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Trump Escalates Trade War with China; South Korea Accuses Japan of Waging 'Economic War'; Hong Kong Protests; Brexit Fears; Presidential Race for the White House. Aired 2-3a ET

Aired August 2, 2019 - 02:00   ET

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


[02:00:00] (COMMERCIAL BREAK)

NATALIE ALLEN, CNN ANCHOR: Asian markets sink as trade tensions ramp up once again between the United States and China. North Korea launches more missiles, the third test firing in just over one week, as nuclear talks remain stalled. And a landmark performance, Saudi Arabia, the kingdom will allow women to travel abroad without a man's approval. We will have a live report on what's behind that move.

Hello and welcome to our viewers joining us from around the world. I am Natalie Allen, and this is "CNN Newsroom."

Our top story, frustrated by the slow pace of trade talks with Beijing, Donald Trump says he will slap another 10 percent tariff on $300 billion of Chinese imports to the U.S. The new levy is to start September 1st, and with tariffs already in place, it hits virtually everything China sends to the U.S. There, you see it. Added now are toys, sports equipment, footwear, clothing, smartphones, televisions, and other electronics.

The announcement sent stocks plummeting on Wall Street with the Dow finishing 280 points lower. And we are looking here at Futures. Now, you see the Dow down 0.09 percent, the Nasdaq Futures down 0.26 percent, and S&P 500 down 0.15 percent, all red arrows there.

Let's head to Beijing and CNN's Steven Jiang. Hello to you, Steven. Let's talk to more about how Asia's markets are reacting and what China's response might be to this.

STEVEN JIANG, CNN SENIOR PRODUCER: Natalie, Asian markets are also down here in China, Shanghai and Tianjin (ph), they were all down about two percent. Other major markets in the region, Hong Kong and Tokyo, down more than two percent as well.

I think this is not surprising, given that these latest tweets, these latest threats from President Trump really plunged this ongoing trade war between China and the U.S. back to where it was before this latest round of talks in Shanghai that took place earlier this week, which offered investors around the world a glimmer of hope. But now, these hopes are gone again.

Now, in terms of what China may do, they are not going to be able to respond to the latest tariffs dollar for dollar because of this imbalance between the two countries trade, but they can do a number of things. One is they can speed up this process of setting up the so- called non-reliable entity list, placing American companies on this black list and make it very, very challenging and difficult for them to conduct business here in China.

China could also set up other non-tariff barriers such as licensing problems, delays in customs clearance, inspection towards, and cancel orders, you name it. All these things could make American companies and even executives lives very difficult here in China. That kind of uncertainty, of course, is making investors very jittery. Natalie?

ALLEN: Understood. And what do you think of Donald Trump's tactic here?

JIANG: That's the thing, Natalie. I think if President Trump thinks his latest threat could what make China cave in to his demands, I think he is probably going to be disappointed, because his threat is (INAUDIBLE) in the face of two of China's core demands: one is sincerity in these negotiations, and two is removal of all existing tariffs before any final deal can be reached.

I think, if anything, this latest threat is going to strengthen President Xi Jinping's hand, because now Mr. Xi is able to really blunt the criticisms from his critics here in China that he has mishandled the situation between the U.S. and China. He can say, look, Trump is impossible to handle. And also, no matter what kind of the concessions China agrees to make, there is no guarantee Americans will keep their end of the promise.

So I think this is really where we stand now. But so far, we have not heard any official details, official responses, other than what the Chinese foreign minister, Wang Yi, has said briefly in Bangkok, where he is attending a regional conference. He said this is absolutely not the right way to resolve trade disputes between the two countries and these tariffs are also against WTO rules. Natalie?

ALLEN: All right. We appreciate it. Thank you so much, Steven Jiang, for us there.

Andrew Sullivan is the director of the financial services firm Pearl Bridge Partners. He joins us this hour from Hong Kong to talk more about this. Thank you so much for being with us. Stock markets in the U.S. and Asia clearly do not like Trump's deepening of the trade war.

[02:05:01] Stock market gains since his election are one of the few major successes he can cite. Why would he put these games at risk?

ANDREW SULLIVAN, DIRECTOR, PEARL BRIDGE PARTNERS: The first reason is he doesn't want a deal in the short term. He wants to wait for this deal to come to 2020 so that he can use it as a plight of his reelection campaign. Equally, you know, it is part of his style to make these outlandish comments, to make these huge positions in order that later down the line, he can get quite clear that up, and he's lost really very little.

ALLEN: Yeah. And a lot of consumer goods will be hit here, almost everything made by Apple, footwear, and clothing. Listen to Donald Trump explain why U.S. consumers won't be impacted.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: China eats it because they have to pay it. Because what they do is they devalue their currency and they push money out. Our people haven't paid. As you know, we're also charging them 25 percent on $250 billion. So we're taking in many billions of dollars. There's been absolutely no inflation and frankly it hasn't cost our consumer anything.

(END VIDEO CLIP)

ALLEN: OK. Andrew, can you explain what he is saying there?

SULLIVAN: I think he is a little bit misguided, and I think most people understand that these tariffs are going to be paid for by the American consumer. I think we've seen that. I mean, you mentioned earlier that we haven't seen a response out of China yet, but we have seen a response out of some of the American retailers.

They are up in arms about this. This is going to hit them just as they run into the Christmas period, which is the most important part of the year. Those last couple of the months of the year is usually where they make the feats (ph). These tariffs are going to come directly onto them. They're starting at 10 percent, but he's warned that he will ratchet that up.

But these are things that, you know, people don't have an unlimited budget to buy kids toys at Christmas, but they do have an almost unlimited demand from the kids. So the retailers are very much aware that this is going to impact them. And of course, for a lot of the retailers, they've already placed their orders for Christmas now, so they're on the hook.

These aren't things that they can speed up and get delivered by the first of September. These are things that are due for delivery in October and November, that very important period for them. So I think for a while, you're going to see China wait, wait and see the response that Trump gets at home before they even consider how they're going to have to respond.

ALLEN: Right. On Wednesday, the Fed chairman announced a cut in interest rates during that news conference. He mentioned the word "trade" 26 times in the context of the rate cut being necessary because of escalating trade tensions, and then comes this 10 percent tariff on trade. What do you make of that?

SULLIVAN: I think Powell is very much aware that a lot of American industry has been very much guided by international trade. If we are seeing a global slowdown and we are not seeing demand from other countries for American goods, it is going to impact America. If you also got tariffs which are impacting on the purchasing side of America, there is just going to be less money to go around.

Personally, I still think that, you know, he's looking at the data and he's very much concerned about what is happening in the U.S., but actually, monetary (ph) policy at the moment has got very little left to offer.

I mean, we are not hearing about American companies having difficulty in raising money. What we are not seeing is American companies aren't spending (INAUDIBLE) because there isn't any demand for the goods at the end of the day, and the real driver for companies is demand.

ALLEN: Right. At one point on Thursday, the U.S. president seems to right off the value of hundreds of billions of dollars-worth of trade. Let's listen.

(BEGIN VIDEO CLIP)

TRUMP: For many years, China has been taking money out by the hundreds of billions of dollars a year. We have rebuilt China. So now it's time that we change things around. If they don't want to trade with us anymore, that will be fine with me. We would save a lot of money.

(END VIDEO CLIP)

ALLEN: Fine with me. Well, there he is talking tough which is sometimes necessary in negotiations. And then there is being, well, ridiculous. Where would you put that statement from Mr. Trump?

SULLIVAN: I think you just have to look at the PMI numbers. America's PMI numbers have been heading in one direction. China's actual recent PMI numbers actually are small take up and that's because China still has the ability to create domestic demand and still can do that. It has spent years spending on infrastructures, spending on other products.

Whereas the Americans, you know, Trump really has not put any of those election promises about improving the roads, building the bridges that were part of his election campaign last time. So I think he's a little bit living in his own little world there at the moment.

ALLEN: Andrew Sullivan, we always appreciate your insights. Thanks so much for joining us.

SULLIVAN: You're welcome.

ALLEN: Staying in the region, South Korean officials have accused Japan of declaring all out economic war.

[02:10:02] The reason? Tokyo removed Seoul from its list of preferred trading partners. Relations between the two have been strained in recent months ever since South Korea's top court ruled Japanese companies can be sued for using forced Korean labor during World War II. Japan says that was settled in a treaty years ago.

For the third time in eight days, North Korea has test fired ballistic missiles. South Korean officials expressed strong concern over the launches, a violation of U.N. Security Council resolution. But the U.S. president shrugged it off, saying he never made an agreement with North Korea on short-range missiles. CNN's Will Ripley has our story.

(BEGIN VIDEO CLIP)

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: North Korean Kim Jong- un appears to be emboldened after his meeting at the demilitarized zone with President Trump. He has been launching short-range missiles at an increasingly rapid pace, two this week, three just in the last two weeks. And the question is: Is he going to continue to do this as the United States and North Korea potentially move closer to the resumption of working-level talks?

That is something the U.S. secretary of state, Mike Pompeo, said he is hopeful and optimistic will happen. He was speaking at a conference in Bangkok. A conference that the U.S. had thought might be a potential place for the U.S. and North Koreans to meet for those working-level talks. The North Koreans did not send a delegation there.

So now, the question is, where will they talk? When will it happen? Are there back channel discussions? These are things that are not being discussed publicly. What we are seeing publicly is a message from the North Koreans that they are unhappy about the U.S. and South Korea resuming joint military exercises.

And by launching these short-range ballistic missiles, tests that violate U.N. Security Council resolutions, tests that President Trump has said essentially don't bother him, he is OK with them because they don't pose a direct threats to the mainland U.S., even though they do pose a threat to Japan and South Korea along with tens of thousands of U.S. troops and both of those countries, well, now the North Koreans are going to see just how far they can go, just how much leverage they can try to secure for themselves ahead of the potential resumption of talks, and of course, what North Korea's ultimate goal is the lifting of economic sanctions.

The U.S. wants North Korea to give up nuclear weapons. So far, neither side has gotten what they want.

Will Ripley, CNN, New York.

(END VIDEO CLIP)

ALLEN: Hong Kong police said they have arrested eight people for possession of weapons and material to make explosives. One of those arrested is the leader of a banned independence party, the Hong Kong National Front. This happened as protesters prepared for the ninth straight weekend of pro-democracy demonstrations.

Matt Rivers is with us from Hong Kong. Matt, talk more about this latest development with these explosives.

MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: Yes. So what happened, according to police, is that last night they were in a routine burglary call as they called it, in a light industrial area of Hong Kong called Sha Tin, when they noticed four people, they said, were acting suspiciously.

So they questioned those people, found that they were carrying what they would call illegal weapon, the kind of things that protesters had been typically carrying over the last two months or so, things like helmets and sticks and face masks.

And so then they searched an apartment belonging to those people where they said that they found petrol bombs and actually two bows and six arrows as they put it. So the police are basically saying that they uncovered people with potentially explosives.

Now, what they did not say is that those people were planning to use those during this weekend protests. Of course, that's the implication that police want to get across here, but they notably did not explicitly say that.

But, you know, they are putting this out -- we can't overlook the fact that this is a bit of a P.R. game on the point of the police. They want to paint these protesters as extreme. They want to paint the violence that has been happening as indicative of the vast majority of protests when that is not just the case.

The fact of the matter is the hundreds of thousands if not millions of people that have been marching in Hong Kong over the last two months have been doing so peacefully. The fact that the police put this out last night will cause skepticism here in Hong Kong.

The simple fact is that a lot of people in this city do not trust what the police have to say anymore, and they are going to point to this very timely arrest, you could put it, and say, oh, it's interesting that they make this arrest the day before protesters are supposed to kick off yet again here in Hong Kong.

So, yes, they did arrest people. Yes, they said that they found explosive devices. But that is going to be met with a lot of skepticism from a lot of different people here in Hong Kong, Natalie.

ALLEN: All right, Matt Rivers, following it for us there. Thank you so much, Matt.

Next here on "CNN Newsroom," the day after democratic candidates square off in Detroit, President Trump delights in the fact they were more critical of Barack Obama than of him.

(BEGIN VIDEOTAPE)

[02:15:05] UNIDENTIFIED MALE (voice-over): Now, please rise.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ALLEN: Welcome back to "CNN Newsroom." Boris Johnson's chance of securing any agreement on Brexit just got harder. His conservative party just lost a seat in a parliamentary via election to pro-E.U. Liberal Democrat Jane Dodds. She says her first act will be to tell Johnson to rule out a no-deal Brexit. This is Mr. Johnson's first electoral defeat since becoming Britain's prime minister less than two weeks ago. It reduces his working majority in parliament to just one.

For the past couple of days, Democrats in the U.S. have taken shots at President Trump in a series of debates among the presidential candidates. On Thursday evening, he fired back. He told supporters in Cincinnati, Ohio that Democrats were to blame for the country's problems, especially the plight of many inner cities.

(BEGIN VIDEO CLIP)

TRUMP: For decades, these communities have been run exclusively by Democrat politicians, and it's been total one party control of the inner cities. For 100 years, it's been one party control and look at them, we can name one after another, but I won't do that, because I don't want to be controversial. We want no controversy.

(END VIDEO CLIP)

ALLEN: Well, a handful of protesters tried to lower controversy, briefly interrupting Mr. Trump's speech, but were shouted down. The president called out to them, "You must have a Democrat mayor."

And speaking about the democratic debate, Mr. Trump said he noticed the candidates criticized former President Barack Obama more than they did him. It's a point that current front-runner, former Vice President Joe Biden, hopes won't be repeated in the future. We'll get the story from CNN's Jeff Zeleny.

(BEGIN VIDEOTAPE)

JOE BIDEN, PRESIDENTIAL CANDIDATE: Hey, guys, how are you?

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): Tonight, former Vice President Joe Biden is calling on his rivals for levelling more criticism at the legacy of the former president than the policies of the current one.

[02:19:57] BIDEN: I hope in next debate, we can talk about how we fix -- our answers to fix the things that Trump has broken, not how Barack Obama made all these mistakes. He didn't.

ZELENY (voice-over): A day after the second democratic debate in Detroit, Biden is still standing and bristling over fellow Democrats directing more attacks at President Obama's record on health care and immigration than at President Trump.

BIDEN: I must tell you, I was a little surprised at how much the incoming was about Barack.

ZELENY (voice-over): But the onslaught was actually aimed at Biden, who is leading the democratic race. They were hardly in firm control of the crowded 2020 field. A series of fiery exchanges set the tone for the race to come, but hardly resolved deepening differences on health care.

SEN. KAMALA HARRIS (D-CA) PRESIDENTIAL CANDIDATE: We must agree that access to health care must be a right and not just a privilege of those who can afford it. And in America today, far too many people, in fact, 30 million people --

UNIDENTIFIED FEMALE (voice-over): Thank you, senator.

HARRIS: -- are going without access to health care.

BIDEN: Any time someone tells you're going to get something good in 10 years, you should wonder why it takes 10 years. You can't beat President Trump with double talk on this plan.

ZELENY (voice-over): At center stage, the dispute between Biden and Senator Kamala Harris intensifying. But after her breakout first debate a month ago in Miami, Harris is also taking considerable fire from other rivals.

SEN. MICHAEL BENNET (D-CO) PRESIDENTIAL CANDIDATE: If we can't admit tonight what is in the plan, which is banning employer-based insurance, we are not going to be able to admit that when Donald Trump is accusing Democrats of doing that as well.

HARRIS: We cannot keep with the republican talking points on this. You got to stop.

ZELENY (voice-over): It was Senator Cory Booker standing on the other side of Biden who has zeroed-in on the former vice president's long record, particularly on crime as he led the Senate Judiciary Committee.

SEN. CORY BOOKER (D-NJ) PRESIDENTIAL CANDIDATE: Every crumble, major and minor, has had his name on it. And you can't just now come out with a plan to put out that fire.

ZELENY (voice-over): Biden pushing back on Booker, raising his record on crime as mayor of Newark, New Jersey.

BIDEN: There is nothing done to deal with the police department

There was nothing done to deal with the police department that was corrupt.

BOOKER: There is a saying in my community, you're dipping into Kool- Aid and yet don't even know the flavor.

ZELENY (voice-over): But again and again, Biden on defense over his administration's record. Even a member of Obama's cabinet, HUD Secrtary Julian Castro, is blasting Obama's deportation policy, calling for decriminalizing illegal border crossings.

JULIAN CASTRO, PRESIDENTIAL CANDIDATE: First of all, Mr. Vice President, it looks like one of us has learned the lessons of the past, and one of us hasn't. What we need are politicians that actually have some guts on this issue.

BIDEN: I have guts enough to say his plan doesn't make sense. Here is the deal. The fact of the matter is, that in fact when people cross the border illegally, it is illegal to do it unless you're seeking asylum. This particular part of the law is being abused because of Donald Trump. We should defeat Donald Trump and end this practice. ZELENY (voice-over): But there was far less talk about Trump than Obama, which infuriated former Chicago Mayor Rahm Emanuel, the first chief of staff in the Obama White House. He told CNN, "We have seen this movie before. Democrats need to wake up. I would not treat the Obama years as something to be airbrushed out of history."

(END VIDEOTAPE)

ALLEN: James Davis joins us now from Munich, Germany to talk about this. He is professor of political science and director of the Institute of Political Science at the University of St. Gallen. Thank you so much for being with us, James. I always appreciate it.

JAMES DAVIS, PROFESSOR OF POLITICAL SCIENCE, DIRECTOR OF INSTITUTE OF POLITICAL SCIENCE, UNIVERSITY OF ST. GALLEN: Good morning. It is nice to see you, Natalie.

ALLEN: Thank you so much. Well, OK, what do you make of the facts that we had a democratic debate and many of the candidates took the time to attack President Barack Obama?

DAVIS: It is clear what the objective is here. You know the vice president, the former vice president is in the lead in these polls, in these early polls, and he's associated with the Obama. He has used his vice presidency under the presidency of Obama as a sort of shield against many of the attacks from the populist left, saying, look I was with Barack Obama, we were the progressive administration, I'm taking my share of the claim -- my claim -- you know, share of the progress that was made.

And so one of the ways that they're going to try, his opponents are going to try to weaken him is to take some pot shots at that legacy. I think the vice president and Rohm Emanuel are very much correct when they say, look, folks, this is not a winning strategy against the Republican President that we want to beat. We've got to draw the contrast between Democrats and what unites Democrats and the Republicans and not amongst the Democrats who can find the weakest elements of the Obama administration and make a point out of those.

ALLEN: Right. Mr. Trump is taking aim at cities run by Democrats and the goal is to portray them poorly as he did this weekend, describing the city of Baltimore as rat and rodent-infested and a place where no human would want to live. That was widely considered a racist comment. What do you think of that tactic?

DAVIS: Again, it's an effort of the president to divide the country and to mobilize his base of supporters, which are largely not in the inner cities.

[02:25:00] It's almost a freebie for him. He's not going to lose any votes by attacking inner cities. He may, in fact, gain votes in those parts of the country that are historically afraid of urban life and what the cities have to represent.

But, of course, he is factually just wrong on this, right? City life in the United States over the past 20 years has become better. We have had lower crime rate in a city like New York. It is the lowest. It has been in decades.

By the way, a series of Republican mayors did make some contributions to that as well as Democratic mayors. But, you know, the claim that the inner cities are all run by Democrats and are all rat-infested is just malarkey, as the former vice president would say.

(LAUGHTER)

ALLEN: Yes, malarkey did get some play there, didn't it, during the debate, that word. Mr. Trump has sought to brand all the democratic candidates as socialist, and he took the stage at the campaign rally in the battleground state of Ohio, eager to exploit the ideological fissures in the Democratic Party laid bare in this week's debates. Is that a chasm he can exploit?

DAVIS: I think Mayor Pete Buttigieg is right on this. It doesn't matter what the Democrats do or who they nominate. The president is going to try to paint that person as outside of the pale of American politics. And one of the ways to do that is to claim that the person is a socialist.

But what does that mean? I mean, you know, traditionally, socialism has meant something like, you know, no private property. Well, no Democrat is making the claim that we shouldn't have private property. Socialism is about the government running the economy in a much bigger way than anybody's claiming for.

It's a tactic that he is going to use, but he's going to use it no matter who gets nominated by the Democrats. And so I think the important thing for the Democrats to do is really focus on the positive message, focus on where they want to take the country.

If they are going to talk about Obama, point the fact that Obama had moved the country on many fronts forward in ways that are being attacked now by this administration, whether we're talking about clean air, whether we're talking about the economy, a fair economy which everyone has a fair shake, whether we're talking about investments in future technologies.

All of these are the areas where the Obama administration made great progress. And so if you want to talk about Obama, let's talk about that. It may draw the contrast between him and the Trump administration instead of trying to find the errors that he might have made in eight years of administration.

ALLEN: We always appreciate your insights, James Davis for us. Thank you, James.

DAVIS: Thanks, Natalie.

ALLEN: American rapper ASAP Rocky is telling his side of the story in Swedish court, explaining the street ball that has him facing jail time.

Also ahead this hour, more on the investigation into an Italian police officer's killing. Prosecutors are raising more questions like why he approached two teenage robbery suspects unarmed.

[02:30:00] (COMMERCIAL BREAK)

ALLEN: And welcome back, you are watching CNN NEWSROOM, we appreciate it. I'm Natalie Allen. Here are our top stories.

China's foreign minister is blasting Donald Trump's plan to impose more tariffs on Chinese-made products, saying that is not the way to solve their trade dispute. The U.S. president plans to add a 10 percent tariff on another $300 billion of Chinese goods.

South Korea has accused Japan of declaring an all-out economic war. This comes after Tokyo removed Seoul from its list of preferred trading partners. Tensions have been rising since the South Korean court ruled citizens can sue Japanese companies for using forced Korean labor during World War II.

South Korea has expressed strong concern over the latest missile test by North Korea, the third in eight days. They appear to be short- range ballistic missiles, a violation of U.N. resolutions. But U.S. President Trump says he's not concerned because he didn't make a deal with North Korea on short-range missiles

The American rapper facing assault charges in Sweden says he was only acting in self-defense during a street brawl in June. ASAP Rocky gave a statement and was cross-examined on day two of his trial. He says he was scared and tried to defuse the situation after he says the alleged victim aggressively followed him.

(BEGIN VIDEO CLIP)

ASAP ROCKY, AMERICAN RAPPER: So, we asked these guys, like, calmly, you know, I even put my hand on his shoulders in a peaceful way, so I wouldn't pose as a threat. We pleaded and we begged them. We said, look man, we don't want to fight you all. We don't even want problems. We don't want to go to jail. We don't want to fight you all. Please stop following us.

(END VIDEO CLIP)

ALLEN: Newly released video shows part of the incident, the accuser says he did not recognize the rapper or his entourage and was trying to ask a question, when he was thrown to the ground. The trial is set to resume next hour.

The families of two American teenagers detained in Italy are standing by their sons, as prosecutors investigate. The teenagers are suspects in the killing of an Italian police officer. The father of one suspect says his son is innocent and is distraught over the officer's death. Melissa Bell has the latest on the investigation from Rome.

(BEGIN VIDEOTAPE)

MELISSA BELL, CNN PARIS CORRESPONDENT: Pushing through a crowd of cameras and reporters, and exhausted and emotionless Ethan Elder, left Rome's Regina Coeli prison, after visiting his teenage son, Finnegan. Finnegan, 19-years-old, and Gabriel Natale-Hjorth, 18, both from San Francisco and now suspects in the killing of Italian police officer, Mario Cerciello Rega.

Police say both teens have admitted to the assault, but say that Elder confessed to stabbing Cerciello. The officer, a newly-wed, was stabbed 11 times, according to Italian authorities. The tragedy has triggered outrage in a country where the killing of a police officer is rare. Natale-Hjorth's lawyer ignored questions about what happened that fateful night, only to say that his client is distraught.

FABIO ALONZI, LAWYER FOR GABRIEL NATALE-HJORTH (through translator): He's a young man who is tired. He is very exhausted. We had a long meeting, obviously, with regards to what our defense is going to be.

BELL: A defense that is likely to challenge the chain of events given by Italian authorities, that's part of the court order for detaining the two American teens. CNN earlier spoke with Gabriel Natale- Hjorth's father, who adamantly defended his son.

FABRIZIO NATALE: Gabriel is distraught by what happened and cannot come to terms with it. We are deeply upset by his predicament, while at the same time, fully convinced of his innocence. He did not know his friend was armed. He only became aware of what actually happened after his arrest.

BELL: Surveillance video shows the two Americans running in the streets that night after allegedly sealing a backpack after a botched drug deal. The owner of the stolen backpack contacted police and two unarmed plain clothes officers, Cerciello and his partner, met the American teens under the guise of retrieving the knapsack.

Cerciello, who was unarmed, and his partner, identified themselves as police, according to Italian authorities. The pair was then immediately attacked. Police alleged Elder brought the murder weapon to Italy from the U.S.

[02:35:06] When Elder was interrogated, he claimed he wasn't aware Cerciello and his partner were policemen, and said he acted in self- defense. CNN has spoken with a source close to the defense, who says it is still waiting for authorities to release the autopsy report before commenting further.

Police alleged surveillance footage also showed the two teens with the owner of the knapsack, seen here with his bike, before the attack. Now, the owner issuing a statement through his lawyer, denying that he is a drug pusher, intermediary, or a police informant, as Italian media have suggested.

SERGIO BRUGIATELLI, OWNER OF KNAPSACK (through translator): They threatened me, telling me they knew where I lived and that they would have come after me.

BELL: Though police say Elder has confessed to stabbing Cerciello, Natale-Hjorth can also be charged for the crime under Italian law, because he was involved, charges that could take, at least, six months to file. Authorities are also looking into why Cerciello was not carrying his firearm, another piece of a puzzle that has become a national tragedy. Melissa Bell, CNN, Rome.

(END VIDEOTAPE)

ALLEN: Saudi women will soon be able to obtain passports and travel freely without the permission of a male guardian. The government says the move is to, "promote women's rights and empowerment." Sam Kiley joins us now from Abu Dhabi, who's following the story. And Sam, is this considered a significant step forward in Saudi Arabia's repression of women?

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: It's only interesting, considered significant by Saudi Arabia's female ambassador to Washington, D.C., Princess Reema al Saud, a member of the ruling family, who has in a series of tweets, celebrated this moment.

It rescinds a law that was brought in the year 2000 that required women to get permission of the nearest dominant male, if you like, in their household, their father or husband, in order to obtain a passport.

And, of course, CNN, Natalie, has, you know, has been reporting recently on young women who have escaped, gone into exile from Saudi Arabia, having used their -- using their father's log-in capabilities known to apply for passports online, and then (INAUDIBLE) from the country.

Many of them seeking asylum around the world, following what they say a threat to their well-being and their lives. So, this is definitely in the context of Saudi women's rights to step forward. And, of course, last year, they were also (INAUDIBLE) to get behind the wheel (INAUDIBLE) Natalie.

ALLEN: Right. Something women have been wanting for a long time. So, we'll continue to follow this new initiative, Sam Kiley for us. Thank you, Sam.

Well, the United States is expected to formally withdraw from the Intermediate-Range Nuclear Forces or INF treaty in the coming hours. This marks the end of a 30-year landmark agreement. The United States blames Russia for violating the treaty, a claim which Moscow denies. The U.N. secretary-general is predicting dire consequences.

(BEGIN VIDEO CLIP)

ANTONIO GUTERRES, SECRETARY-GENERAL, UNITED NATIONS: The world will lose an invaluable break on nuclear war. And this will likely heighten, not reduce, the threat posed by ballistic missiles. Regardless of what transpires, the party should avoid destabilizing developments and urgently seek agreement on a new common path for International Arms Control.

And I strongly encourage the United States and the Russian federation to extend the so-called new start agreement, to provide stability and the time to negotiate future arms-controlled measures.

(END VIDEO CLIP)

ALLEN: U.S. defense officials confirmed they are preparing to test a new missile, specifically, to counter Russian aggression. CNN's Barbara Starr has our exclusive report.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT: This is the Russian missile, the U.S. says, led to the demise of a critical Cold War. U.S. Soviet Arms controlled treaty.

CNN has learned that the U.S. military is set to test a new non- nuclear, mobile launched cruise missile, developed specifically to challenge Russia in Europe, according to a senior U.S. defence official. Details of this new weapon are scant, as it is just entering the test phase.

This comes as the U.S. is expected to formally withdraw from the 1987 Intermediate-Range Nuclear Forces Treaty, signed by President Ronald Reagan, and Soviet leader, Mcal Gorbachev.

MIKE POMPEO, STATE SECRETARY OF THE UNITED STATES: We can no longer be restricted by the treaty, while Russia shamelessly violates it.

STARR: It's one of the few areas where the Trump and Obama administrations agree.

MARK ESPER, DEFENSE SECRETARY OF THE UNITED STATES: Russia has cheated or is cheating on treaties. I give the Obama administration high marks for calling them out and trying to work this.

[02:40:08] STARR: The U.S. has long claimed Russia was in violation, when it built and deployed this new ground launched missile. Defense officials say Russia has deployed multiple battalions on rapidly moving mobile launch vehicles that U.S. intelligence may find difficult to detect.

JOHN BOLTON, NATIONAL SECURITY ADVISOR OF THE UNITED STATES: The threat is not American withdraw from the INF treaty, the threat is the Russian missiles already deployed.

STARR: If war breaks out, the potential targets Russia could hit, include European ports, cities and critical military and civilian infrastructure, according to a U.S. official. This new U.S. missile aimed to deter those Russian threats, but could also be used against China in a crisis.

ESPER: We obviously need to prepare air missile defenses to defeat those intermediate-range missiles, but then, the other part is to make sure that we develop our own conventional INF range missiles to deal not just with Russia, but China.

(END VIDEOTAPE)

ALLEN: Barbara Starr, reporting there. NATO members would still have to approve any missiles deployment, but countries including Poland are nervous about Russian military moves and say they just -- they just might do it.

U.S. negotiators are optimistic about a peace deal with the Taliban, as the Trump administration is scaling back at the U.S. embassy in Afghanistan. Five sources tell CNN, the U.S. plans to cut embassy personnel in half, by the end of September, including diplomats and security staff.

The U.S. also hopes to bring home about 5,000 troops in the coming months, as part of its push to end the 18-year war in Afghanistan.

Still to come here, one year after an Ebola outbreak was declared in the Democratic Republic of Congo, a new case of the deadly virus is confirmed in a major border city, what it means, next.

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ALLEN: In the Democratic Republic of Congo, international health officials have confirmed a third case of Ebola, in the major border city of Goma. The disease has already killed two people there, after killing hundreds elsewhere, in the country. For more about this development, David McKenzie has our story.

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DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Well, it's a grim milestone in the Democratic Republic of Congo. It's been a year to the day of --

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[02:44:43] ALLEN: In the Democratic Republic of Congo, international health officials have confirmed a third case of Ebola in the major border city of Goma.

The disease has already killed two people thereafter killing hundreds elsewhere in the country. For more about this development, David McKenzie has our story.

MCKENZIE: Well, it's a grim milestone in the Democratic Republic of Congo. It's been a year to the day of this Ebola outbreak, and still, no sign that they are managing to get it under control. This despite there being an experimental vaccine that many hoped would stop this outbreak in its tracks.

But in the northeast part of the Congo, they're dealing with a conflict zone and also a deep level of mistrust, which we saw on the ground recently when we traveled there.

Now, there's been a third Ebola confirmed case according to Doctors Without Borders in Goma. This city of more than a million people, a transit hub on the border of Rwanda. There's fear, and WHO says a high risk of this disease spreading into Rwanda, into Uganda, South Sudan -- those neighboring countries.

That is why they're trying to make sure that there isn't a spread in Goma. They are stopping people and testing their symptoms thousands of times a day at the various entry and exit points of this country. More than 70 million times, they say since this outbreak began.

But despite this surveillance, they are just not getting a handle on this outbreak, more than 1,700 people have died. And even with the announcement of a global health emergency of international concern in a couple of weeks ago, they'd haven't seen really the slowing of this outbreak in those key areas of the provinces in Northeast Congo.

David McKenzie, CNN, Johannesburg.

ALLEN: We were learning new details about the sixth wife of Dubai's ruler, who was in London seeking legal protections for herself and her two children. CNN's Nina dos Santos has our report from London.

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NINA DOS SANTOS, CNN INTERNATIONAL CORRESPONDENT: The Dubai billionaire ruler's wife, Princess Haya has appeared in a central court in London. Mounting a high-profile legal battle, seeking a forced marriage protection order. Specifically, to prevent one of her children from being pushed into wedlock.

The couple who married in 2004 have two children. And Princess Haya bint al Hussein is the sixth wife of Sheikh Mohammed bin Rashid al Maktoum, who is one of the richest men in the world, and whose power in the Middle East is undisputed. The architect of Dubai's transformation.

The British media have speculated for weeks about the collapse of their marriage. After the princess reportedly left her husband and traveled to London. The hearing was subject to stringent reporting restrictions. CNN and other international media were not allowed in the courtroom.

On Tuesday, the press association reported that Princess Haya also requested a non-molestation order from the court for herself and for both of her children to be made wards of the court.

Meaning that any future decisions about their welfare cannot be made without the approval of a judge. Sheikh Mohammed who was not present at court opposed the application and asked the court to order the return of his children to the UAE. His representatives declined to comment.

The custody battle is the latest chapter in this high-profile separation. One would risk becoming a diplomatic minefield for the U.K. and its close ally, the UAE. Both parties have royal blood in their veins and connections to Britain's monarchy.

Princess Haya is the daughter of the late King Hussein of Jordan and the half-sister of that country's current monarch. Through their shared passion for horses, she and Sheikh Mohammed have often been seen in the presence of the Queen at key events.

An Oxford graduate, Princess Haya is no stranger to the public limelight. She has championed humanitarian efforts in the Middle East and competed as an equestrian for Jordan in the 2000 Sydney Olympics. On Wednesday, after the two-day hearing, the judge set a date for a full hearing in early November. Princess Haya is the third female family member of Sheikh Mohammed's court to leave the UAE. Two of his daughters from another marriage had previously attempted to leave the country, they ended up returning to Dubai.

Nina dos Santos, CNN, London.

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ALLEN: We are tracking several tropical systems right now around the world. Our meteorologist Derek Van Dam is following it all from the CNN Weather Center. You got lots of circles there on your map there, Derek.

[02:49:34] DEREK VAN DAM, CNN INTERNATIONAL WEATHER ANCHOR: Yes, you can see three of them, there are six in total. You won't believe this that now, typhoons can form basically any months of the year in the western Pacific. But they typically form during the months between March and October.

Now, we're starting to see them line up one after another, after another across the western Pacific. We've got Tropical Storm Wipha impacting southern China and northeastern Vietnam. We've got newly named Francisco, and then an area of interest just east of the Philippines.

Let's shift the globe in the satellite to the Central Pacific where we have Tropical Storm Erick, Tropical Storm Flossie, and an area of organized shower and thunderstorm activity that will likely become another named tropical system.

So, we try to focus on there was that are impacting land or most imminent threat. Tropical Storm Wipha, again, Hainan Island into northern Vietnam, specifically near Hanoi, and the Ha Long Bay region, that area could see significant rainfall totals over the next three days that could bring some landslides, mudslides, and localized flooding.

Rainfall totals in excess of 500 millimeters possible there. And here's Tropical Storm Francisco. This was recently named from the Joint Typhoon Warning Center, 65 kilometers per hour.

But, look at the trajectory as we take it into the weekend and early parts of next week. The potential for the storm to impact mainland Japan as a typhoon looking more and more likely.

Then, we head to the Central Pacific. Erick and Flossie, these two threaten the Hawaiian Islands. A different part of the world, of course.

But, this is interesting because the Tropical Storm Erick track actually brings it south of the Big Island. But, of course, that is going to kick up some major surf especially along the south and east- facing shorelines of not only the Big Island, Maui, and Oahu, as well as Kauai. We're expecting anywhere from 4-1/2 to six-meter swells, you better believe the surfing industry that are going to take advantage of this. Now, it's not only a flood threat there but it's also rainfall totals in excess of 100 to 200 millimeters for this region as not only one a tropical system impacts the Hawaiian Islands, but two.

So, the outer rain bands from both storms, even though, we won't get a direct hit from either of them, the potential for rainfall totals in excess of 100 to 200 millimeters certainly a possibility that means flash flooding and localized landslides as well.

Tropical Storm Flossie, here is the trajectory that cursed of the north and east once it makes its way to the Hawaiian Islands. And just a little bit of an FYI for you here, only 15 named storms have passed within 100 kilometers of the Hawaiian nation.

And for you, Natalie, I know you'll like this one. Only five storms have made landfall in Hawaii since records have begun. So, this area is pretty safe, if you ask me.

ALLEN: Leave Hawaii alone.

VAN DAM: That's right. We like it too much. Pristine beaches, we'll leave it that way.

ALLEN: Much to keep watching there. All right, Derek, thanks so much.

VAN DAM: All right.

ALLEN: Coming up here. Fuel system failure, a quick-thinking or maybe desperate pilot, turns a roadway into a runway. What happened next?

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ALLEN: Take a look here. You're looking at an extreme case of engine trouble. A plane making an emergency landing on a busy street near Seattle, Washington after its fuel system failed.

This video shot on a police dashcam, shows the moment the plane set down during the morning rush hour with traffic all around.

A state trooper flipped on his emergency lights to block traffic. That pilot is some driver, he stopped right at the red lights along with the rest of the traffic. Good job, Mr. Pilot.

Well, meantime, in Moscow, several homemade aircraft couldn't even get off the ground. It was all part of Flugtag, a quirky flying competition that sees more splash landings than successful takeoffs.

CNN's Lynda Kinkade has our story.

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[02:55:08] LYNDA KINKADE, CNN INTERNATIONAL ANCHOR: It's the Oscars of water sports. Flugtag means flight day in German. The participants in this competition usually spend more time in the water than in the sky. It's a scenario that plays out at 100 venues worldwide every year.

This week's events sponsored by Red Bull was in Moscow and it pretty much followed the usual script. Onlookers didn't learn much about aeronautics, but they did get to see a lot of people dunked in cold water. And let's face it that never gets old.

And then, there was this. And there they go. The rules stipulate that vehicles can only measure up to 10 meters long and 150 kilograms in weight. Some of the teams take things very seriously.

ANTON RUDENKO, PARTICIPANT, RED BULL FLUGTAG (through translator): The vehicle is totally fine. The pilot is ready. The vehicle has been tested, and we hope for a flight record today.

KINKADE: A flight record maybe not, but it was one of the longer flights on the day. But, of course, not everyone can be a winner. Most did at least make it off the runway and into the water, again, and again.

Experienced competitors say it's all about getting the details just right. Like for instance, hairstyles.

UNIDENTIFIED FEMALE (through translator): We are bright, we are creative. Look at our preparations, everyone has costumes and we have hairstyles.

KINKADE: And it's a nice hairstyle, I suppose. But when it actually came to flying, it didn't go so well for the Self-Styled Flight Dream Team. At least, they showed a lot of team spirit and great hair. And let's face it, Flugtag isn't really about the flying, these guys just seem to be there to have fun.

For others, well, it was just way too much excitement. Lynda Kinkade, CNN.

(END VIDEOTAPE)

ALLEN: Where are the Wright brothers when you need them? Thanks for watching CNN NEWSROOM. I'm Natalie Allen. I'll be right back with more of the world's top story.

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