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May Jobs Numbers; Global Economic Jitters amid Tariff Talks; Tariffs on Mexico; Biden Changes on Hyde Amendment. Aired 12-12:30p ET
Aired June 7, 2019 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[12:00:21] JOHN KING, CNN ANCHOR: Welcome to INSIDE POLITICS. I'm John King. Thank you for sharing your day with us.
Talks continue but the White House is filing the legal papers today so it can start imposing new tariffs on Mexico come Monday. It would a big gamble for the president. A new jobs report out just today shows a slowing economy as he heads into re-election season.
Plus, a giant Joe Biden flip-flop on abortion policy. It puts him on the same page now with his 2020 Democratic rivals, but it was handed horribly and reminds many veterans of past Biden campaign failings.
And as the president flies home, here's his big takeaway from his state visit to the United Kingdom.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The meeting with the queen was incredible. I think I can say, I really got to know her because I sat with her many times. And we are automatic chemistry. You understand that feeling. It's a good feeling.
There are those that say they have never seen the queen have a better time, a more animated time.
(END VIDEO CLIP)
KING: We begin the hour with a new and a dramatic warning to the president from the American economy he hopes to ride to re-election. The government says just 75,000 jobs were created last month, way below expectations. It's the latest sign the economy is slowing, and it comes as the president is just hours away from a big step that could slow it more, announcing new tariffs on all Mexican imports to the United States.
Now, tariffs are normally a weapon in trade wars, as we see in the high-stakes White House confrontation with China. But in the case of Mexico, they are a presidential bludgeon in an immigration dispute. Talks continued today, and there is a chance the president pulls the plug before Monday if Mexico meet his border demands. Today's jobs numbers certainly give him good reason to think twice, or thrice, about injecting more uncertainty on an economy suddenly showing serious symptoms of stress.
CNN's Christine Romans walks us through the sluggish numbers.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: John, this is a rare stumble in what has been a very strong American jobs market. Only 75,000 jobs created. And when you look at March and April, the government actually subject 75,000 from those two months together. So that shows you a soft patch here in the spring.
Let me tell you about February. February was only 56,000. So what's different there? That was weather. This is concern about tariffs. A lot of companies are starting to say they don't know what their supply chains are going to look like, what their costs are going to look like and they're concerned about the multiple prongs of the president's tariff war.
The good news, the unemployment rate stayed at 3.6 percent, basically steady. You had about 176,000 people coming into the labor market.
In the sectors, broad-based kind of growth slowdown here. Business was positive, healthcare was positive, but not as robust as we've seen. Construction, only 4,000. Last month it was some 30,000 and manufacturing only added a few thousand. So there's something going on here.
So why isn't the stock market concerned about this? Because the world is upside down on Wall Street. This is bad news. It is good news. Wall Street thinks that the Fed, the Federal Reserve, will be forced to come in and undo the damage from the president's trade war, if it comes to that, with rate cuts, maybe by the end of the summer.
KING: Christine Romans breaking down the numbers.
With me now to share their reporting and their insights, Greg Ip with "The Wall Street Journal," Jeanna Smialek with "The New York Times."
Christine calls it a soft patch. We often say, and we do this a lot, every month, don't focus on one report. Is this just a slow month and next month will be fine, or is this yet another sign the economy is slowing in a significant way and with the threat of Mexican tariffs around the corner on Monday, a risk for the president to keep going?
GREG IP, CHIEF ECONOMICS COMMENTATOR, "THE WALL STREET JOURNAL": I think it's clearly a sign the economy is slowing. But I'd like to have some perspective here. Seventy-five thousand is actually roughly how many jobs we can expect the U.S. economy to create over the long run given that ours is an aging population with low population growth. So I think the likeliest interpretation of today's data, when you also combine it with other information, for example, on the number of people filing for unemployment insurance claims, the economy, which was growing very fast, around a 3 percent rate, is probably slowing to around a 2 percent rate.
KING: Slowing to a 2 percent rate, which is what the president, again, we're having an economic conversation that also has political ramifications for him because he's talked about 3 percent or 4 percent or more.
The questions is -- you mentioned -- there are a lot of signs. You could find a lot of data that says it's OK, and this is why the president thinks he can impose these tariffs. He thinks the U.S. economy is this big, strong bear that can take the hit. But there are some warning signs, retail sales were off recently, factory orders fell, the more China tariffs are on the horizon, these Mexico tariffs, the international growth rate has slowed.
Sort of, where are we?
JEANNA SMIALEK, FEDERAL RESERVE AND ECONOMY REPORTER, "THE NEW YORK TIMES": I think that last part you just emphasized is perhaps the most important thing you said. The international picture has gotten a lot worse over the last couple of months and quarters. And I think taken in context, this slowing in the U.S. economy is really something to be concerned about.
[12:05:01] You know, like Greg said, you have to take this in trend. The three month moving average on job gains is 151,000. So, you know, that's not terrible compared to what we should be expecting. But taken again a backdrop of slowing growth, this is going to make the Federal Reserve worried.
KING: To the point of the Federal Reserve, let's just show the Dow right now. Normally you'd see 75,000 sluggish job growth. You think the markets might take a hit, but the markets are actually up 250 something points you see there.
How much of that is, they think the president's going to blink and not impose the tariffs, or how much of it, and I suspect this is more, they think that the Federal Reserve, Jerome Powell on the record this week saying, we're watching all of this, and, if necessary, even though a couple of months ago this was not their policy, now he's saying, if necessary, and let's listen to the president who wants this, we'll cut interest rates.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I built an economy that's incredible. We're up $14 trillion in value. Look at what's going on with the stock market. And this is despite a Federal Reserve that, frankly, should have had lower interest rates and everything else.
Who thought he was going to raise interest rates all -- but if we didn't have that, we'd be at 5.2 and the stock market would be up 10,000 points more.
(END VIDEO CLIP)
KING: We -- we can talk to particulars there and go into the fact check machine. I don't think he built the economy. It was there. He's -- it's gotten better while he's been president, but he didn't build it.
But the idea, is the president going to get what he wants here out of this, a Fed interest rate cut?
IP: I think the Fed is looking at two things. First of all, the trade war is one of those kind of exogenous events that the Fed has no control over and doesn't really know how it's going to play out. And there's a very important summit meeting between President Trump and other world leaders at the end of this month, at which point the Fed will know a lot more about whether this is just, you know, a threat or whether it really will hit the economy. That might be a reason not to deliver the rate cut right away.
On the other hand, there are signs underneath the data that even if you set aside all the trade worries, things are softening. I'll just point to one thing, construction employment in May was anemic. That's not because of the trade war. That's the kind of thing that's got to get the Fed a little worried.
KING: Construction employment anemic and there's some slowdown. You have an America first president, as he says. And the president says these tariffs will help American manufacturing, will convince companies to come home. Maybe on the longer term we can think about that. But if you just look in May, 3,000 manufacturing jobs in May, 30,000 added in 2019. Still going up, but not at the rate we saw, especially right after the tax cuts and the like. Some of that stimulus out of the economy.
For people watching out in the country, if these tariffs go into place, when you look at this jobs data, what should they be thinking about the economy out there in middle America?
SMIALEK: I think one really important takeaway for sort of your average everyday American family is that wage growth slowed down a little bit this month and came in well below expectation at 3.1 percent on the year. And I think that's so important because what we haven't seen this cycle is wage growth that really equals what we saw at the peak of last cycle, despite what has been a really strong job market. So now if you see things sour, the job market slows down. There's not a lot to get you back to a higher path for wage growth. And I think that matters a lot to your average family.
KING: And what would be the impact if we get to Monday and the president goes forward? Five percent would be the first round of tariffs on all Mexican imports. If this impasse stayed in place, those tariffs would then go up down the road. If you go to cnn.com today, you see American importers are warning the White House and members of Congress a logistical nightmare could unfold. The simple plumbing of trade not something that some of these companies are familiar with. The idea of being that if this happens, the complexity of the U.S./Mexico trade relationship, that not only will you have tariffs that raise costs on consumers, but you're also going to have some chaos.
IP: Right. And I think that if you just look at the dollar values of the tariffs, it's not that huge, but that kind of understates the impact because there's a whole uncertainty element that's going on here. Manufacturers don't know if tariffs are going to go up or down, whether they'll hit China, whether they'll hit Mexico. And when you're faced with that kind of uncertainty, you kind of like pull back. You don't make commitments. And that's probably one of the things we're seeing here. And, yes, if the tariffs go into place on Mexico, I think that uncertainty gets worse.
SMIALEK: I think that's absolutely the case. It was really interesting, we got the Fed's Beige Book earlier this week, which is this collection of anecdotes from around the country, and I think they really foreshadowed today's jobs report in the sense that you saw a lot of companies saying that they were facing great uncertainty because of these tariffs, especially the idea that intermediate goods, so the things that companies use in their end product were going to be tariffed and they weren't hiring as a result. So I think there is some ability to map what we're seeing in the data straight back to these tariffs.
KING: Pulling back to wait this out to see what happens because the one thing they hate is uncertainty. Got it.
KING: Appreciate you both coming in.
[12:09:28] Up next, the White House prepares new tariffs on Mexico, as we just discussed. The president says anyone who doesn't like it, his words, should be ashamed of themselves.
KING: The president is working the phones and watching the clock as he flies across the Atlantic today. In order for those new tariffs on Mexican imports to take effect on Monday, the president must sign an executive order today. Negotiations with Mexican officials are continuing and Team trump keeping the boss updated as he flies hoping from Europe. So he could pull the plug, or at least back off, to let the negotiations continue. But to listen to the president is to hear someone who very much likes his tariff plan and is ready to assign blame for why this is happening.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Tariffs are a beautiful thing. It's a beautiful word if you know how to use them properly. Republicans should love what I'm doing because I view tariffs in two phases. Number one, it's great to negotiate with because people don't want to be tariffed for coming into the United States. They don't want that. And, number two, frankly, if they go on you make a fortune because all the companies are going to move back into the country. You know --
[12:15:02] LAURA INGRAHAM, FOX NEWS: But isn't this Congress' fault for not --
TRUMP: Yes. INGRAHAM: Passing asylum reform?
INGRAHAM: So why -- why does it seem like Mexico's bearing the brunt?
TRUMP: Well, because it's their fault also because they're letting millions of people walk up through their country.
(END VIDEO CLIP)
KING: With me to share their reporting and their insights, Eliana Johnson with "Politico," CNN's Phil Mattingly, Tarini Parti with "The Wall Street Journal," and Jackie Kucinich with "The Daily Beast."
To a degree he has a point, Congress hasn't passed any legislation to deal with the border and immigration in forever. To a degree he has a point, there are -- these migrants are coming, especially from Central America, through Mexico. But to hear a president of the United States say tariffs are a beautiful thing, this is a confounding couple of days, especially for Republicans, the free market Republicans on Capitol Hill.
PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Sure, it clashes with the Republican Party ideologically. It clashes, to some degree, with economic history as it regards to tariffs. But one of the things I've been struck by in conversations, long -- long running conversations about this issue, since he's obviously tried to utilize this tool many times, is the question of, what if it actually works in these negotiations right now? We know that on the table are potential asylum changes the administration has been seeking from Mexico for a long period of time. They haven't been agreed upon yet.
But there's kind of two slots to it. What if it works and he believes now that this is absolutely something he should be doing on a regular basis from here on out, which I think would go to the core of how he's felt about tariffs for a long time. And the second is, even if it works, even if they reach a deal, even if they pull off, what is the long run -- you guys just had a great conversation about the economy in the last bloc -- what is the long running impact about the economy -- both the U.S. economy and how allies view us economically in the future. I think those two questions remain unanswered right now.
KING: And you could hear that from the president. He thinks the bludgeon of tariffs, usually used in a trade war, but in this case an immigration dispute, he thinks it work. With a big trading partner like Mexico, it just might.
The question is, will Mexico do enough? Over the last 24 hours we've heard progress and the administration keeps saying not enough. So Mexico comes back and says, we'll deploy National Guard troops. Mexico comes back and says, we'll do more at the border with Guatemala. The question is, can they reach a deal on people who want to seek asylum either being held in Guatemala as they come north, or being held in Mexico as they come north. Listen to Marc Short. He's now the vice president's chief of staff. He
used to be the president's liaison to Capitol Hill, so he gets the objections in Congress.
(BEGIN VIDEO CLIP)
MARC SHORT, CHIEF OF STAFF FOR VICE PRESIDENT MIKE PENCE: There's a legal notification that goes forward today with the plan to implement tariffs on Monday. But I think that there is the ability, if negotiations continue to go well, that the president can turn that off at some point over the weekend. But there has a requirement that if they're going into effect Monday, it has to be notice today, so you shouldn't anticipate that happening.
(END VIDEO CLIP)
KING: We have, from day one of this presidency, dealt with the idea, well, Mike Pence said that on Capitol Hill, but has the president signed off? Now we have this remarkable day where the deadline to file the executive order is coming.
The president is on Air Force One coming across the Atlantic. Mexican officials are in their meetings, whether it's the vice present or Secretary Pompeo, the lawyers and the legal people involved, he has to sign off on anything they do, and his inclination so far has been to say, not enough, I want more.
ELIANA JOHNSON, CNN POLITICAL ANALYST: Right. It does seem as if these Mexican officials are in there negotiating these subsequent increase from 5 percent to 10 percent, rather than to fend off the increase to 5 percent that would take place on Monday.
You know, tariffs are the president's preferred negotiating tool. We've seen him deploy them not just with respect to Mexico, but all over the world on -- on medal, steel and aluminum tariffs that he put in last year. The president is insistent that tariffs hurt the country and that they're imposed on and doesn't seem, I think, fully cognizant of the fact that they hurt American consumers. He's resisted -- he's resisted the advice and caution of his economic advisers when they tell him that these are -- these tariffs are going to hurt the American economy. And it's not Republican members of Congress who are going to be hurt when the president imposes tariffs, it's voters in their district.
JACKIE KUCINICH, CNN POLITICAL ANALYST: Well, and it's -- another thing that's going on, though, is Congress is kind of enabling this because they passed legislation to put a band aid on what's going on with farmers. That farmers are receiving more subsidies right now because of what's going on with China. And that has net (ph). You can't, you know, give a band aid to the entire state of Texas, for example.
So the question is, is what's Congress' breaking point going to be? We've seen, and Phil's been interviewing all of these senators this week wringing their hands about Republican senators wringing their hands about this and, you know, they, probably rightly so, want to talk to the president himself, because unlike some of these officials that are talking with Pence, they know, at this point, they've been burned so many times, they've got to go to the guy.
KING: And to that point, the question is, Tarini, would the president say to them in that meeting, if they got that meeting, John Cornyn of Texas down on the floor called it a tax, said this is horrible, it's bad for the American consumer. Would the president say to their face what he said to Fox News, which is essentially, members of Congress just don't get it?
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: And I have senators and others and Pelosi coming out saying, oh, how horrible. What they're doing is they're hurting a deal. They should be saying, we're with the president, we'll to whatever he wants to do, and Mexico would fold like an umbrella. Now I have these people, and I'm saying there are some Republicans, too, I think they should be ashamed of themselves.
[12:20:00] But we have Schumer, we have all these people, they come out and they talk about tariffs are bad. So they're killing -- you know, they're hurting my negotiation.
(END VIDEO CLIP)
KING: They should be ashamed of themselves for opposing him or thinking he's wrong.
TARINI PARTI, NATIONAL POLITICAL REPORTER, "THE WALL STREET JOURNAL": Right. So I thought it was interesting that Laura Ingraham, who's, you know, known for not really pushing the president too hard in her interviews, actually asked the president why he's not shifting the onus on this to Congress rather than Mexico, which is an ally, and that was his response, that he is still very much fixated on Mexico and not as much on members of his own party in Congress.
MATTINGLY: I would not too, to your question, would the president be willing to say that to Republican senators in a closed door lunch (ph), which, as Jackie notes, is what they want. They want him to come in and make this presentation. I would actually flip that.
KING: They would -- right.
MATTINGLY: Would Republican senators be willing to confront the president face to face?
MATTINGLY: History would say they are not. Obviously it's a lot easier to talk about and kind of bang your fist on things when the president is in another country and he's not available to tweet at you or attack you or talk about you personally. I'd be very interested to see how the dynamics shift when he comes home and if he comes to Capitol Hill.
KING: And if this takes effect on Monday, whether they're willing to put paper, legislation, in an effort to stop him behind their harsh words. That's a great point.
Up next for us, a giant Joe Biden flip flop on abortion. Will it help the Democratic frontrunner or will it hurt?
[12:25:57] KING: Joe Biden has a new position on taxpayer funding of abortions today, suddenly abandoning a position he held for more than three decades, that in the wake of searing criticism from his 2020 Democratic presidential rivals. The flip-flop executed last night at a Democratic event in Atlanta.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENTIAL CANDIDATE: I can't justify leaving millions of women without access to the care they need and the ability to exercise their constitutionally protected right. If I believe healthcare is a right, as I do, I can no longer support an amendment that makes that right dependent on someone's zip code.
(END VIDEO CLIP)
KING: Now that's the vice president and his campaign spin, that the about face came as the Democratic frontrunner got into the fine print of healthcare policy and as he took stock of abortion rights retreats in states led by Republicans. But think that through. The campaign said just Wednesday, just Wednesday, that Biden stood by his longtime support for the Hyde Amendment. That's a Ronald Reagan era prohibition on using taxpayer money to pay for abortions. And, on that same day, Wednesday, it sent one of its national co-chairs on CNN to plant the flag of conviction.
(BEGIN VIDEO CLIP)
REP. CEDRIC RICHMOND (D-LA), BIDEN CAMPAIGN CO-CHAIR: His record on this has never wavered.
What we don't want to do is misled anybody. And I think that that's been Joe's track record to always be a man to stand up and own what he believes. And -- and so we want to make sure that we did that.
(END VIDEO CLIP)
KING: That was Wednesday. This is Friday. It's a deja vu moment for Democrats old enough to remember the prior two Biden presidential runs.
(BEGIN VIDEO CLIP)
DAVID AXELROD, CNN SENIOR POLITICAL COMMENTATOR: That was a flip-flop- flip, which is never a good thing in politics, and it raises questions about his own performance and his own steadiness and his campaign's performance. So this was not a good -- you know, beyond the issue itself, this was not a reassuring episode for the Biden campaign.
(END VIDEO CLIP) KING: So how big is it? Will -- now he's on the same page with his Democratic rivals. When he's on a debate stage in a couple of weeks, he won't have to deal with at least the substance of this. But, is David Axelrod right? For those of us -- I covered the 1987 and '88 campaign. Then, of course, Joe Biden ran again. He's a candidate whose own instincts have been doubted at times. And when his own instincts are in question, he's always had the problem of, was his campaign ready for primetime? In this case they certainly weren't.
JOHNSON: It's absolutely right. In and of itself, this may not be that big of a deal. But in terms of a window into how prepared Biden is to deal with issues, it suggests they're really not.
The first window into this was the way he handled accusations from women, that he made them uncomfortable. And he took five or six days to come out and talk to the press. With this, he had Cedric Richmond, his campaign chairman, came out and gave one position. Biden came out and gave another position. It was a campaign that was not ready for primetime.
And the Trump campaign's theory about all of this is that Biden is not going to be able to survive a primary because he will be pulled to the left. This suggests that their theory is right. Biden took a lot of criticism from the left on this, and, in the end, he -- he buckled. And it does suggest that that -- if that's a recurring theme, it suggests that he will go into the general election if he does survive the primary as a different candidate than he entered the race.
KING: Or he -- or he learns from it or he -- or he learns from it or the field's not strong enough to take him out, and then we do get the question answered when he's in the general election campaign. But to see this play out, this is how Lisa Lerer of "The New York Times," who's frequently here at the table with us, put it in a tweet in March, Biden's staff told me they had no comment on Hyde beyond his decades long position of support. Last month he told a woman on a rope line he was against it. This week, his campaign said he misunderstood the question and did support it. And now he's against it. Head- spinning.
Again, this is not some issue that just popped up. This has been an issue since back to the Ronald Reagan era. It's a bigger issue now in Democratic Party politics because of the rise of women candidates, the rise of women leaders, the rise of women issues, what's happening in the states on abortion rights. This is not -- this cannot be a surprise where we got to page 77 of the healthcare plan and said, oh, we have a problem.
[12:30:00] KUCINICH: And not to mention the debate in the House over, there's a pro -- or an anti-abortion rights Democratic member who the DCCC was initially going to fund raise for.