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Dow Tumbles as China Retaliates; Trump Goes Off on Everything; Graham Tells Trump Junior to Ignore Subpoena; Supreme Court Ruling on Apple; O'Rourke Pushes Reset Button. Aired 1-1:30p ET

Aired May 13, 2019 - 13:00   ET

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

[13:00:00] KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: American citizen to be surveilled in that way that they've been talking about. So she made some pretty strong remarks, pushing back on the attorney general there.

JOHN KING, CNN ANCHOR: See, she likes the new world of politics.

See you back here this time tomorrow.

Brianna Keilar starts RIGHT NOW.

Have a great day.

BRIANNA KEILAR, CNN ANCHOR: I'm Brianna Keilar, live from CNN's Washington headquarters.

Underway right now, the president warned them, don't do it, but the Chinese just did it. How Beijing's retaliation for U.S.-imposed tariffs is sending shock waves through the markets and the Midwest.

He's a former lawyer, the head of the Senate Judiciary Committee, and the man who once said ignoring a subpoena was impeachable. Yet Senator Lindsey Graham tells Donald Trump Junior, ignore the subpoena from my fellow Republican.

Plus, iPhone users can now sue Apple over apps. Hear what the Supreme Court just ruled.

And the actress who is admitting guilt in the massive college admissions scandal is about to appear in court to make her plea.

The trade war is on. Today, China retaliated against the U.S. by announcing plans to slap tariffs on $60 billion of U.S. goods. This is rocking the markets. Right now the Dow is down nearly 700 points. And despite the market's negative reaction, President Trump continued to insist in a series of tweets that tariffs are actually helping the economy, but it's not. Look at all of the products that might be affected. Even the president's own economic adviser acknowledged U.S. companies would likely pay a tax increase, which would ultimately be passed on to the consumer.

(BEGIN VIDEO CLIP)

CHRIS WALLACE, FOX HOST, "FOX NEWS SUNDAY": The tariff on goods coming into the country, the Chinese aren't paying.

LARRY KUDLOW, PRESIDENT TRUMP'S TOP ECONOMIC ADVISER: No, but the Chinese will suffer GDP losses and so forth with respect to a diminishing export market.

WALLACE: It's U.S. businesses and U.S. consumers who pay, correct?

KUDLOW: Yes, to some extent. And I don't disagree with that. Again, both sides -- both sides will suffer on this.

(END VIDEO CLIP)

KEILAR: CNN international business anchor Julia Chatterley is joining me now.

Julia, what do you make about the president's assertions about how tariffs work?

JULIA CHATTERLEY, CNN INTERNATIONAL BUSINESS ANCHOR: You know, there is a lot of head-scratching going on right now, I have to say, Brianna, and I think that's part of the pressure that you're seeing on markets. Look, innocent mistake or otherwise, there is definitely a misunderstanding going on here. And I think this is a critical part.

Let me keep it really simple and explain what's going on as far as tariffs are concerned. When the U.S. government slaps a 25 percent tariff or tax on some Chinese item, a company based here in the United States pays that additional cash in order to bring that good here into the United States. Now, some of that extra cost could be absorbed by the company itself, but probably not all of it. Some of that is going to be passed on to consumers. So things like bicycles, furniture, tires, car seats, they're all going to get more expensive.

Now, eventually, U.S. firms will buy those goods from elsewhere. They won't buy them from China anymore. So, you know, in that case what Kudlow was saying, Larry Kudlow is saying there is right, it does hurt the Chinese economy, too. Both sides ultimately get hurt. There is a sharing of the pain.

But, you know, I think that's what markets are grappling with today. How big is that pain for U.S. companies like Apple, who have big interests in China here in the short term, but long term, too, what does this mean for the U.S. economy, for U.S. jobs and for the global economy?

Now, President Trump did tweet among many over the weekend that China broke this deal, and he has that right where he wants them. He may have a point, to some degree, because, you know, I think the Chinese were pretty restrained today, as you mentioned, in the tariff rises that they've put on in response. I'm sure they would prefer a deal, but when you look at what's going on from both sides here and the rhetoric, neither side is giving any ground to make a deal. So, fine, the president's playing hardball so we can expect lots of rhetoric here. His tweets are fierce, They're determined. They're aggressive. But they're not always accurate, Brianna, we have to remember that.

KEILAR: A very good point. And thank you for explaining them for us, Julia.

Julia Chatterley with us.

And in 2018 alone, the total trade between the U.S. and China equaled $737 billion. China exported $558 billion of goods while the U.S. exported about $179 billion. And one of the biggest exports to China was U.S. soybeans. And those farmers are really feeling the pinch.

John Wesley Boyd Junior is a soybean farmer in Baskerville, Virginia. He's the founder and president of the National Black Farmers Association.

John, thank you so much for being with us.

JOHN WESLEY BOYD JUNIOR, SOYBEAN FARMER HIT HARD BY TARIFFS: Thank you for having me.

KEILAR: And as China is implementing tariffs on U.S. goods, last year's trade war took a toll on you. How is this latest round of tariffs going to impact you, do you think?

BOYD: Well, I think it's even worse because right now farmers are trying to get into their fields to actually plant soybeans, and I checked the market this morning and prices are beginning to plummet since the president's announcement, and the president of the United States owes farmers like myself some type of plan of action. And we hear that they're trying to sell some soybeans overseas, but at what price? Does -- you know, does that help American farmers?

[13:05:13] So right now, today, I was in the fields this morning getting my fields ready to plant some soybeans, and we don't know the outcome of what's going to be in store for us as American farmers and producers in this country. And the president of the United States needs to take that into consideration.

Farmers were his base. You know, was his base. You know, they helped elect this president and make him president of the United States, and now he's turning his backs on America's farmers when we need him the most.

KEILAR: The tariffs helped send down grain futures with soybeans slipping to a new contract low. What kind of price are you looking at now for a bushel, do you think, compared -- and just put that in perspective for us, compared to what it would have been?

BOYD: Well, a few years ago I was selling soybeans at $16.80 a bushel. And as I checked to come on your show today, soybeans have dropped just below $8 a bushel. That is a 50 percent reduction for those people who go to work every day and draw a salary. If you make $100,000 a year, you're now make 50. And you can't make it like that. And the president doesn't give clear answers on their future of what farmers can expect.

You know, so we're out here right now we're paying for diesel fuel, we're paying for these seeds at $60 a bag. Where's the tariffs for that to help farmers, you know, reduce prices so that we can afford all the necessary things that we need to get into the fields?

The president is not giving clear direction for America's farmers, and for the future of America's farmers in this country. In fact, he's helping us run -- he's helped run us out of business right now with these kinds of decisions.

KEILAR: How -- when you're dropping from $16 a bushel to $8 a bushel, how do you survive? I mean your margin is not that much.

BOYD: Well, I'm not. And right now I'm seeking a farm operating loan from the top ten banks. They haven't been receptive to help me. And, you know, we need some help. And we need it right now. And the president is playing footsie with China while America's farmers are on the losing end of the stick. And, quite frankly I don't know why more Midwestern farmers are not outraged and speaking out against this administration for its poor decision on helping America's farmers when we need him right now.

KEILAR: All right, John Wesley Boyd Junior, thank you so much for your perspective from Virginia. We appreciate it.

BOYD: And as we go, for people who want to watch more of my story, they can watch it on the History Channel this Thursday night at 10:00 p.m. It's going to show my soybean harvest and the difficulties that I have as a soybean producer.

KEILAR: All right, John, thank you. We really appreciate you being with us.

BOYD: Thank you.

KEILAR: We're also going to keep an eye on the Dow as it is continuing to fall.

Now, the trade war with China was just one of the topics that President Trump railed about in an epic Twitter tirade. The president fired off 118 tweets and re-tweets since Saturday. This is a breakdown of the most frequent topics. You have China trade, the Senate Intelligence Committee subpoena of his son, Don Junior, and claims that his campaign was spied on, as well as the Democrats' investigations.

Our Jim Acosta is at the White House.

Jim, the president even attacked his own FBI director. What prompted his re-tweet that criticized Christopher Wray?

JIM ACOSTA, CNN CHIEF WHITE HOUSE CORRESPONDENT: That's right, Brianna, we're seeing a bumper crop of outrage from the president on Twitter, a harvest of outrage from the president on Twitter over the last 48 hours. He was just yesterday attacking his own hand-picked FBI director, Chris Wray. We can put this tweet up on screen as he continues to attack the Mueller investigation, the same Mueller investigation that the president claims cleared him, and here's what the president tweeted about the FBI director. The FBI has no leadership. The director is protecting the same gang that tried to overthrow the president through an illegal coup.

Now, the president is quote tweeting there, something he's been doing a lot of lately, a conservative activist here in Washington. But the president again parroting this language that he was somehow the victim of an attempted coup through the Mueller investigation and the president has been talking about that a great deal.

One reason why Chris Wray may be finding himself in the president's not so good graces is because, as we know in the last week or so, he has essentially disagreed with the opinion of the attorney general, William Barr, when William Barr said that there was spying going on of the Trump campaign by the federal law enforcement community. Chris Wray, when he was asked about this during recent testimony up on Capitol Hill said that was not the assessment he had and that he felt that there was legitimate surveillance and investigative activity going on with respect to the Mueller investigation.

At the same time, Brianna, we should also point out, he has been attacking -- the president has been attacking his former White House counsel Don McGahn saying in a tweet on Saturday that it was McGahn who had a better chance of being fired, not the special counsel Robert Mueller. There's that tweet right there. Actually, Lawyer Don McGahn had a much better chance of being fired than Mueller. Never a big fan, the president said about Don McGahn.

[13:10:08] Of course, we should point out, "The New York Times," "The Wall Street Journal" and CNN, we were all reporting late Friday evening that the president wanted Don McGahn to, and this was through the White House Attorney Emmitt Flood, wanted Don McGahn to state publically that he felt that the president did not obstruct justice. Don McGahn did not do that. And according to sources I talked to Friday evening, the president was upset by that, that he did not get that kind of public statement from Don McGahn, that the former White House counsel felt that the president did not obstruct justice in the middle of the Mueller investigation and that obviously annoyed the president. That's why we saw all of these tweets over the weekend.

And so, Brianna, you know, while the president is tweeting about trade, he's also welcoming the Hungarian prime minister, Viktor Orban, over here to the White House this afternoon. We'll be watching to see what the president has to say, not only about the Russia investigation, the Mueller investigation, because obviously he has a lot to say about that, but, I mean, as we're seeing with the Dow Jones falling right now, Brianna, the president may elect to also weigh in on these tariff disagreements that he has with China, this trade war that he has going on with China. And, obviously, any kind of statement that the president makes this afternoon could have a major impact on what happens with the markets this afternoon.

Brianna.

KEILAR: All right, we'll be watching with you. Jim Acosta at the White House.

Senator Lindsey Graham is one of the president's most fervent defenders, saying this about the subpoena issued for Donald Trump Junior.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R-SC): As I understand it, this subpoena that relates to what Michael Cohen said about some meetings and about the Trump Tower in Russia. And if I were Donald Trump Junior's lawyer, I would tell him, you don't need to go back into this environment anymore. You've 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)

KEILAR: That's the Republican chairman of the Senate Judiciary Committee telling the president's son to ignore a subpoena issued by the Republican chairman of the Senate Intelligence Committee.

It's pretty stunning. And even Lindsey Graham disagrees with Lindsey Graham on this one. Here's what he said about subpoena power back in 1998.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R-SC): Article III 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 you. The day Richard Nixon failed to answer that subpoena is the day that he was subject to impeachment because he took the power from Congress.

(END VIDEO CLIP)

KEILAR: All right, we have Carrie Cordero with us here to sort out all of the legal implications of this.

And it's not the first time, Carrie, that Lindsey Graham has contradicted himself as he tries to defend President Trump, right, but why is it so significant that he's telling Donald Trump Junior to ignore a subpoena?

CARRIE CORDERO, CNN LEGAL ANALYST: Well, first of all, because the subpoena that's being issued is from the Republican chairman of the Senate Intelligence Committee, which has done a really serious investigation of the entire Russian influence effort. They haven't issued their public report. They have tried to conduct their investigation in as bipartisan a way as they possibly could. They have really been the chairman and the vice chairman, Warner, have really been a model of bipartisanship.

I'm sure there's a lot going on behind the scenes that perhaps they haven't agreed about everything, but in terms of their public facing work, they have tried to conduct this investigation seriously. They are just about done with their work, it's my understanding, and so really they are inviting and subpoenaing Don Junior to come back I think probably to be able to correct the record of maybe things that he provided to them previously. So this is really at the tail end of their investigation, and so it's really astounding to see Senator Graham not adhering to the principle of Congress being able to conduct its oversight.

KEILAR: And not adhering to his own principle. When you -- when you look at those two sound bites and he's -- I mean he's talking about Richard Nixon answering a subpoena but he's talking generally about subpoena power and the will of Congress. What do you -- what do you think of those two different opinions?

CORDERO: Well, look, we are in an environment where conservatives and Republicans are having to come to terms with whether they are going to be intellectually consistent with the way that they were in the '90s during the Clinton impeachment proceedings. And so that is what I assumed the Lindsey Graham clip is from, from the '90s, and he is changing his position based on his current political decisions related to his support of the Trump presidency.

[13:15:03] The fact of the matter is that this is a legitimate subpoena. This is a legitimate investigation, and it's a legitimate exercise of the Senate Intelligence oversight responsibilities. And for him to tell a witness not to come comply really is not consistent with his prior positions on this topic.

Especially with some -- someone who spent so much time being a lawyer as well, we should mention. Carrie -- not you, Lindsey Graham.

CORDERO: Right.

KEILAR: Carrie, you as well. Carrier Cordero, thank you so much for joining us.

And just in, iPhone users can now sue Apple over their apps. This is a new Supreme Court ruling.

Plus, a month before the first debate, hear how Beto O'Rourke is pushing the reset button on his campaign.

And moments from now, the president hosts a far right leader too extreme for Presidents Bush and Obama. What many Republicans are warning President Trump about.

(COMMERCIAL BREAK)

[13:20:44] KEILAR: A major supreme court ruling against Apple today. The court is allowing iPhone owners to continue their class action lawsuit against the tech giant over its high app prices. This lawsuit claims Apple's App Store is violating anti-trust laws and operating as an illegal monopoly by encouraging app developers to raise their prices so that it can take a 30 percent cut.

We have CNN tech reporter Brian Fung joining us now to talk about this.

How did the Supreme Court reach this decision and what kind of implications could this have?

BRIAN FUNG, CNN TECH REPORTER: Well, the Supreme Court said it didn't agree with Apple's argument that it's simply an intermediary. The court said when iPhone users buy an app on the App Store, they have a direct purchasing relationship with Apple. And that means that the iPhone owners who are at the center of this lawsuit can sue Apple for allegedly monopolistic behavior.

Now, it's important to point here that the Supreme Court didn't hold that Apple as a monopolist. It's just saying that this suit is allowed to go forward.

KEILAR: And so it can go -- so what is the next step? What are we going to see?

FUNG: Well, I think we can see a lot of back and forth in the courts over whether or not what the iPhone owners have alleged is actually correct that Apple is allegedly, you know, keeping its prices artificially high because it has a lock on the IOS App Store.

KEILAR: All right, Brian, thank you so much. We're going to keep watching this. It seems like it's going to continue to be an issue and they really have a shot here.

Brian Fung, thank you.

Beto O'Rourke hitting the reset button after lagging in the polls, and Joe Biden heading to New Hampshire for his first campaign visit since launching his 2020 bid. Hear which rival is winning the hearts and minds of many voters in that key state.

(COMMERCIAL BREAK)

[13:27:04] KEILAR: Democratic presidential hopeful Beto O'Rourke is hitting the reset button on his campaign. O'Rourke started out with a bang, but then his campaign fizzled a bit and his reboot is including a CNN town hall next Tuesday in an appearance this week on "The View." O'Rourke is hoping to turn around his sagging poll numbers.

A new Monmouth University poll of likely Democratic primary voters in New Hampshire has former Vice President Joe Biden leading the pack with a whopping 36 percent. And you can see that O'Rourke there is tied for sixth place with just 2 percent.

We have. A B. Stoddard, associate editor and columnist for RealClearPolitics with us.

So when you were looking at this, O'Rourke come out with so much promise and appears to have really gone nowhere there. What happened?

A.B. STODDARD, ASSOCIATE EDITOR AND COLUMNIST, REALCLEARPOLITICS: Well, I do think we all attribute this to the rise -- the explosive rise of Mayor Pete Buttigieg. He stole the new and different white guy from a red state thunder from Beto O'Rourke, and is now driving ahead of him in that lane. And Beto O'Rourke found himself kind of rocked by that.

So I do not count him out at all. I think if he has some good debates and people end up falling off, he still could be a top four or five contender in the long run. But he's going to do a reboot because he has to come -- he has it overcome the perception that he's not interesting enough, that he doesn't -- is not ready with a bunch of policy prescriptions, that he's not sort of in the game, that he's hiding from TV interviews. Mayor Pete is like President Trump, he takes every interview, will answer any question.

KEILAR: Takes all of the meetings.

STODDARD: And I -- and I do think that Beto O'Rourke has taken -- you know, he's learned from that, that that's something you have to do. You have to seem like you're ready to take any comer and any question.

KEILAR: So even if Mayor Pete Buttigieg continues to have success, you think this, as you said, it's the -- what did you call it, the -- the guy from the red state?

STODDARD: The new and different --

KEILAR: The new and different which guy from the red --

STODDARD: Interesting guy from the red state.

KEILAR: OK, from the red state.

STODDARD: Yes, he's a white guy, too.

KEILAR: So can they both occupy that lane or would Mayor Pete, in your estimation, have to stumble?

STODDARD: Well, I mean, we -- I think that Mayor Pete -- I've also said about him, unless there's some big scandal or something we can't foresee, I think that he is going to be one of the final four or five contenders in the long slog. But he is facing a real problem with black voters, really bad polling for him with black voters.

So if this is something that Beto O'Rourke can, you know, breakthrough on, that he's liberal enough and that he has enough appeal with black voters, that he can take an edge on Buttigieg later down the line that could be -- that could be a part of the coalition that he has some strength. But we don't know that. But that's something I'm sure an opening that he'd like to take advantage of.

KEILAR: Yes, if he can hang on there.

All right, let's talk about Joe Biden because he's campaigning today in New Hampshire. And he's taking questions from voters. Later today he's going to hold his first town hall style event since he began his campaign. Do you think that format is going to be good or bad for him?

[13:30:04] STODDARD: Well, both.