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Trump Attacks FBI Director; Felicity Huffman Pleads Guilty; China Strikes Back in Trade War. Aired 3-3:30p ET

Aired May 13, 2019 - 15:00   ET

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


[15:00:00]

BROOKE BALDWIN, CNN ANCHOR: And, moments ago, President Trump responded to the new higher tariffs China just imposed on the U.S. today, sending the Dow plunging by triple digits.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: This is a very positive step. I love the position we're in. There can be some retaliation, but it can't be very, very substantial by comparison.

And out of the billions of dollars that were taken in, a small portion of that will be going to our farmers. We had a deal with China. It was 95 percent there.

And then my representatives, as you know, Secretary Mnuchin and Bob Lighthizer, Ambassador Lighthizer, they went to China. And they were told the things that were fully agreed to, we're not going to get anymore. They're going to un-agree to them. That's not acceptable.

I said, good, that's fine. Put on the tariffs. And, again, so we have tens of millions of dollars pouring into our coffers, the coffers of the U.S. treasury.

(END VIDEO CLIP)

BALDWIN: Here are the specifics now in China's tariffs on U.S. goods.

The government will be raising tariffs on $60 billion worth of U.S. goods starting June 1. Items like cotton and machinery and grains will be taxed as high as 25 percent. The move by China comes three days after President Trump increased tariffs on many Chinese goods by that same percentage.

He also started the process to impose tariffs on another $300 billion worth of Chinese goods, like iPhones, and toys. And President Trump continues to wage a campaign to convince Americans that tariffs are good for the U.S. economy.

Diane Swonk is back with us today. She's the chief economist for accounting firm Grant Thornton.

And, Diane, what a difference between chatting on Friday and now today with you. Just listening to the president, hearing the tariffs are a good thing for the U.S. economy, what's your response to that?

DIANE SWONK, GRANT THORNTON: No, they're not good. They're a tax on the U.S. consumer and on U.S. businesses. And that's what's really difficult about all of this is, they seem to get sort of lost in translation these are a tax on consumers.

And I think that's one of the things we're worried about going forward. If we get the next tranche, which really covers just about anything you go into, any big box discounter, you are going to see it, or online discounters. That's going to affect those kinds of goods, which means it says those that at the lowest end of the income strata the most.

So, this is something we're worried about, that, if we do get the full-out trade war, it is deflation on other things, like on farm goods, as you mentioned the farmers. Any subsidies that go to the farmers have already been too little too late, actually, because we have seen bankruptcies in the farm sector actually rise.

So it really is a tax on U.S. consumers. And if we get the full throttle of all tariffs, it does risk a recession.

BALDWIN: When you hear the president mention a moment ago that he will be meeting with President Xi at the G20 at the end of June, does that allay concerns, or -- clearly not, by the looks of the market right now.

SWONK: Well, we'd like to see -- one of the things that the Chinese are requiring of us is that we remove some of the tariffs for them to negotiate further.

And the difference between the two, the gap is still very, very wide. The last mile is always the hardest. But this is a really road fraught with a lot of potholes in between where we want to be and where China to wants to be. It really is challenging what they feel is their sovereignty.

And our side of it is, we feel they're cheating, which there's legitimate sides to both of that story. But the rest of the world -- if we had the peer pressure of the rest of the world with us with something like TPP, like we had, we'd have a lot more pressure points on China, rather than it just off falling to us.

But I think it really is important that even though they're going to talk again, it's hard to get to where we need to go by that G20 meeting in June.

BALDWIN: Hmm.

Trump claims there's no reason for U.S. consumers to pay tariffs. Then we hear Larry Kudlow saying both sides will feel the impact. I mean, just for people watching, wondering, OK, so following this whole trade war, China, U.S., how will this really hurt me, what's the answer?

SWONK: Well, it really is a tax on us. It's a tax on the U.S. consumer. It is also hard on China, and there's collateral damage. What happens in China does not stay in China. It spills over to the rest of the world.

We saw that at the end of the year. When China slowed own, Europe and Japan slowed down as well. China also represents a very big consumer market for our multinational companies who build and produce goods for China. So it really has many spillover effects that go beyond even a tax on consumers that tariffs represent.

BALDWIN: All right, Diane Swonk, thank you so much.

Rick Helfenbein is the president and CEO of the American Apparel & Footwear Association. His group represents more than 1,000 retailers and manufacturers in the clothing and footwear world. And so you may recognize some of them. You got Carter's, Tory Burch, Anne Klein, and Vans.

So, Rick, nice to have you on.

Just listening to the president, I know that, what, six days ago you were quote -- quoted everywhere saying you were freaked. Right now, you are?

RICK HELFENBEIN, CEO, AMERICAN APPAREL AND FOOTWEAR ASSOCIATION: Beyond freaked.

BALDWIN: Beyond freaked.

HELFENBEIN: Yes, we have gone to the next stage.

We -- our industry is sitting around feeling like we have just bought tickets for the second sailing of the Titanic. The only difference is, this time, we know exactly where the icebergs are.

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We're scared. We're panicked, because we know what's going to happen. All you have to do is go back a little time in history to 1930, to the Smoot-Hawley tariffs, which were designed to protect our industry.

They did a great job. They did a wonderful job, because, today, 98 percent of apparel and footwear is imported into the United States. It is very clear to us tariffs do not work. And the president is using them, shall we say, as a weapon. He's weaponized a tool that was in his arsenal. And it's going to hurt. It's going to hurt the American consumer big time.

Prices...

BALDWIN: How?

HELFENBEIN: Prices are going to jump dramatically.

Our industry right now is 6 percent of all imports. But we already pay, because of Smoot-Hawley, 51 percent of all tariffs collected. Now you're going to add on top of that another 25 percent? You must be kidding.

Prices are going to jump $10, $20, $50 an item. And we know, historically speaking, it's very simple. You raise the price, the sales go down, the jobs get lost. And we don't want to see another 1930. But this is bad. And, quite frankly, I'm watching, as everyone is, what the market is doing today.

I don't think this is a full reaction from the market just yet. I don't think -- I think they're still hoping that we're in a negotiating tactic.

BALDWIN: You're clearly not still hoping that. You say...

HELFENBEIN: No.

BALDWIN: ... you know the iceberg is a coming.

HELFENBEIN: Well...

BALDWIN: You're just thrilled that you know where the iceberg is. Like, do you not have hope? He's meeting with Xi. June 28 is the G20. You're not holding your breath a little bit?

HELFENBEIN: In the apparel and retail business, six weeks is a lifetime.

BALDWIN: Right.

HELFENBEIN: And, also, we buy -- think about this -- we buy four to six months in advance. So, we're going to wait six weeks? You must be kidding. This is just not going to happen.

So it doesn't matter at this point whether he hits us with a tariff or he doesn't, because we're businesspeople. We're not politicians. We have to do what's right for business, and we have to protect ourselves, or we will be shutting more doors.

BALDWIN: You're the guy on the front lines. So the president is sitting there misstating that this is good for GDP, that this is good for the U.S. economy. What would your message be back to the president?

HELFENBEIN: Look, we have been to the White House. We have been to USTR. We have explained innumerable times.

But the president, to his credit, is a master salesman. And he is out there trying to convince everybody this is somehow good for us? You know, to his credit, he got everyone to the table. But now we have gone a step too far.

And this step too far, if carried out, is really going to burn us. It's going to burn us big time. And you have to realize, when an apparel manufacturer moves out, there's all sorts of effects that happen with that, because they don't come back so fast or at all.

And, plus, it's very simple. We have something going on. We call it bumper car inflation. You move out of China, you go to Vietnam. Somebody gets bumped out of Vietnam. They go to Indonesia. Prices start rising everywhere.

And just recently, the president used another -- this is Section 301. He used 201 on washing machines. Have you gone to a store lately? The price of a washing machine went up $82. And dryers, which aren't tariffed, went up $92.

BALDWIN: Yes.

HELFENBEIN: So, this has a ripple effect on our economy.

BALDWIN: I hear you, a long-term, damaging ripple effect.

Rick Helfenbein, please come back any time. I appreciate you very much.

HELFENBEIN: Thank you. Thank you.

BALDWIN: Thank you. Wish you well.

Just in to CNN, actress Felicity Huffman has pleaded guilty in federal court to her role in that massive college admissions scandal. Prosecutors say she paid thousands of dollars to the fake charity to cheat on her daughter's SAT exam.

Brynn Gingras is our CNN national correspondent there outside the courthouse in Boston.

So, what happened?

BRYNN GINGRAS, CNN NATIONAL CORRESPONDENT: Yes, we're learning -- she's still in court right now, Brooke.

But we're learning that when you said she paid Rick Singer's foundation that money to help get those test scores boosted, we're actually learning from the U.S. attorneys in court that it came from her account.

So it sort of gives you an idea of the evidence prosecutors had against her before she did come forward and admit her guilt to her part in this huge, elaborate scam.

Now, my colleague Mark Morales, he's still in the courtroom giving us details and updates of what exactly is happening, but, so far, she has just been really read what the charges are against her.

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But an important fact here, though, we knew from the source that prosecutors were going to recommend anywhere from four months to 10 months for Felicity Huffman to spend behind bars.

Remember, she was facing up to 20 years for that single federal charge. Well, prosecutors, according to my colleague Mark in the courtroom, are going to request or recommend it be the low end of that. So we're talking about more likely four months.

But, again, we have to pause for a minute because this all is going to be up to a judge. And that won't happen today. We will learn more about what she actually will receive behind bars, if any time at all, at her sentencing. And, hopefully, soon, we're going to learn what that sentencing date will be.

So court is still happening. We haven't seen the actress leave just yet, but certainly getting some interesting details out of the courtroom.

BALDWIN: OK, we will keep our eyes on those court doors.

Brynn Gingras, thank you so much for the color and the detail.

Staying on this, I have with me now Erica Hill, who has been following the case super closely. Melissa Murray is back with us, professor at NYU School of Law.

So, ladies, let me just -- Melissa, just starting with you, I mean, the fact that Felicity Huffman is owning it, showing remorse, mea culpa, I'm guilty, how much will that factor in to the judge and the sentence?

MELISSA MURRAY, NYU SCHOOL OF LAW: That will be huge in the sentencing phase of this.

The judge is actually allowed to consider whether the defendant has accepted responsibility, has expressed remorse. And the fact that she's done so and done so, so publicly will weigh in her favor.

BALDWIN: What else do you want to add to what's been going on?

ERICA HILL, CNN NATIONAL CORRESPONDENT: Well, just, too, in terms of what you said, Melissa, in terms of saying that very publicly -- and I think we have a copy of her statement.

This statement that she put out just a few weeks ago...

BALDWIN: Yes.

HILL: ... saying very clearly, I accept full responsibility here, I am admitting my guilt.

And she talked about how she was ashamed, and how poorly she felt -- "I'm ashamed of the pain I have caused my daughter, my family, my friends. I want to apologize ."

And she goes on to -- and this is what is really important here that got a lot of attention when the statement was put out, Brooke. She said: "I want to apologize to the students who work hard every day to get into college and to their parents, who make tremendous sacrifices to support their children, and do so honestly."

BALDWIN: It's a huge deal that she said that then. Waiting to see what she said today. And, as you pointed out, it'll factor in, in how she is sentenced.

What I really also wanted to ask you about is her husband, her husband, who, despite his role here, has not been charged. And I'm wondering why.

MURRAY: Well, the spokesperson for the district of Massachusetts had said this is an ongoing investigation. So William H. Macy is not out of the woods yet.

But the evidence that we do have that's in the complaint suggests that he played more of a role in their younger daughter's situation, which was later scrapped, and they never actually went through with making a payment for that child.

But I personally think that this is really about a more traditional division of labor that a lot of households see, where the wives spend more of the time doing the kind of household admin, whether it's communicating with teachers or talking with other parents, and this just might have been one of those things where she was more intimately involved in getting their children through the college admissions process than he was.

HILL: It's interesting it does say, though, in that complaint, right?

So it talks about -- it references spouse, and we know that her spouse is William H. Macy -- and says specifically that this payment came from Felicity Huffman and spouse. And to your point, he is on as spouse on a call talking about the younger daughter, which, again, they didn't go through with. But he is at the top of that.

BALDWIN: And I hear you saying the investigation is not over, dot, dot, dot.

MURRAY: Not over.

BALDWIN: To be determined on potentially his fate.

MURRAY: Right, to be determined about his fate. But, again, this is very similar to what we see in lots of households, where the woman is actually the one doing a lot of the day-to-day organizing.

And in the case of the older daughter, it seems that she had a lot more of a role.

BALDWIN: Got it. Melissa and Erica, thank you so much.

Meantime, Republican Senator and lawyer Lindsey Graham has a long history of standing up for the rule of law. So why is he now saying it does not apply to Don Jr.?

Plus, President Trump tweeting that the FBI has -- quote -- "no leadership," even though the current director was, by the way, hand- chosen by him. We will discuss what's behind the new line of attack there.

And Alyssa Milano getting quite a bit of backlash today for saying women should go on a sex strike to protest strict abortion laws. My guest explains why she thinks the idea is misguided.

You're watching CNN. I'm Brooke Baldwin.

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BALDWIN: A defiant senator Lindsey Graham is already adding fuel to a fiery fight between President Trump and congressional Democrats when it comes to subpoenas.

The Republican South Carolina senator is now urging President Trump's son Don Jr. to ignore a subpoena from his fellow Republican colleague on the Senate Intelligence Committee.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R-SC): As I understand it, this subpoena relates to what Michael Cohen said about some meetings and about the Trump Tower in Russia.

If I were Donald Trump Jr.'s lawyer, I would tell him, you don't need to go back into this environment anymore. You have been there for hours and hours and hours, and nothing being alleged here changes the outcome of the Mueller investigation.

I would call it a day.

(END VIDEO CLIP)

BALDWIN: It's staggering to hear it also because Senator Graham appears to be contradicting himself on this very issue.

We will play for you what he said about subpoena power back in 1998.

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(BEGIN VIDEO CLIP)

GRAHAM: Article three of impeachment against Richard Nixon, the article was based on the idea that Richard Nixon, as president, failed to comply with subpoenas of Congress.

Congress was going through its oversight function to provide oversight of the president. When asked for information, Richard Nixon chose not to comply. And the Congress back in that time said, you're taking impeachment away from us. You're becoming the judge and jury.

It is not your job to tell us what we need. It is your job to comply with the things we need to provide oversight over, over you. The day Richard Nixon failed to answer that subpoena is the day that he was impeachment, because he took the power from Congress.

(END VIDEO CLIP)

BALDWIN: CNN legal analyst Michael Zeldin is a former prosecutor and Robert Mueller's former special assistant at the Department of Justice.

A pleasure to see you.

MICHAEL ZELDIN, CNN LEGAL ANALYST: Thank you, Brooke.

BALDWIN: When you hear Senator Graham, especially then and then now, and the notion of just saying defying a subpoena, it's like he's watering down his own power in Congress, watering down the power that is Congress.

ZELDIN: Well, exactly right.

Congressman Graham was exactly right that this is what the role of Congress is in our branch of divided government. Senator Graham is behaving unconstitutionally in respect to the powers of his own body.

This is a Senate subpoena by a Republican chairman from North Carolina to say to Donald Jr., we need your testimony to clarify that which you testified to previously. Come on in. And now there's a senator from his own party saying, ignore it? It's really not acceptable.

BALDWIN: I mean, just take it a step further, just quickly. I mean, he's a lawyer. He knows what he's saying. He's been someone who used to stand up to this president. It's just -- it's kind of unbelievable.

ZELDIN: Well, FBI Director -- former FBI Director Comey said in his town hall that people get eaten away bit by bit the more they spend with the president.

I have no experience with the president, so I can't say whether that is so. But in case of Lindsey Graham, he really does seem to have changed remarkably over the course of just the last two years.

When he started running for president, he knew that Donald Trump in his mind was a threat. Now he is his best friend and feels that congressional oversight is a threat to the president.

It's hard to reconcile the two.

BALDWIN: Michael Zeldin, thank you very much.

ZELDIN: You're welcome.

BALDWIN: Thank you.

Coming up next, President Trump directly attacking FBI Director Christopher Wray for the first time, one of the many targets in his weekend tweetstorm. And it comes as the man who oversaw the Russia investigation just gave a surprising commencement speech. Hear why Rod Rosenstein quoted the special counsel and his advice to law students.

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[15:27:25] BALDWIN: First, it was James Comey, and now is Christopher Wray's turn to be the FBI director on the receiving end of presidential criticism.

This weekend, he quoted Judicial Watch's Tom Fitton questioning Wray and saying the FBI has no leadership. That was just one of 118 tweets in 48 hours, which begs the question, with a trade war with China escalating and heightened tensions in Iran, and the White House fighting subpoenas on everything, Mr. President, don't you have better things to do?

CNN law enforcement analyst Josh Campbell is a former FBI supervisory agent. And he's worked for both Bob Mueller and James Comey.

So, welcome, welcome to you.

JOSH CAMPBELL, CNN LAW ENFORCEMENT ANALYST: Thank you.

BALDWIN: But to see this tweet, for the first time, again, Wray handpicked President Trump, what do you think of it?

CAMPBELL: Yes, well, I don't think we can overstate the significance of this moment, that you have the president essentially shifting his Twitter turret to the person that he chose to lead the FBI.

And, again, I think it signals for many people who have been looking at the relationship between the Justice Department and the White House, that there's been this destroying of norms when it comes to separation and independence.

You go back to James Comey, he mentioned -- obviously, the president denied it, but he said that the president demanded loyalty from him and was speaking like a mob boss essentially.

BALDWIN: Isn't that what this is all about?

CAMPBELL: It seems very much that way.

And, again, it's very dangerous, because, again, I thought we were past that point where -- obviously, the president continued to attack Mueller, but now that he's going after the person that he chose to lead the FBI, I think that signals dangerous waters.

BALDWIN: I also want to get to this clip. This is former Deputy Attorney General Rod Rosenstein.

So, he just gave the commencement at the University of Baltimore Law School. It's his first appearance since leaving the Justice Department. And so listen to what he just told these graduates.

(BEGIN VIDEO CLIP)

ROD ROSENSTEIN, U.S. DEPUTY ATTORNEY GENERAL: Of course, you will face pressure to compromise on things that matter most, perhaps even to trade virtue for the appearance of virtue. But you should exercise caution when circumstances tempt you to disregard principles. As Robert Mueller once said, there may come a time when you will be tested. You may find yourself standing alone against those you thought were trusted colleagues. You may stand to lose all that you work for. And it may not be an easy call.

(END VIDEO CLIP)

BALDWIN: Quoting Robert Mueller, what did you make of what he was trying to say?

CAMPBELL: Well...

BALDWIN: What was he trying to say, you think?

CAMPBELL: Yes, well, I think a little bit of projecting there, obviously talking about his own predicament.

BALDWIN: Uh-huh.

CAMPBELL: The one thing that's interesting with him is, he talked about sometimes you might find yourself standing alone. I think he's certainly alone, but I don't think he's standing. I think the White House threw him under the bus, where he remains.

He's a very complicated figure, when you talk to people inside the Justice Department, because, on one hand, he's the reason why we're in this predicament, where we have Robert Mueller, we have the president obviously trying to obstruct justice, in the minds of some experts.

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