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White House Announces Tariffs; Markets in the Red after Tariff Threat; Overcrowding of Border Camp; Barr on Mueller Report. Aired 12- 12:30p ET

Aired May 31, 2019 - 12:00   ET



[12:00:21] DANA BASH, CNN ANCHOR: Welcome to INSIDE POLITICS. I'm Dana Bash. John King is off today.

Today, a spike in GOP concern about a Trump trade war, this time it's the president warning he'll impose tariffs on Mexico if they don't stop migrants from coming across the border.

That as the attorney general is out defending his decisions, his reputation and his president.

And Democratic senator and presidential candidate Michael Bennet selling his 2020 message at last night's CNN town hall with a touch of humor.


SEN. MICHAEL BENNET (D-CO), PRESIDENTIAL CANDIDATE: I went to work for the city and county of Denver for a guy named John Hickenlooper. I don't know what ever happened to that guy, but he was a terrible boss.

I also want to bring in Nadia Foster (ph), a paralegal who will be attending law school in the fall of 2020.

BENNET: Congratulations.

NADIA FOSTER: Thank you, Senator Bennet.

So my question is --

BENNET: The legal profession threw me out, but I hope you have a better time.

FOSTER: It's not for everybody.

BENNET: That's what I told my mom.


BASH: We begin with the markets sinking into the red. The Friday freak-out on Wall Street is a reaction to President Trump and his new tariff threat against Mexico. The president, this morning, tweeted that the new levies are about stopping drug and illegal immigration. Quote, Mexico must take back their country, the president says, and it's clear today his views on the tariff threat are a way to force the issue.

The president wants to slap a 5 percent tariff on all Mexican goods, which would sharply increase to 25 percent over the next few months. The potential ripple effects are huge. That 5 percent hike adds up to a tax increase of more than $17 billion on taxpayers, which is why you already hear complaints from the president's fellow Republicans on Capitol Hill this morning.

And there's another big worry, the timeline to find a fix is really short. He says it would kick in June 10th. That's less than two weeks to begin solving a problem that this president, his predecessors, Congress and Mexico have not been able or willing to solve for decades.

Now, if President Trump follows through on this, the global economy could suffer the consequences for a separate policy dispute. The White House insists they know the risks and this should not be a surprise.


SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: Not only have we thought this through, but we've been talking about it since the president not just on the campaign but took office. The president has been saying for months, if not years, that we have to do something to secure our border.

Anybody in this country or frankly in the world that says that they're surprised by this has been living under a rock.


BASH: Let's get to somebody not living under a rock, our Kaitlan Collins, who is at the White House, been doing reporting into the wee hours last night and this morning.

Kaitlan, tell us what you're hearing from your sources about what's going on in the built be behind you?

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: So we're learning a little bit more about why the White House made the decision to roll this out last night. The president tweeted it out even though he had given a hint earlier in the day when he said he was going to be making a big announcement on the border. And now we're being told by sources that the White House actually held a call on when they were going to make this decision yesterday morning. The president had decided he wanted to move forward with it, and they decided that instead of waiting for what could be a more prepared, more calculated rollout, they decided they wanted to announce it last night because they didn't want details of this to leak to reporters.

Now, the president, in the previous days, had been cautioned against making this move from people like the Treasury Secretary Steven Mnuchin, but then on the other side of things there were people like his trade adviser Peter Navarro who were telling the president that this was the move that would get Mexico's attention.

Now, of course, that rollout has not gone as smoothly as the White House had hoped and they are now getting an earful from some Republican lawmakers on Capitol Hill who are urging the president to reconsider this move, but so far, us you showed on his Twitter feed, he has not shown any signs of backing off.

BASH: That is an understatement. And since they haven't been living under a rock at the White House, they, I'm sure, fully expected that this kind of backlash, even and especially from their own party.

Kaitlan, thank you so much for that reporting.

Wall Street, today, is reacting quickly and harshly to the tariff threats. The president's move adds more economic certainty to the markets already unnerved by the prolonged trade fight that's going on with China.

Let's get straight to the New York Stock Exchange. Alison Kosik is there.

So, Alison, you understand the pulse of that place so well. Explain why this is such a big deal to investors and what we've seen so far since the markets opened.

[12:05:01] ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Why this is a big deal, because these tariffs would almost immediately raise costs for businesses and consumers. And that, in turn, could wind up slowing down the economy. That is the huge worry hanging over Wall Street at this point.

More immediately, because these tariffs would go into effect a week from Monday, we could feel it at the grocery store, whether it's the mangos we buy or the avocados. But it's the auto industry that would really take a direct hit with this because every American auto factory depends on Mexican auto parts to put into its cars and trucks, to build its cars and trucks.

Deutsche Bank says the tariffs could wind up raising, in the U.S., a cost by the billion -- by the tens of billions of dollars, and that's just the auto industry alone. And guess who's going to foot the bill? It's consumers who will foot the bill. Deutsche Bank says, on average, if you're looking to buy a vehicle, you're going to wind up paying $1,300 more for that vehicle. It's why a big trade group that represents the big Detroit automakers, Fiat Chrysler, GM and Ford, are coming out with this statement saying, we are strong supporter of the administration's United States Mexico Canada Agreement. The imposition of tariffs against Mexico will undermine its positive impact and would impose significant costs on the U.S. auto industry.

So a lot of concern there. You even see it with investors. We're seeing Ford shares down almost 3 percent, GM shares down more than 4 percent. So we're seeing the hit in the market. We're seeing a lot of nervousness about the downside risk to the overall U.S. economy if consumer costs are -- go up suddenly and you see this slowdown in business investment. Dana.

BASH: Very, very real world jitters. Thank you so much, Alison, for explaining that.

KOSIK: You got it.

BASH: Here with me to share their reporting and insights, CNN's Nia- Malika Henderson, Michael Bender with "The Wall Street Journal," NPR's Tamara Keith and Rachael Bade with "The Washington Post."

Thank you all. Happy Friday. I mean, we'll see how happy it gets because I want to bounce off of what Alison was just describing, which is so important is, why that this isn't just theoretical, this could have -- affect every single consumer person in America.

We have something I want to put on the screen to give a little but more context about autoworkers and auto parts and so forth. U.S. goods imported from Mexico, $93 billion in vehicles, $5.9 billion in vegetables, $5.8 billion in fruit, $3.6 billion in wine and beer.

You know, it's summertime. I think a lot of people like to drink their wine and beer, eat their fruit, not to mention continue to purchase vehicles, which are not only needed, but also help to rev up the economy, which is one of the reasons why this is so big. And the question I have, not to be, you know, a doubter here, but, Michael, you cover the White House. How much of this is a Trump threat that he likes to beat his chest and warn everybody, and how much of this is something that you think he might actually follow through on?

MICHAEL BENDER, WHITE HOUSE REPORTER, "THE WALL STREET JOURNAL": Well, I mean, that's definitely part of it is, is he wants to get a reaction from Mexico and he wants to get them to the table. Mick Mulvaney did a briefing with reporters last night and said as much, that this is -- that I think his term he used, he wanted a reaction tonight from Mexico. They're going to measure this day by day, week to week. So it is definitely more of a short term looking for reaction than, you know, than a long-term game here.

And, you know -- you -- but, you know, when you pull that out to the long term, that raises questions that your graphic just brought up here, where the pressure is going to be felt by these tariffs. Just a week ago, the president had a Roosevelt Room ceremony in order to announce $16 billion in direct aid to farmers who are struggling due to his trade conflict with China. What your graphic showed is that this -- these same folks in important states in the re-election campaign are going to -- you know, are going to be targeted and hurt by potentially, you know, by these tariffs.

BASH: I'll give you one example, the state of Iowa. Obviously we're looking at it for the Democratic caucuses, but it's also really, really important for the general election. The senior senator, who happens to be an important chairman, the Finance Committee chair, is not very happy, Chuck Grassley. He put out a statement saying, trade policy and border security are separate issues. This is a misuse of presidential tariff authority and counter to congressional intent. Follow through on this treat -- following through on this threat would seriously jeopardize passage of USMCA, a central campaign pledge of President Trump's and what could be a big victory for the country.

NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL REPORTER: Yes, and in that statement he talked about alternatives like remittances, basically taxing remittances, the money that people send to Mexico. A plan that the White House also had, folks in the House also had it and it went nowhere. The statement basically I think gets at all the difficulties that this president has faced, not only with USMCA, which, you know, last week he basically walked away from working with Nancy Pelosi because of the investigations and now they obviously want some sort of deal on USMCA.

[12:10:17] What we do know is this sort of marries the president's two favorite issues, tariffs and immigration. Those are two of the issues that, I think, really resonated with people in those important battleground states, places like Michigan, Pennsylvania. But we don't know. I mean is this something that Americans are actually going to feel at some point? Will Trump supporters actually even care, or will they feel like this is a long game? We can sort of take a hit in the short term with a sort of future, you know, of prosperity in terms of these different industries. But it's classic, know, Donald Trump.

BASH: It's classic, go big or go home.


TAMARA KEITH, WHITE HOUSE CORRESPONDENT, NPR: Right. Now this is -- this is the president trying to send a message. This is very much in line with things that he has done before. In fact, you know, Mexico, year to date, is the number one U.S. trading partner overtaking China as the number one U.S. trading partner. China, another country that the president has picked a trade war with.

And, you know, people like Chuck Grassley have probably told President Trump a million times that tariffs are a tax on American consumers, tariffs are not Mexico sending money to America. President Trump simply does not care. He views this -- he has -- he has very set views on tariffs, and all the economists in the world, including some in his administration, are not going to persuade him of the effects.

RACHAEL BADE, CNN POLITICAL ANALYST: It feels like he is putting one of his central campaign promises over other potential campaign wins. I mean he clearly wants to crack down on the border, right? He hasn't been able to do it. He's cleaned house at the Homeland Security Department. He's tried -- he used an emergency declaration to build the wall. We're still seeing this problem. And so by lashing out at Mexico though and, you know, threatening these tariffs, he's undermining a great economy that is really humming for people right now. I mean this is something that he could run on in 2020 and really use to his advantage. And then also potentially upending this trade deal that he had spent so long negotiating. I mean Mexico was just getting ready to begin the ratification process. I mean do they back away now or -- and what does this mean in the Congress too?

BASH: Or -- or the flip side, let's just like throw this out there, any chance this works and like suddenly there's a -- there's a deal and Mexico has done something to change in the next two weeks?

KEITH: He has a remarkable ability to create chaos.


KEITH: To, you know, have an emergency that is of his own making. And then, the great thing with this for him is that he sets the metric. There is no hard and fast numerical metric that says, oh, this problem is now solved.

BASH: Right.

KEITH: He can decide it's solved.

HENDERSON: Yes. And that's the thing. I mean he declares victory even when it's a clear defeat, whether it's North Korea, whether it's this wall that isn't really being built and certainly isn't going to be paid for by Mexico. So I think you're right, he can essentially say, you know, he set the terms and he's won.

BASH: Everybody stand by because on this topic of the border crisis, we have a CNN exclusive showing the depth of what is going on at the border. According to a report obtained by CNN, a government watchdog found dangerous overcrowding at an El Paso border processing facility.

CNN's Polo Sandoval is in El Paso.

So, Polo, just how many people were in this center?

POLO SANDOVAL, CNN CORRESPONDENT: Up to 900, Dana, in early May, in a facility that's meant to hold only about 125 people. Context extremely important here. This is just some of the information that we obtained in that report that was published by the Office of Inspector General, exclusively obtained by my colleague, Priscilla Alvarez (ph), in Washington, D.C. And as you mentioned, it really does provide a clearer picture of the dire situation that Border Patrol agents on the ground are up against, particularly here in El Paso.

A little bit of background on this report. Again, it was just obtained here. Investigators with the Office of Inspector General visiting seven locations here in the El Paso area, two ports of entry and five border patrol-run facilities. One in particular, the El Paso Del Norte Processing Center, not far from where I'm standing here, which is that one that has a capacity of about 125 people, in early May it held anywhere from 750 to 900 people, according to investigators, and there were some cells here, Dana, that were equipped to handle only about 35 people. Those were holding about 155 individuals.

A very important point to note here. This is basically going with what we continue to hear from high ranking DHS officials, what we've heard in Congress, what we have heard here on CNN air when the chief for Border Patrol spoke to CNN, address the situation for agents. These are men and women in uniform who are tasked with handling this large flow.

BASH: Yes. SANDOVAL: And, finally, I should mentioned that there is corrective action that needs to be taken according to this report and DHS officials are recognizing the findings in this OIG investigation.

[12:15:06] BASH: The system is simply not prepared for what is going on down there at every level. It's really important to keep shining the light on it. Thank you for bringing us that exclusive, Polo.

And up next, the attorney general is defending his reputation and considering his legacy.


UNIDENTIFIED FEMALE, CBS NEWS: You're at the end of your career or --

WILLIAM BARR, ATTORNEY GENERAL: I'm at the end of my career. I've, you know, I --

UNIDENTIFIED FEMALE: Does it put -- I mean it's a reputation that you've worked your whole life on, though.

BARR: But, but, everyone dies and I'm not -- you know, you know, I don't believe in the Homeric (ph) idea that, you know, immorality comes by, you know, having owned some (INAUDIBLE) over the centuries.



[12:20:20] BASH: A new divide is emerging between the attorney general and the Russia special counsel. The split, the legal analysis that Robert Mueller's team used to determine a key question, did the president obstruct justice? In written testimony earlier this month, Attorney General William Barr told Congress the following, quote, although we disagreed with some of the special counsel's legal theories and felt that some of the episodes examined did not amount to obstruction as a matter of law, we accepted the special counsel's legal framework for purposes of our analysis and evaluated the evidence as presented by the special counsel in reaching our conclusion.

But today, in a new interview with CBS News, Barr suggested that the DOJ did not accept Mueller's analysis after all.


WILLIAM BARR, ATTORNEY GENERAL: We analyzed the law and the facts and a group of us spent a lot of time doing that and determined that both 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 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.


BASH: CNN's Shimon Prokupecz joins our conversation.

Now, Shimon, a lot of legalese in what we just set up and what the attorney general said. Put it in layman's terms for us.

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: So it's very rare that we ever get an inside look exactly between the battles between the Department of Justice, that is the main justice here in Washington, D.C., and various attorneys generals across the country. This happens in a lot of cases where local offices are saying, we want to charge something, and main justice could come in and say, you know what, we don't think you have enough here.

So usually this kind of plays out behind the scenes. And we are not privy to these kinds of discussions. And before anything like this would ever get public, you would think that the offices would kind of work this out and have a good relationship and figure out, what can we say publicly about this so that we are aligned. And what we're clearly seeing here is that the special counsel's office and the attorney general are not aligned. They are not on the same page. And that you never get to see.

BASH: On a really important issue. The important issue.

PROKUPECZ: On a really -- the biggest really most important issue probably that has come before the Department of Justice in years when you think about the investigation of a sitting president and the fact that these two offices couldn't agree on this or couldn't work something out. It also tells us, I think, that this relationship, they really had -- there was no relationship between the special counsel's office and the Department of Justice.

When you think about it, when you see how things are starting to play out now, you have to wonder, well, what were these communications between Rod Rosenstein, who was overseeing this investigation, and the Mueller team? It would seem like there wasn't a lot of good communication. They were surprised. The attorney general has said that he was surprised by a lot of what Mueller did and that, you know, they asked, what do you want redacted? Mueller never got backed to them. They were surprised by the fact that Mueller never came to a conclusion on the obstruction issue and left it to him.

So this tells me that there was certainly poor communications going back and forth. And it could be a trust issue in the end in that the Mueller team didn't wanted to -- they wanted to keep this independent and so they weren't telling the Department of Justice what they were doing.

BASH: Well, you mentioned that the attorney general said that they were surprised that Robert Mueller did not reach a conclusion affirmatively on whether or not the president obstructed justice. He talked about that as well this morning. Let's listen.


WILLIAM BARR, ATTORNEY GENERAL: He could have reached a conclusion. The opinion says you cannot indict a president while he's in office, but he could have reached a decision as to whether it was criminal activity.

The fact is Bob did not make a decision that there was a crime. He didn't get into the analysis at all. Part of the reason for that was his judgment about the OLC opinion coupled with other things. He just didn't think it was proper exercise of his authority. So a totally different issue. And that's why -- that's why both of us feel that this idea that there's been discrepancy over the OLC opinion is simply wrong.


BASH: And that is what Robert Mueller said earlier this week with his surprise statement that --


BASH: He didn't even go there and they didn't reach a conclusion because they didn't think he could because he doesn't think its constitutional to indict a sitting president.

BENDER: Yes. And it's clear that Mueller sees himself as a -- more of a -- an investigator here and not as a prosecutor and certainly not as a messenger, which is a different tact that we're seeing from Barr here, right? He has become much more willing to sort of shade the lines now that he has the jobs than he was in the nomination process.

[12:25:12] And, you know, what we're seeing in this interview, again, is Bob Barr sort of sweeping view of executive power, expressing it in ways that we just haven't really heard before. And, you know, and he's -- and he's also made it quite clear that he's reached the point in his career that he doesn't really care what people like you and I say or, you know, what the coverage is going -- how the coverage is going to reflect on him.

BADE: I mean it's a very interesting debate, legal debate going on right now because, I mean, Barr sort of lays it out in his interview like it's a very simple thing, just charge him or don't. But, you know, if he would have -- if Mueller would have determined that the president committed a crime and then could not charge him and then that became public, I mean, if that's not a constitutional crisis, I mean, what is? And how does the president, to be fair to him, defend himself when he's also running the country? I mean so Mueller's argument, yes, seems unprecedented and very new and fresh, but he basically said that there is no circumstance where this would be a good idea. I've got to kick to Congress.

BASH: And this is playing out, not surprisingly, on the campaign trail on the Democratic side. Elizabeth Warren says she wants to put an end to all of this potential gray area. In a tweet she said, I pledge to nominate an Office of Legal Counsel head who will reverse the Watergate era rule that a president cannot be indicted for criminal behavior. The OLC's purpose is to govern the conduct of the executive branch, not act as the president's get out of jail free card.

KEITH: One fascinating thing about this is that the way this is set up is that Congress has a role, that congress would come in and potentially impeach instead of an indictment, instead of a trial. And what Elizabeth Warren, in some ways, is proposing is taking that out of the hands of Congress and putting it in the hands of the executive branch.

BASH: Yes, which is -- which is quite interesting.

OK, everybody stand by.

Up next, we're going to talk a little bit about the impeachment talk on the campaign trail. Senator Michael Bennet is going against the 2020 Democratic grain, making his case against booking an impeachment quite yet. But, as we go to break, how he made a rare admission for a politician in a CNN town hall last night, saying he regrets a key vote supporting a rule change that allows judges to be confirmed with a simple majority.


BASH: You call your vote to support that your biggest regret in your ten years in the Senate. You say you did it because you were a member of the Democratic leadership. What have you learned from this regret?

SEN. MICHAEL BENNET (D-CO), PRESIDENTIAL CANDIDATE: Well, what I've learned from this regret is, first of all, it's important to be honest when you make a mistake.