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Dow Up 300-Plus Points after Trump Delays China Tariffs; Soon: Trump Heads to Pennsylvania Plant to Tout Economy & Jobs; Report Warns on Economy, Highlights Ballooning Budget Deficit; Hong Kong Protests Force Flight Cancellations for 2nd Day as China Loses Patience. Aired 11-11:30a ET

Aired August 13, 2019 - 11:00   ET



[11:00:14] KATE BOLDUAN, CNN ANCHOR: Hello, everyone. I'm Kate Bolduan, in Washington today. Thank you so much for joining me.

A busy hour ahead. A big move, leaving big questions now in the trade war with China. Is the president backing down? Is President Trump acknowledging for the first time that this war has been hurting American businesses?

Either way, the markets, as you can see, like this announcement from the administration. The Dow up right now.

This, as the president is about to head off to the battleground state of Pennsylvania where he will be visiting one of the largest construction projects under way in the nation right now, a chemical processing plant, offering a chance for him to spotlight manufacturing, highlight job growth.

The timing here is interesting and significant. It's just after a new report is offering a new warning about the U.S. economy. The administration yesterday saying that the country's budget deficit is ballooning to a level not seen in years and that it also could reach a trillion dollars by the end of this fiscal year.

Let's get straight to White House correspondent, Kaitlan Collins. She's joining me right now.

Kaitlan, what are you hearing about all of this?

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Well, Kate, that wasn't going to be a pretty backdrop for the president going to Pennsylvania to this manufacturing town today where the White House said he was going to tout their economic accomplishment, something that the Republicans want the president to focus on, the economy gains they made.

But also it will come with those mind-blowing deficit numbers in the background and, of course, the stalled trade talks with China that have been putting fear in investors and, of course, spooking the markets, something the president and his allies have been paying close attention to. So we're getting this news about this delay, even though we know that

companies in the background have been lobbying the White House for exemptions from some of these tariffs that the president had said he was going to go full throttle with. And that was a few weeks ago when the president made those remarks.

And now we're going to be seeing him go to the petrochemical plant, deliver these remarks. And now we've got the news about it change. And you're seeing the markets start to surge.

It's something the White House has been keeping an eye on in recent weeks as the markets have slid with the announcement of the tariffs.

That's going to be a more significant backdrop for what the president is going to be saying today.

And that's something that Republicans want the president to focus on and away from the controversies that the president has been instead tweeting and talked about last week since he visited the scenes of those two mass shootings. Of course, promoting the conspiracy theory about Jeffrey Epstein's death on Twitter.

They want him to stop focusing on things like that and start focusing on things like this.

BOLDUAN: That's an interesting point. Let's see how long it lasts.

Kaitlan, thank you so much. I really appreciate it.

The president will be leaving, likely leaving this hour. We'll bring you anything that we get.

Until then, let's bring in John Kasich, former Republican governor of Ohio, former Republican presidential candidate, and now CNN senior political commentator.

Governor, we've got to talk about this. I've been going off on it all morning.

This trade war with China taking yet another turn now. Now the tariffs that were promised and threatened, some of them are going to be delayed. They were supposed to start -- go into effect in September and now maybe not until December. This has to be because businesses are telling the president a reality that it's hitting the U.S. consumer, not the other way around, which the president keeps trying to argue.

Is the president blinking or is it something else?

JOHN KASICH, CNN SENIOR POLITICAL COMMENTATOR: Well, I think, Kate, they're very sensitive about the economy. That's what he has going for him into a 2020 election. And we were seeing a slowdown of economic growth.

I don't want to say it's a collapse because you have many things you have to look at to determine the strength of the economy, including reinvestment that companies make, their ability to invest in new plant and new equipment, things like that.

So I think they got very nervous when they saw the market going down because businesses are beginning to say this is not good, this is a negative. So I think that's why he's moved a little bit on this.

Look, I think everybody, Kate, in our country and around the world understand that China engages in predatory trade tactics. They cheat, OK.

The way to go after this was to do it on a global basis, to get our friends and allies, some of whom have moved away from us, to be able to assert the fact that we want a level playing field with China and that we would act together, not just unilaterally.


BOLDUAN: -- slapping tariffs on them?

KASICH: Well, I mean, and that's a problem here. Because when we have our alliances and we work together, we're able to achieve good outcomes, and when we don't, we have problems.

So the Chinese approach the fact that they want them to change their behavior is good, but I think doing it in a unilateral way doesn't work. And I think the markets are clearly spooked and it spooked the president's team and that's why he's saying I need to figure out -- get myself out of this.

[11:05:02] BOLDUAN: And the tariffs that are already in place are having an impact, though. What we don't know still is if they, meaning the president and China, are any closer to a deal. The forecast now is, don't expect it any time this year, especially.

As this drags on, what does this mean in places like Ohio or Pennsylvania where the president is headed today?

KASICH: Well, higher prices for consumers, which means because of higher prices for businesses.

And look, this is a constant ratcheting up of how many products you want to put tariffs on. Internally, the reports are that the president's team had a debate inside saying we don't need to up the ante anymore, and yet there were a few people that prevailed.

The situation is that they have to be very careful that they don't throw not only our economy, but the world economy, into a big spin.

So again, it's important that we deal with China. It's important that they honor trade rules internationally. But I think it's better again if we just don't do it alone and we're able to march together.

In addition to that, you mentioned at the top the burgeoning deficit in this country.

BOLDUAN: Yes. KASICH: They say, he's a former governor, Republican candidate for president, CNN contributor. I was chairman of the House Budget Committee when --


BOLDUAN: I can't list -- I can't list all of your resume.

KASICH: No, I know. OK. OK. MVP of the congressional baseball game. OK? You can't do better than that.

BOLDUAN: That, too.


BOLDUAN: No, that's what I wanted to ask you about. Where are the budget hawks, where are the deficit hawks left in Washington or anywhere? Please tell me.

KASICH: You know, it took me fighting for 10 years. The first time I offered a meaningful proposal to get the budget under control, the vote was 405 against me and 30 for me. And there were a bunch of Democrats that voted with me on that. They said they didn't want me to be embarrassed.

It was a 10-year struggle that brought in a number of people on both sides of the aisle because we realized we were heaping debt on our children and disrupting the economy.

When we finally got to an agreement after 10 years of struggling, you saw an incredible economy growth. We paid down the largest amount of the publicly held debt in modern history and we were running surpluses. Kate, was that unbelievable?

And here's a little secret. You don't have to slash and burn and you don't have to do root canal. You have to look at the government operations, their programs. You need to figure out which ones work, which ones don't work, which ones can be modernized. And you cannot achieve this by just getting rid of waste, fraud and abuse.

BOLDUAN: So help me out with this. With this, what we're seeing right now with the new numbers out, largest deficit since 2012, an increase of 27 percent over this time last year, estimating that this could reach a trillion-dollar deficit by the end of the year. And of course they just passed a two-year spending budget that adds hundreds of billions of dollars in spending.

KASICH: Yes. Crazy.

BOLDUAN: When you see, that what kind of economy is this right now?

KASICH: Well, look, there are a couple of things that have happened that improved this economy. The single biggest thing was the deregulation.

Frankly, the Obama administration had piled so many rules and so many regulations that it really was hurting the economy. It didn't allow things to be able to flow appropriately.

And the administration came in and they deregulated. Maybe in some areas too much. But the deregulation, the ability for businesses to function better, has had a significant lift on the economy.

And the tax bill, which lowered the taxes on corporate America. And encouraged reinvestment --


BOLDUAN: But they were supposed to pay for themselves and we have not seen that.

KASICH: No, they didn't. No, they didn't. And that was part of the problem. That was my problem with the tax bill. They needed to pay for some of this, which they didn't want to do.

The reason they're ignoring deficits is because nobody is going to a town hall and talking about the debt. But the chickens will come home to roost. There will be a moment, and it will be our children who will ask us, what did you do when you were in charge.

That's why I fought for 10 years to get to a balanced budget. It will come back, Kate. It will come back. It's just not here now.

BOLDUAN: Until then, we will continue shouting into the void until it does because it's serious.

KASICH: You and me. You and me.


BOLDUAN: There's literally not a single budget deficit hawk in Washington left. Find me one.

KASICH: What a chance --

BOLDUAN: I would like to speak to him or her. It would be great.

KASICH: What a chance for somebody to become a leader --


KASICH: -- by being able to point out the tremendous damage that gets done long-term to this economy by this fiscal practice, OK?


BOLDUAN: Until then --

KASICH: We're spending too much and we're passing the debt on to our kids. It's bad. It's immoral. It's not right. Stop it.


BOLDUAN: Until someone starts listening we can just keep shouting at each other.

Great to see you, Governor. Thank you so much.

KASICH: Thank you.

[11:09:56] BOLDUAN: Turning now, I want to turn to some breaking news right now. A major protest is paralyzing one of the world's busiest airports. Look at this video. This is Hong Kong International Airport. Thousands of protesters forcing airlines to cancel flights for the second straight day.

And now reports the Chinese government is losing patience. What does that mean?

CNN's Paula Hancocks is at the airport in Hong Kong. She's joining me now.

Paula, what is happening now? What is happening around you? And what are the chances that this is going to escalate further?

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Kate, just in the last few minutes, we've had some remarkable scenes here. We've had the police turn up, maybe half a dozen police vans coming into the airport, much to the furry of thousands of protesters in here.

They were trying to barricade with some of the trollies, with anything they could find to keep the police out.

But it appeared as though that was an operation by the police to rescue one individual who protesters claimed was an undercover policeman. They had been holding him for many hours and paramedics were unable to get to him. So they managed to extract this particular individual.

CNN has no way to independently verify if he was an undercover cop.

But it just shows the passion of the protesters here, the anger that they have against the police.

Let me just give you a sense of the scene right now. People are starting to leave. But as the police were retreating, once they had retrieved that particular individual, they were backing out slowly, there were cheers, there was delight that the protesters felt they had had another victory. Bear in mind, there has been five days.

Something is going on over here. You can see a number of people running into the airport. We're not quite sure what's happening at this point.

This is the kind of thing you don't want to happen, to have this kind of stampede of an awful lot of people.

As we understand it, there were police outside. We do believe that some of those police vans had left. It's possible that -- some of the protesters are now saying the riot police have arrived. We don't know that for sure. But certainly, something has spooked these protesters. You can see that they are all trying to get back.

Of course, this would be a grave concern, because, bear in mind, this is an international airport. There are passengers here waiting for their flights. Just downstairs, in the arrivals department, which was a little less crazy and chaotic, there were children down there. So it would be a surprise, to say the least, if the riot police were to come into the Hong Kong International Airport.

But certainly, from these images that you're seeing right now, these protesters are very concerned about something that they have seen. I can see in the moment there are ambulances outside.


HANCOCKS: There have been ambulances outside the whole time.

Yes, Kate?

BOLDUAN: I'm sorry. I don't even know if you can hear me at this point, Paula, because it seems really chaotic where you are.

What I'm looking at is people are injured that are being brought past you. Obviously, we don't know what's going on. But where exactly are you in the airport? Can you a picture for where you are? Where these folks are kind of running from and to?

HANCOCKS: Well, what we're seeing at the moment is a couple of people running in injured, as you say. This man has just had his eyes washed out by a colleague. Whether that is potentially pepper spray, we simply don't know. We weren't outside when it happened. But that would be in keeping with what we would expect the reaction from pepper spray to be.

Now, we do know that once the police did retreat from the airport, there were a number of protesters that actually ran out after them. Whether or not this was an altercation, we simply don't know. There are a lot of people coming in and they have very sore eyes. This does look as though it may have been pepper spray, although we can't confirm that at this point.

Something has happened outside to make the protesters run back in.

I'm trying to have a look to see if I can see any more police vans out there. There does appear to be police vans still outside the airport, along with a fire truck and also some ambulances.

BOLDUAN: Paul, where you are, where you and your crew is, is it secure, is it safe?

HANCOCKS: Well, we're in an international airport, so you would imagine we would be safe.

We're taking a look at these images of people coming in and they're telling everybody to move back.

But once again, you have to bear in mind there are passengers inside this airport that haven't managed to get on a plane, that have been waiting to get on a plane.

[11:15:01] And you can see the riot police outside the window right there. The protesters were correct in that. The riot police are now running towards the entrance of Hong Kong International Airport.

These are remarkable scenes. There are passengers in this airport. Yes, there are protesters, but there are people who are waiting to get on a flight.

You see these green and blue lights. This is lasers. The protesters are trying to use to put the police off. And you can see that may have worked, at least for the time being.

Protesters are trying to put some kind of blockade across the entrance.


HANCOCKS: You can see the trollies being used there.

BOLDUAN: Paula, help our viewers understand. The riot police coming into the Hong Kong International Airport, this has not happened. This is a major escalation if they come back in, correct?

HANCOCKS: This is one of the world's busiest airports. This is a massive transport hub. This is not somewhere that you expect riot police to be coming into.

I've spoken to a number of protesters and they have said that they didn't believe this would happen. They have said that they thought that they were onto a good thing. They thought the fact that they were protesting in the airport meant that they were going to be safe from tear gas and pepper spray and the riot police.

Now, as we're pointing out, they didn't come far into the Hong Kong airport. Is that a show of force? Is that a sign that the riot police want to give to the protesters, that they are there? It's just unclear at this point.

BOLDUAN: So at this point, does it seem now that the riot police are blocking any of the protesters from leaving, almost blocking any protester from even leaving? Is that what's happening?

HANCOCKS: I don't believe they're blocking people from getting out of the airport. At this point, it appears as though the protesters are blocking them from getting into the airport.

And something quite surreal actually. I'm just looking down onto the ground floor, just looking over the banister, and everything is completely calm. Everyone is wandering around. Passengers are wandering around looking at boards. So it's very localized to this particular area.

This is the arrival hall -- sorry, the departures hall and this is the area where protesters have been focusing the last few hours. And we are seeing a fair amount of activity outside. This appears to

be more riot police now coming in to get into position. We simply don't know what they are going to be doing.


BOLDUAN: Just remind viewers, just for our viewers, remind them that there are passengers, as you mentioned, still in the airport. This has been an airport that's been largely almost paralyzed for two days as the protests have caused airlines to cancel will flights. But as you said, there are passengers in the airport trying to get on their flights.

HANCOCKS: That's right. And they have been walking around looking rather confused. Some of them are angry that they have, in some cases, been -- not been able to leave the country for two days now. They have come both days. I've met people, and they're still not able to get on a flight.

But the fact is passengers are still coming. They did hear from the Hong Kong authorities saying that passengers should not come to the airport. But, obviously, some are not listening to that because, last night, just after midnight, some flights did take off. So there's a hope by passengers here that they would be able to get on a flight.

And up until just a couple of minutes ago, in fact, right now, you can still see people arriving at this airport down in the arrival hall. It's a bit tricky to show. People are still arriving. This is, as you can see, a normal functioning airport.


BOLDUAN: This is such an amazing juxtaposition of what is happening at this airport with people walking around with their luggage. You can't see it, Paula, because you're in the middle of it, but we have another shot. It looks like from basically behind the riot police looking into where you are. And you can see shields up, helmets on, clearly with pepper spray canisters in their hands.

[11:20:03] It almost looks like -- I don't know if it was an airport official kind of standing outside, almost looking like trying to hold back the riot police.

It's really an amazing split screen that we are looking at right now, what is happening where you are and the riot police on the outside, and then passengers kind of milling about the airport in the level below you. It's truly remarkable.

HANCOCKS: I have to say, Kate, this is one of the most surreal images I have seen. You look one way and you see the riot police holding onto pepper spray, and you look the other way down below and there are families arriving in Hong Kong, coming home, coming from a holiday. It is simply surreal.

This is, to all extents and purposes, down below on the ground floor, a functioning airport. This is an arrivals hall, but up here, one floor up, in the departures hall, it is chaos. It is very chaotic. No one quite knows what's going to happen.

They have seen the riot police and it has certainly spooked many people. But they don't know whether or not they're going to come into the airport. It is a very unusual situation, to say the least.

This is an international airport. This is one of the busiest transit hubs in the world. Last year, in fact, Kate, this was the eighth busiest airport in the world.

And to have riot police with pepper spray and whatever else they have just outside with thousands of protesters inside, just downstairs, you have arrivals as normal, it's very unusual.

BOLDUAN: Paula, for our viewers, this is like taking two steps back to get to where we are right now. And let us know what you're seeing.

But why all the protesters have now massed in the airport. These are protests that have been going on relentlessly for quite some time on the streets and now to the airport where we have seen thousands of people show up. What does this all come down to? Why are they there? What is the pressure point at the moment?

HANCOCKS: The original pressure point, the original anger of these protesters was an extradition bill, a bill that was attempted to be put through the Hong Kong parliament that would allow Hong Kongers to be extradited to China to stand trial. That was unacceptable to Hong Kongers. They say it is one country and two systems and they're trying to protect their democracy, these protesters say.

Now, the airport protest has been going for five days but it's really only the last two days that it has been so big that have been so many thousands of people and effectively shutting down the airport.

That, we're told by everyone we're speaking to, were speaking about what happened on Sunday. There was a protest on Sunday and there's a widespread perception that police overreacted in that protest. This is according to the protesters. They believe that there was too much force used. There was excessive force used.

Now, the police deny that. They say they did what they had to do in order to keep the peace. And they've been giving a press conference. And the chief executive of Hong Kong, Carrie Lam, she supported the police and said Hong Kong is on the brink of no return.

So this protest right now, yes, it is based on the extradition bill, but this protest is anger at the police, and it has been since Sunday. In fact, it has been for longer than that, but really Sunday appeared to be somewhat of a turning point.

BOLDUAN: Let me know what you see where you are, Paula.

I'm looking at the split screen of you in the terminal with folks behind you. On the other side of the screen, I'm looking at, I believe, it's outside of the airport, riot police and photographers. And it looks, comparatively, from what I can see in the two shots, it looks like there are very few riot police compared to the masses of people inside there.

What have the clashes been like with the riot police to this point? It seems what we were just witnessing with you live was a major inflection point.

HANCOCKS: Absolutely. It's just pointed out to me there's a number of police vans that have just pulled up or are pulling away. Appear to have just pulled up.

Bizarrely, just behind them you're seeing double-decker buses that are taking passengers to wherever they're going to. Again, a very surreal image of this protest here.

But from this vantage point, at this point, we can't see the riot police. (AUDIO PROBLEM) Thousands of protesters here as well.

I'll tell you what, this has thinned out significantly. If we just pan around and show how it has thinned out. Obviously, there's more of a mass of people over in that direction, but this was crammed. It was jam-packed just a matter of 10 minutes ago.

[11:25:03] So whether this is people dispersing, whether this is people trying to get out of the airport and go home, we simply don't know. But this is a very different dynamic to what it was just 20, 30 minutes ago.

BOLDUAN: Absolutely. And give me the context of yesterday. The airport was largely paralyzed yesterday because of -- it looked like, at one point, mostly a sit-in of protesters. Did folks go home and come back or have they remained there throughout?

HANCOCKS: The vast majority did go home, Kate. We understand there was about 30 that stayed. CNN spoke to them and they said the reason they stayed overnight is they wanted to show people that the airport was safe, that it was possible to stay here, and they wanted to make sure they were here ready for today's protest as well.

The protesters I've spoken so say they believe this was a successful protest. They didn't believe that the riot police would actually make any attempt to try and come in here. They thought it was a protected area and the fact that there were passengers around gave them protection from repercussions from the police.

To a certain extent, is that true?

You can see just over here there's a barricade being moved into place. It looks like they're actually moving barricades to keep these riot police out. This is something that they have done time and time again over the last 10 weeks.

Not just here in the airport. On the streets, they have used any barricades they can find. They have barricaded themselves in to make it more difficult for the police to get close to them.

Now, for the most part, many of these protesters, I have to point out, are peaceful. There are some who are engaging in civil disobedience. There are some who have been throwing things at the police.


HANCOCKS: I'm not sure who this particular individual is. It appears as though he's being hounded out of the airport.

Protesters are saying they believe undercover policemen are working among the protesters, pretending to be protesters, and then documenting what they're doing and trying to take people and arrest them. Potentially, that was that situation. We simply don't know.

BOLDUAN: Paula --

HANCOCKS: You have these young kids trying to show you propaganda photos, trying to show you their images, despite everything else that's happening. They want this message to go around the world. They want the police brutality to be known around the world.

BOLDUAN: Paula Hancocks, Paula, please stay there.

We're going to take a quick break. We're going to get back to this. Protesters facing off with riot police at one of the busiest airports in the world, Hong Kong International Airport. And we saw it playing out live as the riot police came into the airport, momentarily, really creating chaos as protesters were running back into the airport, right past Paula.

We're going to take a quick break. We'll get back to this, make some more sense of the chaos that we're seeing play out in Hong Kong right after this.