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ERIN BURNETT OUTFRONT

Trump Pushes Pick For Intel Chief To Withdraw, Blames Media, But Pick Lacked Support Among GOP Senators; Rep. Raul Grijalva (D-AZ) Is Interviewed About How Republicans Stood Up Against President Trump's Nomination Of Congressman Ratcliffe In DNA; De Blasio Defends Biden Clash Amid Calls To Focus On Trump; Trump Warns He Can "Substantially" Increase New Tariffs Even As U.S. Stock Market Posts Worst Week Of The Year; Interview with Peter Navarro, Assistant to the President; Trump: North Korea Missile Launch "Not a Violation" of My Deal with Kim. Aired 7-8p ET

Aired August 2, 2019 - 19:00   ET

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


WOLF BLITZER, CNN HOST: We'll stay on top of the story. Thanks to our viewers for watching. I'm Wolf Blitzer in THE SITUATION ROOM. Follow me on Twitter and Instagram @WOLFBLITZER. Erin Burnett OUTFRONT starts right now.

ERIN BURNETT, CNN HOST: OUTFRONT next, the President abandoned since- picked to be the country's top intelligence official after bipartisan outrage as another Republican in Congress calls it quits tonight. Is Trump's party starting to turn or not? Plus, a Baltimore pastor praised by the President has a message for Trump after the President called the city rodent infested. He's OUTFRONT. And the President escalating his trade war with China, issuing a new threat as Americans consumers pay the price. Let's go OUTFRONT.

And good evening. I'm Erin Burnett. OUTFRONT tonight, going down in flames. President Trump's nominees to lead the U.S. intelligence community is picked for the Director of National Intelligence is done. Congressman John Ratcliffe forced to withdraw.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I felt that Congressman Ratcliffe was big treated very unfairly. He's just too good. He doesn't deserve it.

(END VIDEO CLIP)

BURNETT: Trump blaming the media but the truth is that Republican senators had serious concerns about Ratcliffe's qualifications. GOP leadership never came out to support his nomination. GOP members called the Trump White House to express their concerns, because it wasn't qualifications that got Ratcliffe a nomination. It was Ratcliffe's impassioned defense of President Trump in the Mueller hearing.

(BEGIN VIDEO CLIP)

REP. JOHN RATCLIFFE (R-TX): Americans need to know this as they listen to the Democrats and socialists on the other side of the aisle as they do dramatic readings from this report, that volume two of this report was not authorized under the law to be written.

(END VIDEO CLIP)

BURNETT: It's all part of what one GOP source tonight calls Trump's SHI blank show and that's a quote. According to the source, Republicans are quote all tired of trying to defend the SHI blank show. Another part of that show today Trump gloating at the news that Congressman Elijah Cummings' home was broken into. The President's tweet, quote, really bad news! The Baltimore house of Elijah Cummings was robbed. Too bad.

This just days after the President's tweet rant against Cummings where he called Cummings a racist and called the Congressman's Baltimore district a disgusting rat and rodent infested mess. After the President's tweet about gloating about Elijah Cummings at the break in though at least one Republican stood up. Trump's former ambassador to the United Nations, Nikki Haley responding, quote, this is so unnecessary.

But other Republicans have clearly had enough too. The only black Republican in the House of Representatives announcing he's leaving Congress, Will Hurd, a moderate Republican who opposed the wall. By the way, he represented the longest stretch of border. Here's Trump.

(BEGIN VIDEO CLIP)

TRUMP: I don't know Congressman Hurd, but I've heard he's done a good job. We differ on certain subjects.

(END VIDEO CLIP)

BURNETT: Trump may not know Hurd well, but Republicans know Trump. Hurd is the eighth Republican to say he's not running for reelection. The sixth to do so in just the past two weeks. Pamela Brown is OUTFRONT the White House tonight.

And Pamela, what more are you learning about Ratcliffe and President was full steam ahead and now, boom, it's over.

PAMELA BROWN, CNN SENIOR WHITE HOUSE CORRESPONDENT: Boom, it's over. And I've spoken to administration sources today, Erin, expressing concern once again about the vetting process here at the White House or lack thereof. A source familiar with the processing of President Trump's selection of Congressman Ratcliffe came without ample vetting and that his performance last week during the Robert Mueller hearings sealed the deal for him.

One source is telling me, Erin, the White House has known for weeks that Coats would be replaced and that there's no excuse for a lack of vetting. Of course, in a typical administration, a thorough vetting would be done and White House officials would be designated to defend the President's pick.

But sources say Republicans have made their concerns about Ratcliffe known to the White House this week, his lack of National Security experience, the exaggeration of his resume brought to light in news reports and that a pick of a political loyalist who has questioned the intelligence community's role in the Russia probe could be problematic.

While Trump defended his pick all week, it eventually became clear to him, I'm told, that Ratcliffe would run into issues, too many issues getting confirmed, even though publicly the President is putting the blame on the media, as you know. We'll also say he needs the media's help to vet.

But what's interesting here is I'm told that the President hasn't been concerned about Ratcliffe's lack of qualification, because he wanted someone in the role who he melds with personality-wise, that was something never felt like he had with Dan Coats. But tonight he's back to the drawing board saying he'll nominate someone else perhaps as soon as Monday, Erin.

BURNETT: All right. Thank you very much, Pamela Brown. Of course, that was the irony. The President blaming the media and then saying I need you guys. You're saving us a lot of money if you do the vetting for me.

OUTFRONT tonight, Democratic Congressman Raul Grijalva, he's a member of the Congressional Hispanic Caucus. And I appreciate your time, Congressman, as always.

[19:05:01] So do you applaud your Republican colleagues in the Senate because they did stop this. They stood up against President Trump's nomination of Congressman Ratcliffe for DNA?

REP. RAUL GRIJALVA (D-AZ): Yes, I think it gets to the point that I think this necessity is both a reaction to what Trump is doing and to the fact that he continues to send nominees that are not only not qualified but quite frankly already tainted coming into the process. And I think it's become a political necessity for the leadership in the Senate to begin to reject, push back and deny those confirmations, because like it or not the American public is watching and watching this trail of nominees that once they come into positions and they are approved by the Senate, turned out to be merely handmaiden, at least in resources and EPA handmaidens for the industry.

I think it'd be more of a political necessity than a real fight of conscience at this point.

BURNETT: Interesting. OK. So that's how you see it. Let me just ask you though in the context of as I said that the GOP fundraiser telling us that Republicans are tired of defending what they see as the President's expletive show. Nikki Haley, the President's former UN Ambassador today, and by the way, she left on great terms with the President. She called him out for that tweet about a break in at Elijah Cummings' home.

She wrote, "This is unnecessary." When the President said, "I heard his name was Rob, too bad!" Kellyanne Conway slam back at Haley's tweet saying, "This is unnecessary." What do you make of Haley and what she did?

GRIJALVA: I'm glad she did that. I really am. She's a national profile, Republican leader with discussions about what her future will be in terms of continuing her political life and continue to move upwards. The fact remains that I think hopefully, hopefully we're reaching a tipping point.

And Congressman Hurd was a good Congressman and worked hard and tried to work across the aisle with Democrats. We've worked together on pieces of legislation that affected his district and other parts of Texas. The fact is I think we reached a tipping point. The bigotry and racism and the attacks on Cummings all associated with that.

At some point the Republicans have to understand that they are marginalizing themselves politically in this nation as this nation changes and marginalize themselves to a nonexistent party.

BURNETT: Congressman, you say tipping point.

GRIJALVA: Yes.

BURNETT: Obviously, there's been eight Republicans who said they're not running for reelection. Hurd is the sixth to do so in just the past two weeks. Have you discussed with any of your Republican colleagues why, what their reasons are, in a sort of private way for saying they're done.

GRIJALVA: Yes. In a very private way is that they don't feel that they're legislating anymore. They feel quite frankly that their ability to get things done, to work on compromises in some level of bipartisanship has been lost, and that the unpredictability, and the kind of rash decision making that's coming out of the administration and Trump all puts them in a very vulnerable position to get their job done, number one.

And number two, the other point is we don't know what's going to happen next and politically this is starting going to be an anchor for us as we go forward, and many of them decide that it's not worth it in 2020 to run for office having to carry as an albatross, this Trump legacy from the last four years.

BURNETT: So you have now passed the majority marker in terms of House Democrats calling for an impeachment inquiry, so you're at 118 out of 235, you got over that line just in the past day today. House Speaker Nancy Pelosi still not there. This is a big moment, but I want to be clear, Congressman, you would need another hundred votes in the House to actually impeach the president in the House.

I mean, once you go through proceedings, you would need more votes to get there. Is Speaker Pelosi going to keep stalling until you get a lot closer to that number? I mean, originally, she said - it appeared once there was a majority in the caucus, but now she could move the goalposts, couldn't she?

GRIJALVA: Well, I would hope that we don't move the goalposts, that this has been beginning with 14 of us to this point of 118, people that feel that the impeachment inquiry is necessary in the next step forward. I would suggest that that number is going to continue to grow. And at some point, our caucus will be overwhelmingly for moving forward and I think Nancy will respond to that, but we've gone from 14 --

[19:10:01] BURNETT: So you think if you look at it that there's a hundred more votes to get to an absolute majority in the entire House of Representatives, you think you're going to start to see a lot more people quickly getting onboard, because plenty of those Democrats who aren't onboard with an inquiry. Our Democrats or moderate districts, They don't want to ever be forced to vote on impeachment, but do you think that you're going to go from 118 in support of an inquiry and jump quickly higher?

GRIJALVA: I don't know quickly is a relative term, but I think that number is going to continue to increase on a weekly basis and when we go back, I think that number will be significant and it'll be that kind of a significant number that requires our caucus to really begin to look at that inquiry as the next step. Because the inquiry and the impeachment are two processes that have to be done.

And, look, inquiry has to begin the hearings and have the authority to be able to call witnesses, something that has been denied to us by the administration with impunity, I might add, and by the Justice Department. I think we need that power and the inquiry has to be the next step and I think we need to take it and I think the number will be there. The vast majority of our caucus to move forward.

BURNETT: All right. Well, I appreciate your time, Congressman Grijalva. As always, thank you. It sounds like, obviously, this break for Congress you think could be very significant. Thank you, sir.

GRIJALVA: Thank you.

BURNETT: And next, doubling down on his attack on Biden, why 2020 candidate says he is not done calling out the former vice president. Plus, Trump ups the ante with China, making new threats in his trade war and there is a cost. Peter Navarro will be OUTFRONT. And a Baltimore pastor who stood by the President side now says Trump is not following through on his promise to help Baltimore. The pastor is OUTFRONT.

(COMMERCIAL BREAK)

[19:15:45] BURNETT: New tonight, 2020 contender, New York City Bill de Blasio explaining his clash with former Vice President Joe Biden. De Blasio forcing Biden to address whether he stood up to President Obama over deporting people in the United States illegally.

(BEGIN VIDEO CLIP)

MAYOR BILL DE BLASIO (D-NY), PRESIDENTIAL CANDIDATE: I was challenging Biden because I wanted to hear him say, "Here's what I did. Here's what I stand for." Because whoever is going to be the Democratic nominee has to be able to ... (END VIDEO CLIP)

BURNETT: OUTFRONT now Ron Klain. He helped Joe Biden prep for both Democratic debates and is the former Chief of Staff for Vice Presidents Biden and Al Gore. In other words he knows him really well. Also with me, former Clinton White House Aide, Keith Boykin.

OK. Ron, Mayor de Blasio, look, he's a New Yorker. He was unafraid to try to take over the stage, become the moderator and throw questions at Joe Biden who actually ended up trying to answer them. What he's saying there though is that he's calling out Biden, saying Biden will not say what he did and what he stands for. In this case the topic was deportations. But what's your reaction when de Blasio says, "Joe Biden won't say what he stands for."

RON KLAIN, FORMER CHIEF OF STAFF VICE PRESIDENT BIDEN AND GORE: Well, Joe Biden said very clearly what he stands for. He laid out his plans on immigration, his desire to pass comprehensive immigration reform. What Mayor de Blasio was asking him to do was to criticize President Obama.

It's quite ironic. We have a president right now who is a disaster on immigration, who has children being separated from families. Locking them up in cages. De Blasio spoke about immigration twice during the debate. He criticized Barack Obama both times and never Donald Trump. And I think Vice President Biden is pretty clear on which of the two presidents has had the right course of immigration.

Barack Obama tried to fix the immigration laws. Donald Trump is an immigration whore and that's a big difference apparently between what de Blasio wants to talk about on immigration and what Joe Biden wants to talk about on immigration.

BURNETT: All right. I will just say for the record, the way President Obama at one point handled deportations was something that got him slammed by people on the far left, that they were upset about it. Now, Keith let me play again some of the exchange between de Blasio and Biden as we're talking about it, when de Blasio comes after Biden and demands that he answer his question. Here's part of the exchange.

(BEGIN VIDEO CLIP)

DE BLASIO: Did you say those deportations were a good idea or did you go to the President say, "This is a mistake. We shouldn't do it." Which one?

JOE BIDEN, FORMER UNITED STATES VICE PRESIDENT, PRESIDENTIAL CANDIDATE: I was vice president, I am not the president. I keep my recommendation in private. Unlike you, I expect you would go ahead and say whatever was said privately with him. That's not what I do.

(END VIDEO CLIP)

BURNETT: OK. Obviously, there are times he was willing to talk about what he talked about, but look he fought back, he slammed de Blasio. Keith, what do you make about that? Did Joe Biden handle this effectively?

KEITH BOYKIN, FORMER WHITE HOUSE AIDE UNDER PRESIDENT BILL CLINTON: I think it was an OK answer. Basically, it is OK to criticize President Obama or to push for a more progressive record than what President Obama was able to achieve. It's not a smart political tactic in the middle of a campaign when President Obama is the most popular Democratic figure.

BURNETT: Eighty-three percent popularity when he left office among Democrats, yes.

BOYKIN: Yes, I think it's even higher now.

BURNETT: And that too is relevant in a Democratic primary, just to be clear, yes.

BOYKIN: Exactly. So if I were Bill de Blasio, I would spend my time attacking Donald Trump, attacking Joe Biden, attacking Kamala Harris, attacking anybody except Barack Obama, because that doesn't help you at all if you are at 1 or 0 percent of the polls, why would you bother attacking the most popular Democrat, attack someone else.

But that doesn't mean you can't ever criticize anything that Barack Obama did as a president, but spend your energy and focus on the right target.

BURNETT: Ron, I would imagine you agree with that.

KLAIN: I do. Look, and particularly in this area of immigration, I take your point, Erin, that there were criticisms of the Obama immigration record early on. But, obviously, President Obama went on to create the dreamer program and to fight hard for immigration reform.

And I just think you're on a debate stage in a Democratic primary, we have the president with the cruelest immigration record in probably in American history as our president right now. There's plenty to say about Donald Trump's immigration record. And attacking Obama's immigration record just makes no sense.

BURNETT: So Rush Limbaugh was on Sean Hannity's show last night and I wanted to just play something that Rush said about the Democrats who were onstage this week. Here he is.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, HOST, THE RUSH LIMBAUGH SHOW: There's not one person, Sean, on that Democrat stage last two nights that can even be onstage with Trump and not be overshadowed simply by his presence before he even opens his mouth.

(END VIDEO CLIP)

[19:20:10] BURNETT: What do you say to that, Ron?

KLAIN: Bring it on. I mean I think that there were - look, I'm obviously supporter of Joe Biden's and I'd love to see Biden going up against Donald Trump, but there were many, many people on that stage both nights who would really take it to Donald Trump.

I mean as the Vice President said in his remarks at the debate, he stands for truth over lies and unity over division. That's the choice any Democrats could put to Donald Trump in 2020 and I am very confident that we have a lot of candidates who can really take it to the President.

BURNETT: So Keith, when it comes to Joe Biden because he is the frontrunner by far, OK, among Democratic primary voters at this point and certainly when it comes to head-to-head against Trump, he wins. But polls are polls, it's extremely early. He had some moments last time that made people wonder what he would do against Trump on a debate stage moments like this.

(BEGIN VIDEO CLIP)

BIDEN: Four more years of Donald Trump will go down as an aberration, hard to overcome the damage he's done but we can overcome it. Eight more years of Donald Trump will change America in a fundamental way. If you agree with me, go to Joe 30330 and help me in this fight.

(END VIDEO CLIP)

BOYKIN: Well, it's no secret that Joe Biden is not the sharpest tack in the box here among the candidates out there. But at the same time, he's still a far superior candidate to Donald Trump when it comes to policy. And honestly, I don't know that debates really matter that much in terms of the general election.

So yes, he gets on the debate stage and he may not be able to have the one liners and the zingers to go back and forth with Donald Trump. But, you know what, at this point it doesn't really matter because anybody who hasn't made up their opinion about Donald Trump is never going to --

BURNETT: But Ron what happen at that moment? You prepared him, he prepared for that, what was that? Was it a prompter issue?

KLAIN: No. Look, let's be clear, Joe Biden went in a one-on-one debate with Paul Ryan at a time people thought Paul was the genius of the Republican Party and he wiped the floor with him, OK, so I have absolutely no doubt that you put Vice President Biden on a stage with Donald Trump, if Donald Trump shows up for that encounter maybe he won't. Joe Bill will kick his butt.

BURNETT: But Ron when people say to you it's going to be eight years ago by the time this happens, right?

KLAIN: Yes.

BURNETT: I mean I'm putting it on the table. We all know it is. OK, Joe Biden's age shows more than it does with Donald Trump. People have this fear. What do you say to them, Ron? You debate with the guy, you're practicing with the guy, what do you say to people who have that fear?

KLAIN: I'll say look at him debate. I think he did a very good job at this debate in Detroit. I think he's out there on the stump every day. He's running around. He's quite active. He's talking about the issues that matter to people and the Democrats so far who've watched him and seen him on the campaign trail.

Right now, he is the leading choice of our party to run against Trump. I think that reflects how the voters are reacting to not just what he says on the debate stage, but the choice he proposes. The choice he offers Democrats against Donald Trump.

BURNETT: You were first. Final word, Keith.

BOYKIN: I just don't think that Joe Biden was a very strong candidate. I don't think he won either one of those debates that we had so far and I think he needs to get stronger. But this is a good thing. The good thing is that we have the candidates who are actually out there debating.

This is not a coronation. This is a competition. He has to earn this, the nomination if he expects to get it and it's OK that the candidates are questioning and criticizing his record, because Donald Trump will do the same. So he needs to go through this test as do all the other candidates.

BURNETT: All right. Thank you both very much. And next the stock market in focus as Trump threatens China amid his trade war. Smart? Peter Navarro, Trump's trade adviser is OUTFRONT. And the President said this not long ago about a Baltimore pastor.

(BEGIN VIDEO CLIP)

TRUMP: He's been an incredible leader, a man of faith and somebody that we all believe very strongly in.

(END VIDEO CLIP)

BURNETT: And now that pastor is calling out the President. He's OUTFRONT tonight.

(COMMERCIAL BREAK)

[19:28:05] BURNETT: Tonight, Trump threatening China upping the ante again.

(BEGIN VIDEO CLIP)

TRUMP: I can always increase it very substantially. In other words, I could increase it. If I wanted to, I could increase it to a very much higher number.

(END VIDEO CLIP)

BURNETT: This after Trump said he will impose a 10 percent tariff on $300 billion worth of goods from China. The new tariffs would impact things like toys and iPhones and are set to go into place on September 1st and that tariff is in addition to the 25 percent levy already imposed on $250 billion of goods from China.

OUTFRONT now, Peter Navarro, Assistant to the President and Director of the Office of Trade and Manufacturing Policy.

Good to have you with me, Peter, as always. So look, the tariffs that the President talked about yesterday haven't even gone into effect yet, now he's threatened even more tariffs, "I can increase it substantially. I can increase it to a much higher number." Do you think China believes him?

PETER NAVARRO, ASSISTANT TO THE PRESIDENT: Of course they believe him. Everything he said he's going to do he's done. On this issue of the tariffs themselves. What we've had so far is 25 percent tariffs on percent250 billion. And the remarkable thing in a way is that the Chinese have managed to basically devalue their currency by a full 10 percent and lower their prices.

So they borne virtually the entire burden of these tariffs. We've seen negligible to zero inflation on the tariffs. And if you think about putting 10 percent tariffs on these additional $300 billion of Chinese goods --

BURNETT: Which by the way our consumer products a lot of these.

NAVARRO: Correct.

BURNETT: This is toys and goods. These are things that people buy.

NAVARRO: Let's think about this, Erin, and let's do a little math here, a consumer math. When we started the tariffs back in March of 2018, since then the Chinese currency has fallen by 10 percent. So even if we were able to pass - if the Chinese could pass on the tariffs all to the consumers, we'd still only be back to where we were a little over a year ago.

[19:30:03] So, this whole idea that somehow these tariffs are going to create inflation, we're just not seeing it. The Chinese are gaming the system.

Why did we do this? I think that's the important question.

BURNETT: So, can I ask you a question, though?

NAVARRO: Sure.

BURNETT: I understand -- and I understand it's part of negotiation, but I just want to follow up on the point on pricing before you move on.

NAVARRO: Sure.

BURNETT: You're talking about overall inflation. I get it. If you are -- as you had put tariffs talking about 25 percent some components and not others, right? The impact on price would not be a full 25 percent.

One of the first things hit by tariffs, one of the very first when you all did this, as you said in the spring, was washing machines. A study conducted by two researchers at the University of Chicago and a Federal Reserve board governor found after the tariffs imposed, the ones that you did there, washing machine prices have gone up by $86.

La-Z-Boy says --

NAVARRO: So, this is apples and oranges --

(CROSSTALK)

BURNETT: Let me give one other number.

NAVARRO: Yes.

BURNETT: La-Z-Boy says it's passed on tariffs to consumers, it says directly.

NAVARRO: But this apples and oranges, Erin. What you're talking about --

BURNETT: OK, but they say $42 extra dollars for a $120 sofa. That's really money for Americans.

(CROSSTALK)

NAVARRO: We're talking -- you shifted the argument. We're talking -- you and I are talking about tariffs on Chinese products. You're talking about tariffs on steel and aluminum. If you want to have that conversation, we can have it but it's a completely different conversation

BURNETT: Well, it's tariffs you put on things from China. We can talk about the distinction between components or finished goods.

NAVARRO: No, no. The Steel and aluminum tariffs are a totally different issue. We put steel and aluminum tariffs on because we have to have steel and aluminum industries in this country. The president took a bold decision to do that. And those tariffs have been tremendously successful in reducing steel and aluminum.

BURNETT: Right, I understand what you're saying, but I'm saying that washing machine prices have gone up by $86. So, Americans --

NAVARRO: And your point is that, is what? That that so we have steel mills blocked -

(CROSSTALK)

BURNETT: The policies you have put in place are costing regular Americans money.

NAVARRO: So, hang on, hang on, Erin. We have steel mills blossoming in Toledo, Ohio, Marion, Ohio, Cuyahoga Heights, the Mesabi Iron Range in the state of Minnesota is just humming. I was down in Duluth personally watching iron ore pellets put on ships that were going across the Great Lakes to steel mills.

BURNETT: Uh-huh.

NAVARRO: Granite City -- I mean, look, the steel and aluminum tariffs were a necessary action to defend our steel and aluminum industries from predation around the world, dumping, and those tariffs have been enormously successful inducing investment.

BURNETT: So, you think that's what -- OK, that's your case. I get it.

NAVARRO: But I think it's better to have a conversation here about China because that's what the news is. And I think it's important for your viewers to understand why President Trump is showing leadership on this, and why Senator Chuck Schumer came in right behind him and supported exactly what he is doing.

BURNETT: So, tell me why with the latest tariffs -- I understand you are making the case you think it's worth it on steel and aluminum, that people paying more. What about toys? What about shoes? What about iPhones? What about $42 more on a La-Z-Boy, on those? Why --

(CROSSTALK)

NAVARRO: Are you talking about China tariffs? I'm telling you, Erin, flat out, that you will not see significant consumer price hikes from a 10 percent tariff on these remaining $300 billion. The Chinese basically are handling this by lowering their prices and lowering their currency. And if you look at the first $250 billion where we had 25 percent tariffs --

BURNETT: Yes.

NAVARRO: -- we have seen zero inflation.

So don't get out the violin and start playing about how consumers are some kind --

BURNETT: Right, on that 25 percent --

(CROSSTALK)

NAVARRO: Hang on, how consumers are somehow bear some burden when in fact a year ago --

(CROSSTALK)

BURNETT: Hold on, hold on, because I understand I know it's confusing to everybody. Twenty-five percent impacted La-Z-Boy, they say they put a discharge on specifically because of that tariff. They say that. I'm not estimating, that's what they say, right? They say 3 to 4 percent.

NAVARRO: So, show me in the data where there is inflation, Erin. BURNETT: I know, but you're citing overall inflation. I would too if

I were you.

(CROSSTALK)

NAVARRO: I don't even why you're beating this dead horse. I've asked and answered your question.

BURNETT: But I'm saying I'm an American -- hold on, Peter, let me just finish the point, please? An American goes to a store --

NAVARRO: I think the American question is why we were taking this action? Can we talk about that? China you know that -- you agree with me on this.

BURNETT: You're taking the action if they're violating trade policies, they're hurting the United States and it's going to be better for consumers. I'm asking you to make the case of why Americans consumers should be paying more for things to accomplish that.

NAVARRO: I can't answer this more clearly. China devalued its currency by 10 percent over the last year --

BURNETT: Yes, but La-Z-Boy is saying it's $42 more for a $120 sofa. So, that's what $42 more.

NAVARRO: -- and if we add 10 percent with $300 billion -- well, if you keep talking over me, you're not going to be able to hear what I say. So, if we can take turns on this --

BURNETT: You keep telling me that they devalued the currency so it's not zero. And I'm telling you it's not zero. So, we're kind of talking past each other.

(CROSSTALK)

NAVARRO: Look, I'm telling you that if we raise tariffs on 10 percent -- by 10 percent on $300 billion and China already devalued the currency by 10 percent over the last year, how can you get out your crocodile tears for consumer effects?

BURNETT: Well, then, they have to do another 10 percent.

NAVARRO: It's just not happening.

That's the problem here. Nobody except the retail federation can point to anything. And they're making stuff up.

[19:35:02] It's just -- look here is what's going on here. The reason why the president raised these tariffs is for three reasons. One is that the Chinese are not fulfilling their commitments to buy any farm products.

BURNETT: Yes. NAVARRO: Two, they are killing people -- before this night ends, 100 more Americans are going to die from made in China fentanyl and opioids. By the end of this week, over 1,000 Americans are going to die from made in China fentanyl and opioids, and over the year, it's going to be 50,000 people. And they're accountants, they're doctors, they're war veterans who dodged shrapnel and bullets in places like Afghanistan and they come and die because of a speck of fentanyl dust the China makes.

And so, the president is standing up to China. He has the backing of this country on this. You look at polls, Harvard Harris poll says that eight out of 10 Republicans are behind the tariffs, 53 percent of Americans.

BURNETT: Peter --

NAVARRO: And we see on Capitol Hill the bipartisan support for these policies and consumers are not going to pay a dime for this.

(CROSSTALK)

BURNETT: Peter, all of this -- all of what you say, this may be true, but what I'm trying to have you -- OK, but, listen, I think it's important to say, you are saying that Americans will pay more for some things. They are.

NAVARRO: Well, I have not said that. I've told you to date on the first $250 billion.

(CROSSTALK)

BURNETT: The head of the Federal Reserve said, we feel like weak global growth and trade tensions are having an effect on the U.S. economy.

NAVARRO: Who said that?

BURNETT: Jerome Powell.

NAVARRO: Oh, Jerome Powell. Don't get me started. Look, when Jerome Powell. Ok. So, he lowered rates and he ended quantitative easing. And he should have quit there. Instead, he got on and he started talking and the market went which down because he said the wrong thing.

If you simply look, Erin, at the Q2 data you can see the footprints of the Fed's foolish policy of rate hikes all over the footprint. When he's what happened.

BURNETT: OK.

NAVARRO: When he raised the rates by 100 basis points over the last year, what he did was set up a scenario where he's suppressing American investment --

BURNETT: All right. NAVARRO: -- he's pushing up the dollar and suppressing exports. If you did the printout of the Q2 numbers, you saw that we lost two thirds of a point of growth because of the lower exports because of the higher dollar and we --

(CROSSTALK)

BURNETT: OK, one last thing, Peter, before we go.

NAVARRO: Sure.

BURNETT: Companies are saying, right, in the most recent manufacturing data where companies report, tariff surcharges are now being passed through to all consumers, to all customers. We've heard it from car companies. We've heard it from jet ski makers.

NAVARRO: I don't -- I don't believe a word of that stuff. You're not seeing it in the data.

BURNETT: So, what I'm saying is are you literally saying they're all lying? They're not passing any true?

NAVARRO: I'm not saying they're all lying. I'm saying that I don't see it -- I'd rather see it in the data than hear it from multinational corporations that have a strong interest in shooting down our tariffs policy.

And here is the thing, look, people are watching this show. They have -- look, we should agree on this. China should not be stealing our intellectual property, forcing technology.

BURNETT: Absolutely.

NAVARRO: Forcing transfer of technology, hacking into our commuters, manipulating their currency and dumping fentanyl into our communities. If we can agree on that, the only question is, what do we do about it?

And President Trump is taking the strong action on this by putting the tariffs on.

BURNETT: But I would argue there's one other question which is you are saying, you are saying there is a price to stop that, you think it can stop it but there is a price and Americans will pay part of that price, Peter, that's what I'm saying.

NAVARRO: The remarkable thing is that we're not paying the sacrifice.

(CROSSTALK)

BURNETT: And that's also a fact.

NAVARRO: Well, it's not a fact. I'm telling you, I'm not see going in the data.

BURNETT: You are looking. Right. But if someone wants to buy a toy, right, a toy that's made cheaply because it's made in China and now, they have to pay more.

NAVARRO: The Chinese are lowering their prices and they're lowering their currency.

BURNETT: You know, it may not sound like a lot of money to you, but to some people in this country, it is.

NAVARRO: No, no, don't play that card because I come -- I come from poverty, Erin. Don't be playing that card.

BURNETT: Well, you know. Then you know that the cheapness of goods made of China has dramatically increased the standard of living in this country.

(CROSSTALK)

NAVARRO: I know what it means to watch my mother make 15 bucks a month or a week and try to struggle to put food on the table. Do not play that card on me, OK?

I'm telling you, that the data does not say there is any inflation from the China tariffs on the first $250 billion. I'm telling you that the Chinese are strategically gaming the system by lowering their prices and lowering their currency.

You were one of the best financial anchors for years. And I'm telling you, that Yuan is going to blow past 7 soon and they're jut going to keep devaluing their currency to try to take advantage of the American public.

(CROSSTALK)

BURNETT: So, then answer this question, Peter, are you saying the companies when you go to the individual products as I'm doing and I see an increase, you're telling me that they are passing along an increase that they're not actually getting.

NAVARRO: Are you --

BURNETT: So, they're the ones that are hurting the American consumer?

NAVARRO: You show me month a case by case basis.

BURNETT: I did, the example of the La-Z-Boy.

NAVARRO: You have an example of a corporation issuing.

BURNETT: I can give you many examples. I mean, companies are putting these surcharges on. You can see it with jet skis. You can see it with Polaris Industries.

(CROSSTALK)

NAVARRO: But is it the tariffs? Is it something else? You -- I'm telling you -- if the Yuan goes down by 10 percent and we have a 10 percent tariff on, it's a wash. (CROSSTALK)

[19:40:04] BURNETT: So, then what you're saying is the companies that are increasing their prices are doing so when they're not getting an increase they are cheating the American consumer?

NAVARRO: Is your argument here -- is your argument here is that somehow consumers are going to pay too much for the president to stand up for China to dump fentanyl into our communities?

BURNETT: I'm not trying to say they're paying too much. I'm asking you to acknowledge that you are asking them to pay something and tell them why they should.

NAVARRO: I don't understand why you're pushing this so hard. I mean, if you had a good argument, but inflation rates at 1.5 percent, well below the Federal Reserve's 2 percent. They never should have raised interest rates to begin with.

BURNETT: OK.

NAVARRO: The China tariffs are working beautifully in terms of getting China to maybe change their behavior and come to the negotiating table. But we are doing exactly what needs to be done for a country that's basically not fulfilling its commitments, and basically stealing our intellectual property and our technology. And so, let's see what happens.

But show me some data. I don't want anecdotes. I don't want a press release from La-Z-Boy. I want to see what's actually happening here, and I'm not seeing it.

BURNETT: All right. Peter, thank you very much. I appreciate your time.

NAVARRO: Sure.

BURNETT: And next, broken promises. A pastor from Baltimore is taking on Trump over attacks on Elijah Cummings that he says failing to deliver for Baltimore.

Plus, the president shrugs off North Korea's latest rocket launches. How does he justify that?

(COMMERCIAL BREAK)

[19:45:06] BURNETT: Tonight, Trump's war over Baltimore, a Baltimore pastor once praised by the president is now calling him out for what he says are unkept promises to help Baltimore. He is doing this after Trump attacked Baltimore, remember calling it a rat and rodent infested.

Now, you know, it wasn't the first time Trump talked about Baltimore. We actually found this. Back last December, he was joined by Bishop Donte Hickman to sign an executive order to give tax benefits to places called opportunity zones, and one of them was in Baltimore. (BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The Treasury Department has estimated that as a result of these tax incentives, private businesses will invest $100 billion in opportunity zones. And that will be incredible.

This council will support communities like East Baltimore, where Pastor Dante Hickman is helping lead a ground breaking project in the newly designated opportunity zone. He has been an incredible leader, a man of faith, and somebody that we all believe very strongly in.

(END VIDEO CLIP)

BURNETT: OUTFRONT now, Donte Hickman, bishop of Southern Baptist Church.

And I appreciate your time, sir.

So, you were there with the president, right, he is talking about -- let's be specific -- $100 billion in opportunity zones from tax census incentives businesses putting this money in. He talks about a specific, a newly designated one that you were helping to lead in Baltimore.

Did you ever get any of that money? Is that promise fulfilled?

BISHOP DONTE HICKMAN, PASTOR, SOUTHERN BAPTIST CHURCH: Well let's be honest from the outset, Erin, we do have to commend the president for laying forth such a bold agenda for urban centers across America. We have not seen this type of support or highlight for our communities in decades from a presidential administration.

To date, it's not been a year yet, and we have not seen investment come into the communities. It takes some time. I believe what the president was calling on is some conscious capital that we need infused within our urban centers.

We need those corporations and businesses and investors to see the opportunities in the distressed communities that the president was pointing to, and not just the easier ones that are around the periphery of the city.

BURNETT: So when he comes out and calls it a rodent infested, rats -- what does that do?

HICKMAN: Well, to me I have grown up in Baltimore all my life, born and raised, and quite frankly, he is highlighting the real conditions and reality that we face in urban communities that have been neglected for decades. But I think we have to move beyond just the highlighting the conditions and really go forward to the real solutions to the problem.

We cannot wait there are issues of poverty that we can't just wait until we get the president that we like or the party we want. BURNETT: What can -- what do you want him to do right now? I mean,

look, you say it's great he announced this you hadn't gotten that amount of attention. At least you say nothing has yet come of it, right? It's been.

HICKMAN: It's a --

BURNETT: You want something to come of it but nothing has as of yet. He certainly got to appear with people like you. He got that appearance. He got that photo op put the numbers out there. What does he need to do now to prove to the world that he actually cares and meant it?

HICKMAN: It's a battleship that's hard to turn around. I mean, I pastored for 17 years and I understand what it is to bring about change.

But I think he needs to not just share the rhetoric of the negative but that he should also engage and influence investors to really take advantage of moving monies into distressed communities. I think that he has those types of influences. And I have every optimism that he will fulfill that and I'm looking forward to that before the year ends.

BURNETT: Well, I hope that he sees you now, remembers what he said, and that that does happen. And that you see some of that.

HICKMAN: I believe it will. We're going to keep pushing.

BURNETT: Shining a light for that happen. Thank you so much.

HICKMAN: And, Erin --

BURNETT: Yes?

HICKMAN: And, Erin, not -- not just the president, but I think the -- the entire administration, the Congress and the Senate it's not just a one man responsibility. No one is saying anything about the plight of the poor. And I think everybody needs to come to task on this one.

BURNETT: Thank you very much, Bishop. I appreciate it.

HICKMAN: Thank you.

And next, the president's surprising reaction to another missile launch by North Korea. And the political buzz flying all around a couple of candidates.

(COMMERCIAL BREAK)

[19:51:54] BURNETT: New tonight, President Trump downplaying the third missile launch in eight days, tweeting in part, quote: These missile tests are not a violation of our signed Singapore agreement, nor was there a discussion of short-range missiles, when we shook hands. There may be a United Nations violation but Chairman Kim doesn't want

to disappointment me with a violation trust. He'll do the right thing because he's too far not to and he doesn't want to disappoint his friend, President Trump.

OUTFRONT now, Retired U.S. Army General James "Spider" Marks, who spent a lot of time serving in Korea.

Putting aside for just a moment, of course, referencing the brutal dictator who murders his own people as a friend, President Trump is again shrugging off missile launches, saying, OK, maybe it's a violation of the U.N. but basically who -- whatever about them. This is about me and I'm fine with that and, you know, short-range missiles, which by the way would put 38,000 U.S. troops in harm's way.

Your reaction?

MAJ. GEN. JAMES "SPIDER" MARKS (RET.), CNN MILITARY ANALYST: Well, I think, Erin, that the key thing in my mind is that the president relies heavily on personal diplomacy.

BURNETT: Yes.

MARKS: That can get you into a corner because the apparatus of diplomacy has to be available to help you out. And now, that's the State Department, those are the folks in the Department of Defense, National Security Council, those folks who routinely engage in the mechanisms of dialogue and trying to get things right. They may or may not be in the loop. That's problem number one.

However, I think what the president has done, I don't know if it's intentional or not, so intentions I think are important here, but the result I think are significant. To mention is that the president really is kind of changed the narrative. Every time something has gone sideways in North Korea, which really is kind of what happens as a matter of routine, the United States has gone to Beijing and has conducted an entreaty and asked Beijing to get involved with Pyongyang and the conversation essentially goes that the United States and the global community will repair, try to repair the damages being done by North Koreans' bad behavior and we're going to reward North Korea for that.

Well, what the president has done is, he's essentially said short range missile tests, not a big deal and, oh, by the way, simultaneously, I'm going to Beijing and I'm going to impose tariffs and you pulled at that with Peter Navarro very, very effectively.

But the challenge in my mind as a guy who's been on the peninsula a lot in my career is that missile tests, whether short range and what somebody might say are defensive in nature, still that's technology that leads to the development of ICBM capabilities. That's what we have to watch for very, very aggressively.

BURNETT: And what do you make of president's double standard of missile test for Iran and North Korea.

MARKS: Yes, Iran --

(CROSSTALK)

BURNETT: Fine for Kim, but not for Iran?

MARKS: Yes, I think -- again, that's -- how does the president feel about that? I certainly am not equipped to do that. I'm not unaccustomed to offering my opinion about folks and their behavior but I'm not equipped, not -- I lack the degrees to do that.

But my point is, I think the president probably views Tehran as being far more aggressive and far more mature than North Korea and that he feels his personal engagement with North Korea can solve that problem --

[19:55:06] BURNETT: Interesting.

MARKS: -- relative to what we see in Iran.

BURNETT: All right. Just interesting, maybe a personal level more mature, again, to your point. But obviously, on a military level, Korea has nukes and Iran does not.

Thank you very much, General. Appreciate your time as always.

MARKS: Sure, absolutely.

BURNETT: And next, what is bugging President Trump?

Jeanne Moos is on the case.

(COMMERCIAL BREAK)

BURNETT: Here is Jeanne.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN NATIONAL CORRESPONDENT (voice-over): There was something in the air --

PETE BUTTIGIEG (D), PRESIDENTIAL CANDIDATE: To live in a society --

MOOS: -- this week when President Trump said --

TRUMP: Make yourselves comfortable.

MOOS: You expect a bug to do exactly that. Landed right on the president's hairline or as one critic put it, that no pest strip he calls hair.

Word buzzed around the Internet, drop what you're doing and watch this fly find asylum in Trump's hair. For the insect at least, it truly was a --

TRUMP: Momentous occasion. MOOS: That lasted about two minutes. Some considered it karma, he's

the one who's infested seems to be the most repeated tweet, a reference to President Trump calling Baltimore a discussing rat and rodent infested mess.

This isn't the first time a flying insect has invaded the president's hair space.

TRUMP: Whoops. How did a fly get into the White House? I don't like flies.

Oh, there was a mosquito. I don't want mosquitoes around me.

MOOS: Bugs at least are non-partisan. At one of the Democratic debates, Pete Buttigieg had a smudge on his forehead.

BUTTIGIEG: That is why I'm running for president.

MOOS: A smudge he later explained.

BUTTIGIEG: There were little kind of gnats around, maybe I smushed one and it got on my forehead.

MOOS: In past debates, flies landed on Joe Biden, Hillary Clinton, and Barack Obama. President Obama famously nailed one.

UNIDENTIFIED MALE: Nice.

BARACK OBAMA, FORMER PRESIDENT: Now, where were we?

MOOS: Leader of Iran managed a swing and miss.

While we in the press are often considered pests, we, too, attract them.

UNIDENTIFIED MALE: Reporting live from Cape Canaveral, Florida.

UNIDENTIFIED MALE: What was that going across the screen? You got (INAUDIBLE)

MOOS: The presidential bug continued its trek across the commander in chief's forehead and reseeded into the hairline, the kind of buzz no politician wants, but even President Trump can't accuse anyone of planting this bug.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BURNETT: Thank you for joining us.

"ANDERSON" starts now.