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Dow Falls on Tariff Threats; Tariffs Would Devastate Auto Industry; Chamber of Commerce on Tariff Threat; Barr on Mueller Report; U.S. Looking into Execution Reports in North Korea. Aired 1- 1:30p ET

Aired May 31, 2019 - 13:00   ET



[13:00:36] BRIANNA KEILAR, CNN ANCHOR: I'm Brianna Keilar live from CNN's Washington headquarters.

Underway right now, from one trade war to the next, the president's threat to slap Mexico with monster tariffs over immigration is rattling everyone from investors to Republicans.

Bill Barr more mouth piece for the president than an independent attorney general, criticizing the Mueller report and saying that those who are trying to stop the president are the ones breaking norms.

Plus, did Kim Jong-un execute one of his top negotiators over the failed summits with President Trump and sentence another to hard labor. The U.S. is looking into it.

And in the wake of two deadly 737 Max 8 jet crashes, Boeing was criticized for not requiring simulator training on the new planes and now their solution to train pilots does not include simulator training.

We begin with a threat by President Trump that could impact everything from a major trade deal with Mexico and Canada to what you pay for a new car. The president's threat to slap new tariffs on goods imported from Mexico is also rattling Wall Street, as we can see right now, looking at the Dow. It's down nearly 300 points at this -- at this moment in time. And the president says that he'll impose new tariffs if Mexico doesn't stem the flow of migrants into the U.S. The tariffs would begin at 5 percent starting in June. Then they would go up each month to 25 percent by October.

Our chief business correspondent Christine Romans has been following this and she explains how new tariffs could affect the economy and your wallet.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Brianna, this is a new phase. We're entering a new phase in the president's trade war using tariffs as leverage not to push a trading partner on trade issues, right, but on an entirely different issue. And the outcry was immediate. The Chamber of Commerce called it exactly the wrong move, said it would raise costs for both businesses and consumers. And the fear here is that tariffs will hurt both economies. You know, the U.S. imported almost $350 billion in goods last year

from Mexico. The North American supply chain for autos and auto products and other manufactured goods, it crosses back and forth across that border. Forty percent of the parts of a typical manufactured product exported from Mexico to the United States actually originated in the United States. Deutsche Bank says for cars in particular, if you have tariffs at 25 percent, that will add $1,300 to the cost of all cars sold in the U.S., American or otherwise.

Now, in 2018, Americans bought not only autos, but machinery, medical equipment and $26 billion worth of fresh fruits and vegetables and other food from Mexico. All those items would get more expensive. Expect appliances, cars, tomatoes, avocados, fruit prices, beer prices, snack prices to rise. But trade goes both ways, right? The U.S. sells to Mexico. What does the U.S. sell? Machinery, mineral fuels and about $20 billion worth of ag products last year, including about 7.5 billion in corn and soybeans, dairy, pork and beef. Any retaliation from Mexico would be devastating for American farmers. They are already reeling from the president's trade war with China.


KEILAR: Christine Romans, thank you so much for that.

And these tariffs that President Trump is threatening to impose would make building and buying a car in the U.S. a whole lot more expensive. They could deal the biggest blow to the auto industry since the great recession ten years ago. And we're talking about tens of billions of dollars in added costs here. And those costs will most likely be passed on to you, the consumer.

CNN business and politics reporter Vanessa Yurkevich is joining us now from a car dealership.

You're in Lyndhurst, New Jersey, Vanessa. What is the potential impact and the industry and for individual consumers who will go to a dealership like the one you're at?


The impact is substantial, and that is according to U.S. automakers who are weighing in on these new tariffs today. Every U.S. auto manufacturer gets parts for their vehicles from Mexico. Some also import fully assembled cars into the United States. Today, we are in Lyndhurst, New Jersey, at Frank Pezzella dealership here and he says that his bestselling vehicle is from Mexico. He is concerned that these tariffs will have a significant impact on his business, employees and the consumer.


FRANK PEZZELLA, OWNER, FRANK'S GMC: Well, if you're a consumer looking to buy one of these nice SUVs, how would you feel about a 5 percent increase in price? I mean, it's going to be tough. A 25 percent increase would probably be a disaster. I don't know how we would deal with it. We have 115 employees that depend on us and depend on us selling these vehicles. So, I am concerned and I -- I don't want to see them affected in a bad way.


[13:05:26] YURKEVICH: And this is coming on top of a really tough year for U.S. auto manufacturers who have had to deal with slumping auto sales, record layoffs and tariffs on aluminum and steel.

And, Brianna, the impact on the consumer is notable. One U.S. auto analyst says that at the end of the day, U.S. vehicles could cost $1,300 more per vehicle. And as we know, Brianna, that is not a small amount of money for the American consumer.


KEILAR: Certainly not.

Vanessa Yurkevich, thank you so much, for us from New Jersey.

President Trump's tariff threat is being answered by loud criticism abroad and also here in the U.S. Mexico's deputy foreign minister says the move would be disastrous and extremely serious. And the U.S. Chamber of Commerce says, quote, imposing tariffs on goods from Mexico is exactly the wrong move. These tariffs will be paid by American families and businesses without doing a thing to solve the very real problems at the border. Instead, Congress and the president need to work together to address the serious problems at the border.

Neil Bradley is the chief policy officer for the Chamber of Commerce. That is actually your quote, Neil, from the Chamber of Commerce. So why is this the wrong move, in your view, and what should be the president be doing instead?

NEIL BRADLEY, U.S. CHAMBER OF COMMERCE: Well, a tariff is nothing more than a tax, right, and so at 5 percent, that's $17 billion, in additional taxes on American consumers and businesses. That won't do anything to keep someone from crossing the border, coming up from Central America, into Mexico and crossing it. There are a lot of things we should do. There are real problems at the southern border. But it's really hard to draw a connection between a tax on consumers and business here in America and solving that problem.

KEILAR: So what are -- what are the things that the chamber is looking at doing, including legal channels?

BRADLEY: We are. We're looking at all of our options. Like everyone else, we learned about this last night when it was announced from the White House.

KEILAR: Is that odd, by the way, that you would just learn last night about this?

BRADLEY: There's a lot of things that are odd about this announcement and approach and that's certainly one of them. Normally an economic move of this magnitude, you would have a lot of input from stakeholders, not just the U.S. Chamber, but labor and others who would want to weigh in, automakers as you just heard about who certainly have an interest this. So it's a bit odd to learn about it at the last minute like we did.

KEILAR: So the channels that you're considering, tell us about that.

BRADLEY: So we're looking at all of our options. First and foremost, we'd like to convince the administration that this is the wrong approach and we're sharing with them the economic data of the potential impacts on -- the same statistics that your correspondents were just talking about. We're also looking at our legal options. This is different than the taxes that the administration has used earlier in this president's administration. It doesn't rely on the same legal authorities. It's kind of a novel use. So our lawyers are looking into that and figuring out what the legal standing is for something like this.

But we're also talking to lawmakers. Senator Grassley, a powerful member of the Senate who has a lot to say on tariffs and trade issues, but also on immigration, has said that this is wrong approach. Congress could step in here as well. And so we're leaving no stone unturned as we try to think through ways to make sure that these tariffs, these taxes on American families, don't go into effect.

KEILAR: And that's what we're seeing is this bipartisan outcry.

BRADLEY: That's correct.

KEILAR: Including from Republicans, who were you talking to. One of the reasons they're concerned is about how this is going to affect the renegotiation of NAFTA. What is your concern there?

BRADLEY: Well, it's a huge concern, right? So to the president's credit, he took an agreement that was done before the age of the Internet and he negotiated a deal with Canada and Mexico to modernize it. It's the White House's number one legislative priority. At the U.S. Chamber, it's our top legislative priority as well because it cements that economic relationship between Canada, Mexico and the United States. It's very difficult to see how imposing unilateral tariffs will help you pass that agreement in Congress. There's lots of opposition. Plus it undermines the very relationship that we've been building up with Canada and Mexico on these economic issues. So this is definitely a roadblock to securing passage of USMCA, which would be a good thing for the economy and for American families.

KEILAR: All right, Neil, thank you so much for coming in. We really appreciate it.

BRADLEY: Thank you. Appreciate it.

KEILAR: Neil Bradley with the Chamber of Commerce.

Attorney General Bill Barr once again raising some eyebrows. Why he sparred with Robert Mueller and why he says the president isn't breaking norms.

Plus, did Kim Jong-un execute a top negotiator for the failed Trump summit and sentence another to hard labor? What the U.S. is looking into here. [13:09:54] And more than a dozen women suing the FBI over what they allegedly experienced during training at Quantico, including an accusation against former Director James Comey.


KEILAR: Attorney General William Barr says that he believes Special Counsel Robert Mueller could have reached a conclusion on potential obstruction of justice by President Trump. Mueller decided not to and instead laid out his findings. And then after talking with Deputy AG Rod Rosenstein, Barr made the decision not to charge Trump on obstruction.

[13:15:12] And in an interview with CBS News, Barr said that he disagreed with Mueller over the report's analysis.


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


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.


KEILAR: We have Eric Columbus with us, he's a former Justice Department official in the Obama administration, and our senior justice correspondent Evan Perez is with us as well.

So it's so interesting to hear Barr say this, we didn't agree with the legal analysis, a lot of the legal analysis he said. It wasn't the view of the department.

What would the nature of those disagreements have been, do you think, Eric?

ERIC COLUMBUS, FORMER SENIOR COUNSEL TO DEPUTY ATTORNEY GENERAL: What I think a lot of it may have come down to (INAUDIBLE) do that, that in -- as a matter of law in Barr's view he cannot be obstructing justice even if the effect is to impede an investigation.

KEILAR: So when he's saying it wasn't the view of the department, does he -- is he saying it wasn't my view, it wasn't Rod Rosenstein's view, or was there -- is there really some sort of -- are we to believe there's some faction where it's Mueller's team feels a certain way and everyone else at justice feels a different way?

EVAN PEREZ, CNN SENIOR JUSTICE CORRESPONDENT: Look, it's not unusual for to you have a set of lawyers look at the same facts and come at different -- come at it in a different place, right? And I think -- I think the other thing that Barr is referring to is this idea that he feels Mueller should have said, you know, you heard him in the CBS -- in the CBS interview. He says he thinks Mueller should have decide that even if you can't indict the president, if he believed the president committed a crime, he should have said that.

Now, Mueller looks at it, the same facts, and says, well, it's not fair for me to accuse the president of a crime if I can't actually have him defend himself against it. So he was caught, you know, both by the idea that you can't indict a sitting president, and by the fact that it's unfair to accuse him of wrongdoing if you -- if he can't defend himself against it.

KEILAR: What did you make of Barr saying that -- he said the president isn't shredding institutions? I mean we know the president has -- he's gone after the judiciary, right? He's gone after a number of institutions. He said it's folks who are going after the president who are breaking norms. What did you think about that?

COLUMBUS: Barr is -- is -- has this laser focus on what happened in 2016, and the investigation by the FBI of the Trump campaign, and he is going to pursue that for the rest of his tenure. And in part because his boss certainly wants him to, and maybe because in good faith he felt that odd things were done. And we just have to hope that Barr is doing this in good faith and that he is not going to declassifying things selectively so as to give us a very partial picture of what was done and why.

PEREZ: You know, one of the things I think, just look at some of the things that the president has done. For instance, there's this case against an executive from Huawei, the Chinese technology company. The president has openly said that he's willing to bargain that -- those charges over the trade -- the trade issue with China. That's something that over decades the U.S. government has always refused to do, right? The Chinese, all these other authoritarian countries come to the United States and say, come on, you guys can make your -- your laws change. You guys can make your judicial system get out of the way so we can make a deal. And consistently, over administrations, the answer has been, no, actually, our judicial system is independent and we can't do that.

So how are we ever going to go back to the old standard after this president has gone, right? I mean that's the question. And that's why when you say the president is shredding norms, that's the (INAUDIBLE)

KEILAR: Evan, thank you so much.

Eric, really appreciate your perspective.

The State Department is looking into reports that a top North Korean negotiator was executed. And this envoy sent to a prison camp over the failed summit with President Trump.

[13:19:15] Plus, why one Democrat is advising her party that they need to turn the Mueller report into television.

(COMMERCIAL BREAK) KEILAR: A senior diplomatic source has just told CNN that two of Kim Jong-un's top officials have disappeared. This comes on the heels of a report that North Korea has executed a senior envoy who negotiated directly with U.S. officials as well as four other government officials who worked on that failed February summit between Kim Jong- un and President Trump. Earlier, Secretary of State Mike Pompeo would only say that the U.S. was looking into that.

This report comes from a South Korean newspaper, which it is important to note in 2013 incorrectly reported that one North Korean had been executed, but this new report claims that the North Korean leader had Kim Hyok Chol, his special envoy to the U.S., killed along with these four officials from the foreign ministry and this Kim Yong Chol, who you may recall, is the North Korean envoy who delivered that monstrous letter to -- from Kim Jong-un to President Trump has been sent to a forced labor camp.

[13:25:01] So let's bring in someone who has extensive experience negotiating with North Korea. We have former ambassador to the United Nations and former New Mexico Governor Bill Richardson with us.

When you look at this report, as the U.S. is looking into it, do you put a lot of stock in it?

BILL RICHARDSON, FORMER U.S.-NORTH KOREA NEGOTIATOR: Well, nothing is for sure with North Korea, but it sounds -- because there's some North Korean sources that are being quoted, that the report of the executions are correct.

What does this mean? It means that Kim Jong-un obviously is still very blood thirsty. He kills his own brother, anybody that crosses him or defies him. But at the same time it shows a certain insecurity on his part because he's probably worried whether he's still the top person. Well, he obviously is, but it also is a distraction from what he claims, and has been reported, the failure of the summit in Hanoi has really hurt him with his own people because he couldn't get sanctions relief.

KEILAR: So you see this more as impulse than strategy or even tactics?

RICHARDSON: I see it more as impulse. He's -- unlike his father, who was more restrained, although he also participated in some -- in some murders, I see it as him feeling that he was going to come through with an agreement with President Trump in Hanoi. And he's trying to blame somebody because I think like President Trump he doesn't listen to his advisers all the time. And I'm sure the spy chief told him, look, they want denuclearization and we're not ready to do it. And I think Kim Jong-un felt that he and President Trump had this special relationship that override both of their advisors.

But it also shows how important the summit was, the success of the Hanoi summit was to Kim Jong-un domestically with his own people, internationally, because obviously the sanctions have really been hurting North Korea, and he wanted some relief from those sanctions, from the summit and his recent trips to Russia, to China, saying to those countries, hey, sanctions are killing me, you've got to help me. I think that's the strategic, but I think it was mainly impulse. This is, you know, how he is, and we've got to be careful. I wish the president would stop praising him.

KEILAR: Well, to that point, how should the president navigate this when you consider that he's actually sided with North Korea over senior level officials in his own government?

RICHARDSON: Well, first, I think the president should stop praising him and saying that he -- that this is a good guy. Secondly, maybe there's an opening here. It shows how important the summit was for Kim Jong-un to be succeeding. It didn't succeed. So maybe now there's an opportunity to show some flexibility, the president, President Trump and Kim Jong-un, both sides on the main issue, which is denuclearization.

Let's get rid of some weapons, some missiles, destroy them, inspections. Some sanctions relief instead of all or nothing, which is what both sides want. So I think the last recommendation to President Trump, don't give this guy another summit until we're able to get some daylight on negotiating strategy on what we are ready to do, what North Korea is ready to do, because if you precipitate, oh, we're going to -- the two leaders are going to make a deal, they don't need their advisers and they (INAUDIBLE) negotiating framework, it's going to be another failure, Hanoi will be another summit. Let's wait. Patience. Have a strategy. And we don't have a strategy and the North Koreans don't have a strategy either.

KEILAR: Ambassador, thank you so much.

Ambassador Bill Richardson speaking with us about North Korea.

RICHARDSON: Thank you.

KEILAR: Boeing does not appear to be fixing one of the biggest criticisms that it faced after two deadly crashes of their 737 Max 8 jet.

Plus, stunning photos what have a government report calls dangerous overcrowding at a migrant border camp.