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Trump Threatens Mexico with Rising Tariffs Over Illegal Migrants; Levee Breaches in Arkansas and Missouri Led to Flooding; Historic Spelling Bee Ends with 8 Champions; Female Recruits Allege Discrimination at FBI Academy; Barr Says He's Seen No Evidence of Trump Shredding Institutions. Aired 9-9:30a ET

Aired May 31, 2019 - 09:00   ET


[09:00:20] POPPY HARLOW, CNN ANCHOR: All right. Good morning, everyone. I'm Poppy Harlow in New York.

JIM SCIUTTO, CNN ANCHOR: And I'm Jim Sciutto here in Washington. We begin to find out in just minutes how big of a bite President Trump's latest of many tariff threats will take out of the U.S. economy.

Stocks are poised for a steep drop -- look at those red arrows at the opening bell -- over the prospects of another trade war with another of America's biggest trading partners. That is, Mexico.

HARLOW: It's pretty remarkable why you would do this in the midst of such a strong economy, maybe he thinks the economy can take it, but what about long term?

Look, the president who once called himself tariff man is vowing to slap 5 percent levees on all Mexican exports to the United States starting on June 10th. Those essentially are taxes paid by us, all of us, the U.S. consumer, U.S. importers, that's how it works, folks, Mexico doesn't pay for these. The tariffs will hit 25 percent by October, the president says, unless Mexico takes unspecified steps to cut illegal immigration to the U.S. by an unspecified amount.

So what is Mexico saying? Mexico's Foreign minister is en route to Washington as we speak in search of what he calls a meeting point.

Let's go to our chief business correspondent and co-anchor of "EARLY START", Christine Romans who is with us.

Romans, I mean, I don't know where to begin. This comes on the same week that the Commerce Department said you've got imports and exports slipping. The bond market is signaling a lot of concerns.


HARLOW: And now this.

ROMANS: And this opens a new front in the president's trade war because this is what is so concerning about this. This is tariffs not to rectify an unfair trade advantage, but tariffs to punish a country for another completely separate issue which is illegal immigration. So that's raising some concerns. Also raising concerns this could weaken the economy in both countries

and weakening Mexico's economy, how exactly does that solve the illegal immigration problem if indeed you want to put these two together, trade and illegal immigration?

Look, last year the U.S. imported almost $350 billion worth of goods from Mexico and it's a little deceiving. And the U.S. Trade Representative's Office even says this. It's a little deceiving because some of the things that the U.S. imports, some of those dollars, like 40 cents of the dollar, is something that was actually U.S. content but went to Mexico to be manufactured into something and then brought back.

So it's a little confusing to think how this could help a very global supply chain specifically for autos but also for agriculture. If there's retaliation at this point we don't see retaliation.

HARLOW: Right.

ROMANS: But if there is retaliation, I mean, the U.S. sends to Mexico $20 billion last year of corn, soybeans, pork, beef. This is tough for America's farmers which is why I think Senator Chuck Grassley said, wait a minute, this is a misuse of the president's tariff authority to use it in this way, Poppy.

HARLOW: Yes. Look, to hear Grassley say that, that the president is misguided on this, is a big deal, right, Jim?

SCIUTTO: No question.

Let's bring in Margaret Talev. She's senior White House correspondent for Bloomberg News.

So these are not -- you know, that's not a soft opposition to this from the Republican chairman of the Senate Judiciary Committee. Trade policy and border security are separate issues. This is a misuse of presidential tariff authority.

Will the president listen when he hears push back like this from Republicans?

MARGARET TALEV, CNN POLITICAL ANALYST: I think, Jim, it depends on how much push back and he may be looking at other factors and listening to other factors, too, we'll see soon what the markets do. You can imagine at Bloomberg last night as this news hit the start of e-mails that were going around my internal system, oh, my god, the peso is falling, what about GM, what's going to happen to Ford?

And what people are talking about when they say this is about the supply chain is the idea that there are products that are, you know, brought from Mexico that kind of originate in the U.S.


TALEV: Or have components or parts that are made in the U.S. So you're talking here about ironically the auto industry in large part which is one thing that President Trump pledged so centrally to rebuild to boost up, you know, during his first term in office.

SCIUTTO: Yes. The president is repeating what is a simplistic and frankly misleading view of trade that if you have a trade deficit that somehow another country is stealing from you. One way he's tried to address that is with the USMCA which is basically a reworked NAFTA deal. It was already facing danger not just from Democrats but also I wonder with this does this further jeopardize it with Republicans as well?

TALEV: Right. Well, right out of the gate, the immediate reaction that we're seeing from the Hill is that this move inherently jeopardizes at least the timetable for USMCA, maybe the passage of the USMCA. There are some Republicans who are so far standing by the president. We've seen Lindsey Graham, for example, say look, it's important to send a tough signal.


TALEV: OK, fair point.

SCIUTTO: OK. He's made the choice to stand by the president on virtually everything.

TALEV: But there's a lot of heartburn inside the Republican caucus about this. Some outspoken, some a little bit quieter.

[09:05:03] There are real concerns about how this is going to affect the economy and I'd say while this is not centrally totally connected to China, we're seeing this sort of parallel story play out over Huawei and national security concerns and questions about whether the U.S. policy on tariffs with China is in any way connected to that.

SCIUTTO: Well, the president sees no fire wall between any of these issues. So, of course, Huawei, an example.

TALEV: In this case that's true.

SCIUTTO: That's a Justice Department case, it's about a violation of law, Iran sanctions, et cetera, but he's mixed it in and said well, maybe that's a chip I can throw into those trade negotiations. Here you have him now --

TALEV: Much more clearly.

SCIUTTO: Mixing trade into a border security issue, right?

TALEV: Just saying --


TALEV: Yes. Just saying look, we are going to use a trade measure -- a tariff measure to deal with what we consider a national security issue. And there is are a lot of push back from Congress about that.

SCIUTTO: The president's calculation on this is that it's a winning 2020 issue and it's reflected in virtually every decision he's making now or perhaps since he walked into the White House. Is it?

TALEV: Well, it depends on how long this plays out. If we're really in a situation where this were to escalate all the way through October and hit 25 percent and all the affects ripple through the economy, I'm not sure about the politics of that.


TALEV: If this is a signal to the base, a test of Mexico, and Mexico offers some sort of counteroffer to do something more and the president says he's satisfied.


TALEV: And two weeks from now he can say that he's secured another win by being tough.


TALEV: That may be a political victory. So the question is how long does this take, how does Mexico respond? In the immediate response we saw the Mexican president say, look, we are not looking for a confrontation with the U.S., but really in a matter of hours, I mean, the story that we are now hearing this morning is AMLO saying, OK, we're not looking for a confrontation but we're also not going to just sort of roll over or be scared into doing something quick.

SCIUTTO: He's got voters as well.

TALEV: Absolutely.

SCIUTTO: Margaret Talev, thanks very much.

Of course, the question, Poppy, is how long do people including the president's supporters buy the lie that tariffs punish the other nation as opposed to American consumers and companies because it's a tax on you and me, people who buy this stuff.

HARLOW: Look, it's a great point and there's a presidential authority Grassley saying he's overstepping here. But, Jim, when you talk about how much we're going to pay this is a big deal with Mexico because so many cars come from there. OK. Deutsche Bank just came out this morning and Deutsche Bank says that they believe undoubtedly, their word, this cost is going to be passed on to consumers with an average of $1300 in terms of the price increase per car in America that comes from Mexico.


HARLOW: They say that will put U.S. auto production -- it will cut it by as much as three million vehicles a year because of all the parts we get from Mexico.

SCIUTTO: That's huge.

HARLOW: Well, that's the president's base, though. Where are these cars made by the way.


HARLOW: You know? So.

SCIUTTO: 1300 bucks you notice that when you buy a car.

HARLOW: Anyone does.


HARLOW: Anyone does. So the question is, is he going to do it, right. Mexico seems to be calling what they think is a little bit of a bluff here. Is he going to do it? That's a question. And will it mean anything for immigration?

So let's talk about that with Gil Kerlikowske. He is the former commissioner for the U.S. Customs and Border Protection and former U.S. drug czar under President Obama.

Good morning to you, Gil. So --


HARLOW: Help me wrap my head around this. You put tariffs on Mexican goods that the U.S. is going -- U.S. consumers are going to pay, but then if we buy less from Mexico you weaken the Mexican economy and yet you expect immigration then to go down, illegal immigration, when a lot of it is happening because of the U.S. economy being good and the Mexican economy being weaker?

KERLIKOWSKE: So let's look at it this way, when we had the largest influx, 1.6 million people coming across the border, around 2,000, that was almost all people from Mexico and they were looking for work. Now Mexico's economy for a number of years has been much better and the crisis, the number of people coming across the border, are not from Mexico.

If we harm or we weaken Mexico's economy we could very much make things worse. Remember this is a president that has had two and a half years of failed immigration policy.

HARLOW: So I understand what you're saying, a number of these are Central American migrants coming through Mexico, but this is the president saying, Mexico, you need to do more as an intermediary here in the middle to stop them from crossing over into the United States. That's what he's asking for and that's why he's threatening these tariffs.

I will note and you know these numbers this week just on Wednesday CBP stopped a group of 1,000 migrants. That was the biggest group that they have apprehended thus far all together. Many of them were families. So there is a problem, right? This is video of it that the president tweeted. So what would you do about it? KERLIKOWSKE: So this is a crisis and for anyone on either side of the

policy aisle that said it's not a crisis, these numbers are a crisis and the workload is tremendous.


KERLIKOWSKE: And remember, too, that Customs and Border Protection are the people that also were supposed to collect tariffs.

[09:10:03] So if you add another work pill to them -- but look at Mexico's border with Guatemala. Tapachula, I've been there several times, you know, to say, OK, Mexico, you need to stop people coming across, that is -- that's jungle, it's very wild, it doesn't lend itself easily to enforcement. If we go back and do the same thing that we did with the Merida Initiative in Mexico, helped their economy, helped their security, if we do that in those three Central American countries for less money, well, lo and behold people from those three Central American countries aren't going to be wanting to make that dangerous trek.

This is about diplomacy and it's about working with other countries. It's not about tariffs and trying to weaponize them.

HARLOW: Right. Well, and, by the way, as you know with these Central American countries the U.S. stopping aid to those countries, it was meant to curb this at the president's own, you know, administration has said in the past is needed in terms of curbing this is a real issue as well.

Finally to you, though, what is the biggest lesson learned from your time in CBP under the Obama administration that you hope the Trump administration would apply here to stem this crisis?

KERLIKOWSKE: Well, I think, again, it's improving conditions in the three Central American countries, but I'm here in Miami with the police chiefs of the nation's largest cities.


KERLIKOWSKE: And they've made it clear that they have immigration policies also. There is no sanctuary for violent offenders, no sanctuary for felons. They want to cooperate in a meaningful way, but they realize that immigration is the sole purview of the federal government and the federal government needs to do a better job and quite frankly Congress needs to work to fix this problem. And it is fixable. It is solvable, but we've had two and a half years of really failed policy.

HARLOW: Gil Kerlikowske, I appreciate your expertise this morning. You know, at this point it's beyond party, right? It's about what is going to be done as a nation together to deal with this. Thank you for being with me from Miami this morning.


HARLOW: You got it. Jim? SCIUTTO: And you're right, Poppy, beyond party.


SCIUTTO: It is bipartisan reaction to this.

Well, another story we're following this hour, just hours ago two levees breached along the Mississippi and the Arkansas Rivers. This puts thousands of homes, of course, thousands of people, in danger of flooding. Just look at those pictures there.

HARLOW: That's from this morning, that's Yell County, Arkansas. I mean, imagine if this is where you called home and this is what you were waking up to this morning, folks. This matters for all Americans. Hundreds of roads are under water and officials say there is a potential for more destruction.

Let's go to our correspondent Rosa Flores. She joins us in Fort Smith, Arkansas.

I mean, Rosa, you know, you're above your knees in water. What are you seeing?

ROSA FLORES, CNN CORRESPONDENT: Well, you know, Poppy, what you guys were talking about is one of the biggest concerns right now for the state of Arkansas and that is the levy infrastructure. Will it hold? As you mentioned, there was a levy breached overnight, I'm about 90 miles west of where that happened and I talked to the emergency management in that county, in Yell County, and they say that about 75 homes were impacted.

Here is the good news, because they thought that this could happen, they issued evacuation orders early, let people know that they needed to move out and they did do that. And so those people are safe today, but, Poppy, you know that water finds a way and so now they're expecting for that water to go into an area called Smiley Bayou, about 500 people live in that area. It's a very hilly terrain, so not everybody will have to evacuate, but that's what they're preparing for about 90 miles east of where I'm standing.

Here in Fort Smith, take a look around. One of the most eerie things as you look around is the calmness of this water. It is not going anywhere. That a huge concern for homeowners because as you look around you can see from the air and from the ground that this water is not going anywhere, Jim and Poppy, and so homeowners who were trying to get access to their homes to try to salvage things they can't get to their homes at least not by car. Some of them are trying by boat -- Jim and Poppy.

HARLOW: Rosa Flores, just looking at those aerial shots from the drones that CNN air has, it's devastation. Thank you for reporting on it for us. Keep us posted.

All right. Still to come, a really fascinating interview with the Attorney General Bill Barr, responding to Robert Mueller this morning, saying he disagrees with the legal analysis contained in the Mueller report. Does that mean he overruled the special counsel?

SCIUTTO: And one of our favorite stories this morning, history made at the National Spelling Bee. Not one winner, not two, eight winners. Eight spelling bee champions. We'll tell you how that happened.


Plus, more than a dozen women who attended the FBI training academy are now suing for what they say was a hostile work environment.

The women say that they were sexually harassed and discriminated against. We will speak to two of those women, that's coming up, stay with us.


SCIUTTO: The Attorney General William Barr is defending his view of the Mueller report, making this clear today. He didn't simply misinterpret Mueller as Mueller wrote in a March 27th letter to the Attorney General, he overruled the special counsel's view of the law. Have a listen.


WILLIAM BARR, ATTORNEY GENERAL, UNITED STATES: As a matter of law, many of the instances would not amount to obstruction.

UNIDENTIFIED FEMALE: As a matter of law?

BARR: As a matter of law. In other words, we didn't agree with the legal analysis, a lot of the legal analysis in the report, it did not reflect the views of the department, it was the views of a particular lawyer or lawyers. And so we applied what we thought was the right law.


[09:20:00] POPPY HARLOW, CO-HOST, NEWSROOM: OK, so Barr also repeated his criticism of Mueller this morning, saying the special counsel should have made a determination, could have, into whether the president engaged in criminal activity. Shan Wu is with us, former federal prosecutor, it was such a fascinating interview and I want to get to more of it in a moment. But just what's your read on that top line from it?

SHAN WU, FORMER FEDERAL PROSECUTOR: He is really unraveling in plain view here. He's struggling so hard to cover up the fact that he misled Congress, the fact that he misled the American people. You can't have it both ways, either he's going to say that he stepped in because Mueller failed to make a decision or he's saying I stepped in because Mueller got it wrong.


WU: So which is it? SCIUTTO: Yes, I mean, that's the thing. You know, the story line

coming out of his summary -- and this is something the special counsel said explicitly in his March 27th letter, he said that your report does not reflect, you know, the full breadth of the special counsel report -- your summary, rather. But now he's saying, OK, not just that, I'm overruling you on your legal analysis here. Is he not?

WU: Absolutely, that's exactly what he's saying, and you know, suddenly we're hearing about that for the first time how he was on his trip. And you know, keep in mind, of course, Jim and Poppy, he's overruling an investigation which he was not involved in the factual development.

I mean, he's saying he's just reading the law and he's disagreeing on the law. And I mean, that's really such a huge reveal, why are we just hearing about it now?

HARLOW: Let's -- Shan, listen to another part of the interview that really struck us. And this is Barr at one point in the interview defending the president, saying that he does not think that the president is changing norms here. Listen.


BARR: I think one of the ironies today is that people are saying that it's President Trump that's shredding our institutions. I really see no evidence of that. And from my perspective, the idea of resisting a democratically-elected president and basically throwing everything at him and, you know, really changing the norms on the grounds that we have to stop this president.


HARLOW: Is that being, you know, loyalist, a soldier for the president or is he right?

WU: That's being completely loyalist. If anyone is shredding the norms, it's Attorney General Barr shredding the normal integrity and gravitas of his office and the institution. All that language he uses, it's so extraordinary having worked for an attorney general closely. He uses all the language of the partisanship.

Of course, there's spying, now he's actually using the term the resistance. It's really highly extraordinary.

SCIUTTO: Yes, you know, it's interesting. He's admitting here that he differs with Mueller on the legal analysis here, and that's fine, you know, he couldn't have a different interpretation of the law, he is a lawyer, he's been around a long time.

But was Mueller -- was Barr there for -- is he admitting that he was wrong to in effect send the message that the special counsel's report exonerated the president when, in fact, it didn't? I mean, it's a different argument to say I look at the law differently from the special counsel and come to a different conclusion. Early on, his message had been the special counsel is basically

clearing the president here. I mean, there's a lot of daylight between those two -- those two positions.

WU: Yes, and I think what's happening to Barr is, you know, he does know Mueller, and he knows Mueller doesn't like to speak in public. He may have been counting on the fact that his misrepresentation was not going to be noticed. It was a foolish decision for him to make. Basically it was exposed.

It was exposed by the report itself and then Mueller went public to reinforce those points. So now he has to backtrack and come up with this alternative explanation that Mueller got it wrong, which yes, is news to us.


HARLOW: I did think it was really -- we have to wrap it up. I just thought it was interesting, people should watch the whole interview because you know, he said that it was the president who, you know, who told him, look, you should declassify stuff as you sort of investigate the investigation, that was notable as well.


HARLOW: Shan, we appreciate you weighing in on this, thanks so much.

WU: Yes, good to see you.

HARLOW: We have a lot -- we have a lot ahead. We're on the verge of a potentially historic day when it comes to abortion rights in this country. Missouri could be the first state in decades to no longer legally offer abortion.

SCIUTTO: It's incredible, one state, an entire state. Plus, U.S. and global market futures are tumbling. This after the president has threatened new tariffs, this time against Mexico. Keep in mind, you and I and American companies pay those tariffs. We will go live from the New York Stock Exchange for the opening bell just ahead.


SCIUTTO: By the end of the day, Missouri could become the only state in the union without a single abortion clinic.

HARLOW: The Missouri Department of Health has refused to renew the license for the state's only facility that offers that procedure. Alexandra Field joins us now live in St. Louis. So how did this happen and what is the status of the lawsuit?

ALEXANDRA FIELD, CNN CORRESPONDENT: Well, the status right now, Poppy and Jim, is that we should hear a decision by the end of the day from a judge. But you really can't overstate the importance of what's happening here.