dollars in tariffs. Two top-notch all-star teams of trade economists have found that the tariffs so far have been 100 percent passed along to consumers and that the areas that have suffered most have actually been Trump country.

CAMEROTA: But what kind of products?

RAMPELL: So there are manufacturing products that have been hurt. Right? Because we're adding tariffs to the cost of inputs that a lot of manufacturing firms buy to make their own stuff. Which, by the way, even the mercantilists in the 17th Century knew was kind of a dumb idea, that you're hurting your own people. So you know, I like to say Trump is stuck in the '80s, the 1680s.

So yes, you could imagine that those tariffs are going to hurt us, as well as, of course, any retaliation that comes from China.

BERMAN: Right. Agricultural goods. You know, farmers in the Midwest have been suffering for a long time. Add it to the floods they're dealing with right now. It's been a heck of a year for them.

Margaret, I want to go to you. You, of course, report for Bloomberg. This is of keen interest to your consumers. What's the very latest on the negotiations?

Let me read you what our Kaitlan Collins just sent us right now, saying, "Both sides were hoping for a breakthrough in these negotiations late yesterday into the night. But it doesn't appear they got one. U.S. officials said earlier this week if the talks went well, the tariffs might not happen. They did."

So read from that what you will. What are you hearing about where things stand at 6:06 a.m.?

MARGARET TALEV, CNN POLITICAL ANALYST: Yes, I mean, John, as you know, it was a real whipsaw of a week. And our trade team, my colleagues, Shawn Donnan and Jenny Leonard, have been, like, all over this story.

You could see finally, an understanding between a couple of events -- the president meeting again with Lighthizer and Mnuchin and then their dinner with the Chinese vice premier that this was not going to get resolved overnight. But there are a couple things to keep in mind. One is that, as early

as the beginning of this week, some of the president's advisers telling me, "Look, we'd like to resolve this." But the president also really believes in the power of tariffs. So if he gets pushed, he may just do it. And guess what? That's what's happening.

The other is, you know -- the thing to really watch is the ongoing response in the markets. The president has been convinced that it's worth kind of calling the Chinese bluff on this.

But -- but you have to look at what he really expects to get out of this. Does he really expect China to codify the changes that they originally promised in law? Or that they're going to end up in this retreat position, where they've been for several days, where they say they're going to do something and then it doesn't -- then it's like the rules kind of change.

They're like, "Oh, we didn't really promise that." So does he think that's going to change or not? And if he doesn't, what will be acceptable to him to kind of ramp this down and kind of reach a deal? And I think people aren't sure how this ends. And that's the issue.

CAMEROTA: So Christine, look. We have seen the president's style -- negotiating style before. Often he says something bold or even does something and then reverses course the next day.

And so if -- so the tariffs have gone into place at midnight. And if the negotiations work out in the next few hours, can the president undo the tariffs today?

ROMANS: You know, I think the one place I've seen this president be the most consistent is that he likes tariffs. And he thinks that they will work. And he's called himself the tariff man. Right?

And he, last night, he even said they're putting the paperwork through for more tariffs. And the tariffs we're talking about, the next big trench, the other leverage he has, these are things that people would feel right away when they go to Target or Wal-Mart and they buy shoes and school supplies.

We're talking about really low-margin items like jeans and apparel. And I mean, so far they've designed these tariffs to kind of protect the American consumer a little bit. So as manufactured products -- the pieces that go into manufactured products, as Catherine said.

But when you're talking about all these things that you buy every day, all of the things that come from China, I think that's where the pressure could start to get to the president when people feel it in their shopping cart.

But I think, Alisyn, he's been very consistent. I mean, he thinks that China is winning and America is losing, that it's taking $500 billion a year from the U.S. It's a piggybank that they're emptying out. That's the way he -- he's wrong on it, but that's the way he sees it. And he's been consistent that tariffs work and he likes them. BERMAN: There are really three things going on here. No. 1, the

talks. What is actually happening in the talks? No. 2, the immediate impact on us in the world economy. And No. 3, if it's worth it.

And Catherine, you talk about this a lot. And you write a lot about this. You do not think it is worth it. People say being tough on China is important. I think you agree with that.

RAMPELL: Yes, I absolutely agree with that.

BERMAN: Why don't you think this is the right way to be tough on China?

[06:10:02] RAMPELL: So to be clear, China has been misbehaving on trade through forced technology transfer, through you know, lots of state subsidies that advantage their own companies over those of competitors by blocking market access, et cetera.

But tariffs are not the solution. The solution is to band together with our allies who have been similarly victimized by China's poor trade practices. I'm thinking countries like Japan and Vietnam and the E.U. and Canada and Mexico and other places that have similarly been victimized. And to say, "Hey, we're going to set the rules of the road. We're not going to tolerate this. We're going to band together through some sort of trade alliance."

And in fact, we did that. It was called the Trans-Pacific Partnership. It was -- it was signed under Obama. Trump, among his first actions as president, pulled us out of it. And as a result, we no longer have the leverage we once had.

CAMEROTA: All right. Margaret, Catherine, Christine, please keep us posted as these talks continue.

BERMAN: We could know more in the next few hours.

This morning it is not clear whether Donald Trump Jr. will honor a subpoena from the Republican-led Senate-led Intelligence Committee. Sources say the president's inner circle is frustrated by the action by the subpoena and the committee's decision to keep its Russia investigation alive.

And the president himself says he's surprised by the whole thing, because he says his son is such a good man. CNN's Joe Johns is live at the White House with the very latest on this. And new words from the fired FBI director overnight, Joe.

JOE JOHNS, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, John.

If the president was surprised, that surprise likely came a week or two ago when we're told that subpoena was actually issued. The significance of this is that there appear to be substantive intelligence issues that are unresolved in this Russia investigation going on in the bipartisan Senate Intelligence Committee.

And no matter how much the president, the White House, and his allies on Capitol Hill would like for this thing to go away. It's not over until it's over.

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JOHNS (voice-over): Two years after being fired by President Trump, former FBI director James Comey says there's no doubt President Trump would be charged with obstruction if he was not president.

JAMES COMEY, FORMER FBI DIRECTOR: I don't accept the notion that, because the president is the head of the executive branch, he can't ever obstruct justice in connection with executive branch activities. That's just crazy and a recipe for lawlessness.

JOHNS: Comey referring to ten episodes of potential obstruction by President Trump outlined in the Mueller report and Special Counsel Robert Mueller's decision not to make a determination on whether the president committed a crime.

COMEY: There's a whole lot of facts laid out in Bob Mueller's report that raised serious questions about whether there's a chargeable case for obstruction and witness tampering against this president.

JOHNS: The president firing back after Comey's CNN town hall in a tweet, writing, "James Comey is a disgrace to the FBI. Comey already on Trump's radar."

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Hello, everybody.

JOHNS: While speaking at the White House earlier that day, saying, without evidence, Mueller and his team had bias against him during their investigation.

TRUMP: Bob Mueller is no friend of mine. I had conflicts with him. We had a business dispute. We had somebody that is in love with James Comey.

JOHNS: But also falsely claiming that the Mueller report proves he committed no crimes.

TRUMP: The Mueller report came out. That's the Bible.

JOHNS: Trump also flip-flopping as to whether Mueller should testify before Congress, now saying --

TRUMP: I'm going to leave it up to our very great attorney general, and he'll make a decision on that.

JOHNS: The president also defending his eldest son, Donald Trump Jr., after the Republican-led Intelligence Committee issued him a subpoena to come back to testify in the Russian interference investigation.

TRUMP: Well, I was very surprised. My son is a good person. My son testified for hours and hours. My son was totally exonerated by Mueller who, frankly, does not like Donald Trump -- me, this Donald Trump.

(END VIDEOTAPE) JOHNS: Now a number of conservative Republican senators did express frustration over this latest subpoena. And the problem is, however, some of them are up for re-election. There's an effort on Capitol Hill to try to get them to hold their fire. Not everybody is taking that advice -- Alisyn.

CAMEROTA: OK. Joe, thank you very much for the view from the White House.

Breaking news now, flash flood watches are up across southeast Texas at this hour as the city of Houston is dealing with devastating flooding, as you can see on your screen. And there's more torrential rain expected this weekend.

CNN's Omar Jimenez is live in Houston with more.

Oh, my gosh. Look at the scene behind you.

OMAR JIMENEZ, CNN CORRESPONDENT: Yes, look, Alisyn, we are in the middle of the round two for this region, if you can believe it or not. They were hit hard and heavy with rain and flooding on Tuesday. And then here we are just a few days later.

I want to give you a look at what downtown looks like right now. This is a portion that leads on to Interstate 10. We've got one car trying to go through some of this water, which is exactly the thing that officials say you should not do when approaching something like this.

It was a few hours ago, obviously, overnight, that we got word from Houston police there were around 40 people on the highway, some of them making calls for rescue just because of how quickly that water had come up there. And when I mentioned, this is a round 2.

Look, earlier in the week, we know schools are closed today, but that's partly because officials don't want a repeat of what happened again earlier in the week. There are some students that were stranded overnight in places where just because parents couldn't get to those schools to pick up their kids.

And we were riding through neighborhoods yesterday speaking to families. A lot of them were making preparations again for the second band of rain. The National Weather Service predicting up to 12 inches will hit by the end of this week. And again, people here bracing for yet another round of flooding.

BERMAN: That is not good news. Just look at that. Omar Jimenez for us in Houston. Omar, thanks very much.

So overnight we know what the president was watching on TV. Fired FBI director James Comey speaking out in a CNN town hall. What the FBI director said about the president and obstruction.

CAMEROTA: And as you all know, it's a crowded 2020 race for president. How many of the candidates can you name? A challenge to our voter panel. And you might be surprised by who they forgot.

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[06:21:02] BERMAN: Overnight new comments from fired FBI Director James Comey. And we know the president was watching. In a CNN town hall, Comey said it is clear to him that the president obstructed justice and that there's no doubt he would have been charged with crimes if he were not the sitting president. Listen.

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COOPER: So in your opinion there was corrupt intent, at least in several of those episodes?

COMEY: Sure looks that way from the report's factual recitation.

COOPER: If -- you know, they're now what -- I think it's up to 800 former federal prosecutors have worked in both Republican and Democratic administrations who have signed a statement, saying that Mueller's findings would have produced obstruction charges against President Trump if he weren't president. Do you agree?

COMEY: Yes, I agree.

COOPER: No doubt?

COMEY: No doubt.

(END VIDEO CLIP)

BERMAN: Joining us now to discuss, Shan Wu, former federal prosecutor and a CNN legal analyst; and John Avlon, CNN senior political analyst.

Shan, James Comey is not a disinterested participant in this discussion. I mean, let's stipulate that to begin with. However, he's a serious lawyer. You know, he was deputy attorney general. You know, his legal opinions count for something.

What do you make of what he said last night?

SHAN WU, CNN LEGAL ANALYST: Substantively, I completely agree especially with his take on those issues, including his take on Rosenstein's character at this point.

I think Comey is such an interesting study in contrasts. I think he's like the original sin, some of this -- his role in the Clinton issue with the election, as well as his firing leading to this.

I think he himself, man of -- not a corrupt man. Very sharp lawyer, like you said. But you know, his own Achilles heel, he's like a moth drawn to the flame when it comes to wanting to be in the center of the attention. I think that's when you listen to him you also take that with a grain of salt.

But analytically, I agree with his position.

CAMEROTA: The way he framed it, I mean, I think that it's interesting to hear you say that he likes to, I guess, be relevant and in the middle of the action. The way he framed it, in comparison to Robert Mueller's choices, he said sometimes when you're trying to do the right and honorable thing, people misinterpret what you're doing. And I have some experience with that.

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: Yes. That's clearly some projection going on.

First, I'd say, to Shan's point, there's never been a prosecutor in the history of the country that enjoys the spotlight. I'm shocked to hear you say that.

I can think of Rudy Giuliani and Chris Christie, for example. Second of all, look, I mean, Comey I think, feels tortured, because he

did try to do the right thing and feels like he was hung out to dry to do it. And I think he hears an echo and sees an echo of that, perhaps, in the Mueller report.

What's striking to me isn't just, you know, his statements that absolutely coincide with that 600 former Justice Department federal prosecutors, the letter they signed. But his really harsh words for Bill Barr, as well.

CAMEROTA: We have that. Yes, let's listen to what he thinks of Bill Barr's reputation.

(BEGIN VIDEO CLIP)

COMEY: I think he acted in a way that's less than honorable in the way he described it in writing and described it during a press conference and continues to talk as if he's the president's lawyer. That is not the attorney general's job. It doesn't make me happy to see this, but I think he has lost most of his reputation with the way he's conducted himself.

(END VIDEO CLIP)

AVLON: And look, remember, when Barr was appointed, Comey said, "We've got to, you know, give him the benefit of the doubt. He's a respected guy." He's regarded as a serious lawyer. And because Trump didn't appoint a Chris Kobach, people greeted Barr with a lot of hope that it would lead to a professionalism.

But that, I think, also sums up and crystalizes a lot of conventional wisdom appropriately about Bill Barr, which is he's acting like the president's lawyer and he's ruined his reputation, but to what end?

WU: I think all of us wanted to give Barr that benefit of the doubt. I mean, he'd been the A.G. previously, had a solid reputation. And, you know, personally, I'm been quite stunned to see just how blatantly his behavior has been. So I think that does hurt his reputation. But obviously, he doesn't care too much about his legacy at this point.

BERMAN: I want to play one other moment from James Comey last night, because Comey has been doing interviews since his book came out. And he's been saying this type of thing before. And it has to do about whether he believes the Russians have something. Maybe that infamous tape on Donald Trump. Listen.

(BEGIN VIDEO CLIP)

[06:25:08] COOPER: Do you think the Russians have leverage over President Trump?

COMEY: I don't know the answer to that.

COOPER: Do you think it's possible?

COMEY: Yes.

(END VIDEO CLIP)

BERMAN: John.

AVLON: I mean, look, that was not a hesitation. And it's a question about influence. Not salacious details but influence. And it's one of the reasons why it's appropriate to still delve into questions about the money trail. Whether he was taking money from Russians.

I mean, the report clearly establishes no coordination or conspiracy directly prosecutable with the Russians. You know, obviously demonstrated a real fact pattern, but the fact there's that open question, why does the president have such fealty to Vladimir Putin, where he refuses to criticize him, which we saw again in sort of the obsequious accounts of the hour phone call from last week. It's an open question.

And again, Comey is not a partisan figure, though he tries to be twisted that way by the president. He and Mueller and other folks are lifelong Republicans and law enforcement figures. So lest we forget, this is not a simple reflexive Democrat/Republican fight. This is about something deeper.

CAMEROTA: One last thing that I thought was very interesting is that Anderson brought up the dossier. Because that's getting so much attention. As you know, Republicans in the White House are now trying to turn all the investigations away from them and to what the origin of the dossier was.

And James Comey reminded viewers that the FBI actually corroborated much of what was in the dossier when they got it. The FBI never just takes something wholesale and goes, "Oh, this must be true." They're investigators. And so they got this stuff, and they worked over months and they corroborated much of it.

But he admitted to -- he told the president what they couldn't corroborate that was in there, which was some of the more salacious stuff. And he's always been up front about that. And I think it's just important to remind them, because we are watching them be off to the races with trying to investigate the investigators.

WU: Yes, and I think Comey is really a master of the two phrases, "I don't know the answer to that," combined with the yes on the follow up. Which really sounds like he's implying that he does know the answer, and we should all be curious about it. I think those are some of the questions, if Mueller does testify, to follow up on some of these missing pieces, what they didn't finish chasing down.

BERMAN: The dossier, the main point was the Russians are trying to hack the election, trying to attack the election.

CAMEROTA: They've corroborated that as true.

AVLON: Yes.

BERMAN: Turns out --

CAMEROTA: Right.

BERMAN: All right. Shan Wu, John Avlon, thank you very much.

A deeply troubling CNN exclusive. A mother says she warned about a repeat of Columbine months before this week's school shooting in Colorado. She tells us her story next.

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