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AT THIS HOUR
Dow Slides 500-Plus Points Amid New Recession Warning, Trump Trade War; New Standoff Between Police & Protesters in Hong Kong; Trump Immigration Official Defends Rewrite of Statue of Liberty Poem, Says It's about Europeans; Democratic Aides Skeptical White House & Congress Will Take Action on Expanding Background Checks. Aired 11- 11:30a ET
Aired August 14, 2019 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[11:00:16] ANNOUNCER: This is CNN breaking news.
KATE BOLDUAN, CNN ANCHOR: Hello, everyone. I'm Kate Bolduan. Thank you so much for joining me.
We're going to start with breaking news. The Dow taking another dive this morning, now down over 500 points right now. And for the first time in over a decade, there are strong warning signs the country could be headed for a recession. Why you should and need to care about the yield curve inversion at this very moment.
This comes after a truce was called and President Trump blinked in the trade war with China, announcing he will delay some of the additional tariffs on China until December.
Why? He says it's in order to not impact the holiday season. But that's also acknowledging what he's refused to acknowledge to this point, that the trade war is hurting U.S. businesses and consumers. So what now?
Let's start with the New York Stock Exchange. CNN business correspondent, Julia Chatterley, she is there for us.
Julia, thank you so much for coming on. I really appreciate it.
Explain to folks why the bond market is scaring everyone at this moment?
JULIA CHATTERLEY, CNN ANCHOR & BUSINESS CORRESPONDENT: It's a great question, Kate. What we have seen in the past is where we've had these kind of warnings signals from the bond market, it can mean a U.S. recession. In fact, all U.S. recessions have seen this happen in the bond market, but it doesn't always mean a U.S. recession is coming. And this is key.
Stock market investors today are clearly nervous. They're worried about the trade war. They're worried about the data we're seeing and the impact of the trade wars happening. We've had China's data weakening. We've had Germany's data weakened today. So there's a lot of nervousness.
People then buy bonds, because they think it's a safe haven asset here, a security, but that then results in the warning signal that we're seeing right now.
So the key here is it may mean a recession. It doesn't always mean a recession. But right now, as you can see, the Dow at session lows. People are simply very nervous.
BOLDUAN: What are investors telling you about the timing? You mentioned it just a bit, the timing of this and the president pulling back on some of the tariffs on China.
CHATTERLEY: That's key. Yesterday, when we saw the president announce that he was going to delay a big chunk of the tariffs, a lot of people said, does this help us reach a trade deal? Or did the president -- again a reference to the poker -- show all his cards and say he's worried about the consumer and the stock market falling and, therefore, just hand over a load of leverage to the Chinese president, Xi Jinping, a rod effectively to beat him with?
I think that's adding to the nervousness. People don't understand now whether China is going to play even harder ball or if this helps us reach a trade deal.
In the meantime, the global economy is weakening as collateral damage. Trade wars aren't easy to win -- Kate?
BOLDUAN: Exactly. We're seeing that right now. You pose a key question. If this move from the president strengthens, whose hand it actually strengthened?
BOLDUAN: I think that's really important.
Julia, thank you very much. I really appreciate it.
CHATTERLEY: Thank you.
BOLDUAN: Joining me for some more on this, a former commerce secretary and, of course, a former ambassador to China, Gary Locke.
Secretary, thank you so much for being here.
GARY LOCKE, FORMER COMMERCE SECRETARY & FORMER U.S. AMBASSADOR TO CHINA: My pleasure, Kate.
BOLDUAN: What's your reaction to what Julia was laying out, the recessions fears that are now taking off this morning? Do you think the country is headed there?
LOCKE: There are a lot of signs all across the world that some of the major economies are headed toward a recession. It doesn't mean they will. That's why it's very important that we actually reach a trade deal with China to try to head off some of these warning signs and some of these danger points.
In both sides -- it's to both sides' advantage to strike a deal as quickly as possible. It probably will not be as far ranging, not quite the grand bargain but people were hoping for, even five or six months ago.
But China's economic is slowing down. There's troubling signs on the U.S. economy. And the president is finally acknowledging that this trade war hurts consumers. Various economists, including the government's own economists, have said that the current tariffs --
LOCKE: -- the ones already in place, are costing the average American household anywhere from $800 to $1,000 more per year.
The tariffs that were schedule to do go in September 1st would have cost Americans even more. I-Phones, video consoles, toys, clothing, shoes, you name it, that would have hurt the pocketbooks of Americans.
BOLDUAN: Look, no one should be surprised when, today or tomorrow, the president comes out and says again this isn't hurting the U.S. economy, the U.S. economy is doing fine, it's only hitting China. Even those, in the move he's actually made, it is acknowledging that it is impacting U.S. businesses and U.S. consumers. That is for sure.
[11:05:14] With this announcement yesterday, and delaying, as you were laying out, kind of the delay on some of these tariffs that he promised to impose, he's clearly blinking. He's clearly feeling the mounting pressure and he's finally reacting to the mounting pressure.
Do you think this helps the president and China get any closer to an actual deal with what the president announced?
LOCKE: I think it bodes well for more productive discussions and negotiations. I think the Chinese and the Americans are set to resume their discussions and negotiations in about two weeks.
With the slowdown of the Chinese economy and, of course, the president's own admission that this hurts American consumers, perhaps both sides will be more realistic and more willing to really strike a bargain.
BOLDUAN: Do you see a world in which the United States and China just do not reach a trade deal, and this becomes the new normal?
LOCKE: That would be very, very problematic. It certainly will impact American consumers. The impact will be even more over time. It certainly will affect businesses. And it will all be passed on to buyers of American products.
It also will hurt American companies that make things using Chinese components. It raises the cost of that American good, as they try to compete against other products made by company from other countries, or even as they try to sell this made-in-America product, which will cost more using Chinese components as they try to sell these all around the world.
We have not yet begun to feel the full impact of this trade war. And as others have said, there are no winners in a trade war. Both sides lose. And it's really the workers and consumers of both countries.
BOLDUAN: Secretary, if you could please hold on. We have some breaking news I want to get to quickly.
Police and protesters have been facing off again in Hong Kong. You saw how quickly things escalated yesterday during this show, live on this show.
Let's get there right now. CNN's Ben Wedeman is in Hong Kong.
Ben, what has been happening there tonight?
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Kate, we're in Kowloon, a very working-class neighborhood, where, within the last hour, protesters have clashed with police just outside this police station here, which essential from which emerged police firing tear gas. This is the first time tear gas has been used since the tumultuous events at the airport.
Now what we're seeing is, even though traffic is sort of coming by sporadically, local residents shining lasers at the police station. And of course, Hong Kong police have deemed lasers as an offensive weapon used by these protesters.
It's important to note that most of the people on the street behind me are not dressed in the black of the protesters. These are local residents who are angry that the police seem to have used a fair amount of tear gas yet again in a very crowded residential, working- class neighborhood.
This is what we have seen emerging in the last few days, is that the anger at the police and, therefore, the government is not just coming from the protesters, but ordinary residents of Hong Kong who are tired of what seeing as they see as excessive police force, excessive use of tear gas.
So despite the apologies that the protesters put on the yesterday and some of the excesses that occurred at the airport, it doesn't appear that the resentment against the authorities is in any way abated -- Kate?
BOLDUAN: Ben, thank you so much. We'll see what happens in the coming hour at the very least there in Hong Kong. Thanks so much.
Let me bring back in former ambassador to China, Gary Locke.
Ambassador/Secretary, it was really surreal to watch it play out -- it played out on the show yesterday in the Hong Kong airport. It was like panic and pandemonium amongst the protesters and police when riot police showed up to the airport. Now you have top Chinese officials saying the protests are showing signs of terrorism and state media showing tanks and amassing along the border. A key question at this moment, what do you think China's next move
here as this continues in Hong Kong?
LOCKE: This is a very tense time, fraught with danger on both sides for both the protesters, the pro-democracy movement, but also mainland Chinese government authorities. They cannot allow this to get out of the hand. Both sides have to be very, very careful about over- reaching or overstepping.
[11:10:12] Certainly, if the protests continue, China is going to be more inclined to step in. They cannot let this get out of hand for fear this would be an example, an encouragement to protesters and demonstrations and violence on the mainland itself, and that's something they simply cannot tolerate.
And yet, if they were to intervene, if they cross the border, we risk a Tiananmen Square, in which there would be massive bloodshed. And the pro-democracy protesters, I fear, would be willing to martyr themselves on behalf of their cause. That would be absolutely devastating --
BOLDUAN: Secretary, that's a terrifying -- yes.
LOCKE: -- democracy.
BOLDUAN: And that's a terrifying thought. From what you have seen, do you think it's a real possibility that China could move in with force?
LOCKE: It is a possibility. And it's something that I hope that world leaders would communicate with Beijing that this is something that must not happen at all costs.
One way that they could perhaps -- that the Chinese can respond is really change the leadership of Hong Kong. The chief executive, who is really aligned with Beijing, needs to step down. She made major blunders by proposing this extradition treaty with the mainland, which sparked all of these protests, refused to back off, and basically said she was tabling the proposal, but not withdrawing it completely. So a face-saving way for both sides would be for her to step down.
The Chinese could say all this chaos was her creation. She let it get out of control, did not control the police. So she could be the convenient scapegoat. Replace her, have her step down, and let's bring some calm back to the situation.
BOLDUAN: You mentioned world leaders speaking up. Let me play for you what the president said about the clashes yesterday.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, the Hong Kong thing is a very tough situation, very tough. We'll see what happens, but I'm sure it would work out. I hope it works out for everybody, including China, by the way. I hope it works out for everybody.
(END VIDEO CLIP)
BOLDUAN: It's a tough situation, I hope it works out. Is that the kind of speaking up and speaking out that you're talking about from world leaders? Is that enough coming from the White House?
LOCKE: No. We don't need just hope. We need active intervention. We need to use all of our diplomatic resources, communications directly with Beijing, communications with the Chinese embassy, and not just wishful thinking, but really intervention and active participation, consultation by world leaders with the Chinese.
BOLDUAN: Ambassador/Secretary, thank you for being here. Appreciate your time.
LOCKE: My pleasure.
BOLDUAN: Coming up for us, no apologies. The Trumps immigration official who sparked outcry over his take on the iconic poem from the Statue of Liberty is now trying to explain himself again. Is it helping?
Plus, the White House and Congress are holding talks on expanding background checks following the mass shootings in El Paso and Dayton, but are talks progress? Where does the president get his apparent optimism when he says that they all want to get something done?
Stay with us.
[11:18:29] BOLDUAN: Doubling down, trying to rewrite history or a little of both. Ken Cuccinelli, a top immigration official in the Trump administration, is standing by his revision of the iconic poem written on the Statue of Liberty. The poem, the original poem, reads, "give me your tired, your poor, your huddled masses yearning to breathe free the wretched refuse of your teaming shore."
Cuccinelli sparked outcry when he offered his own version of that in an interview with NPR.
(BEGIN VIDEO CLIP)
RACHEL MARTIN, HOST, NPR (voice-over): Would you also agree that Emma Lazarus's words etched on the Statue of Liberty, "give me your tired, your poor," are also part of the American ethos?
KEN CUCCINELLI, ACTING DIRECTOR, CITIZENSHIP & IMMIGRATION SERVICES (voice-over): They certainly are. Give me your tired and your poor, who can stand on their own two feet and who will not become a public charge.
(END VIDEO CLIP)
BOLDUAN: That did not sit well with a lot of people. Cuccinelli last night tried to explain it further this way on CNN.
(BEGIN VIDEO CLIP)
CUCCINELLI: Of course, that poem was referring back to people coming from Europe where they had class-based societies, where people were considered wretched if they weren't in the right class. And it was introduced -- it was written one year, one year after the first federal public charge rule was written.
(END VIDEO CLIP)
BOLDUAN: Joining me right now, CNN political commentator, former executive director of the Congressional Black Caucus, Angela Rye.
Angela, does that explanation that Cuccinelli gave Erin Burnett last night make it better or worse?
ANGELA RYE, CNN POLITICAL COMMENTATOR: What it makes it is honest. What we know about this administration, and we knew from, you know, Donald Trump's treacherous history with race, we knew when he announced his campaign, we knew when he was questioning Barack Obama's citizenship, that anyone who is other who they cannot trace through their lineage, right, is problematic.
[11:20:20] It is for that reason -- Kate, I could tell you how exhausting it is to talk about racism and xenophobia in this administration. But I also cannot express the outrage, the exhaustion, the people on the other side of that racism are feeling.
So I will yell about it until my voice is hoarse. This is a problem. This is something we cannot sit idly by and watch. This is something that requires the allies among us, who benefit from white supremacy and families who have benefited from white supremacy in this country, it's time for everybody to stand hand in hand and say it's just not right.
What's so crazy to me about the poem, Emma Lazarus, last name Lazarus, so, of course, that brings me to the Bible. I think about, you know, the God that I serve. You know, we see all of this evangelical support for Donald Trump and I wonder, what Bible are they reading. There are some Bibles that have Jesus' words in red print. There's nothing about Christ's words that are in alignment with the policy implementations issuing from this administration. It's a problem.
BOLDUAN: We know that this issue is energizing to the Trump base.
BOLDUAN: And I -- I think we can say candidly that when people are angry about when he says something or an ally of his says something like this, or there's outcry to something he says, that's energizing to President Trump's supporters as well.
Do you see it energizing the Democratic base as well? This discussion, very importantly, I think, with where you are, is far beyond politics, actually.
RYE: Right. Right.
BOLDUAN: But when anything is done in the political season, you know there's a political point to it. I just wonder if it doesn't energize the Democratic base as much. What do you think right now?
RYE: I don't know, Kate. Just going back to how I personally feel, I'm so tired of talking about it, and even more so, just like --
BOLDUAN: Analyzing it almost.
RYE: Not even that. It's like, how can this -- it's like shock. You know, this conflict, how do we go down this far, and the next thing is even worse. The fact he said what we all know the policy is for, saying, well, this is about Europeans. We know that's what you thought.
BOLDUAN: His point, right, is this law has been on the books forever, since like the 1980s (sic). What they're doing, this administration, is expansion on the original concept. But the concept of the public charge has been on the books for a long time.
BOLDUAN: Is it the law or is it the explanation of what they're trying to do with it that's so troubling?
RYE: It's the intent. Again, to me, as a lawyer, there are a gazillion cases out there in case law that talks about discriminatory intent as the reason. For me, I would always argue that if there's discriminatory impact, it's just as egregious.
But he told you in plain sight, plain hearing, exactly what the intent was. It was about Europeans.
So they have decided that black and brown immigrants are worthless. They have decided they don't contribute to this economy, which is not true. They have decided near not adding value to this economy, which is not true. All of those things are problematic. He's been very explicit about their intent from the beginning.
RYE: And you ask a political question about energizing the base. I can't tell you enough, like, it is demoralizing to know that in our 400 years being in this country, this is where we are.
BOLDUAN: Thank you for being here, though.
RYE: Thank you.
BOLDUAN: Great to see you, as always.
RYE: Good to see you. [11:24:04] BOLDUAN: Coming up for us, President Trump says, in his
words, he has "tremendous support" is out there on for new gun measures, like expanding background checks, and there are new talks on Capitol Hill. But if past is prolog, is any of this really a sign of progress? That's next.
BOLDUAN: It's now 10 days from the nation's last mass shooting, nine dead in Dayton, Ohio, just after 22 were killed in El Paso, Texas. Since then, President Trump has said that he wants to see something done. Here he was just yesterday.
(BEGIN VIDEO CLIP)
TRUMP: I am convinced Mitch wants to do something. I have spoken to Mitch McConnell. He's a good man. He wants to do something. He wants to do it, I think, very strongly. He wants to do background checks. And I do, too. And I think a lot of Republicans do.
(END VIDEO CLIP)
BOLDUAN: But where is the evidence of that? Where is any real sign of real progress or that anything has changed in the gun debate that has stalled in Congress for years?
CNN White House correspondent, Kaitlan Collins, is in New Jersey near where the president is vacationing. She's joining me now.
Kaitlan, CNN is reporting that there are informational talks going on between the White House and Congress, but what are you actually hearing about how they're going?
[11:29:56] KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: And the question is, Kate, where are they going. Because right now, these talks are happening at early stages between congressional aides and White House aides, of course, on legislation that could strengthen background checks, something you have heard the president calling for. But there's also a great deal of skepticism.