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Market's Plunge as China Hits Back with New Tariffs; Larry Kudlow Acknowledges U.S. Companies, Consumers Will Pay for Tariffs; WAPO: Trump, Allies Try to Block More Than 20 Investigations; Trump Retweets Criticism of His Own FBI Director; Trump: "I'm Very Surprised" by Subpoena of Don Jr; Trump Says He's OK with Attorney General Investigating Biden. Aired 11-11:30a ET
Aired May 13, 2019 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[11:00:17] KATE BOLDUAN, CNN ANCHOR: Hello, everyone. I'm Kate Bolduan. Thanks so much for joining me.
We're beginning with breaking news on Wall Street this morning. The market still plunging right now. Take a live look at the Dow, down over 500 points. This, after China just this morning announced it was retaliating against the president's latest hit, slapping new tariffs on $60 billion worth of U.S. goods. In case you had any doubts, friends, this is what a trade war looks like. China hitting back after President Trump more than doubled tariffs on $200 billion of Chinese goods late last week.
The president is still denying the reality in all of this, when he's defending his moves this morning. Tweeting this: "There's no reason for the U.S. consumer to pay the tariffs, which take effect on China today."
The reality, of course, is not that. And companies big and small know that all too well.
Let me play for you the CEO of one of the largest bicycle makers in the U.S. that I spoke with.
(BEGIN VIDEO CLIP)
BOLDUAN: Is there any way you can avoid passing that to customers?
ARNOLD KAMLER, CEO, KENT INTERNATIONAL, INC: Only if I wish to go bankrupt really quickly.
KAMLER: No, there's no way -- no way to absorb that. We have to pass it on.
(END VIDEO CLIP)
BOLDUAN: Joining me right now, CNN politics and business correspondent, Cristina Alesci, at the New York Stock Exchange, and also CNN international correspondent, Matt Rivers, joining me from Beijing.
First to you, Cristina. What are you seeing there right now?
CRISTINA ALESCI, CNN POLITICS & BUSINESS CORRESPONDENT: Investors are sending a clear message to Trump. They are not buying his positive spin on his trade war. Here's the deal. Investors are now pricing in the possibility this tit for tat goes on for longer than expected. And, look, that can change as we head into 2020. For sure, Trump is not going to want to see this kind of market movement on the campaign trail.
Also, what may push the two sides to a deal is the pain that the consumers will start to feel because of these tariffs. Unlike what the president is putting out there on Twitter, it is not true that China is the only one feeling the pain. The U.S. consumer is paying for these tariffs. And will pay even more if he goes ahead on imposing a $300 billion -- tariffs on $300 billion in addition to what Trump did last week.
But, look, no doubt about it, President Trump loves to blame Fed Chairman Jerome Powell for a decline to the market. This move today and these losses, it's all Trump's doing.
BOLDUAN: All Trump's doing, 573 points down now.
Cristina, thank you so much. There's a lot to watch from your angle today. Really appreciate it.
Let's get over to China.
Matt, what are the Chinese saying about the latest move they just did?
MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: Well, they're basically saying, we told you this was coming. You know, the Chinese have been very transparent. This government isn't transparent about most things but they're transparent about what they're going do in the trade war. And on Friday, as soon as the Trump administration said they were raising those tariff rates, China's government came back and said, OK, we're going to retaliate. The question wasn't if, Kate, it was when and how. We found that out late this evening when China said it was going to raise tariff rates on $60 billion worth of American imports here to China.
Now, it's also interesting the timing of that announcement. They could have announced it over the weekend, but I think they waited until about an hour before U.S. stock markets opened to make sure they have the maximum impact. As you put it, off the top, this is what happens in a trade war.
Now, if you're looking for a silver lining here, Kate, I think a couple things. One, it's only $60 billion, not the whole $110 billion worth of tariffs that China has already put on American imports. They didn't kind of escalate. They just retaliated in kind. And, two, these tariffs in China are not going to kick in until June 1st. Conceivably, that gives negotiators a couple weeks to maybe come up with a last-minute deal. Do I think that's likely? Probably not. But it does give negotiators a small window to maybe avoid these tariffs coming into effect full force -- Kate?
BOLDUAN: It's a real statement of where things are right now when you're talking about tariffs on the $60 billion is the silver lining and the good news in all of this.
Matt, thank you so much.
BOLDUAN: I really appreciate it.
For more perspective on this, maybe someone who can offer a silver lining or not even close, former U.S. ambassador to China, Max Baucus, who is also a former Democratic Senator from Montana.
Mr. Ambassador, it's great to have you here. Thank you so much.
MAX BAUCUS, (D), FORMER U.S. AMBASSADOR TO CHINA & FORMER SENATOR: Hey, Kate.
Leaning on you once again to make sense to what doesn't make sense to a lot of us.
Let's start with the president denying the reality of what these tariffs do and who actually will be paying for them. You can speak to this as someone from Montana as well. Tariffs are going to be paid, by and large, by U.S. companies and by U.S. consumers. That's the reality. Even though the president doesn't say that, I know you have heard this, I'm sure you have, but even his economic adviser is needing to concede that in interviews now. Let me play you what Larry Kudlow said.
(BEGIN VIDEO CLIP)
[11:05:03] CHRIS WALLACE, FOX NEWS HOST: It's not China that pays tariffs. It's the American importers, the American companies that pay what in effect is a tax increase and, oftentimes, passes it on to U.S. consumers.
LARRY KUDLOW, ECONOMIC ADVISOR TO PRESIDENT TRUMP: Fair enough. In fact, both sides will pay. Both sides will pay in these things.
(END VIDEO CLIP)
BOLDUAN: Do you think the president, at this point, that he doesn't understand this, or that he does not care that he is not giving it to the American people straight on this?
BAUCUS: The facts are clear. His tariffs really are a tax on the American people, not on the Chinese. He likes to imply China is paying this. China is not paying this. Americans are paying, either importers or consumers. We're all paying it. I think the president just likes to talk tough on China generally. Add to that, he loves tariffs. He's got tariffs on lots of countries around the world.
BAUCUS: And this is his way of appearing macho. And I think he's either disingenuous or he's ignorant, one of the two.
BOLDUAN: Either one is probably not acceptable, I would say.
BAUCUS: It's a problem.
BOLDUAN: I have heard you say you think China has more leverage right now. Look, this could go on a very long time, and leverage and the momentum can change hands. But I have heard the opposite from a lot of folks, that they think at this moment the U.S. has more leverage. Tell me why you think China has the leverage?
BAUCUS: This may be a bit presumptuous but I think those who think the U.S. have leverage do not really fully understand China. China thinks long term. China is an authoritarian government. Their party controls everything. They think the long haul. I think to, some degree, China thinks, oh, well, these tariffs will kick in, hurt the American people pretty soon. America is a democracy, and their government is going to be forced to respond. Whereas, all of us in China, we're not a democracy, we can do what we think we want to do. Add to that China is a big country. Americans really don't realize how big China is. It's so important. It's such a major economic force in the world. And China feels it does not have to give in. Add to that, saving face is a big deal in China. President Xi Jinping does not want to appear to have backed down. I don't think Americans understand that.
BOLDUAN: Also, an interesting element when you bring up Xi Jinping is this relationship that Donald Trump talks about all the time, the personal relationship between him and Xi.
BAUCUS: Right. Right.
BOLDUAN: Do you think -- how much do you think that factors into how this is going to play out, this trade war?
BAUCUS: Well, I think not much.
BAUCUS: I think the president has put too much stock in a lot of great personal relationships. Really what counts is the best interest of that country. President Xi is only going to do what is best for China, irrespective of whether he has a good relationship with Donald Trump. Same with the United States. But still, knowing somebody helps.
BOLDUAN: Do you think that if Donald Trump takes the next step, putting tariffs on all Chinese goods coming into the United States --
BOLDUAN: -- is that a way to get China to -- I don't any other way to put it -- other than get China to bend?
BAUCUS: Not much. I think China will bend a little, not much, because China is proud. China has other options. They can boost the Belt and Road Initiative. It can invest in lots of other countries around the world. China will not bend.
BOLDUAN: You see this ending poorly for the United States?
BAUCUS: I think we're in a tough spot, especially because President Trump is so public about what he's done. And it's such a big deal, it's hard for him to back down from what he's done already. The danger I see, too, this is a faint echo of Smoot-Hawley.
BAUCUS: The '30s, the depression was caused, in large part, because countries put tariffs on each other's products. We're putting big tariffs on Chinese products. You have tariffs on other country's products. China is putting tariffs on our products. I hope we don't get momentum to move us in that direction because that's going to cause a recession in America and other countries as well.
BOLDUAN: With concern like that, I do then wonder, how happy are you that you're not the current U.S. ambassador to China?
BAUCUS: It's mixed. I loved the job. I like being there. Maybe a bit of a masochist. I like jumping in. I care a lot about the U.S./China relationship.
BAUCUS: I wanted to do all I could just to help people understand each other. A lot of this is misunderstanding both ways. Because more people look at each other as premises and assumptions, they can start to talk a little bit and understand each other.
BOLDUAN: What's your advice to Terry Branstad right now?
BAUCUS: Keep asking questions. Keep talking. Ask constructive questions. Find ways to get out of this mess.
BOLDUAN: What's the one question, what would be the one question you would be asking right now or how you would be trying to direct the conversation, to if not to stop a trade war, de-escalate tensions, if it's possible?
BAUCUS: Well, it depends on who you're talking to. If he's talking to President Trump, say, hey, China is not what you think, China's not a pushover like you think it is. If he were talking to President Xi, he would say, we want to work with you, the United States and Americans want to work with the Chinese because we need each other, let's find a way.
BOLDUAN: Great to see you, Ambassador. BAUCUS: Thanks.
BOLDUAN: Thank you so much. Really appreciate it.
[11:10:03] BOLDUAN: Coming up for us, stonewalling Congress. A new wave of defiance as the White House and President Trump's allies resist more than 20 congressional investigations. That's the new analysis. So where does the standoff go from here?
Plus, they're back in court. Actress Felicity Huffman is getting ready to formally plead guilty for her role in the college admissions scandal. What will she say when she comes face-to-face with the judge? And could she soon be behind bars?
We'll be right back.
[11:15:18] BOLDUAN: President Trump's efforts to stonewall Congress are escalating so quickly it's getting tough to keep track. Thanks to the "Washington Post," we are. At least 20, yes, 20 congressional investigations are being blocked by the Trump administration currently. That's according to a new analysis by the "Washington Post." That includes blocking requests for testimony, blocking requests for documents. Even includes going to court to try to block outside financial institutions from complying with congressional subpoenas. Some of the fight is over issues relating to the Mueller report and the Russia investigation, but at least 10 such stonewallings, if we're now going to call it that, have nothing to do with the Russia investigation or Trump's finances for that matter. Things like disaster relief for Puerto Rico and security clearances.
Let's go to the White House to figure out what they're saying about it. CNN's Abby Phillip is there.
Abby, what are you hearing there this morning?
ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Well, the strategy from the White House is really hold the line on all of these various inquiries. The president and the White House have a strategy of not really giving an inch on any of them. And this has to do with the president's view that Democrats are using what they're calling oversight to become what he is calling presidential harassment.
And over the weekend, we heard from one of the president's aides in a statement talking about how the White House believes that Democrats are asking the president to provide them with information that they simply are not entitled to. Steve Grove says, "There are rules and norms governing congressional oversight of the executive branch, and the Democrats simply refuse to abide by them. Democrats are demanding documents they have no legal right to see, including confidential communications between the president and foreign leaders and grand jury information that cannot be disclosed under law." But that being said, the White House hasn't exerted executive
privilege over all of these materials. They have only done so in one case over the unredacted Mueller report. So even without doing that, the White House is saying, no, you can't have any of these documents.
At the same time, President Trump is really going on the attack on all kinds of different fronts, including in his own administration. This time, this morning, attacking his FBI director, Chris Wray, who, by the way, he appointed, saying this in a series of tweets: "The FBI has no leadership. The director is protecting the same gang that tried to overthrow the president through an illegal coup." He is quoting someone else there. But the president putting his own spin on it at the end, saying, in parentheses, "Recommended by the previous DOJ."
Well, this was someone President Trump appointed when he came into office, recommended by an associate of his, an adviser, Chris Christie. Christopher Wray is not a random person. But President Trump is seeing attacks coming from all fronts, and he's pushing back pretty aggressively. I think this is just a sign of how they are going to go forward with all of these investigations for months and months to come.
BOLDUAN: Yes, I mean, it's easier to count friends than enemies at this point.
Great to see you. Thank you, Abby. Really appreciate it.
Joining me right now is Daniel Lippman, a White House reporter for "Politico," co-author of the "Politico's Playbook," and Seung Min Kim, a CNN political analyst and White House reporter for the "Washington Post."
It's great to see you guys.
Seung Min, let me ask you this. One line from the first graph of your piece kind of encapsulating the scope of the stonewalling coming from the White House, in your analysis is, "Amounting to what many experts wall the most expansive White House obstruction effort in decades."
Do you get any sense the White House is concerned about this though?
SEUNG MIN KIM, CNN POLITICAL ANALYST: No, not at all. And I think they really, from the president on down, has taken that defiant attitude, that defiant stance towards congressional investigations because they do believe it's political. They're trying to make their case to the public that it is political. His allies are going out there saying this is just the work of Democrats who are still bitter about losing the 2016 elections to Donald Trump. But Democrats will tell you, and if you look add kind of the list of 20 investigations that my colleague, Rachel (ph), and I examined, some of them have to do with the president's conduct, sure. Some of them do stem from the Mueller vision. But a lot have to do with actual actions, actual policy initiatives of this administration that, you know, Congresses in the past have generally exercised oversight over from any administration. You're looking at the roots of the family separation policy.
Democrats want to know why the administration decided to stop defending the Affordable Care Act in court. And they also want to examine the federal response to Puerto Rico. But for this White House, it's all kind of wrapped up in one. Democrats are overreaching and we're going to make that case to the public.
And, Daniel, you interviewed the president late last week with your colleagues. One thing that came up is an investigation, is Donald Trump Jr, and the fact you have the Senate intelligence Committee chairman, a Republican, Senator Richard Burr, subpoenaing Don Jr to come back in to answer questions. And what I was really struck by, in this moment, when this was the moment that he -- when you asked him about it, that frustrated him that Richard Burr was doing this, that was the moment that Donald Trump decided to bring up election results and to bring up election results in North Carolina, which is where Richard Burr is from. I think that says almost everything.
DANIEL LIPPMAN, WHITE HOUSE REPORTER, POLITICO: He's obsessed with the 2016 election still. And so he talks about it --
BOLDUAN: And the way he talked about it to you.
BOLDUAN: It's like it surprised him because of election results --
BOLDUAN: -- that this would be happening.
LIPPMAN: Just because he won the state of North Carolina, that means the Senate and the House Oversight Committees can't actually do any investigating of people who had meetings with Russian agents.
LIPPMAN: So you know, he didn't say that he had called up Richard Burr and is yelling at him on the phone. But I think, privately, there are a lot of people in the White House and Republicans who think that it is an act of betrayal on Burr's part to actually do that oversight, even though there are questions about whether some of that testimony lined up between what he told Mueller, what he told the Senate. And so kind of that's the sense that we got from the president. He also seemed in a very good mood. He feels pretty untouchable now. And reminds me of what I heard from a good friend of his who said he's not a person who sees danger around the corner very easily.
BOLDUAN: Another part that came up in your interview that I want to ask about is another possible investigation, I guess we could call it right now, would be the president -- the president told you that he would be OK with the attorney general of the United States investigating Joe Biden. And this is over Joe Biden's son working with a gas company out of Ukraine when Biden was vice president, and questions, though no evidence yet emerging, that Joe Biden had a hand in helping that gas company, helping Hunter Biden out in that. Did you get a sense that -- did you get a sense he was serious about that, in how he was talking? That he would be OK with the attorney general investigating Joe Biden?
LIPPMAN: He said it would be appropriate for him to talk to the attorney general about this.
LIPPMAN: When in any -- we're not an African dictatorship, the last I checked. That type of stuff happens where you want to investigate your political opponents. You want to put them behind bars. And so I think he thinks that's a weak spot for Biden, when, you know, for Hillary Clinton, there was all these questions about her ethics. But with Joe Biden, it's more about is he too, you know, comfortable with women? Is he too old? Not many people think of Joe Biden as a corrupt person. They think of him as a working-class guy from Pennsylvania. And Bill Barr has gotten a lot of flak for his role in what Democrats see as a cover-up of the Mueller report. And he's almost said he's open to getting asked by the president.
BOLDUAN: It's really amazing.
Seung Min, on this exact point, right after the interview that Daniel and his colleagues did with Donald Trump, Rudy Giuliani, all of a sudden, canceled his planned trip to Ukraine when he told the "New York Times" very openly he was going to be pushing for an investigation and this was part of it. It was like this whirlwind reversal. Do you think that, in some way, was acknowledging they knew this was a problem?
KIM: Well, I think clearly Rudy Giuliani knew, at the very least, he was pushing the boundaries of what would be appropriate. He even acknowledged, in the "New York Times," in that first interview, that, well, some could call it improper. And obviously --
BOLDUAN: That's a direct quote, exactly.
KIM: Exactly. Perhaps he realized that this may not have been a good idea and backed down.
But I also wanted to go back to Daniel's great interview with the president and go back to the Burr point. There was a really interesting point where the president was saying, I won North Carolina, no one else could have won it beyond me, and Burr ran with me. If you look at the numbers, almost every Senate Republican on the ballot that year outran the president. So Burr won North Carolina by a bigger margin than the president did. And also, Richard Burr is not running again for re-election. So he does have a little bit of this freedom, despite all the pressure that he's facing from Trump allies right now. He's going to be impervious to political pressure. It remains to be seen whether others in the Republican Party will continue to stand with him.
BOLDUAN: That's a great point.
On 2020 politics, Daniel, the president seemed to make clear in your interview he thinks Joe Biden is the only Democrat he's worried about.
LIPPMAN: Yes. He nicknamed Mayor Pete as Alfred E. Neuman. He said an Alfred E. Neuman person could not become president, kind of making fun of Mayor Pete's age. But he said, in terms of --
BOLDUAN: Mayor Pete, doing it in turn --
BOLDUAN: -- saying, I didn't know what he was talking about.
LIPPMAN: Had to Google that guy. "Mad" magazine getting in on the fun and saying, who is Mayor Pete?
But in terms of a more serious point about Joe Biden, he said his 2016 race reminds him of the Democratic field. It's a massive field. Biden is on top. But if you extend that analogy one step further, that means Joe Biden could be elected in 2020 and that's probably something that Trump hadn't thought of.
[11:25:17] BOLDUAN: Well, his political analysis only goes so far until it collides with reality, it seems.
LIPPMAN: And there's a lot of Trump advisers who are worried that Joe Biden could be a big threat.
BOLDUAN: Yes, absolutely.
Great to see you, Daniel.
LIPPMAN: Thank you.
BOLDUAN: Great interview.
Seung Min, great analysis. Thank you so much. Great to see you.
Coming up for us, she has already said she's sorry. Now, Actress Felicity Huffman is getting ready to plead guilty for her role in the college admissions scandal. So what is going to happen to her next?
We'll be right back.