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CONNECT THE WORLD

Democratic Candidates Offer Different Visions for America; Biden Harris, Booker, Castro and Six Others for Round Two of Debates; North Korea Launches Another Round of Ballistic Missiles; Italian Forensics Team Searches Suspects' Hotel Room; Progressives and Moderates Clash at Democratic Debate; U.S. Federal Reserve Poised to Cut Interest Rates; Palestinian Brewery Shows Cracks in Trump's Peach Plan. Aired 11a-12p ET

Aired July 31, 2019 - 11:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[11:00:00] LYNDA KINKADE, CNN HOST: A bruising night of debate and round two is just ahead. We're live in Detroit, Michigan as more 2020 Democratic

candidates are set to face off.

Also, North Korea orders the U.S. and South Korea to cancel upcoming military exercises, calling them reckless and suicidal.

And conflicting details are emerging in the gruesome killing of an Italian police officer. We're going to go live to Rome with the latest on that

case that has rocked Italy.

Hello and welcome to CONNECT THE WORLD. I'm Lynda Kinkade live from CNN's world headquarters here in Atlanta. good to have you with us.

If you thought Thursday's debate was fiery and full of heated exchanges, just wait until round two. The counting down to the second "CNN

PRESIDENTIAL DEBATE" in Detroit, Michigan, now just hours away.

Frontrunner Joe Biden will take the stage tonight along with nine other candidates, and he has something to prove, after being caught off guard in

previous debate by stinging attacks from Kamala Harris. Those two will come face to face again as other contenders like Cory Booker and Julian

Castro will be looking to score standout moments.

Last night, a fight for the soul of the Democratic Party was on display. Moderate candidates attacked high profile progressives like Bernie Sanders

and Elizabeth Warren, as radicals that couldn't win a general election. Well they fired back and they stood their ground.

Let's go to CNN's Athena Jones at the debate venue for a preview of tonight's matchup as well as all of the news from last night. And of

course, Athena, there was a lot of passion on display last night. We saw Senators Bernie Sanders and Elizabeth Warren on the defensive somewhat when

younger candidates tried to paint their policies as unrealistic.

ATHENA JONES, CNN U.S. NATIONAL CORRESPONDENT: Absolutely, Lynda, Warren and Sanders were right behind me at center stage. And they took a lot of

fire for much of the debate. It was kind of the two most progressive candidates against the rest, not only younger candidates, but also more

moderate candidates. Who were arguing that their policies are just kind of pie in the sky, unrealistic, too costly, just won't work. What was

interesting is that we didn't see Warren or Sanders go after each other at all.

(BEGIN VIDEOTAPE)

JONES (voice-over): The ideological divides within the Democratic Party unfolded play last night.

GOV. STEVE BULLOCK (D), PRESIDENTIAL CANDIDATE: Folks seem more concerned about scoring points or outdoing each other with wish list economics.

SEN. AMY KLOBUCHAR (D-MN), PRESIDENTIAL CANDIDATE: You're going to hear a lot of promises up here.

JOHN DELANEY (D), PRESIDENTIAL CANDIDATE: We can go down the road that Senator Sanders and Senator Warren want to take us, with bad policies like

"Medicare for All", free everything, and impossible promises that'll turn off independent voters and get Trump re-elected.

JAKE TAPPER, CNN DEBATE MODERATOR: What do you say to Congressman Delaney?

SANDERS: You're wrong.

JONES: The moderates clashing with Senators Bernie Sanders and Elizabeth Warren questioning their electability with their progressive agendas and

slamming their key domestic proposal, "Medicare for All".

JOHN HICKENLOOPER (D), PRESIDENTIAL CANDIDATE: I'm saying the policies of this notion that you're going to take private insurance away from 180

million Americans who many of them don't want to give it -- many do want to get rid of it, but some don't.

That is a disaster at the ballot box. You might as well FedEx the election to Donald Trump.

SEN. BERNIE SANDERS (I-VT), DEMOCRATIC PRESIDENTIAL CANDIDATE: Well, the truth is that every credible poll that I have seen has me beating Donald

Trump.

JONES: Sanders standing by his plan.

SANDERS: They will be better because "Medicare for All" is comprehensive. It covers all health care needs for senior citizens. It will finally

include dental care, hearing aids, and eyeglasses.

Second of all --

REP. TIM RYAN (D-OH), PRESIDENTIAL CANDIDATE: But you don't know that -- you don't know that, Bernie.

SANDERS: Second of all --

TAPPER: I'll come to you in a second, Congressman.

SANDERS: I do know it I wrote the damn bill.

JONES: But instead of attacking each other, Sanders and Warren appeared united in defending their agendas.

DELANEY: So, I think Democrats win when we run on real solutions, not impossible promises. When we run on things that are workable, not

fairytale economics.

SEN. ELIZABETH WARREN (D-MA), PRESIDENTIAL CANDIDATE: You know, I don't understand why anybody goes to all the trouble of running for president of

the United States just to talk about what we really can't do and shouldn't fight for.

SANDERS: To win this election and to defeat Donald Trump -- which by the way, in my view, is not going to be easy -- we need to have a campaign of

energy and excitement and of vision.

I get little bit tired of Democrats afraid of big ideas. Republicans are not afraid of big ideas.

JONES: Other candidates like Mayor Pete Buttigieg saying the focus should stay on defeating President Trump instead of taking down fellow Democrats.

PETE BUTTIGIEG (D), PRESIDENTIAL CANDIDATE: It is time to stop worrying about what the Republicans will say.

[11:05:00] Look, if it's true that if we embrace a far-left agenda, they're going to say we're a bunch of crazy socialists. If we embrace a

conservative agenda, you know what they're going to do? They're going to say we're a bunch of crazy socialists. So let's just stand up for the

right policy, go out there and defend it.

JONES: Warren blasting Trump when questioned about white supremacy fueling domestic terrorism in the wake of the latest mass shooting in California.

WARREN: Call out white supremacy for what it is, domestic terrorism. And it poses a threat to the United States of America. We live in a country

now where the president is advancing environmental racism, economic racism, criminal justice racism, health care racism.

JONES: Beto O'Rourke highlighting his call for a new Voting Rights Act to address systemic racism.

BETO O'ROURKE (D), PRESIDENTIAL CANDIDATE: The legacy of slavery and segregation and Jim Crow and suppression is alive and well in every aspect

of the economy and in the country.

JONES: Political outsider, author Marianne Williamson, also issued a warning to more seasoned candidates.

MARIANNE WILLIAMSON (D), PRESIDENTIAL CANDIDATE: The entire conversation that we're having tonight, if you think any of this wonkiness is going to

deal with this dark psychic force of the collectivized hatred that this president is bringing up in this country, then I'm afraid that the

Democrats are going to see some very dark days.

(END VIDEOTAPE)

KINKADE: Well a lot of big ideas on display last night. We will be seeing more tonight. And how will former Vice President Joe Biden perform given

last debate led to concerns over his age.

JONES: Hi, Lynda. That's exactly the big question tonight. All eyes will be on the former Vice President, the frontrunner at center stage. He's

going to be flanked by Senators Cory Booker and Kamala Harris, who are two of the candidates who have gone after him already and are likely to do so

again, along with other folks on this stage. And of course, stakes are high for him because of his underwhelming performance at the last debate --

the one in Miami.

Now Vice President Biden has said he's going to be more aggressive and fighting back. So we'll watch and see how good a job he does of defending

himself. And also how good a job he does in making a compelling, affirmative and persuasive case for his candidacy. He needs to be a bigger

and more memorable presence on the stage tonight -- Lynda.

KINKADE: Yes, he certainly does. You are doing a great job for us. Athena Jones for us in Detroit. Thanks so much.

We're going to stay on this story. Let's get perspective now from both parties about these debates that will play a critical role in shaping the

race for the White House. We're joined by two of our political commentators. Democratic strategists, Karen Finney, who worked on

Hillary's 2006 presidential campaign. And Republican strategist, Alice Stewart, who served as communications director for 2016 presidential

hopeful Ted Cruz. Good to have you both with us.

ALICE STEWART, CNN POLITICAL COMMENTATOR: Hi, Lynda.

KINKADE: I want to start first with you, Karen. Because you worked with Hillary Clinton who is up against Bernie Sanders in 2016. Give us a sense

of how you thought Senator Sanders performed last night.

KAREN FINNEY, CNN POLITICAL COMMENTATOR: Well you know, I think we heard a lot of the same ideas from Senator Sanders that we heard in 2016, and

frankly these are a lot of the same issues that he's been talking about for some time in terms of a revolution, in terms of, you know, the sort of

economic disparity.

But I will tell you what I think was really different for him was that having Elizabeth Warren right there as a sort of kinder, gentler version --

and she and Bernie differ slightly on a few things -- but you know, you could tell she's so good at explaining things. Having been a professor,

you can tell she can take that complicated material, and then she really did an excellent job of kind of breaking down through the more complicated

policies and making it sort of sound more approachable -- I guess I would say. So I think that was a real contrast for Bernie, having her kind of

right there, given that they, you know, are talking about some of the same issues.

KINKADE: Absolutely. She has been noted for her strong performance last night. I want to go to you, Alice. Because this debate happened not long

after the latest mass shooting here in the U.S. which left a three-year-old boy dead, a 13-year-old girl dead, and a former military officer and the

mayor from Indiana Pete Buttigieg had this to say. I just want to play this for our viewers.

(BEGIN VIDEO CLIP)

BUTTIGIEG: Pete I was part of the first generation that saw routine school shootings. We have now produced the second school shooting generation in

this country. We dare not allow there to be a third.

(END VIDEO CLIP)

KINKADE: He went on to claim that 80 to 90 percent of Republicans want a universal background check. We checked with CNN fact checker, that rings

true. So from what you saw last night, Anna, who can work across the aisle to enact change when it comes to this issue?

STEWART: That will be a huge question. Certainly second amendment rights are a big factor for Democrats on the stage last night and tonight. But

the question is, how will that play out when we get to the general election.

[11:10:00] Yes, there are many in the Republican Party that would like to see some tweaks when it comes to second amendment rights and how people

acquire guns. But we are very protective of overall second amendment rights and gun control policies that are coming out of the Democratic

Party, and that needs to be discussed.

And I agree. One mass shooting is one too many. And we cannot continue to do nothing. We need to have this conversation. But it's important to

realize, Lynda, it is not just about looking at stricter gun control legislation, we also need to look at mental health component and other

factors that are -- contribute to these mass shootings.

And what we saw last night -- whether talking about the second amendment rights issue, gun control, but a lot of the policies, what we saw last

night was the far leftwing of the party, Bernie Sanders and Elizabeth Warren, the more self-described socialist progressive wing of the party

versus the moderate. And that is dividing the party. It is splitting them apart. And it remains to be seen which will come forward. If the far

leftwing of the party comes forward in the primary, that is not a winning formula. That's not a good long-term strategy in the general election

taking on President Trump.

KINKADE: Karen, I want your take on that issue. Who do you think can best perform on this issue? Because never see any change. There seems to be a

mass shooting every other week in this country.

FINNEY: I mean, that's part of what has really changed I think in terms of the mood of this country. In 2018 I worked on a race in Georgia, which is

a state, you know, second amendment rights very important. And there's been a constant chip. And there's two things I think we should be thinking

about.

Number one, when you have your child, first grader, six years old, seven- year-old, ten-year-old, coming home and talking about having done active shooter drills, that's really is terrifying a lot of friends of mine and

when they hear it from their kids. And so, I think the nature of the conversation is changing. I think that's why you're seeing more people

saying, OK, yes, common sense measures like background checks. We need to be willing to do that.

And the other thing we heard on the stage that I think was really important. Governor Bullock talked about it. Beto O'Rourke talked about

it. This is a public health issue. We cannot be in a situation where the NRA has such a strangle hold on legislators that we can't do the research

that ought to be done so that we better understand the scope of this problem.

So I think there's been a real change in attitudes in this country. I think people are more open to different ideas. And I think the

frustration, you know, it's heartbreaking that we've had this mass shooting happen, and you know, nobody really was out there saying thoughts and

prayers anymore because we know that's not enough. And I think there's such a frustration. Because we know this government is not going to take

action. And I think it's one of the things people really want to see change.

KINKADE: I want to get to another moment from last night that was a surprise stand out moment from someone relatively unknown to the U.S.

population, certainly around the world. Marianne Williamson, these a self- help author, and she was widely mocked for her talk about political love. But I just want to play sound from her from last night.

(BEGIN VIDEO CLIP)

WILLIAMSON: We need to recognize that when it comes to the economic gap between blacks and whites in America, it does come from a great injustice

that has never been dealt with. That great injustice had to do with the fact there was 250 years of slavery, followed by another 100 years of

domestic terrorism.

(END VIDEO CLIP)

KINKADE: I was one of many people Googling her name last night to find out more about her. To you, Alice, are you surprised she was a standout for

some of her comments last night?

STEWART: Oh, Lynda, you're not alone. She was trending the top of the list on Twitter as well last night. So she did really make a huge name for

herself. And I'll be the first to say, in the first debate, I questioned really the amount of time she was even given. But last night, she really

made valid points. She certainly in my view, represented a strong heart and soul of the Democratic Party. But at the same time she called out some

of her colleagues. And she said in some areas we're not doing enough. In some areas you're focusing on the wrong things.

And she will be a real liability to the other candidates if she's able to continue to gain steam. And if nothing else, there's strength in numbers

and there's also a detriment in the large number. If she's able to just pull some of the support away from some of those lower polling candidates,

they will not be on stage next time and she will be. So, a lot of what she is talking about, peace and love, really resonated with people. And if she

gets a little more meat on the bones with regard to policy, she's someone that I think has a little bit more longevity than I thought after last

month's debate.

KINKADE: Yes, absolutely. And, Karen, I want your take on that. How important is it to have some of these lesser known candidates really

challenge the frontrunners?

[11:15:00] FINNEY: Yes. You know, that was part of the way the DNC intentionally designed this process, having 12 debates and having sort of a

strategy whereby more permissive to get on stage in the beginning. Obviously, the requirements are getting tougher as we go along. A lot of

these candidates -- we should remember who we saw on stage last night and will see on the stage tonight -- we won't see them on the stage in

September.

But it was important to have the lesser known candidate to give them the opportunity to be heard, to see if they can pick up steam. I mean, I will

tell you, one of the things about Marianne Williamson that I thought really resonated. And I was happy to hear other candidates on the stage talk

about it. We do need to talk about economic disparity. And you need to talk about systemic racism and sort of what that legacy of red lining and

certain other practices has meant in this country. Those are good conversations for us to have.

As Alice pointed out, not enough meat on the bones I would say in some of what she talked about. And I think you heard more kind of that from some

of the other candidates. But I think, you know, I'm one of these people believes debates are a good thing. It helps whoever becomes the nominee in

the end be a stronger candidate because they have gone through a tough primary.

KINKADE: It certainly does. I love watching these debates. Because you learn so much about the candidates and what they stand for. And in the

leadup to these debates, we did get a lot more detail when it came to policy. But despite that, Bernie Sanders and Elizabeth Warren caught a bit

of flak from some of the other moderates last night. But they stood their ground. I want to play sound from Senator Elizabeth Warren. Just take a

listen.

(BEGIN VIDEO CLIP)

WARREN: I don't understand why anybody goes to all the trouble of running for President of the United States just to talk about what we really can't

do and shouldn't fight for.

(END VIDEO CLIP)

KINKADE: There certainly is a lot done there, Alice. How important is it for both Elizabeth Warren and Bernie Sanders to be challenged within the

party, given that they could eventually face Donald Trump?

STEWART: It's critical. And that's what these debates are all about. And to agree with Karen -- all these candidates certainly need to be heard.

But Elizabeth Warren and Bernie Sanders had the benefit of sharing the target last night. Both of them stood firm on their policies. Whether

we're talking about "Medicare for All" or "Green New Deal" or decriminalizing illegal border crossings. They were standing firm.

But the other candidates in my view from a long-term perspective were right to call it out, and saying, look, this is not about impossible promises.

We need real solutions. And coming from more center left, their saying this is not about left or right, this is about new and better. And they

really challenged the front running candidates. Because in the end, some of these policies will not make it through the general election. It's

really critical that the debates are the good time to have this conversation.

KINKADE: But firmly or not, some of the things that seem to be far left ideal -- like universal healthcare exists in most of the developed world.

To Karen on this. How useful is this to Senator Warren and Sanders right now. But what is it going to mean when they have to face each other going

potentially forward and you don't have all of the other lesser known moderates on the stage with them.

FINNEY: Well I think we saw kind of a preview of that last night. Again, I think Elizabeth Warren, I mean, I think she was -- if we had to call a

winner, I would say she and then probably Governor Bullock, were I think the strongest last night.

She really did a very excellent job not just -- you know, Bernie does good broad strokes of talking about the policies and the revolution. But you

know, Senator Warren really talks through the specifics. And look, I think the other thing that she did very well last night -- we know, you know, as

a woman part of what folks are looking at -- you know, we're looking for can you be the commander in chief? Can you beat Donald Trump? And she

made the case for herself as someone who is tough and strong and has courage. And I think they want to hear that.

Because you know, again, these are ideas that we should keep talking about. And I was really proud frankly of our network that we had 45 minutes on

health care which is the most important issue in this election to every American. I mean, that was really phenomenal. I thought it was great to

see the back and forth. And, yes, let's challenge those ideas. Because again, we got to challenge them now in the primary. Because we know in the

general election, we're going to have to defend those ideas there again.

Karen Finney, Alice Stewart, good to have you both on the program to share your perspective. Thanks so much, appreciate it.

FINNEY: Thanks, Lynda.

KINKADE: Thank you.

Don't miss round two of the Democratic debate live on CNN, coverage beginning 8:00 p.m. Eastern time in the United States. But you can see

encore presentations at 7:00 a.m. London time, 2:00 p.m. in Hong Kong on Thursday. Only of course, here on CNN.

And you can of course read a lot more about what the candidates had to say and what you can expect at tonight's debate. You can go to our website.

You can find out where all of the candidates stand on issues like climate or health care.

[11:20:00] You can search by candidate or you can look under a particular issue that you're interested in. All of that is at CNN.com/politics.

North Korea launches another round of short-range ballistic missiles as a warning to South Korea to stop its upcoming military exercises with the

United States. It's the second launch in less than a week. Seoul says its military is ready for anything. CNN's Ivan Watson has the latest from Hong

Kong.

(BEGIN VIDEOTAPE)

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: North Korea engaged in some predawn cyber rattling with what South Korea says was the launch of

two short range ballistic missiles around 5:00 a.m. on Wednesday, off of North Korea's eastern coast into the sea.

Now this comes a month exactly after President Trump had his first historic steps across the line of demarcation in the demilitarized zone with the

North Korean leader, Kim Jong-un. And it's actually the second short range ballistic missile launch carried out by North Korea in less than a week.

It is engaging in these activities more and more frequently. There was a previous launch took place in early May.

Now the Trump administration has been downplaying these missile launches. A U.S. officials saying that this was no threat to the U.S. or to any of

its allies. The South Korean government is not downplaying the missile launch. There was an emergency meeting of South Korea's national security

council. And it issued a statement expressing concern about the missile launches, saying that they threaten to hurt the ongoing peace process on

the Korean Peninsula.

And this isn't the only saber rattling that North Korea has been engaged in. It unveiled recently what it says is a new submarine. The South

Korean government says that it could potentially be used to launch submarine launched ballistic missiles.

The Trump administration is of course very heavily invested in President Trump's one on one personal diplomacy with Kim Jong-un, and the

administration says that the two sides are trying to work towards reestablishing face to face working level negotiations. But the time

schedule has slipped, after that meeting took place a month ago. President Trump said the meeting would take place within a matter of weeks, well, it

has been a month.

Ivan Watson, CNN, Hong Kong.

(END VIDEOTAPE)

KINKADE: Still to come at CONNECT THE WORLD, a knife, two teenagers, a drug deal gone bad and at the end, a police officer dead. What really

happened that night in Italy? We have grisly new details when we come back.

(COMMERCIAL BREAK)

[11:25:00] KINKADE: Welcome back. You're watching CNN and this is CONNECT THE WORLD. I'm Lynda Kinkade. Thanks for joining us.

We're going to Italy where the search for clues in the killing of that police officer continues. Police now returning to the hotel in Rome where

the two American suspects stayed. Forensic teams are expected to search through their rooms. Melissa Bell has this report from Italy.

(BEGIN VIDEOTAPE)

MELISSA BELL, CNN PARIS CORRESPONDENT (voice-over): American teenagers Finnegan Elder and Natale-Hjorth running through the streets of Rome in the

early hours of Friday morning, carrying a rucksack they'd allegedly just stolen after a botched drug deal.

FRANCESCO GARGANO, CHIEF OF ROME CARABINIERI: (through translator): We examined the surveillance footage of both Trastevere and the road the

fugitives took to the hotel (INAUDIBLE). And by comparing them, we managed to identify these two Americans.

BELL: What happened next has shocked the country. According to Italian authorities, a police officer, Mario Cerciello Rega, tried to stop the pair

but was stabbed to death.

NUNCIA D'ELIA, PROSECUTOR OF ROME: (through translator): They were after money and drugs. We have clear evidence indicating that.

BELL: Police say the two Americans had arranged to meet the owner of the bag to return it in exchange for money and drugs. They weren't expecting

police to turn up instead.

GARGANO (through translator): And as soon as they identified themselves as carabinieri, they were unexpectedly and immediately assaulted.

BELL: Police say Cerciello was stabbed 11 times. According to court documents, Elder was carrying a 7-inch knife and also confessed to the

stabbing. Police say he'd brought the knife with him from the United States.

GARGANO (through translator): Some of the stab wounds went straight through the body the length of the blade -- through the stomach, the spine,

and the intestines -- so it was impossible to react.

BELL: The two teenagers dispute the police account, saying the plain- clothed officers did not identify themselves as Italian police.

But the pair have now seemingly turned on each other. Natale claims he was not aware that Elder was carrying a knife.

His lawyer issued a statement saying --

EMILIANO SISINI, NATALE HJORTH'S LAWYER (text read) Mr. Natale has clarified his position, which is completely extraneous to the unpredictable

conduct of others, which led to the death of a servant of the state.

BELL: Under Italian law, the two suspects can be held in custody for up to six months, if not longer, before any charges are filed for a crime that

has outraged the country.

(END VIDEOTAPE)

KINKADE: That was Melissa Bell reporting.

Still to come here at CONNECT THE WORLD. A decision just hours away as the U.S. Federal Reserve considers lowering interest rates. What would a cut

mean for America's economy?

Plus, a toddler in China clings to the edge of a sixth-floor balcony. Onlookers watching nervously below. The heart pounding video you can't

miss. That's to come.

[11:30:00] (COMMERCIAL BREAK)

KINKADE: You're watching CNN and this is CONNECT THE WORLD. I'm Lynda Kinkade. Welcome back.

Well eight and a half hours and counting. Anticipation building for round two of the Democratic presidential debates hosted by CNN. And the stage is

set in Detroit, Michigan, where no doubt frontrunner Joe Biden will come under attack on multiple fronts as nine other candidates hope to dent his

lead in the polls.

Many people are waiting to see the rematch between Biden and Senator Kamala Harris in particular after her attacks in a previous debate left him

politically bruised.

Ten other candidates faced off last night with moderates ripping into high profile progressives, Bernie Sanders and Elizabeth Warren. Accusing them

of making unrealistic fairy tale promises.

(BEGIN VIDEO CLIP)

DELANEY: So why don't we actually talk about things, big ideas that we can get done. The stakes are too high.

WARREN: I don't understand why anybody goes to all the trouble of running for President of the United States just to talk about what we really can't

do and shouldn't fight for.

(END VIDEO CLIP)

KINKADE: Don't miss round two of the Democratic debate, that is live on CNN. Coverage begins at 8:00 p.m. Eastern time here in the United States.

But you can see an encore presentation at 7:00 a.m. London time, 2:00 p.m. in Hong Kong on Thursday only on CNN.

We're turning now to Hong Kong. Where protesters gathered outside a police station, calling for the release of dozens of people arrested during

Sunday's clashes with police. Officials say a car drove by the scene Tuesday night, targeting the demonstrators with fireworks. Six people were

injured.

Meanwhile, a judge has granted bail to 44 people charged with rioting during Sunday's protests. That charge carries a potential ten-year jail

term. One other person not granted bail never showed up to court. Well the cases have been divided into four trials. They're set to begin in

September.

The U.S. Federal Reserve is poised to cut interest rates for the first time since the financial crisis of 2008. A move that could boost the already

strong American economy. Such a move would be music to the ears of President Trump. Who breaking with precedent has been trying to pressure

the fed to cut rates for months. Well for more on all of this, we are joined by Clare Sebastian in New York. And, Clare, this of course, as I

say, would be the first rate cut since the great recession in 2008. Why now?

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Lynda, that's a great question. Because if you look at the raw data of the U.S. economy, cutting

rates doesn't seem like the obvious thing to do at all. The economy is not in a recession. Growth is pretty solid. Unemployment is at generational

lows. Consumer spending is strong. We just got new numbers about that this week. And the stock market is close to record highs. But the fed is

doing this not because of pressure from the President. It says not because it's not even pressure from the stock market. Which has been pricing in a

rate cut for a while now.

But because they're thinking of it more as an insurance policy to stave off a potential slowdown. They're worried about things like global growth.

Europe is showing signs of weakness. They're worried about U.S./China trade tensions trickling through and hurting the U.S. economy. And there

are signs in the economy that things aren't quite as rosy as we might have thought. The momentum might be slowing. Things like business investment

are slowing. Manufacturing is showing weakness. Inflation has never really recovered in the way many had expected after the great recession.

So they're thinking of it more as a kind of a vaccination rather than medicine that when something has already happened. So really that's how to

look at this.

KINKADE: A shot in the arm so to speak. Well the U.S. and China of course in trade talks, hitting another roadblock. The latest meeting ending 40

minutes ahead of schedule, not looking good there.

SEBASTIAN: Yes, this is the first face-to-face meeting between the two sides, Lynda, since the talks broke down in May, and since that truce was

agreed between President Trump and Xi at the end of June. All evidence points to the fact it didn't yield much in the way of progress. Two sides

are both calling it constructive. They both say that they talked about China increasing purchase of U.S. agricultural products. That's important.

Because we know that the President wants to bring down the U.S. trade deficit. He on Twitter has criticized China for not doing that. But

that's part of the problem here, is what's happening on Twitter and beyond. Even as talks are going on, the two sides are publicly still slinging mud

at each other. The President on Twitter, China's foreign ministry spokeswoman saying the U.S. needs to show more honesty and sincerity in

these talks, calling the U.S. economy sick. So they're set to resume again in September. But for the moment it does look like this is still going to

take a while.

[11:35:00] KINKADE: Yes, it certainly does. Clare Sebastian in New York for us. Thanks so much.

I want to show you some hair-raising video now from China. A three-year- old boy is safe after this happened on Monday. You can see him hanging out of an apartment window six floors up. Neighbors gather below and amazingly

caught him in a blanket. The boy was left alone when his grandmother went out shopping for groceries. Thanks to some pretty quick-thinking

neighbors, he walked away unhurt.

Well let's get you up to speed on some other stories that are on the radar right now.

Health officials in the Congo have confirmed that a second patient diagnosed with Ebola in Goma has died. Goma is a highly populated city

with an international airport. There are concerns the disease could spread rapidly if it gains traction there.

Boris Johnson, Prime Minister of the U.K. is making his first visit to Northern Ireland. Downing Street saying the U.K. leader will meet with the

leaders of the five main Northern Ireland political parties. Talks will focus on restoring power sharing in the Northern Ireland executive.

Well Mr. Johnson will need some good news as the pound sterling drops to its lowest point in more than two years. Currently at around $1.21 to the

pound. The currency has been pushed down by fears of a no deal Brexit under his leadership.

Live from Atlanta, this is CONNECT THE WORLD. Still to come, when you think of the West Bank, you probably don't think of beer. We're going to

look at a brewery and how it could be impacted by the Trump administration's financial plan for that region.

Plus, the U.S./Mexico border turns into a playground for the kids on opposite sides of the barrier. Those stories after a short break.

(COMMERCIAL BREAK)

KINKADE: You're watching CNN and this is CONNECT THE WORLD. I'm Lynda Kinkade. Welcome back.

Well the Trump administration says it is trying to bring peace to the Middle East with a financial plan, but as our Michael Holmes traveled to a

successful brewery, he learned that you can't run a business in the West Bank without coming up against political roadblocks.

(BEGIN VIDEOTAPE)

MICHAEL HOLMES, CNN CORRESPONDENT (VOICE-OVER): The Taybeh Brewing in the West Bank is a Palestinian success story, producing 600,000 liters a year,

shipped locally to Israel and to 15 countries from Morocco to the U.S.

It's a family owned enterprise, started 25 years ago and now run by a second generation of Khoury family brewers. And for all of the 25 years,

the family has negotiated myriad obstacles, just getting the brew to markets abroad.

(on camera): It's a windy day here in the West Bank. But we wanted to come up here to show you the water tanks. Because one thing you cannot

make beer without is water. And water has always been a big issue in the West Bank. Israel controls the water supply. Taybeh beer, like all

Palestinians, they get an allowance. Once that allowance runs out, that's it. You want more, you have to pay for a tanker to ship it in.

MADEES KHOURY, GENERAL MANAGER, TAYBEH BREWING COMPANY: At the moment in the summertime, that's when we feel the water shortage, that's when you

want to brew more beer, and that's when we have water coming once a week.

[11:40:00] HOLMES (voice-over): Under the 1995 Oslo II agreement, Israel retained ultimate control over water resources. But COGAT -- the Israeli

military authority responsible for civilians in the West Bank -- says the brewery is in a Palestinian controlled area and Palestinian authorities are

responsible. In essence, when it comes to water issues, both sides blame the other.

The latest attempt to untangle the Israelis-Palestinian conflict took place in Bahrain a few weeks ago. The U.S. President's son-in-law, Jared

Kushner, unveiling an economic plan for Palestinians. One criticized by many for rehashing old ideas, being vague about implementation and putting

off political solutions for later. Madees Khoury and her family say economic dreams are pointless without a political settlement first.

KHOURY: We need to resolve the political issue. We need to go back to negotiating and resolving the political problems and then talk about the

economy and the economic solutions.

HOLMES (on camera): When you heard that plan, what did you think?

KHOURY: I just brushed it off.

HOLMES (voice-over): Instead of aid or vague investment promises, Madees Khoury says much could be achieved by the easing of Israelis restrictions,

taxes, red tape, rules and regulations she says are for Palestinians only.

The first roadblock, a literal one. The Israelis checkpoint between the West Bank and Israel.

KHOURY: If you look at the map, you would see the distance between our town Taybeh to Haifa Port. Which we use to export. On the map, it's an

hour and a half drive. In reality, it actually takes three days if everything moves smoothly, which it never does.

HOLMES: Israel's COGAT says those claims are, quote, not consistent with reality. The checkpoint transit times for goods are down to an average 90

minutes, and further improvements are planned.

The Khoury's disagree. But back in Taybeh the family will continue to brew and wait. Their business, a microcosm of the broader economic hurdles that

confront the Palestinian economy. Hurdles the Khoury family say won't be cleared without there being that political settlement. Something that

looks more remote now than ever before, although Madees's father, Nadim, is the eternal optimist.

NADIM KHOURY, OWNER, TAYBEH BREWING COMPANY: Someday we will be free. We have high hope in the future. Nothing left for us except the high hope.

HOLMES: Michael Holmes, CNN, Taybeh in West Bank.

(END VIDEOTAPE)

KINKADE: In tonight's Parting Shots, something you don't see every day, laughter at the U.S., Mexico border. It was all smiles on Monday after see

saws were built through the fence so kids on opposite sides could play together. Even some adults managed to join in the fun. Well the creators,

professors from California, says the event was, quote, to fill them with joy, excitement, and togetherness.

What a great story. What a great image there. I'm Lynda Kinkade. That was CONNECT THE WORLD. Thanks so much for watching. See you next time.

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