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Dow Tumbles as China Retaliates; Pompeo Cancels Moscow Trip; Stepdad Likely to be Charged in Missing Girl's Murder. Aired 9:30-10a ET

Aired May 13, 2019 - 09:30   ET


[09:30:00] UNIDENTIFIED FEMALE: : By a chorus of devoted fans.


JIM SCIUTTO, CNN ANCHOR: Well, that is quite a life, 97 years old, Doris Day, an America legend.

News we're following now, the opening bell ringing on Wall Street. This as investors react to the breaking news. China retaliating now by raising tariffs 25 percent on many U.S.-made goods. This, of course, after the U.S. raised tariffs again on Friday on Chinese-made goods. Look at the numbers there, already down 400 points. Just 20 seconds into the market open.

We have Cristina Alesci shortly from the stock exchange, along with Christine Romans here and Rana Foroohar here with me as well.

Christine, as you watch these numbers, you know, it's interesting, last week, when we saw early drops on the possibility of a trade war, they kind of bounced back. And everyone's like, ah, we'll get over this. I mean is this more enduring?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: There's been a lot of resilience, I think, in the market. And you can see, you know, the Nasdaq's up 20 percent this year. The S&P is still up 15 percent this year. So your 401(k) has had a great -- a great year.

I think a 2 percent decline, it's a little shy of that right now, is reasonable given the uncertainty here. Costs are going to go up for consumers or costs are going to go up for business, or both, and there's a -- some uncertainty about what the end game is here. We know the Chinese retaliated again this morning on U.S. companies who are selling into the Chinese market.

I'm actually surprised it's only 2 percent. So I -- I --


ROMANS: I think you could just see kind of this malaise, just kind of like grip us over the next days and weeks.

FOROOHAR: But I think that this is predicated on the fact that business leaders globally think that there is going to be a deal. I mean, you know --


FOROOHAR: No one can get their heads around the idea that there will not be a deal.

And I think what's really worrisome to me is that we're coming down to a personality issue between Trump and Xi.


FOROOHAR: I mean I think that this is going to be about whether these two men, as individuals, as human beings, can actually come together between -- sometime between now and June and make a deal. I don't feel real confident about that. You know, I mean we know the president's personality.

Xi Jinping is a very tough leader. A very hard-headed guy. I mean this is a guy that's had a major clampdown in China on human rights, on journalists. I mean this is someone who is not going to let up easily once he has a goal. And I think the fact that this is the two leaders we're talking about here is a worrisome thing.

SCIUTTO: Well, it's personal, it's political, it's an enormous amount of pride here, right.

FOROOHAR: Pride, absolutely.

SCIUTTO: Disincentive to be seen as giving in. And that's a powerful force.

ROMANS: For sure.

SCIUTTO: Cristina Alesci, she's down at the market here.

Listen, the market's been wrong on this for some time, has it not? I mean it priced in a deal. The deal hasn't happened. Now both sides are firing tariffs at each other in effect. Do you sense something different on the floor today than in prior weeks when the market said, ah, you know, we'll get through this?

CRISTINA ALESCI, CNN POLITICS AND BUSINESS CORRESPONDENT: Well, investors are clearly sending a signal to the administration. They are not buying the positive spin that Trump is trying to put on these tariffs.

And, look, how did we get here, right? Right now the U.S. does not feel clearly pressured to make a deal. Trump is saying our economy is very strong. Right now both sides actually feel like they don't need to make a deal.

I think what's going to change in the coming months is that the U.S. may actually lose some of its leverage as we head into the 2020 election cycle. Trump is not going to want to see this kind of pain on Wall Street. And we might see how these prices and how these price increases, because of the tariffs, will actually come through the data and start to show that the U.S. consumer is actually bearing the cost of these tariffs. And as those two things play out, we may see the U.S. lose a little bit of leverage. I think that the overall consensus from investors is that we'll get there on a deal between the U.S. and china.

The question is how much pain is it going to take to get there. And that's the big question. Is it 10 percent? You know, I've seen some notes on the street today that say a 15 percent decline is in order before the two sides feel like a need to come to the table. But that's what it's going to -- that's what it's going to come down to right now.

SCIUTTO: That's -- that would be huge. I mean that -- 10 percent is officially a correction, but 15 percent, and if they're talking in those terms, that would wipe out, would it not, Christine -

ROMANS: This year's gains.

SCIUTTO: This year's gains.

ROMANS: It would. I mean I think the biggest loser could be honestly here American farmers.


ROMANS: And I think politically this is going to be a huge story. This is the first week of planting season. They've got to decide if they're planting corn or soybeans. It is wet. There's terrible flooding. And they've got soybeans that are rotting from last year that were going to go to China but then the Chinese didn't buy them because of this trade war.

So that is going to be a lot of political pressure for the president if -- if, in fact, some of those states that supported him the first time around get wary this time.

FOROOHAR: Well, it's interesting, too, because I've talked to a lot of farmers in the southwest, in the Midwest, and some of them say, you know, we laud the president for exposing the hypocrisy to the global trading system.


[09:35:01] FOROOHAR: Fair enough. But I think when the rubber hits the road and you've already got a lot of headwinds in agriculture right now, if you start to see even more pain and you start to see foreclosures, farm foreclosures of the type that, you know, maybe we saw in the 1980s, then I think that that is really going to hurt the president.


FOROOHAR: These are the states that voted for him. He has a lot to lose here.

SCIUTTO: (INAUDIBLE) what's one of those first voting states in 2020? Iowa, right? There are farmers there.


SCIUTTO: Cristina Alesci, Christine Romans, Rana Foroohar, thanks very much. We're going to stay on top of this story.

Another one we're following, oil tankers sabotaged. More U.S. missiles on the way to the region. This as tensions rising in the Middle East. Secretary of State Mike Pompeo making a last-minute stop in Brussels to speak with European leaders about this looming crisis.


[09:40:07] SCIUTTO: Secretary of State Mike Pompeo is now in Brussels. That's NATO headquarters, by the way, after canceling today's trip to Moscow and a last-minute change. He will now meet separately with leaders of the U.K., Germany and France in Brussels to speak about the situation regarding Iran.

This is happening after European leaders said they were concerned about rising tensions in the Middle East. Tomorrow, Pompeo will go ahead and meet with Vladimir Putin, the Russian president, in Sochi, Russia, as planned. What's he going to talk about there?

Pompeo's change of plans come as defense officials say U.S. forces could be at risk. The target of a new Iranian threat. That is according to intelligence sources to USS -- to CNN. That is why these B-52 bombers have been deployed to the region. They are on the way to an air base in Qatar. And more patriot missiles have also been sent to the Middle East.

A lot going on. CNN's senior international correspondent Frederik Pleitgen is in Tehran now.

Fred, tell us what's happening in Iran and how is Iran viewing the situation?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, the Iranians have had a pretty angry reaction, Jim. They are basically blaming the Trump administration for what they say is the escalation of the situation they say -- this is the Iranian government speaking -- that the Trump administration is involved in what they call psychological and economic warfare against Iran and saying that they're trying to ramp up these tensions.

At the same time, however, you do have senior Iranian commanders, especially from the Revolutionary Guard Cops, who do have some pretty tough talk against the United States. There was one who said that the U.S. would, quote, get hit in the head if it tried to mess with Iran here in this area. And there was another senior IRGC official who came out and said that they believe that this aircraft carrier, the Abraham Lincoln, in the Persian Gulf, is actually an opportunity for the Iranians because they think that they could hit it with their ballistic missiles if indeed there was a larger confrontation with the United States. So some pretty tough talk going on there between the Americans and, of

course, the Iranians as well. And all of this, of course, as not only you have that standoff with the bombers coming in, but you do also have the Lincoln carrier strike group. And, you know, right now those ships are operating in such close proximity, we do know that the Iranian Revolutionary Guard Navy has also upped its presence down there in the Persian Gulf.

The, of course, you had those merchant ships, those oil ships, that apparently were attacked from the Saudis and from the UAE. The Saudi and the UAE sort of insinuating they believe that the Iranians might be behind it. The Iranians insinuating that it might be some sort of false flag attack. But you do have really tensions flaring up, not only here between the U.S. and Iran, but, of course, all the other players in the Gulf as well. And, again, the region and the Persian Gulf right now will be very much a tinderbox. And there are many people who hope that there's not going to be a similar miscalculation that could have grave consequences, Jim.

SCIUTTO: Frederik Pleitgen on the ground in Tehran. Thanks very much.

Joining me now to discuss the broader implications and what happens next, CNN global affairs analyst Susan Glasser. She is a staff writer at "The New Yorker."

Susan, always good to have you on.


SCIUTTO: So this may be unknowable at this point, but you have four oil tankers now sabotaged off the coast of the UAE. This at a time when U.S. officials have been speaking very publicly about an increased threat, at least to U.S. military forces in the region.

Do we have any idea who is behind the sabotage of these -- of commercial shipping there?

GLASSER: Well, look, this is just still an emerging story as far as the security piece. But I agree that the timing could not be more worrisome. You already had this speeded-up deployment of the USS Abraham Lincoln, the carrier into the Gulf last week, which was in response, according to U.S. officials, to what they said was specific intelligence that caused them to worry.

And, you know, the timing here is clearly not coincidental. It's not an accident. It was exactly one week ago -- one year ago last week that the U.S. unilaterally withdrew from the Iran nuclear deal. You also, at the same time, you have this escalating kind of saber rattling in the Gulf. You also have indications that Iran has decided to start piece by piece possibly moving towards pulling out of the Iran deal itself. I think it's significant that Secretary of State Pompeo has gone to Brussels today to talk around with U.S. allies in Europe.

By the way, this has been a major rift, I would say, with our European allies. The fact that the Trump administration decided to make these moves essentially unilaterally. And what I'm struck by is that the sheer normalcy in any other context of having an American official go and talk with its close friends and partners, the Europeans, before talking to the Russians about this.

And, you know, this is the kind of stuff that used to happen as a normal standard par for the course. And what's interesting about this is that it's noteworthy, right?

SCIUTTO: Yes. No, you're right. No, normally that would be an automatic. And the secretary of state had gotten some criticism last week that that was not the case, meeting the allies first. Now he's doing it.

[09:45:02] Let me ask you this. Let's do a little reality check here because both sides have a disincentive to get into a shooting conflict here, right? I mean President Trump has shown very little appetite, in fact the opposite, for further military alignments in the Middle East. Iran knows that if they're hitting at U.S. forces there, that there's going to be a -- an enormous response. How much of this is saber rattling to serve a domestic, political audience, and how much of this from both sides is a substantive step towards a possible conflict?

GLASSER: Well, listen, I think the word miscalculation, right, is the one that tends to come up. It's in very doubtful that it's in either side's interest to directly pursue military conflict, which is why I think the concern is more, once you move more military actors onto the field, get them close to each other, you could have the risk of an outside conflict or a mistake that leads to more escalation.

The U.S.' allies in the Gulf, Saudi Arabia and others, are -- you know, see Iran as this -- their main regional source of problems that have long advocated the U.S. take a more aggressive posture. So, remember, we're getting pressure on that side as well to do more.

Trump has been, in many ways, very lucky geopolitically, right? He has actually not had that much in the way of external crisis imposed on him. So now the question is, will some of his decision, some of his moves, including putting the screws on Iran at a time when we had this Iran deal, cause that conflict finally to occur.

But I agree with you that Trump's inclination seems to be often to resort to this move of increasing pressure as a way of getting leverage and forcing people back into talks.


GLASSER: You saw that with North Korea. And I wonder if that is what he thinks is going to happen here as well.

SCIUTTO: Yes. Although you're playing with fire and often times those moves can lead to conflicts you don't want, right, the risk of escalation. U.S. commanders talk about that all the time.

Susan Glasser, thanks very much.

GLASSER: Thank you. SCIUTTO: The man who sparked a manhunt for his four-year-old

stepdaughter after claiming she had been abducted is set to appear before a Texas judge this morning. Prosecutors are saying he may soon be facing charges.


[09:51:43] SCIUTTO: Darion Vence, the man who sparked a manhunt for his four-year-old stepdaughter, claiming she had been abducted, is now likely to be charged with that little girl's murder. This according to court documents. Moments from now, Vence will appear in a Texas court on charges of tampering with evidence. That evidence, jail records say, is difficult to hear, is a corpse, a human corpse.

CNN's Nick Valencia has been following this story.

Nick, good morning.

So the charges are going to be tampering with evidence. Are we going to see a charge for the little girl's murder as well?

NICK VALENCIA, CNN CORRESPONDENT: It appears that way, according to court records, Jim, and it appears that the evidence against Darion Vence was just too much. For days investigators had tried to reach him for an interview unsuccessfully. Over the weekend, they finally caught up with him, charging him with tampering with a human corpse.

And we want some -- want to show you some exclusive video that our affiliate KTRK obtained. And it shows what appears to be and what we believe to be the last time that Maleah Davis, that four year old little girl in the corner of your screen, entering her apartment complex. In a separate video, it shows Darion Vence just days later leaving the apartment complex with what appears to be a large blue laundry basket that's heavy, as well as a trash bag in it. And he was also, according to police, carrying bleach.

Now, I mentioned that evidence. Inside in family's home, there was a large amount of blood that, according to investigators, there appeared to have been an attempt to clean up that blood. That DNA matched DNA taken from the tooth brush of Maleah Davis.

And throughout this, Jim, I've been talking to the mother of Maleah Davis, who initially defended the stepfather, defended Darion Vence. But this is what she told me about him on Friday.


VALENCIA: Do you still believe Darion? Do you still believe his story?

BRITTANY BOWENS, MOTHER OF MALEAH DAVIS: No. No, I don't believe his story. Only because I've been out here every single day doing what I have to do as a mother. I've been trying, and he hasn't been by my side, not one time.

(END VIDEO CLIP) VALENCIA: Just hours later, she held a press conference outside the family's home where she made explosive allegations alluded to sexual abuse, physical abuse inside the home. We should say, we've been unable to corroborate that with police. But you remember, since the very beginning, there was a lot of gaps, a lot of holes in the stepfather's story.

He is expected to make his first court appearance in about an hour from now. His story, investigators say, just didn't add up. And now he's facing these charges, potentially facing a murder charge after that.


SCIUTTO: That is a beautiful little girl. What a horrible story.

Nick Valencia, thanks for staying on top of it.

Well, we continue to watch the markets. This after China responds to the U.S. increased tariffs. Look at it there, down 500 points at nearly 2 percent. I believe that's the most it's been down so far this morning. We're going to continue to watch this story.

And coming up, CNN journalists revisit stories they've never forgotten that continue to inspire them today. "Champions for Change," a powerful prime time special, airs Saturday night at 8:00 p.m. Eastern. I'm happy to be part of this project. This, of course, only on CNN.


[09:59:19] SCIUTTO: This morning, WikiLeaks founding Julian Assange is being reinvestigated, this for allegations of rape. Swedish prosecutors announced they have found, quote, probable cause to reopen an investigation dating back to 2010. That is when Assange was first accused of sexual assault and rape by two Swedish women. Those allegations are what prompted Assange to first seek asylum in Ecuador's embassy back in 2012.

He was evicted from that embassy after seven years, just last month, you may remember these pictures here, and then immediately taken into custody by British authorities. Assange is also facing possible extradition to the U.S. This for allegedly conspiring to steal U.S. military secrets in 2010.

[10:00:03] At this point, Swedish prosecutors say that no formal charges have yet been filed.