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Media Companies May Pull Out of Georgia Due to Abortion Law; Trump Considering Mexico Tariffs; China to Impose $60 Billion Tariffs on U.S. Imports. Aired 10:30-11a ET

Aired May 31, 2019 - 10:30   ET



BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: -- in Georgia. They say they will re-evaluate staying in Georgia. Again, if this law goes into effect. And that's the big "if" right now. NBC and other companies are saying, "We know what's going on here. These laws are designed to stoke a Supreme Court fight and a re-evaluation of abortion rights." This is all going to take months to happen.

But what all the media companies are saying is, "If these laws do take effect, we may pull out of Georgia." And that would have serious economic consequences.

POPPY HARLOW, CNN ANCHOR, NEWSROOM: Hey, Brian, this reminds me so much of when Salesforce, the biggest tech employer in Indiana, threatened to pull out completely from Indiana when the vice president was then the governor, and Governor Pence of Indiana.

STELTER: Right, right.

HARLOW: And it -- I mean, it was part of what changed things there.

STELTER: And the two sides of this --

HARLOW: Because of it (ph) -- a law that was viewed as --

STELTER: -- are very similar.

HARLOW: -- anti-gay. Right.

STELTER: That's right. The critics of these media companies say, "You're just hurting the local workers who want to work and film in television in Georgia." Georgia, for example, it's a big hub for Hollywood. It's called "the (ph) Hollywood" -- that's the nickname because of the generous tax breaks. And the concern is that work will move to other states and local employees will be hurt.

The flip side of that is, if you're trying to attract A-list Hollywood talent to make movies, they don't want to be -- in a mostly liberal community in Hollywood -- they don't want to be going --


STELTER: -- southern states where abortion is effectively being banned. Those are the two sides. That's the debate.

SCIUTTO: Well, and you remember when a number of major CEOs pulled out of the president's economic policy commission --

HARLOW: Right.

SCIUTTO: -- following the Charlottesville -- and, you know, they make these public stands at times. There's no question.

HARLOW: Money talks, for sure.

STELTER: That's right, that's right.

HARLOW: We'll see what it does here. Brian Stelter, thank you.

STELTER: Thanks.

SCIUTTO: Well, the president says that he wants Mexico to get tough on immigration. But could his new tariff threat against Mexico have a major political impact on a key state that the president needs in 2020?


[10:36:15] SCIUTTO: Well, tariff man is back. The president is threatening a new country with new tariffs, this time, Mexico. But is he posing another big threat as a result for Republicans in the coming 2020 election?

HARLOW: He just may be. Especially if you ask Chuck Grassley. Look, we don't have to tell our next guest how important jobs in manufacturing and the auto industry are to voters in his state -- a critical one, by the way, in presidential elections -- CNN senior political commentator, former Republican governor of Ohio, John Kasich is with us.

Good morning, Governor Kasich.


HARLOW: Gosh. I mean, Chuck Grassley is upset. Obviously this could really hurt the ag industry in his state. You've got the result on car prices in this country that would come if he slaps these tariffs on Mexico. I don't get it. Do you?

KASICH: Well, I don't know if he's serious about this. One minute, he says X, and the next minute, he takes it back. One minute, he says he's not going to talk to Nancy Pelosi and the next minute he says he is. You've got to follow the bouncing ball, but I don't even think this is a bouncing ball you can follow.

You know, to say that if Mexico doesn't solve the immigration problem -- something that we've not been able to solve -- therefore we're going to punish them economically. So what's the result of that? Well, number one, everything that comes in from Mexico, costs more. And there's a lot of investment in the auto industry in Mexico, which means that cars will cost more.

But there's another side to this. And that is, if all of a sudden their economy slows in Mexico, then more people who are living in Mexico will try to come to the United States. It has the absolutely opposite effect. And he's trying to pass this free trade agreement with Canada and Mexico, and I guess that's been put -- you know, I don't even know if it's going to be alive here in the -- well, certainly not in the short term.

So, you know, I don't know. Maybe it was changing the subject from Mueller. I can't figure it out. But it doesn't make any sense.

Beyond that, if you want to really solve the immigration problem, it's -- it cannot just be solved at the border. It has to be solved in the region.


KASICH: And we are just -- as Jim Sciutto knows, it's -- to some degree, it's a national security regional problem --


KASICH: -- that we're just not paying attention to.

SCIUTTO: No, no. And, you know, you mentioned national security there. Because this is not the first time that the president has mixed national security and trade. He used the national security exception to impose tariffs on U.S. allies on steel. He has brought up the possibility of criminal charges against a Huawei executive for breaking Iran's sanctions, as being a bargaining chip in the China trade negotiations.

And now this. He's imposing tariffs on Mexico because it's not doing enough on border security. Why is that a problem?

KASICH: Well, because it's the wrong -- it's a solution that doesn't work. I mean, it is a phony or false way to go. But you've got to remember, this is not just a problem of tariffs now on Mexico. We're in the middle of a trade war with China.

And so what we do is, we have another program now to give money to farmers so that we can make up for the fact that they're losing market share. Now, that just makes no sense. And farmers don't want to be in a position of where they can't get their projects around the world.

So this idea of using trade as a political weapon is not the right thing to do. It hurts American consumers, it hurts our relationships with other countries. And, look, we've got to be together, you know? The free world's got to be together. We can't be fighting with one another all the time --


KASICH: -- and the president looks like he likes --

HARLOW: You know --

KASICH: -- to fight on that stuff.

HARLOW: -- I think the president and his team think that they have some leeway here because the economy's so strong. And I get that. But there are some big warning signs. I mean, you have the bond market showing a lot of pressure. You've got the Commerce Department showing just, you know, last week that both imports and exports are down. You've got a slowing in manufacturing, you know. And so those are all ominous signs.

And then you have a --

KASICH: You have a --

HARLOW: -- yeah, go ahead --

KASICH: Go ahead, go ahead.

HARLOW: -- Governor.

[10:40:01] KASICH: Well I was going to say to you, look, there's a lot of strong investment. Companies are making internal investment. And when you look at that, there's where you see your rise in productivity and you see a strong economy. I'm not convinced the economy's going to go south here, but we do have a big overhang here, which is the rising debt.

The single biggest thing they did that made sense was to deregulate a lot of things, which the Obama administration was regulatory-heavy. That has really worked.

But you look at the chaos in the trade area, you look at the overhang of debt, these things -- somebody's going to have to deal with them at some point. They're absolutely crucial.

And I was thinking just today, why is it that when you see all this disruption, you see all this name-calling, you see all these things, why do his people keep sticking with him? I'm not sure that they know he's doing this.


KASICH: I'm not sure that Americans increasingly don't live in silos. So we don't want to know what -- and this is with Democrats, Republicans. We live in our little silo, our own little world. And anything that comes in that we don't agree with, we brush it off. And that's not where we want to be as Americans.

SCIUTTO: So, Governor, can I ask you a question you don't want me to ask you?

KASICH: Ask (ph) whatever you want.


HARLOW: Yes, go for it. Go for it, Jim.

SCIUTTO: So you've heard of Justin Amash, Republican congressman from Michigan. Matt Lewis, conservative columnist, wrote an interesting piece earlier this week saying, "Draft Justin Amash to challenge President Trump in the Republican primary next year." Of course, you've got Larry Hogan, governor of Maryland across the border here from D.C., who's considering that as well.

And I just wonder, in the midst of that, do you think someone might jump in in a spot that, perhaps, you've considered in the past? Would you be --

KASICH: Look, there's -- Jim, look --

SCIUTTO: -- happy to see one of them jump in?

KASICH: -- I don't -- you guys can ask me anything you want. I just will figure out which things I'm not going to answer. But here's the issue. There's no path. So all these people are talking about this, and some reporter writes a story. He doesn't even know what it's like to run for president.


KASICH: There is no path right now for me. I don't see a way to get there. Ninety percent of the Republican Party supports him. It may be a shrinking Republican Party, but nevertheless.

I've got friends all over the country. There is not a path. There's not the support for that. So maybe somebody wants to run and make a statement, and that's fine. But I've never gotten involved in a political race where I didn't think I could win. And right now, there's no path. And I like what I'm doing now.

And I like what I'm -- I particularly like what I'm doing on CNN. I enjoy it. And -- but right now, there's no path. But we never know what the future's going to bring. We never know.


KASICH: Not only just now, but in the future. Who knows.

SCIUTTO: Well, we're happy to have you on CNN.

HARLOW: You're a young man. Yes. You're a young man. There is a long future ahead --

KASICH: Thank you, Poppy.

HARLOW: -- just when that announcement --

KASICH: Yes, you are --

HARLOW: -- comes, make -- when that announcement comes, make sure it's between 9:00 and 11:00 a.m. Eastern on CNN --


HARLOW: -- OK, Governor?

KASICH: That is absolutely going to be. Thank you both.

HARLOW: Good. There you go. You heard it.

SCIUTTO: thank you.

HARLOW: Governor Kasich, have a nice weekend. Thanks so much.

KASICH: Thank you.

HARLOW: Really, turning the page now to a very disturbing story. The secretary of state, Mike Pompeo, says he's looking into reports that North Korean leader Kim Jong Un may have had a top envoy executed because of the failed summit with President Trump in Hanoi. We'll have reaction from the State Department ahead.


[10:48:00] SCIUTTO: This just in to CNN. Secretary of State Mike Pompeo says that he is now looking into unconfirmed reports that North Korea executed its senior envoy to the U.S.

HARLOW: If this is true, this is unbelievable. So here's the reporting. That Kim Hyok Chol, that you see here, led negotiations ahead of the second U.S.-North Korea summit last February, which we know failed. That's who they're talking about here, as reportedly executed.

CNN's senior diplomatic correspondent, Michelle Kosinski, has more details.

What is the secretary of state, Mike Pompeo, saying this morning?

MICHELLE KOSINSKI, CNN SENIOR DIPLOMATIC CORRESPONDENT: Well, he's said very little. He said he was aware of these reports, that the State Department is doing its best to check them out. And he was sure to add that he wasn't going to have anything else to say about this for the rest of the day, while he's traveling in Europe.

Now, Pompeo, though, was asked about rumors to this effect earlier in May. And he kind of smirked about it in his answer. And he said, "Well, it does appear that, going forward, if there are negotiations my counterpart is going to be somebody different." But he didn't elaborate on why he thought that or if he had any reason to believe that these reports of executions were true.

So what we know, according to this report in "Chosun," a South Korean newspaper, is that Kim Hyok Chol, who would be the equivalent of the U.S. envoy to North Korea, Steve Biegun, was executed along with four other working-level diplomats accused of being recruited by American imperialists.

And that others, including Kim Yong Chol, that the U.S. has been dealing with for such a long time, he is the counterpart of Mike Pompeo. He's a former spy chief, a top negotiator, that he's been sent to forced labor.

Also, according to this report, other people involved with the negotiations, including the translator, have been sent to a prison camp. And that Kim Jong Un's sister has been removed from official duties. And she, of course, is the right-hand person of Kim Jong Un.

[10:50:04] So if this is true -- and we need to say "if" because this newspaper has had some issues in the past -- this is incredible. And of course it's not out of the realm of possibility because --


KOSINSKI: -- we know that Kim Jong Un has executed others, including members of his own family --

HARLOW: Family.

KOSINSKI: -- his uncle and his half-brother.



SCIUTTO: Sometimes with a nerve agent, sometimes with an anti- aircraft gun in the middle of a sports stadium. It's happened there before. Michelle Kosinski, thanks very much.

HARLOW: Hours from now, China will slap more tariffs on goods made here in the United States. Folks, this is what a trade war looks like. And business owners say -- one business owner who's going to join us -- says the tariffs have forced him to find a creative way to keep his business afloat. He'll joining us next.


[10:55:15] HARLOW: All right, welcome back. In just a few hours, China will slap tariffs on $60 billions' worth of U.S. goods. This is a move to retaliate to President Trump's tariffs on Chinese goods. This means that it will be harder for American companies to sell their products in China.

SCIUTTO: The president's tariffs on products from China mean higher prices here in the U.S. That's right, to things you and I buy and what we pay for, on everything from heavy machinery to furniture.

The White House says President Trump and Chinese President Xi Jinping will hold face-to-face talks next month, this during the G20 summit in Japan. But the White House is showing no signs of yielding.

Joining us now is Andy LaFrazia. He's owner of ControlTek. It's an electronic manufacturer in Portland, Oregon.

Andy, thanks for joining us this morning.


SCIUTTO: So first off, just for absolute clarity here, the president claims repeatedly that foreign countries pay these tariffs, that somehow gets into American coffers. You're a business person. Why pays the tariffs? And what impact has it had on you and your business?

LAFRAZIA: Well, so for us, we buy a lot of electronic components. And quite a few of them come out of China. And we've seen price increases on those, as well as tariff charges that we basically pay today.

Initially, we haven't been able to pass those on to customers. But over time, those are going to eventually pass to our customers and then to the end consumers.

SCIUTTO: Right. Mr. President --

HARLOW: You know --

SCIUTTO: -- if you're listening, he's a company. He pays them. And then he passes them on to consumers. That's how tariffs work.

HARLOW: And you know what's interesting, I think, Andy, is that, you know, on this threat to impose these tariffs on all goods from Mexico, that the president made last night, he's tweeting this morning, "Well, you know, people are just going to move their companies elsewhere, they're not going to manufacture in Mexico any more instead of dealing with these tariffs."

Is that plausible? Because for you, I know that you have tried to sort of circumvent China. But you can't totally avoid it, right?

LAFRAZIA: Well, we can't avoid it on everything. But we have seen a lot of our supply chain move plants into Vietnam. We have one who's moving a plant into the Philippines. So we are seeing, I think, some global changes of some of the supply chain.

But certain -- the single-source items, we still have to get out of, you know, Chinese plants. And that is definitely still going to impact us.

SCIUTTO: Now, at the root of this is the fact -- and you hear this from many companies, and I've heard it through the years -- that China is not a fair trade player and the president is right in this, makes it very difficult for U.S. companies to operate there.

I just wonder what your experience of that is, if any, and how you view that larger issue. Is part of you happy to see the president confronting China on those issues?

LAFRAZIA: Well, I think on the I.P. is, we've definitely seen that over the years. I've been doing this for about over 25 years now, and we've seen customers over the years have major intellectual property problems with China as well as trade restrictions and barriers for them to actually get into the Chinese market. So there is some facts that support that. And I do think it needs to be addressed.

As I said, I'm not a politician. I'm not sure how to address it. We're just sort of trying to respond, the best that we can.

HARLOW: You know, I get that you're not the president. But I am also interested in what you would do. I mean, obviously you want to see some of the trade practices change with China. But tariffs hurt your business. What -- I mean, what would you suggest if you were sitting with the president?

LAFRAZIA: I think, you know, open dialogue and discussions like they're doing are very good. I'm not sure, you know -- there's a lot of different negotiation tactics that you could do, but you'd try to look for a win-win. What are the things that we need, what do they need, how do we work together to both get, you know, a better outcome.

And that's not just with China. It's, you know, throughout the world and, you know, trade policies. We've got issues -- I've got customers that try to sell into (ph) Brazil. They --


LAFRAZIA: -- have huge barriers to trade there. Same thing going into Europe. I mean, it's not just a one-way thing with China, it's --


LAFRAZIA: -- with all countries.

SCIUTTO: Yes. Finally here, you say that, to this point, you haven't passed those costs, the increased costs of tariffs that you as a U.S. company importing from these countries, pays those tariffs -- you haven't passed them off to consumers yet. When do you believe you'll have to do that? When will consumers here in the U.S. start to see higher prices?

LAFRAZIA: Well, we'll start -- it starts flowing in. So you have the supply chain, we actually started seeing things happen in August. So you can imagine, the supply chain, the things that we have in our inventory, that our vendors have in their inventory. So it sort of flows in over time.

TEXT: China Tariffs on U.S. Products: On $60 billion worth of American goods; Tariffs of 5 percent to 25 percent; China targeting more than 5,200 U.S. products including meat, coffee, nuts, alcoholic drinks, minerals, chemicals, leather products, wood products, machinery, furniture, auto parts

LAFRAZIA: We started really seeing it start hitting in January and February of this year, seeing charges. I think we're doing about $20 to $30,000 in tariff charges per month right now, which for us as a small business, we're under $25 million per year. That's a significant amount of money every month.

HARLOW: OK. LAFRAZIA: And as our -- and a lot of our contracts are now, you know, coming into play and those prices will start flowing through.

SCIUTTO: There you are. Companies pay it and you'll pay it at home. Andy LaFrazia --

[11:00:03] HARLOW: Yes.

SCIUTTO: -- very good to have you on.

HARLOW: Thanks, Andy.

LAFRAZIA: All right. Thank you. Have a great day. 'Bye.

HARLOW: And thank you all for joining us.