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Dow Opens Higher After Sell-Off; U.S. Business Owners Struggle as Tariffs Rise; Steve Bullock Enters 2020 Primary; "Champions for Change" Story of Hanif Qadir; Huffman Pleads Guilty. Aired 9:30-10a ET

Aired May 14, 2019 - 09:30   ET


[09:30:00] ALISON KOSIK, CNN BUSINESS CORRESPONDENT: In about three hours. One of them was interesting. It was the last one that he tweeted, pushing the Fed yet again to cut interest rates. Investors don't like this when the president gets involved in this. You know, the other questionable situation here for investors is, how is this trade situation going to end? Nobody knows. And it's that uncertainty that's really going to drive the markets as we see in the next few weeks, especially as we get closer to the G-20 when President Trump has said he's going to meet with President Xi. The thing is, you look at that timing, that's around when the president may be able to impose those additional tariffs on $300 billion worth of Chinese goods. That could either be leverage or that could be a way that he could anger the Chinese even more.

JIM SCIUTTO, CNN ANCHOR: Yes, the president likes to think that through personal interaction, relationship, he can overcome a whole host of issues --


SCIUTTO: Whether it's North Korea, China, Russia. So far it doesn't look like it.


SCIUTTO: Alison Kosik, thanks very much.

KOSIK: OK, you got it.

SCIUTTO: Let's do a fact check here. President Trump is claiming this morning that the U.S. is, quote, in a much better position now, that is, in a full on trade war with China, with mutually escalating tariffs. Better than with any deal we could have made, he says, which may come as news to Americans who are actually shouldering the sharply higher cost of Chinese imports. And I don't just mean consumers. To be clear here, tariffs are paid by U.S. companies and consumers. There's no money coming into U.S. coffers from this as the president repeatedly complains.

How do we know? CNN's Nick Valencia reports that many American businesses rely on products for components that cost a lot more now than they did just a week ago. (BEGIN VIDEOTAPE)




JESWANI: We're almost there.

VASNANI: Yes. We're -- we're like tethering on the edge of panic.

VALENCIA (voice over): Kishore Vasnani, and his wife Vanessa Jeswani, own the successful travel bag company Nomad Lane.

UNIDENTIFIED FEMALE: Each side has a zip around divider.

VALENCIA: It's been around for about two years. But right now, with the current China trade war, their U.S.-based small business is taking a big hit. Vasnani, a registered Republican, blames President Trump and his tariffs policy. He calls it a gut punch to the American public.

VASNANI: It makes us wonder what, you know, the justification is, what the reasoning is behind it and, you know, we're, you know, trying to find our way at the moment.

JESWANI: Yes, and I think it's tough because he's supposed to be, you know, pro-business, but this was not a pro-business move, especially for small businesses like us.

VALENCIA: The company is based in New York, but their bag is manufactured here in Guincho (ph), China. After getting the news on Friday that the bags will be hit with huge tariffs when they come back into the U.S., the couple are now on their way back to Asia to find a new supplier outside of China. With an upcoming production order they have to figure it all out in less than two weeks.

VASNANI: It's going to have a downstream effect on not just us, but on a wide swath of industries, accessories, products, et cetera.

VALENCIA: The couple is now debating between absorbing the new costs or leaving that to the consumer. They've already been severely impacted and as a new business aren't sure how much more costs they can take on. Before President Trump, the tariffs for bags was 17.6 percent. Then it increased to 27.6 percent in the summer of 2018. As of last Friday, it's 15 percent more, bringing the total tariffs now to a whopping 42.6 percent.

VASNANI: I think Americans love, you know, being able to find high quality products at a reasonable price. And so I think the new reasonable, you know, now has a 25 percent markup on it.

VALENCIA: Which, in the end, may leave the couple holding the bag.

Nick Valencia, CNN, Jonesboro, Georgia. (END VIDEOTAPE)

SCIUTTO: This is where it's happening right now on the ground, American businesses and consumers, they are paying the tariffs.

Another story, and then there were 22. Another Democrat joins the 2020 race for the White House. We're going to tell you about him, next.


[09:38:04] (BEGIN VIDEO CLIP)

GOV. STEVE BULLOCK (D), PRESIDENTIAL CANDIDATE: We need to defeat Donald Trump in 2020 and defeat the corrupt system that lets campaign money drown out the people's voice.

I'm Steve Bullock and I'm running for president.


SCIUTTO: Red state Montana Governor Steve Bullock officially jumping into the 2020 race. Bullock now the 22nd Democrat to join the diverse and crowded field. Could barely fit it on the screen.

CNN's Jeff Zeleny with me now.

So, Jeff, the big question here, I mean, he has a lot of advantages on paper, and lots of folks have talked about this model, a red state governor or senator or lawmaker running to kind of bring in moderate Democrats and maybe some Trump voters. Does Steve Bullock have that combination?


We'll find out if he has that combination. But, you're right, on paper, Governor Bullock is largely central casting for what a Democratic presidential candidate perhaps used to be in years past. He's a governor from a red state. Again, he won on election night in 2016, the same night Donald Trump won, by 20 points. And he's largely aligned with the Democratic Party on their progressive principles. Of course, he's much more moderate than some of the people in the race here.

But I think one central question is, why is he getting in the race now? And the answer to that is, at least according to his advisers, is because he was waiting for the Montana legislative session to end at the beginning of May. He didn't want to jeopardize that he was doing there on some health care reform and other matters, so he is jumping in at this point.

The question is, is there sort of a hunger for a new face among all these faces of 22 candidates? The big question is if he can make that debate stage in June, he certainly can, you know, join the rest of these candidates on stage, Jim.

SCIUTTO: Yes, and sometimes one big moment in a debate can rocket you --

ZELENY: Indeed.

SCIUTTO: You know, if not to the top of the field, to the middle of the field.

So, Alexandria Ocasio-Cortez, she appeared with Bernie Sanders last night, took a swipe at Joe Biden, some friendly fire here within the party. Tell us what she said and what this sort of exposes about a rift within the Democrats.

[09:40:07] ZELENY: Friendly, perhaps, but not so friendly if you're thinking of fellow Democrats here, who's ultimate objective is, of course, to win back the White House. But there's no question that Bernie Sanders, for the second time in a week's time, is appearing alongside the rock star, rising star freshman congresswoman from New York talking about the green new deal.

But this is what she had to say last night here in Washington when asked about Joe Biden. Let's listen.


REP. ALEXANDRIA OCASIO-CORTEZ (D-NY): I will be damned if the same politicians who refuse to act then are going to try to come back today and say we need a middle of the -- a middle of the road approach to save our lives. That is too much for me.


ZELENY: The question here, though, is, where is the middle of the Democratic Party as you look to how the party elects its primary candidates, Iowa, New Hampshire, South Carolina, Nevada on there. So she is not the only say here in terms of Democratic primary voters, but it does highlight a rift that Joe Biden will certainly have to answer. He's not going to win the far left of his party anyway, Jim, but it certainly is something that he's going to have to contend with.

Bernie Sanders doesn't need to be taking on Joe Biden when he has AOC to do it for him.


SCIUTTO: Listen, I mean, right now, in all the polls, both statewide and nationwide, Joe Biden's crushing, you know, that wing of the party. So the question is how important AOC's voice actually is in this.

ZELENY: We'll see.

SCIUTTO: We'll see.

Jeff Zeleny, thanks very much.

ZELENY: Thanks, Jim. SCIUTTO: All right, now, "Champions for Change." I sat down with a former al Qaeda recruit who is now looking to stop terrorism before it ever begins. It's a fascinating story. Please stay with us.


[09:46:14] SCIUTTO: This week we're bringing you stories of remarkable people making a lasting impact around the world. We call the series "Champions for Change." And it's our chance to revisit amazing change makers that we've covered in the past and through the years and followed their passions and their differences that they're making to this day.

I met my champion nearly ten years ago in London. His name is Hanif Qadir, and he is waging his own war against terrorism. It's a war that he knows all too well because he has been on both sides of it.


ASSAD (ph): With father's death, I took that very, very badly.

SCIUTTO: Assad (ph) is a kid who was one step away from hopping on a flight to Syria to fight.

ASSAD: The only goal at that time, without my dad, was to get to him quicker.

SCIUTTO: To die?


SCIUTTO: He wanted to be a martyr. He wanted for a suicide bomber.

ASSAD: I possibly would have just ended my life and killed a lot of innocent -- innocent people. For what? And, you know, I would have been -- my book would have been closed, basically.

HANIF QADIR, CHIEF EXECUTIVE, ACTIVE CHANGE FOUNDATION: He was just in this vicious whirlpool of grievance.

SCIUTTO: I first met Hanif him more than ten years ago in London.

SCIUTTO (voice over): Former militant Hanif Qadir told us, rich or poor, educated or not, extremism doesn't designate.

QADIR: Everybody's one of them.

SCIUTTO (on camera): Hanif is a "Champion for Change" because he's trying to fight terrorism before it happens, long before it happens, before young kids, young Muslims, make the choice to become a terrorist.


QADIR: Hey, Jim.

SCIUTTO: Long time.


SCIUTTO: How you been?

QADIR: A very long time.

SCIUTTO: Good to see you.

QADIR: And you -- and you, my friend, and you.

SCIUTTO: Do you have a sense of how many young people you helped during that time?

QADIR: We had a huge amount of difference over the years. And we -- we grew from a very small organization to delivering into 11, 12 different parts of the country and abroad in Pakistan. We've helped people understand that they've got a stake in society and in life, to do things differently.

ASSAD: I won't be able to describe how much -- how grateful I am towards him.

QADIR: It took us a bit of time, but it was just about having the conversation with this guy about what would your father have wanted you to do? Did your father really want you to go on this journey, or did your father want you to take care of the affairs of the family, help your mom, help your brother and sisters and be a decent, law abiding citizen and a God fearing individual.

ASSAD: I mean now I'm working every day, six days a week, providing for my family, which I would -- I wouldn't -- I wouldn't do none of these things before.

SCIUTTO: When he talked to you about going to Syria, you listened. You trusted him.


SCIUTTO: This is personal for you because --

QADIR: Of course it is.

SCIUTTO: You had your own experience.


SCIUTTO: When he was a young man, he left the U.K. to go to Pakistan to join al Qaeda. It sounds I'm incredible to say that. But when he got there, he saw the violence that they were planning, that they were carrying out. He saw it up close. He saw it personal. And he decided, that's not Islam in his view. He didn't want any part of it.

QADIR: It was an experience of taking things personally about the way that the war on terror was -- was conducted in Afghanistan, especially where innocent women and children were being killed. And I dwelled on that. For some reason, those kids reminded (INAUDIBLE) and I wanted to (INAUDIBLE) to help them. But I also wanted to prevent that. So I traveled abroad to join al Qaeda. But then seeing the same thing happen to those children by members of al Qaeda, using them as suicide bombers, also was something that I was not going to tolerate, was not going to take.

SCIUTTO: Does that give you credibility as you're counselling young men that they know that you've been there?

QADIR: Absolutely. I talk to them and I'm taking them through a journey they're going on without them even opening their mouths. And that's, for them, it's like, how the hell does he know this? And it's still relevant today when I talk to people who are thinking of going to Syria or thinking of going to Palestine and fighting the Israelis or thinking they're going to Iraq or to Pakistan. I say, look, this is what you're feeling, this is what you're going through. And I know -- and I know this.

[09:50:15] SCIUTTO: The loudest voices are the extremist voices.

QADIR: Absolutely. Absolutely.

SCIUTTO (voice over): When I met him ten years ago, his center was just buzzing with activity. He had hundreds of kids coming there over the weekend.

SCIUTTO (on camera): It's a shame to see it empty now. The last time I was here, it was buzzing.

QADIR: Yes, yes, yes.

SCIUTTO: You know?

QADIR: It's depressing when you come in.

SCIUTTO: Now, today, he's lost the funding, the support that he used to get from the British government. It became a political issue in the U.K. And he warns, he's worried that a lot of the kids that he would have stopped going down this path, that they don't have the support network anymore.

QADIR: The challenge will not get any easier, especially with the perception that ISIS is gone and al Qaeda is gone. This is -- this is just as fake as --

SCIUTTO: It's not gone.

QADIR: They're not gone. They're reemerging.

SCIUTTO: Tell me about "I Want Out."

QADIR: This is the campaign that I'm pinning all my hopes on, to tell you the truth, working with a lot of young people, extremist networks and, you know, thinking about getting involved in terrorism or gang violence. And when you really speak to them and it's like -- you know, and you get to know them, then you say, I want out. Just give me a chance. Just, I want out. You know, understand me. People can change and we need to give them the opportunity to change.

SCIUTTO: He is not deterred. He's going to stick with it. He's told me repeatedly, I'm going to keep fighting.

QADIR: The day you start to look at these young people as if they were your own, that's when you will always step forward. I'm not going to let this go without the biggest fight of my life.


SCIUTTO: You know, one of the frustrating parts of this story is that he doesn't have the support he used to have, including from the government. It means that center may close. But as you heard there, he is pressing on with his own campaign, including in social media, which has been hugely and influential. Some of his previous campaigns cited by U.S. presidents mentoring young men away from violence. It's an inspiring story.

And we're going to keep sharing these inspiring stories all this week. Tune in this Saturday night at 8:00 Eastern Time for an hour-long special, "Champions for Change."

In just over an hour from now, America's chief diplomat will sit down with Russia's president, Vladimir Putin. Will they see eye to eye on anything?


[09:57:17] SCIUTTO: Actress Felicity Huffman will learn in September how much time she may have to spend in prison. This after pleading guilty in the college admissions scandal. The actress cried in court yesterday as she admitted to paying $15,000 to a fake charity to boost her daughter's SAT score, to correct answers on the SAT. Prosecutors have recommended a four-month prison sentence.

Brynn Gingras joins me now from Boston.

Brynn, the judge did not decide -- or could decide not to follow the prosecutor's sentencing recommendation, either go on the higher end or on the lower end. What do we know?

BRYNN GINGRAS, CNN NATIONAL CORRESPONDENT: Yes, she's got a lot to consider four months from now when that sentencing happens, Jim.

I will tell you, when Felicity Huffman came into court, she was holding the hand of her brother. And, as you said, she was emotional. She started crying in front of this judge, who will be the same judge that sentences her in September. And the prosecution did lay out everything that they had against her in this case. What you said, $15,000 going to this sham charity to help change the answers on her oldest daughter's tests and boost that score. They also said they had proof that the money was paid from Huffman's account.

And she started crying when she said she didn't realize how William Singer, the mastermind behind this whole college scam, was dispersing the money throughout his entire sort of organization, but she did say everything else the prosecution said she did, she did. So she took ownership of it and she cried when she was talking about her daughter, reminding the court that her daughter knew nothing about her involvement in this scam.

And the prosecution, in exchange for that emotional guilty plea, is going to recommend a lower end of sentencing, four months. But like you said, Jim, the court can really decide however this judge wants, more time, less time. We're definitely going to find out in September.

One more thing to quickly point out. There is another guilty plea that is coming later today in about an hour, at 11:00. That's of Donna Heinel. She's a former USC soccer coach. But she was instrumental in William Singer's whole elaborate plan. She actually is accused and will plead guilty to making fake profiles to help get people into schools as recruits for sports they never played. Let's remember, two of those people she's accused of making profiles for were Lori Loughlin and Mossimo Giannulli's two daughters. And she is cooperating with the government in this case. So that will get interesting, again, as this elaborate case moves forward.


SCIUTTO: Yes, meanwhile, Lori Loughlin not pleading guilty, fighting this. Different strategies.

GINGRAS: Exactly.

SCIUTTO: Brynn Gingras, thanks very much.

[09:59:52] Right now, the U.S. Coast Guard is searching for two missing people after two planes collided midair in Alaska. At least four people were killed. Another nine people injured. According to Princess Cruise Lines, some of the victims were Royal Princess guests out on an excursion. The NTSB is now investigating the crash.