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CNN NEWSROOM

President Trump Claims Victory for Raising Tariffs; China Retaliates to U.S.; Social Media on Hot Spot Again; President Trump Admires Weird Mean Leaders; Authorities Are on Full Alert in India's Upcoming General Election; Iran Set To Be On Agenda For Putin-Pompeo Talks; U.S. Trade War With China; U.S. Admission Scandal; Humanitarian Crisis In North Korea; Anti-Semitism In The United States; South Korea's Dating Difficulties. Aired 3-4a ET

Aired May 14, 2019 - 03:00   ET

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


[03:00:00] ROSEMARY CHURCH, CNN ANCHOR: China fights back as Beijing slaps steep tariffs on U.S. products, markets are stumbling worldwide due to the escalating trade war.

Plus.

(BEGIN VIDEO CLIP)

NIKHIL KUMAR, CNN NEW DELHI BUREAU CHIEF: Almost everyone we have spoken to in this village has a phone, and they are often relying on the messages they see there. The politically themed videos and means, to decide who gets their vote.

(END VIDEO CLIP)

CHURCH: It's election time in India, we will tell you why WhatsApp is crucial in influencing voters there.

And finding love isn't easy but South Korea is doing something about it. We will take you inside a class that's trying to encourage more people to date.

Hello and welcome to our viewers joining us from all around the world. I'm Rosemary Church. And this is CNN newsroom.

U.S. President Donald Trump is confident of his position in the trade war with China, but investors they are not so sure. The Dow plunged 617 points Monday on words of China's retaliatory tariffs on $60 billion worth of U.S. goods. It was the Dow's worst day since January 3rd.

NASDAQ, the NASDAQ dropped 3.4 percent. Most Asian markets remain in the red on Tuesday. You can see there Hong Kong's hang Seng lost nearly 2 percent. But U.S. futures are slightly positive suggesting a cautious opening on Tuesday.

So, Matt Rivers is in Beijing, joins us now with the very latest. Matt, China as we've been reporting retaliated with more major tariffs against the U.S. But now President Trump is threatening to apply tariffs on everything that comes from China. So how is Beijing likely to respond to this escalating threat from the U.S., these tit-for-tat tariffs?

MATT RIVERS, CNN CORRESPONDENT: Yes. I mean, Rosemary, we have talked about it before where Beijing cannot match the United States in terms of going dollar for dollar on the amount of tariffs because America sends far fewer goods here to China than the other way around.

And so, at some point, if the United States continues to, you know, broaden the scope in terms of Chinese imports that is levying tariffs against, well then China is going to have to get creative, right. It could do a couple of different things. It can increase tariff rates on products that are already facing tariffs American imports here on China.

But I think more likely than that and that's certainly a possibility but what they're also going to have to do to match that kind of level of escalation from the Trump administration would be non-tariff barriers. It would be drastic steps like cutting off certain exports to the United States, certain rare earth minerals that the U.S. really relies on for certain supply chains in the U.S.

It's going to be making increased restrictions on purchasing American agricultural products which could devastate U.S. farmers. That's the kind of steps that they would have to take in order to really make an impact felt.

They could also make life difficult for American companies operating here in China with a litany of different things both formal and informal that can make doing business in China that much harder for American companies.

So that's what China would have to do should the Trump administration go forward with this. Now we should say that the earliest according to the process announced by the U.S. trade rep on Monday in Washington, the earliest that we could see those new tariffs on an additional roughly $300 billion of Chinese imports to the U.S., would be late June and so there is a lot of time before that happens.

But the fact that they have announced that process has begun is, you know, could easily be seen as another escalation and it is something ultimately that China would have to respond to.

CHURCH: All right. Matt Rivers joining us live from Beijing. Many thanks to you.

Well, the tariffs are hitting U.S. farmers now and consumers are expected to pay higher prices as importers pass along the costs.

But Kaitlan Collins reports President Trump remains confident in his strategy.

KAITLAN COLLINS, CNN WHITE HOUSE REPORTER: As we are seeing this trade fight intensify between the two sides President Trump is defending his latest moves even though some of his economic advisers have conceded that yes, this is going to hurt American consumers as this process plays out.

The president said it's going to be a good thing for America.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We are dealing with them. We have a very good relationship. Maybe something will happen. We're going to be meeting, as you know at the G-20 in Japan and that will be, I think, probably a very fruitful meeting.

We are taking them and right now, hundreds of millions of dollars, we are taking billions of dollars of tariffs and those tariffs are going to be tremendously, if you look at what we have done thus far with China, we've never taken in 10 cents until I got elected. Now we are taking in billions and billions.

(END VIDEO CLIP)

[03:05:05] COLLINS: Now the president said the U.S. is taking in billions of dollars even though that's not how it works because it's the importer who pays the tariff and then they either decide to pass that cost on to the consumer, raising prices on whatever those goods are or they eat the cost themselves.

Now that is something that the president's own trade advisers have conceded it does happen in recent days but the president didn't say whether or not he made a decision about imposing more tariffs on China, even though behind the scenes one of the officials inside the White House is admitting that yes, those tariffs will not be a long- term sustainable policy that they can follow through on.

Now the question on how long this is going to last is still up in the air because even though the president said he is going to meet with the Chinese president, President Xi next month at the G-20 summit in Japan, it's unclear what kind of progress they are going to make. Though, officials do sound hopeful that once those two leaders are in the same room together, hopefully they can hammer something out.

Kaitlan Collins, CNN, the White House.

CHURCH: For more on all of this, we want to go to Abu Dhabi where CNN's John Defterios joins us again. Good to see you, John.

So, President Trump insisting he is optimistic that this trade war can be resolved, that he can resolve it, but markets don't share his confidence, so they? So how are those markets looking right now?

JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Well, often we have a case, Rosemary, where there is a market contagion after such a route that we saw on Wall Street yesterday. You had that board up earlier, a two and a half percent drop for the Dow, three and a half percent drop for the NASDAQ, but the response so far in Asia is a little bit better. And I'll tell you why.

We had those tariffs drafted up by the United States trade representatives some $300 billion with a 25 percent tariff, but the Chinese's response is about a fifth of that, and I think that provided some solace to the Asian markets.

Let's take a look here. You see Hong Kong with the biggest drop, because it's so related to the trade activities in the south of China in Shenzhen where some of those companies listed on Hong Kong. The Shanghai Composite index is down two-thirds of 1 percent, the Nikkei index down about the same.

And you can see in Seoul just fractionally a higher. This is a net positive considering what we saw on Wall Street. We have the early indications coming from Europe and after them seeing a drop of one of a quarter percent, they are trading up in their early trading.

Let's take a look at the major four indices in Europe right now. We see that the FTSE 100 is up a third of 1 percent. Germany is up about a quarter percent, they're now a third of a percent, and you see the Paris CAC 40 up about two thirds of 1 percent.

So, net-net, Rosemary, after what we saw yesterday shocks in the Middle East with regards to oil prices, and the ride on Wall Street, this is not bad as they say 24 hours later.

CHURCH: Good news, we like some good news. CNN's John Defterios joining us there. I appreciate it.

Well, the top U.S. diplomat will have lots to talk about when he meets Russian President Vladimir Putin in the coming hours, but Iran might top the agenda.

Secretary of State Mike Pompeo made a detour Monday to meet with E.U. officials in Brussels. The U.S. says he briefed them on threats from Iran. His trip comes as the U.S. deploys extra troops and war ships to the Middle East.

It also comes after allege sabotaged against U.S. allies in the region near the Strait of Hormuz, that is a key waterway and a choke point for the world's oil supply. It's not clear who is responsible, but Saudi Arabia says two of its oil tankers were attacked, an Emirati ship and a Norwegian ship were also damaged.

And for more, CNN's Fred Pleitgen joins us now live from the Iranian capital Tehran. Good to see you again, Fred. So, what more are you learning about these damaged oil tankers?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hi, Rosemary. Well, so far no one is really outright blaming anyone for sabotaging as the Saudis and the Emirates that said this oil tankers. But of course, one of the things that some people are insinuating is that it might be the Iranians who are behind it.

Because of course, right now you have these major tensions in the Persian Gulf, you have these major tensions not just between the Iranians and the U.S. but of course, pretty much perpetually between the Iranians and the Saudis as well.

Now what you have is the Iranians come out and they also condemned the attack. It was quite interesting because the statement that they put out seem to insinuate that it might be some sort of false flag attack, at least in their opinion, they were saying that there might be third- party elements or third country elements who might be behind it.

But no doubt it is something that could very well inflame an already very tense situation in the Persian Gulf even though right now of course we always have to stress no one really knows what exactly happened, who exactly was behind it and what sort of projectiles or weapons might have been used in this allege sabotage attack.

However, the Iranians are saying that with the U.S. deploying an aircraft carrier into the Persian Gulf, that they believe that they would be ready for any sort of escalation from the America sides.

[03:09:59] It's quite interesting because the head of Iran's navy came out late yesterday and he called the deployment of the aircraft carrier theatrical. He said that the U.S. was trying to raise the shadow of war in the Persian Gulf.

But the Iranians are also saying they would be ready for something like that. Of course, they've been deploying additional navy assets into the Persian Gulf, and specifically into the area around the Strait of Hormuz.

We always have to make clear to our viewers, Rosemary, how close proximity U.S. and Iranian forces are in that area anyway. When the U.S. rolled through there with an aircraft carrier, for instance, they can see Iranian ships, they can see Iranian planes, they have then on their radar the entire time. They can see the Iranian coast like as well.

So, it's always a bit of a tense situation there, of course now more so than ever. The Iranians also saying and have been saying for quite a while that if there is an escalation in this -- in that conflict in the Middle East, that they would be potential capable of hitting American forces, American bases in the Middle East with their ballistic missiles.

Of course, the Iranians have said themselves that they have been expanding their ballistic missile program.

Now both sides continue to say the U.S. and the Iranians as well, that they don't want an escalation, that they don't want that to happen, but of course you do see on both sides of the equation right now some pretty bellicose rhetoric as the Iranians are accusing the U.S. of trying to drag them into a war of economic and psychological warfare. While the U.S. is saying they believe that Iran is the aggressor in all of this. Rosemary.

CHURCH: Right. Meantime, Russia's Foreign Minister Sergey Lavrov says he will press the U.S. Secretary of State Mike Pompeo on the Iran crisis when they meet in the coming hours.

PLEITGEN: Yes.

CHURCH: What might that mean and how will that meeting likely go? PLEITGEN: Yes, and also how much pressing could Sergey Lavrov

actually do with Secretary of State Mike Pompeo. Of course, the Russians are part of the nuclear agreement of the JCPOA.

They want to remain part of that. They say that that agreement is something that is very valuable to them. And they're also, of course, quite frankly, an ally of the Iranians here in the Middle East.

Those forces are essentially not fighting side by side but fighting on the same side at least in Syria. So those relations between the Russians and the Iranians have gotten very good.

We're going to look for Sergey Lavrov to press Mike Pompeo as to how he believes this crisis can be solved diplomatically. Because right now the Russians don't believe that the U.S. wants to solve the crisis diplomatically.

So, Iran is certainly going to be a big topic on the agenda of these two foreign ministers as they meet, but it's only going to be one of many topics because they are also going to talk in general about improving relations between the U.S. and Russia.

They're also going to talk about, most probably talk about Venezuela as well, and denuclearization also between these two or nuclear disarmament, and possible nuclear disarmament treaties between the U.S. and Russia, and other parties.

So, there is a wider range of topics. And generally, the relations between Russia and the U.S. seem to be improving a little bit after the last meeting between Lavrov and Pompeo took place.

But Iran is certainly going to be a big topic, not clear how much leverage the Russians actually have.

Quite interesting to see, though, we talking about Mike Pompeo's visit to the Europeans yesterday, and it really doesn't seem as though Pompeo made much headway into trying to sell America's narrative on the Iran crisis.

You saw after that meeting took place that there were no common press conferences, or press availabilities between the Europeans and the American side.

And also, the Europeans really sticking to their line saying the nuclear agreement needs to stay in place and all sides need to tone it down here in the Middle East to prevent a bigger conflict, Rosemary.

CHURCH: All right. Many thanks to our Fred Pleitgen reporting there from Tehran where it is 11.45 in the morning.

Well, Donald Trump has made no secret of his fondness for authoritarian leaders from other countries. From Russia's Vladimir Putin to the Philippines Rodrigo Duterte, they have all gotten glowing reviews from the U.S. president.

And after Monday's meeting at the White House, add Hungary Viktor Orban to the list.

CNN's Michelle Kosinski has our report.

MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: In the Oval Office President Trump full of praise for Viktor Orban.

(BEGIN VIDEO CLIP)

TRUMP: Highly respected. Respected all over Europe.

(END VIDEO CLIP)

KOSINSKI: The man the European Union has branded a systemic threat to the rule of law as the prime minister of Hungary.

(BEGIN VIDEO CLIP)

TRUMP: Probably like me a little bit controversial but that's OK. That's OK. You've done a good job.

(END VIDEO CLIP)

KOSINSKI: Orban is just the latest version of autocrat Trump has either welcomed, invited or praised like Egypt's El-Sisi, Vladimir Putin, Kim Jong-un. Yet, Trump's ex-campaign manager Steve Bannon called Orban Trump before Trump.

(BEGIN VIDEO CLIP)

VIKTOR ORBAN, PRIME MINISTER OF HUNGARY: We are proud to stand together with the United States on fighting against illegal migration.

(END VIDEO CLIP)

KOSINSKI: In the last eight years Orban and his party have been accused by international observers of chipping away democracy, rewriting the Constitution, allowing corruption, controlling the media, gerrymandering, thwarting opposition, and stacking the courts and government offices with loyalist.

[03:14:59] Months ago, an international watchdog group name Hungary the least Democratic in the E.U. but he and Trump do have some things in common.

(BEGIN VIDEO CLIP)

TRUMP: America first.

(END VIDEO CLIP)

KOSINSKI: Orban's motto, Hungary first. Once a fighter for democracy post-communism in 2010, he seized on populism after economic downturn and fear over migrants. Orban called it an invasion.

(BEGIN VIDEO CLIP)

TRUMP: If you look up what's marching up, that's an invasion.

(END VIDEO CLIP)

KOSINSKI: Orban built a wall, a big one on the border with Serbia.

(BEGIN VIDEO CLIP)

TRUMP: We will build the wall; Mexico is going to pay for the wall.

(END VIDEO CLIP)

KOSINSKI: Orban sent the bill for his wall to the E.U. and he's demonized Hungarian-born billionaire George Soros who has the means to fund opposition there just as Trump supporters have demonized him here.

Seeing the threat of a fear press Orban has consolidated now around 90 percent of Hungary's media under either state control or Orban's friends according to a Hungarian study.

(BEGIN VIDEO CLIP)

FRANKLIN FOER, STAFF WRITER, THE ATLANTIC: One of the reasons that Obama didn't want to meet with this guy is because he considered the way that he ran he's decided to beyond the pale, and he was worthy of the reprimand of the United States.

(END VIDEO CLIP)

KOSINSKI: The last time an American president let Orban in for a one- on-one was 1998.

So Trump administration officials tell CNN that this meeting is just part of a push to engage more with countries in Central Europe, at the same time that they are being courted by the likes of Russia and China. That they want the erosion of democracy to stop although Trump was not expected to bring that up at this meeting.

It ends up being just one more example where he is finding plenty of kind words for somebody like Viktor Orban on the same day that he is partially criticizing a fellow American, namely a Democrat, namely on this day, Congresswoman Rashida Tlaib.

Michelle Kosinski, CNN, the State Department.

CHURCH: The popular WhatsApp message app boost one and a half billion users and now the company is sending out a warning to every one of them after a new attack. The details coming up.

(COMMERCIAL BREAK)

CHURCH: Gunfire in the Sudanese capital Monday killing a military police officer and injuring a large number of protestors at a pro- democracy rally in Khartoum. Unclear exactly who open fire.

[03:19:59] But the ruling transitional counsel blames Monday's violence on group seeking to undermine what they call the goals of the revolution.

In a separate development, Sudan's public prosecutor office wants charges brought against ousted President Omar al-Bashir and others for their alleged ties to the deaths of demonstrators in recent weeks. And will recall Al-Bashir was removed from power during a military coup last week.

Well, the encrypted messaging service WhatsApp is under attack or was under attack and more than 1.5 billion users have been warned to update their apps for safety.

The company which is owned by Facebook announced Monday that they had discovered a vulnerability that could allow hackers to install spyware on users' phones by calling them through WhatsApp.

Now it adds that a, quote, "advance cyber actor has used a flaw to target a select a number of users. " WhatsApp says the problem has been fixed.

So, we are joined by Thomas Brewster from Forbes magazine. He reports on security, surveillance and privacy. Good to have you with us.

THOMAS BREWSTER, SECURITY, SURVEILLANCE & PRIVACY REPORTER, FORBES: Hi, Rosemary.

CHURCH: So, is a danger over?

BREWSTER: From this perspective it's over. That this single vulnerability you have to remember that WhatsApp and a lot of other software on your phone has a lot of vulnerabilities that can be exploited. It seems in this case this vulnerability was exploited by supposedly by an Israeli company called NSO Group. That is what reporters say.

They will have a lot more of these vulnerabilities to be using on people's phones because that's their whole business is, the whole business is spying on people's iPhones, androids, whatever and to do that they need this kind of stockpile of vulnerabilities that they can then attack.

So, the problem from the WhatsApp and this specific vulnerability is over, in terms of everything else, you know, the number of vulnerabilities that they probably are still seeing on, whether that's with WhatsApp or Facebook or Instagram or from another app, they want to exploit to find a way into your phone. That danger is certainly not over.

CHURCH: Right. And we were always led to believe that WhatsApp was very protected app, and people were very safe on that particular app. This obviously has destroyed that sense of security using it.

How exactly can all users of WhatsApp protect themselves now? What do they have to do?

BREWSTER: Well, so the obvious thing is going to the App Store, going to Google Play Store and simply update your phone, and update the WhatsApp software specifically.

(CROSSTALK)

CHURCH: So, would they need to get rid of their old app and just repurchase? So how do they actually do that to make sure they've cleansed every possibility here?

BREWSTER: So, it's very simple. On an iPhone, for instance, this morning, I went on the AppStore searched WhatsApp, clicked update. it's very simple. It's the same way that you need to go a Play Store. And so just go ahead and do that straight away.

Also don't be afraid of continuing to use WhatsApp and think that it's safe because the encryption itself which is what's it's known for is actually very, very strong and very good and it's still a secure way to communicate and there are very few other apps that do, as well as WhatsApp. So, don't be kind of worrying too much about that aspect.

CHURCH: And now I just want to read this to you because in a statement provided to CNN on Monday, NSO said, "Under no circumstances would NSO be involved in the operating or identifying of targets of its technology which is solely operated by intelligence and law enforcement agencies."

NSA -- NSO, I should say, said "its technology was licensed to government agencies for the sole purpose of fighting crime and terror." What do you say to that?

BREWSTER: Yes, this is interesting. It's an interesting way for them to frame it because they and others have been following NSO and their partners for a long time because NSO is one of a bunch of Israeli companies that are very good at this surveillance.

They framed it in the way that, you know, it's not an issue, it's not our fault because we've sold it to these governments legally and the governments have gone and use then in whatever way they saw fit.

So NSO, that's essentially what NSO is saying, they're not denying that, you know, they -- and their software was used in this attack. They are saying, you know, it is not our problem. And you know, in one respect they're right. You know, it's not like that it's targeting specific people with this.

But then you know, a lot of people think that company should have some kind of responsibility when it comes to, you know, monitoring how their products are used.

[03:25:02] You know, we are about to run with this story looking at one of NSO's partners who has exactly that stance. You know, it's not their problem because it's their customers who admit are using it.

And you know, they claim to have these ethics codes as well that should be, you know, preventing misuse but we've seen time and again with NSO in particular, you know, claims have misuse in Mexico, claims have misuse in UAE, where journalists and activists' phones have been targeted. So, you know, that argument that they have is, maybe they don't have

like a stand on there (Ph) where they can really make it.

CHURCH: All right. Many thanks. Thomas Brewster, bringing us some clarity to that particular topic. Many thanks to you. I appreciate it.

Well, still speaking of WhatsApp, the general election is underway in India and social media plays a crucial role in informing voters there.

Our Nikhil Kumar explains.

KUMAR: As India votes, a typical village scene in northern Uttar Pradesh state, a post-launch huddle about who might win. These men are discussing the latest political news, their main source, messages and post on Facebook and WhatsApp.

"We only use WhatsApp and Facebook, that's the internet for us, and with the election my phone is flooded with political messages."

Almost everyone we've spoken to in this village has a phone and often relying on the messages they see there, the politically themed videos and memes to decide who gets their vote. It's their main source of news, the electoral battleground it's in their hands.

But the terrain is murky, littered with fake news that can sometimes prove fatal. Authorities here say fake rumors spread on WhatsApp which is owned by Facebook, triggered mob attacks that claimed more than a dozen lives in 2018.

Experts in Indian politics are worried that during the elections social media could be used to divide communities. Or worse trigger political violence.

Facebook already under scrutiny after the 2016 U.S. presidential election has set up this election war room in California. Sitting in Silicon Valley, these Facebook staffers are keeping a close eye on post being seen by hundreds of millions of Indian voters.

(BEGIN VIDEO CLIP)

KATIE HERBATH, PUBLIC POLICY DIRECTOR FOR GLOBAL ELECTIONS, FACEBOOK: We are starting to see a wide variety of different tactics that people might be using to interfere with the elections.

One of those that we have been investing a lot in our capabilities around is video and audio that might be altered, to not be truthful.

(END VIDEO CLIP)

KUMAR: Indian police are also worried this is just one of the many special units set up to monitor social media around the clock. And WhatsApp has launched a massive campaign to warn Indians about the threat of fake news, with more than 200 million users, this is the app single biggest market.

In fact, in Uttar Pradesh the problem is clear. Voters say it's often hard to figure out which political message on social media is real and which is fake.

"We can't trust every message. We get a lot of fake messages. We just don't know what's true."

Social media has become more than just a tool for mobilizing support, it's become a weapon for peddlers of misinformation. And voters like these often don't know what to believe.

Nikhil Kumar, CNN, Uttar Pradesh, India.

CHURCH: While the politicians fight for trade war, business owners are paying the price.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Is it panic mode yet?

UNIDENTIFIED FEMALE: Basically.

UNIDENTIFIED MALE: Yes, I mean --

UNIDENTIFIED FEMALE: We are almost there.

UNIDENTIFIED MALE: Yes. We're like teetering on the edge of panic.

(END VIDEO CLIP)

CHURCH: One small company has raised to avoid higher costs. We'll take a look.

(COMMERCIAL BREAK)

ROSEMARY CHURCH, CNN ANCHOR: Welcome back everyone. I'm Rosemary Church I want to update you now on the main stories we've been following this hour.

Iran is said to be on the agenda as the U.S. Secretary of State meets with Russian President Vladimir Putin. Mike Pompeo's Russia trip comes as the UAE and Saudi Arabia say ships were sabotage near the Strait of Hormuz. The U.S. has sent extra warships in Baghouz in the Middle East citing an Iranian threat.

Though Asian markets extended Wall Street's Monday self over trade war fears, the European market are slightly up. The DOW plunged on news that Beijing was retaliating to a U.S. tariff hike with a hike of its own, despite the turmoil, President Trump is confident a trade deal will be reached eventually.

For more on this David Rennie joins us now from Beijing, he is the Beijing's bureau chief for The Economists, thank you so much for being with us.

DAVID RENNIE, BUREAU CHIEF FOR THE ECONOMISTS, BEIJING: Hello.

CHURCH: And in response to U.S. hikes and tariffs on Chinese goods, Beijing retaliated as we saw with tariffs of its own, now President Trump says, he will apply additional tariffs on everything. Where is all this going do you think?

RENNIE: Well I think it is important to realize that the way that Donald Trump describes this when he tweets out this kind of -- sort of war cries and where he lays his speeches is really misleading. He makes it sound as if America is one kind of a castle or fortress and China is another and they are showing projectiles at each other, but actually the world is made up of supply chains. You have American companies making a ton of stuff in China and then shipping it back to the states, and that is the problem with these tariff wars when Donald Trump says as he did in his latest tweets that China is going to be very badly hurt, because Donald Trump has the power to, if he like frightened foreign companies out of China and somewhere else, it just doesn't work like that.

If you think of a company like General Motors, they sell more cars in China than they do in America. China is an enormous market for Apple, and when Apple makes an iPhone and China shipped it to the states, actually China does not get that much the price and it gets about eight dollars of $600 price tag goes to Chinese companies. So, this ties of globalization, they are very complicated and it is not like just beyond to punish China, by levying a tariff, quite above from the fact that tariffs are tax that will ultimately in caught, be paid by American shoppers when they pay a higher prices.

CHURCH: Yes, and of course, I want to talk about that, but first, President Trump insists, he is optimistic this dispute, this trade war can be resolved, but that's certainly not how investors are feeling is it? What's making Mr. Trump so confident right now that this will all be worked out? What is his negotiating plan do you think?

RENNIE: I think there is quite a dangerous dynamic in the markets, which is that they are very complacent, they think that a deal can be done quite easily and the idea is that Donald Trump is desperate to keep the stock market in good shape in the states that he looks at that as a barometer of his success as a kind of businessman and president.

And so he will cave, certainly that's the view of Asian investors and I think that was partly the view the Chinese government. They though that Donald Trump was more vulnerable. And on the other side I think, there are people around Donald Trump who said some pretty alarming things about how weak they think the Chinese economy is and how actually America is almost typical tip China into a recession, with the so touch of his finger.

And so I think both sides have gone into this latest escalation, greatly over estimating their own power and underestimating the resilience of the other side. I think, the thing that's become dangerous the last day or so, is that, you've seen the levels of nationalist rhetoric by getting much, much sharper here in China.

The state media, which is the only media that the Chinese get to see, has been really restrain up till now, in terms of attacking Donald Trump. The last 24 hours has taken a much sharpen national tone. And that of course reduces the room for maneuver, once it becomes a kind of a fight of nationalist pride. [03:35:14] CHURCH: Yes, so interesting, so you are saying that across

Asia, there is a sense of that Donald Trump will cave, if he has not done that, has he and then on the United States side, they think that the economy in China is vulnerable. So, if they re-adjusted that assessment, where do they go from here?

RENNIE: I think people need to spend a lot more time thinking about the politics, including the domestic politics on the two sides. This isn't for the moment a test of kind of pain and endurance between these two very large economies, the truth is that U.S.-China trade is big, it's $2 million a day, but it is not overwhelmingly gigantic.

I mean, exports from China to America are about 4 percent of Chinese GDP. So, actually this is going to be a fight about a political pain, and we are starting to see, you know, Donald Trump saying things about how he can be trusted to handle China in a way that Democrats can't, and that is why he should win the next election in 2020. Xi Jinping obviously doesn't have elections here in China, but he has domestic politics too. I mean, when you see that nationalist reaction, how well it's going down here.

So, I think that until our markets had been looking at the economics on the two sides and thinking both sides of have too much to lose, this is too profitable a business relationship. Of course they will do a deal. It's becoming much more sharply in focus, there is actually a political fight with domestic politics to think about on both sides.

CHURCH: Yes. As always of course, David Rennie, thank you so much for your assessment and analysis, appreciate it.

Well small businesses across the United States say that they are already feeling the impact of Donald Trump's tariffs, many have forced to pass the cost on to consumers. Our Nick Valencia has more.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: We're almost there.

UNIDENTIFIED MALE: We are like telling on the edge of panic.

NICK VALENCIA, CNN NEWS CORRESPONDENT: Kishore Vasnani and his wife Vanessa Vasnani own the successful travel bag company, Nomad Lane.

UNIDENTIFIED FEMALE: Each side has a zip around divide.

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

KISHORE VASNANI, COFOUNDER NOMAD LANE: It makes us wonder what, you know, the justification is, what the reason is behind it, and you know, we are trying to find a way at the moment. VANESSA VASNANI, COFOUNDER NOMAD LANE: Yes, I think it is tough,

because he is supposed to be, you know, pro-business, but this was not the pro-business move especially for small businesses like us.

VALENCIA: The company is based in New York, but their bag is manufactured here in Guangzhou 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.

K. VASNANI: It is 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 cause or leaving that to the consumer. They've already been severely impacted and as a new business aren't sure how much more cost they can take on. Before President Trump, the tariffs for banks was 17.6 percent that it increased to 27.6 percent in the summer of 2018, as of last Friday it is 15 percent more bringing the total tariff now to a whopping 42.6 percent.

K. 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, not as a 25 percent mark up on it.

VALENCIA: Which in the end, it may leave the couple holding the bag. Nick Valencia, CNN, Jonesboro, Georgia.

(END VIDEOTAPE)

CHURCH: Well it is been called the biggest college admissions scam in U.S. history, and one of the most famous names associated with it, had an emotional dame caught on Monday. Here's our Brynn Gingras.

(BEGIN VIDEOTAPE)

BRYNN GINGRAS, CNN CORREPOSNDENT: Hollywood actress Felicity Huffman admitting to her part on the largest college admission scam in U.S. history, the Oscar nominated actress sob in court today as she pled guilty to a federal conspiracy to commit fraud charge for paying a fake foundation $15,000 to get her daughter into college.

In court, Huffman said she had no knowledge about the payments confess mastermind Rick Singer made as part of the cheating scam, but then said quote, everything else they said I did, I did. In court documents, prosecutors detailed evidence of emails and recorded phone conversations between Huffman and Singer. The two making a deal for a proctor to correct Huffman's oldest daughter SAT's answers, boosting her score. The government also said that they had proved the payment came from Huffman's account.

[03:40:00] Huffman wrote in a statement last month, my daughter knew absolutely nothing about my actions and in my misguided and profoundly wrong way, I have betrayed her. This transgression towards her and the public, I will carry for the rest of my life. In exchange for her guilty plea, prosecutors recommended to the judge

that Huffman get four months in prison and she is spared additional charges. It is possible she may receive no time at all depending on the judge's decision of sentencing.

It is a much different path than actor Lori Loughlin who is also implicated in the scam but instead facing 40 years behind bars after she refused to plead guilty to the initial charge.

The actress most known for her role as Aunt Becky in Full House, maintains she did nothing wrong. A source tells CNN, she feels like she did what any other parent would do for their kids.

LORI LOUGHLIN, ACTRESS: I don't really care about school, as you guys all know.

GINGRAS: Loughlin and her husband fashion designer Mossimo Giannulli are accused of paying $500,000 to get their daughters admitted to USC, as crew recruits though neither joined the team. A source tells CNN, that Loughlin is now searching for crisis management team to help him prove her image after the public backlash of this case. Loughlin's publicist denies that. The couple is among more than a dozen parents pleading not guilty in the case that has a global reach.

The parents of this girl, allegedly paid $6.5 million to facilitate her admission into Stanford, they denied knowing anything about the fraud and have not been charge. Authorities have yet to make more arrest in the case, but a source tells CNN more maybe coming and may include students who authorities believe knowingly participated in the scam.

A source say so called target letters have been sent to three students, informing them they are the subject of the ongoing investigations, as of earlier this month, Loughlin's daughter did not receive a letter says the source. Huffman will be back in this Boston courthouse in September for her sentencing. Brynn Gingras, CNN, Boston.

(END VIDEOTAPE)

CHURCH: Food shortages in North Korea are affecting the most vulnerable there, pregnant women and children, we will look at this to bring help to those who needed most.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You will never feel safe again. You don't feel safe again.

If this can happen to us, it can happen to anyone everywhere.

(END VIDEO CLIP)

CHURCH: The rise in deadly anti-Semitic attacks in the United States who is behind the surge and how some communities are fighting back.

[03:45:00] (COMMERCIAL BREAK)

CHURCH: Well, North Korea is demanding the U.S. return a cargo ship it seized for breaking U.N. sanctions, the U.S. says the ship was hauling coal from North Korea to sell in other countries including China. Pyongyang says the seizure is counter to the deal signed by Donald Trump and Kim Jong-un in Singapore last year, and they will keep a sharp eye on U.S. behavior going forward.

Well, as many as 10 million North Korean's could right now be at risk of starvation that is according to a new U.N. report, but as CNN's Paula Hancocks reports, the U.S. and other countries, may want to be cautious about sending help.

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN CORRESPONDENT: North Korean farmers prepared the land for rice planting. A staple free in the country. This footage was filmed last month, by the United Nation World Food Program, one of the few aid groups allowed to operate in North Korea.

It is morning, but the recent climate conditions bring 40 percent of the population are now in need of urgent food assistants.

NICOLAS BIDAULT, ANALYST, WORLD FOOD PROGRAMME: What is clear is that the succession of about the drought, heat wave and floods this year has bad impact in the crop collection.

HANCOCKS: The report from WFP and the U.N.'s food and agricultural organization says those most at risk are young children and pregnant women. They warn families being forced to cut meals or eat less. It is a warning that is being heard in the highest levels. President Trump spoke by phone to South Korean president Moon Jae-in last week and supported the South's desire to send humanitarian aid.

MOON JAE-IN, PRESIDENT OF SOUTH KOREA9through translator): We would have the effect of cracking opened the door form the current stalemates in talks. President Trump expressed the total support on their regard.

HANCOCKS: This despite North Korea's suspected short range ballistic missile tests earlier this month. A violation of U.N. resolutions.

South Korea's unification ministry says they are working on a plan to send aid, bit no specifics yet. For some experts concerns of food and security may be valid, but the extent of the crisis is unclear.

UNIDENTIFIED MALE: Something bad is definitely happening. However they should also keep in mind that food prices at free market, free food prices are stable. And it sort of does not agree this idea of famine just about to erupt.

HANCOCKS: WFP has 11 supported food factories in North Korea and provides nutritional assistance to some 770,000 malnourished women and children. Its report is based on information gathered during the assessment in country last month and in late 2018, the WFP does acknowledge it some data is provided by North Korea itself, experts fear that. It could be open to manipulation.

The U.S. has been skeptical of humanitarian aid from North Korea in the past, because they say that Kim Jong-un is perfectly capable of feeding his own people, he just chooses to divert millions of dollars into his nuclear and missile program. The Trump softening of that stands could signal a return to eight shipments as an incentive for Pyongyang to come back to the negotiating table. Paula Hancocks, CNN, Seoul.

(END VIDEOTAPE)

CHURCH: Anti-Semitic attacks in the United States are rising dramatically, a new report shows assaults against Jewish peoples more than doubled last year. CNN's Sara Sidner is looking into what's behind the alarming trend.

(BEGIN VIDEOTAPE)

SARA SIDNER, CNN CORRESPONDENT: Unorthodox Jew beaten in the streets of Brooklyn, another soccer punched in New York, in Los Angeles a driver targets Jewish man with his cars screaming f-ing Jews, and exactly six months apart, shooters attacking American synagogue during services with the intent to kill Jews.

Pittsburgh last October, 11 lives were lost in the worst act of an anti-Semitic violence in American history. In April, killing one worshipper, the direct threat against American Jews as victims of vandalism, assault and even murder is at alarming levels.

UNIDENTIFIED MALE: We are talking about some of the highest numbers of incidents that we have ever seen, into a really kind of unfolded itself in a very ugly way.

SIDNER: For third year in a row, the anti-defamation league says, anti-Semitic incident in America rose to near historic highs, each of the 1879 dots, a physical manifestations of hate in 2018.

GEORGE SELIM, ANTI-DEFAMATION LEAGUE: The threat environment today is one that we haven't seen in this country in recent memory.

SIDNER: George Selim oversees the ADL center for extremism. He has also spent more than a decade working to fight extremism and radicalization at the Department of Homeland Security. The growing deadly threat he says, is homegrown and overwhelmingly far right and white.

SELIM: There is this concept within white supremacist circles of accelerationism, that means that individuals feel like the white race is in danger and they need to act now.

[03:50:09] SIDNER: The evidence of the growing threat is plain to see, synagogues is now (inaudible) mark with bullet holes.

RABBI YISROEL GOLDSTEIN, POWAY, CALIFORNIA CHABAD: I was centimeters away from death. I still feel the power of the bullets flying. SIDNER: Rabbi Yisroel Goldstein came to Poway, California in the

1980's with a dream to build a safe oasis for the Jewish community, but his sense of security was shattered in seconds.

At what point did you see a gunman walk into your synagogue?

GOLDSTEIN: It's so hard to go back to the moment. It is like unimaginable, right there in the lobby, and feet away from me, he was standing there with his feet spread apart in an aiming position. Right there.

SIDNER: The first blast marking the door and wall hit and killed Congregant Lori Kaye, who is there to pray for her recently deceased mother, then the rabbi was hit.

GOLDSTEIN: My granddaughter was there instead grandfather you are bleeding.

SIDNER: You didn't even know you were hit.

GOLDSTEIN: I do not even know I was hit. I looked at her, and she was so traumatized and she is just four and a half years old. In the pictures you see, the black and white of the holocaust and the programs, crystal (inaudible) and you see those images in 2019 in United States of America.

SIDNER: Eight year old Noya Dehan (ph) and her uncle were also injured by gunfire in the synagogue.

UNIDENTIFIED FEMALE: He was aiming at all the kids, he was aiming where the kids were, it was terrifying in scary.

SIDNER: The 19 year-old white male suspect wrote killing Jews in an open letter before the attack. I feel no remorse. I only wish I killed more.

He said his inspiration came from the slaughter of 15 Muslims in two mosque in Christchurch New Zealand and the massacre of 11 Jews at the synagogue in Pittsburgh. Both of which police say they were perpetrated by white supremacists. Poway's mayor says this was not representative of the city he loves.

UNIDENTIFIED FEMALE: There are swastika spray paint in their schools, just last Hanukkah, a family heads swastikas, spray painted on their house.

SIDNER: Lifelong resident Kim Garnier said the attack did not surprise her one bit.

How to you see Poway?

UNIDENTIFIED FEMALE: When I hear this isn't Poway, that's a slap in the face for the people who have experienced the bigotry, the hatred, the racism, and the anti-Semitism, there is another element and to ignore it is so disrespectful to those who have experienced it. SIDNER: According to the ADL, all but four states saw incidents of

anti-Semitism last year. Down slightly from 2017, were all 50 states had incidents, for the first time ever, the most deadly at the hands of far right wing extremists.

SELIM: Let me be very clear on this, white supremacy and white nationalism is a real and persistent threat. Law enforcement at the federal state and local level need to take this threat much more seriously.

SIDNER: If it isn't he says, the deadly threat may continue.

GOLDSTEIN: We will never feel safe again. You don't feel safe again. If this can happen to us, it can happen anywhere and everywhere.

SIDNER: Sara Sidner, CNN, Poway, California.

(END VIDEOTAPE)

[03:55:00] (COMMERCIAL BREAK)

CHURCH: Well, colleges in South Korea are now offering classes on dating, love, and sex. The goal to get more people on the market of growing numbers of South Koreans are choosing to stay single. Our Anna Coren explains why.

(BEGIN VIDEOTAPE)

ANNA COREN, CNN CORRESPONDENT: This isn't just a date, it is college assignment. Students Kim Min-ye and Kim Junyuop (ph) are taking a class in dating and relationships. They have been instructed to go on cheap date and write about it.

KIM MIN-YE, STUDENT AT SEJONG UNIVERSITY (through translator): I was curious about men and how they think, when I learn these things, I thought they could be helpful when I'm with my boyfriend.

COREN: In South Korea, college level dating classes are popular and very competitive to get into.

BAE JEONG-WEON, PROFESSOR AT SEJONG UNIVERSITY (through translator): The goal is to understand differences among people especially between men and women in how to form good relationships. From picking the right partner to coping with break ups, it is a lesson on dating, love and sex.

JEONG-WEON: Students learn about sex more through porn then through sex education, they know about sex, but often their knowledge is distorted.

UNIDENTIFIED MALE (through translator): Sex education in school does not teach you about sex, they just teach physical differences, many of my friends learned about sex through porn. So when they have their first sexual experience, it leaves them to make mistakes.

COREN: The class in Sejong University is popular for its dating assignment. Students are paired with random partners and required to spend at least four hours together, spending less than 10000 Wan which is 9 U.S. dollars.

UNIDENTIFIED MALE (through translator): I had to think of something different, I wanted to bring her to where I work, this way we save money. I learned that I don't need to spend much money to have a good time.

COREN: And 2018, South Korea had the lowest number of marriages in 46 years according to statistics Korea. And experts believe part of the reason is the lack of full time employment. A recent survey found only one in 10 college students due to graduate this year have found full time jobs.

JEONG-WEON: Young people in South Korea are suffering economically, so many feel they don't have enough money to get married.

COREN: And these students seem to agree.

UNIDENTIFIED MALE (through translator): Because it is hard to get a job, there is no money to spare, I can't afford to meet anyone. Going on a date like this makes me want to date.

COREN: Anna Coren, CNN.

(END VIDEOTAPE)

CHURCH: And thanks so much for your company, I'm Rosemary Church, remember to connect with me anytime on Twitter @rosemarycnn. We would love to hear from, you and the news continues next with our Max Foster in London. You are watching CNN, have yourself a great time.

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