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China Announces New Round of Tariffs; Trump Suggests Fed Chief Could be "Bigger Enemy" to the U.S. than Communist Chinese President; Fed Chair Acknowledges Growing Risk of Economic Slowdown & Says Trade is Factor; Rep. Seth Moulton Announcing End to Presidential Bid; Frontrunner Joe Biden Absent from DNC Summer Meeting; Buttigieg Looks to Iowa to Regain Momentum. Aired 11-11:30a ET
Aired August 23, 2019 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[11:00:33] ANNOUNCER: This is CNN breaking news.
KATE BOLDUAN, CNN ANCHOR: Hello, everyone. I'm Kate Bolduan. Thanks so much for joining me.
Big developments on the economy today. President Trump continuing to lash out. China announces a new round of tariffs. The chairman of the Federal Reserve gives no indication that he's going to be cutting rates any time soon.
And President Trump, Donald Trump, in response, it appears is asking this: "My only question is who is our biggest enemy, our bigger enemy, Jay Powell or President Xi?"
The president considers the independent Federal Reserve chairman, whom he appointed, a bigger enemy as the leader of China, the United States' most powerful adversary.
Just this morning, China slapped tariffs on $75 billion worth of U.S. goods, everything from beef to automobiles.
And this morning, the chairman is speaking out, as I mentioned, acknowledging that there's a growing risk of economic slowdown and specifically pointing to trade as a factor.
Everyone, of course, now is keeping an eye on market reaction to all of this.
CNN business correspondent, Alison Kosik, is in New York. CNN's Sarah Westwood is at the White House.
Sarah, let us begin with you.
Now we've got the president attacking Jay Powell once again in a way that we have not yet seen before. What are you hearing from there?
SARAH WESTWOOD, CNN WHITE HOUSE CORRESPONDENT: That's right, Kate. This is just another complication in the White House's efforts to project confidence in the outlook of the economy. Ad President Trump responding to these retaliatory tariffs from China this morning by continuing to take shots at the Federal Reserve and suggesting that perhaps it's chairman, Jerome Powell is as big a threat to economic success as the Chinese leadership.
Here's what President Trump wrote on Twitter this morning: "As usual, the Fed did nothing. It is incredible that they can speak without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed. I will work brilliantly with both and the U.S. will do great. My only question is who is our bigger enemy, Jay Powell or Chairman Xi?"
Actually, just within the last 60 seconds or so, Kate, President Trump is still tweeting again about China saying he's going to respond to these tariffs specifically later this afternoon. So we're going to see what approach the administration is going to take.
But this is coming as the White House has been reviewing options to try to keep this economic growth that we've seen over the past two years up heading into the president's reelection bid. There's fears that any sort of recession or stop in the growth could affect the president's reelection prospects.
To try to address that, earlier this week, President Trump threw out that perhaps he was considering a number of taxes, a payroll tax cut, a capital tax reform measure, before walking those back.
These tariffs, though, from China show that the president's efforts to try to strike this trade agreement with China has not been entirely successful. A clear escalation today.
Kate, we're going to see later today apparently what the White House is going to do in response.
BOLDUAN: Let us see. I think we're going to first probably be getting more reaction on Twitter from the president, who seems to now be on a tear.
Yet, another day, Alison Kosik, that the president is in a cloudy mood about the economy.
Let's talk about what seems to be setting the president off right now.
The Federal Reserve chairman, the man he appointed to the position, we must keep repeating, what did Jay Powell actually say?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Jay Powell, who is in the middle of a big conference in Jackson Hole, Wyoming, is in the middle of a big conference with central bankers around the world and economists, and they're talking about the economy and monetary policy.
So the Fed chief went ahead and gave a speech, And, in the speech, he did go ahead and acknowledge that the market or the economy is more turbulent in the past three weeks since it lowered interest rates for the first time in a decade, that the economy is more turbulent than it was three weeks ago. But it also didn't indicate -- he didn't indicate any action or
inaction he would or wouldn't take in its next September meeting, something that President Trump has been pretty much harassing the Fed chief about over the course of this week, to go ahead and cut rates again.
So I do take issue with this latest tweet from President Trump saying, as usual, the Fed did nothing.
Just so you know, the conference here at Jackson Hole is really not an appropriate place for the Fed to take action and to go ahead and actually cut rates or make any decision-making.
If you look at the timing of this, the meeting isn't happening for the Fed, not happening until September 17th with the decision coming down on December 18th whether or not there's going to be a rate cut. So just because he didn't say anything at this conference doesn't mean something will or won't get done in September.
[11:05:10] Also you have to realize the Fed chief doesn't just come up with this idea of whether or not the interest rate should be cut at a whim, whether the president wants him to or not. He's got to look at data and there's a lot of data still to come between now and the Fed meeting. That includes GDP and jobs data.
And that includes manufacturing, too. By the way, we got a manufacturing report this week, Kate, that showed the first contraction in a decade -- Kate?
BOLDUAN: There's a lot of data out there. All of it worth paying attention to. Maybe not from the president's Twitter feed.
Alison, thanks so much.
Sarah, let us hear what happens from the White House. Please keep us updated when you hear more.
Joining me right now is Douglas Holtz-Eakin. He's the former director of the Congressional Budget Office and former economic adviser to Senator John McCain.
Doug, it's great to have you here. Thank you so much.
DOUGLAS HOLTZ-EAKIN, FORMER DIRECTOR, CONGRESSIONAL BUDGET OFFICE & FORMER ECONOMIC ADVISOR TO SENATOR JOHN MCCAIN: Thank you, Kate.
BOLDUAN: First, I need to get your reaction to the tweet from the president. It literally came through as we were walking on the set. He says, "As usual, the Fed did nothing." He's talking about the speech from Jay Powell.
And then, "My only question is who is our bigger enemy, Jay Powell" -- which it looks like he spelled his name wrong -- "or Chairman Xi?"
Your reaction to that. HOLTZ-EAKIN: It's a clear escalation in what has been a longstanding
campaign against the Fed and trying to force his hand to lower rates. That's unmistakable.
I think what I find interesting is that no one should have been surprised that China levied these tariffs. From the outset, they have responded to every tariff increase with some sort of commensurate response and this looks exactly the same. Some on September 1st and December 15th, exactly when the president laid out his additional tariffs. So that's not surprising.
They chose today to announce it. And I think that was an unmistakable intrusion into American politics. They know the White House has been all over the map about whether the economy is in trouble or not, whether they need to do something about it.
HOLTZ-EAKIN: And they knew this would put additional pressure on the tension between the Fed and the president. And the president took the bait.
BOLDUAN: It sure looks like it.
One correction on my part. My note was incorrectly written. He did not incorrectly spell Jay Powell's name. That's the only small correction I will offer. I wish I could say that wasn't the tweet, but it was.
What does this do, though? Honestly, the list of people that the president lists out as enemies is long now.
BOLDUAN: And how seriously -- what is the impact of this? His words matter. Confidence in the economy matters. When he's equating Jay Powell to being as big of an enemy or worse than China, I don't even know what to do with it.
HOLTZ-EAKIN: Well, I think a couple things. Number one, we know from watching him now for some time everything is personal. He takes every policy issue and he turns it into a personal battle between him and somebody. So he has turned this into a battle with Jay Powell. He has made Jay Powell the face of his discontent with the Federal Reserve.
It's important to step past that. If you're Jay Powell and you're the Fed, you have to stick to your mandate, look at the data, as was mentioned earlier, and decide whether it is appropriate for the American people to have rates go down or stay where they are.
There's a lot of reason to believe they're in the right place and that they shouldn't move. And they will have to put up with the continued ire of the president if that's the decision they make in September.
BOLDUAN: Can I read you something? There was an interesting quote, Doug, it's about all of this, from the "Washington Post" this morning. And it says, as the president's staff has been beginning to talk to him about warnings of the economic clouds ahead, the president apparently thinks that it's just all about the narrative.
Here's one bit from the article: "He has told aides that he thinks he can convince Americans that the economy is vibrant and unrattled through a public messaging campaign."
Is the current economic forecast and outlook you see something that you can message your way out of?
HOLTZ-EAKIN: I think there's actually an element of truth to this. I've been in two White Houses. It is important for the president to exude confidence in the American people and the American economy. It is a bad thing for the president to talk down the economy and still fears to have no merit.
So in every White House, there's an attempt at messaged discipline to talk about the strengths of the fundamentals, to talk about the kinds of things that you see in the data, and at the same time, to prepare for any downside risks with policies that might help.
The difference is, all this stuff is typically kept out of sight of the public, the debate in the background about whether they should move or not, sort of, what's the outlook. This is all over the front pages and does nothing to help the president actually convince the American people that the economy is in good shape.
He's beginning to convince them that it's not, and that's a mistake, and I find it all quite discouraging. We need tighter message discipline out of the White House and we need better economic policy development, not this chaotic process we've seen over the past week.
BOLDUAN: Doug, thanks for being here. Really appreciate it.
HOLTZ-EAKIN: Thank you.
BOLDUAN: Joining me right now, CNN's senior political reporter, Nia- Malika Henderson.
[11:10:02] Nia, this is another day of what seems to be erratic behavior from the president. Now he's lashing out from everything -- you know, yesterday, he lashed out about something else and, today, he's really lashing out on the Federal Reserve chairman.
Look, he's been a boogeyman or they've been trying to create -- make him a boogeyman for quite some time when it comes to any economic woes that the White House sees. Do you think -- economically is one thing. Politically, is Jay Powell, the Federal Reserve chairman, an effective boogeyman, politically, for the president on this?
NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL REPORTER: Sure. The president likes to do this. He likes to sort of find somebody to blame. He likes to find somebody to kind of direct his supporters to also blame. But one of the things that you heard from Powell today was essentially
that there's only so much that the Fed can do. There's only so much rate cutting they can do. They obviously cut rates before --
HENDERSON: -- and that was something that the president was encouraging them to do.
But he also suggested that the sort of trade instability around tariffs around this China trade war, that is a problem as well. And there's nothing that cutting the Fed rates can do about the instability that businesses, particularly manufacturing and folks in some of those Rust Belt states and farmers, feel because of this trade war.
You saw a part of the instability today with China coming out and saying that they're going to put tariffs on products. And you saw some of that earlier with the president saying he was going to put tariffs and then he rolled back the tariffs because of the impending Christmas shopping season. That is something of the president's own making, the instability
because of the trade war.
But, of course, he's not going to blame himself. He would much rather blame Jerome Powell.
BOLDUAN: Yes. The president is also continuing to go off on Twitter about trade, about China, and about Jay Powell. And here he's saying that he's going to respond to the tariffs this afternoon. That's coming in a series of tweets.
HENDERSON: We'll see the markets, I'm sure, respond to that. It's down 302.
HENDERSON: So we'll see.
BOLDUAN: It's been heading down today. At this point, with how much he's putting on Twitter, I wish he would just walk out and speak to the press about it. Because he is unhappy.
HENDERSON: Yes, he is.
BOLDUAN: He is stewing in the White House about this.
HENDERSON: I think that's right, yes.
BOLDUAN: And also, I mean, this comes on a strange day, an important day. The president is about to leave for the G-7 later this evening. We're going to hear from him this afternoon on how he's going to respond to tariffs from China. But going into the G-7, there was already so much tension ahead of
this weekend amongst the leaders and nations that are going to be gathering in France.
I mean, what does this, whatever we're going to hear this afternoon, and what do these economic warning signs that are out there and this fight that the president is now -- you know, this battle the president is now locked in with the Fed chairman and the tariff war with China, what does that do for President Trump and the group at large when they're getting together?
Because it's not like the economies of the world are suffering as well right now.
HENDERSON: That's right. That's right. You think about Italy, you think about Germany, you think about the U.K. with the Brexit or no Brexit, a lot of warning signs that this president, I think, has always felt he could sort of buffet the United States against as if the global economy isn't intricately intertwined.
We know that Trump likes to put on a show. We know that he's not close to a lot of those folks. He's at odds in terms of whether or not to, for instance, readmit Russia into the G-7. Most of the folks in that group say no. So we'll see what happens.
This is -- a lot of times these big summits, not necessarily any real deliverables come out of them. They're sort of a symbolic showing of unity among these Western allies or Western democratic allies. So we'll see.
But we know that the president hasn't been that person that we're normally used to seeing in the American president, somebody who is central to these allies and these relationships. So we'll see.
The president is very unpredictable. We don't know what's going to happen out of these meetings.
BOLDUAN: That's for sure.
HENDERSON: We know what kind of mood he is in. So that, I think, probably doesn't bode well for what comes out of these meetings. But we'll see. Stay tuned.
BOLDUAN: And that -- always. That mood definitely coming through with his official statements on Twitter today.
BOLDUAN: It just really looks that, one, he's definitely angry about the tariffs. Two, he's talking about something that Democrats and Republicans have agreed on, which is the United States needs to find a way to take on China.
BOLDUAN: But how he's going about doing that is obviously where he is facing the most criticism.
It almost looks like, when you read his statements this morning, that if he's not nervous about this latest move from China and what that means, he's worried. It just reads that way.
[11:15:04] HENDERSON: Yes. And, listen, if you're China, like if you're President Xi, you are president for life. And he goes in to 2020 and Donald Trump doesn't -- I don't know that he gains leverage with China going into 2020. He's the one who has got his back up against the wall in terms of the economy and in terms of what the economy means for his reelection chances.
So President Xi is playing a pretty strong hand at this point.
BOLDUAN: And he's playing a much longer game --
HENDERSON: Yes, exactly.
HENDERSON: -- than President Trump has, quite honestly, when you look at our political systems.
Nia, thank you.
HENDERSON: Thanks, Kate.
BOLDUAN: Coming up for us, and then there were 21. Another Democratic presidential candidate is calling it quits, the third in the last seven days of the campaign. What does it mean for the rest of the field?
Plus, as the president sparks outrage over offensive comments about Jewish voters, Jared Kushner and Ivanka Trump are out of sight. It's becoming something of a pattern. What does it mean? Why? That's coming up.
[11:20:52] BOLDUAN: Breaking news this morning, another presidential candidate is calling it quits. Congressman Seth Moulton will end his bid today. He's the third candidate in the last seven days to end his campaign.
But he is also one of 13 today who will be taking the stage to speak at the Democratic National Committee summer meeting in California this afternoon. It's the biggest gathering of the summer but not every candidate is attending. Noticeably absent, frontrunner, Joe Biden.
CNN political director, David Chalian, is outside the DNC meeting in San Francisco.
It's good to see you, David.
So the Democratic front-runner not attending the biggest gathering of party Democrats of the summer. California has moved up its primary to early March, so it is more relevant than ever. What are you hearing about this there? DAVID CHALIAN, CNN POLITICAL DIRECTOR: Yes, you are right, California
is the biggest prize on Super Tuesday in this process. Those that aren't showing up in person have been invited to submit videos to talk to the Democratic Party faithful, the members of the Democratic National Committee here.
I don't hear much grumbling that Biden or Pete Buttigieg, who are campaigning in New Hampshire today instead, aren't here today.
But it is an opportunity, Kate, for the candidates who are here to make their appeal to people who are state party chairs, who really are plugged into activists circles back home in their critical states.
It's also where the party is doing its business of finalizing the calendar and the delegate plans to actually lay down the rules of the road for these candidates about how they're going to achieve the nomination.
BOLDUAN: What do you make -- on Biden, what to you make of this "New York Times" about Biden? I'll read it for our viewers, in part, "Less than two weeks before Labor Day, there are signs of a disconnect between his relatively rosy poll numbers and excitement for his campaign on the ground here, Iowa, in the state that begins the presidential nominating process."
You were just in Iowa, David. What do you make of that?
I think we're having a technical problem with David. Unfortunately, we'll see if we can get David reconnected.
In the meantime, let's talk about another candidate who is skipping the DNC's big meeting in California, South Bend Mayor Pete Buttigieg. He's instead hitting the trail in the early voting state of New Hampshire. But he is keeping a focus on Iowa where he's making moves to try and regain some of his early momentum.
CNN's Phil Mattingly has more.
PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): A biography can grab attention.
BUTTIGIEG: Well, I'm definitely the only left-handed, Episcopalian, Maltese-American, gay, war veteran in the race, so I've got that going for me.
MATTINGLY: The message can create energy and raise money.
BUTTIGIEG: Are you ready to turn the page and start a new chapter in the American story?
MATTINGLY: But it's here in homes like this just eight miles away from the Iowa state capital where campaigns live or die. SHANNON SANKEY, BUTTIGIEG CAMPAIGN ORGANIZER: We just want to rethink how you guys think about campaigning and how you think a campaign is done, and this is kind of just the beginning that we're going to do this.
MATTINGLY: It was the bio, Harvard graduate, Rhodes Scholar, military veteran, mayor that, along with this CNN town hall --
BUTTIGIEG: We would be well-served if Washington started to look more like our best-run cities and town rather than the other way around.
MATTINGLY: -- sent Pete Buttigieg from nowhere, polling at one percent in March in the CNN/"Des Moines Register" Iowa poll, to a blowout -- $25 million second-quarter fundraising number -- and firmly into the top five of Democratic primary candidates.
BUTTIGIEG: Well, it's been a rocket ship.
MATTINGLY: But, Buttigieg's rocket-ship moment, at least according to the polls, has passed. And now, the campaign is under pressure to turn that early rise and big cash into the type of operation that can win.
BUTTIGIEG: This is the stage where I think the campaign is really to be won because now we have people on the ground forming the interpersonal relationships that are the real stuff of good politics, especially in a place like Iowa.
MATTINGLY: Iowa and its looming caucus is ground zero for those efforts --
UNIDENTIFIED FEMALE: So we're calling tonight to talk about Mayor Pete.
MATTINGLY: -- with seven visits in the last seven weeks in a rapidly- growing organization.
Compared to his competitors, who have spent a year or more building their Iowa organizations, Buttigieg's campaign launched lean and minimal and is just reaching full strength in the state with more than 60 staffers.
[11:25:10] And it's the campaign's volunteers who are key to their strategy.
PAM KENYON, BUTTIGIEG CAMPAIGN VOLUNTEER: So, there was a house party in Dallas County. Didn't know anybody.
MATTINGLY: Pam Kenyon, a Democrat, who has never actively volunteered on a campaign before, is the prototype for that effort.
KENYON: Pete just held the room.
And I wanted more. And I signed up and I was invited to do some phone banking, which I did immediately the next week, and the week after that, and the week after that. And then, there was another house party. I just -- I couldn't get enough. (CHEERING)
MATTINGLY: With money, media, and more than five months to the caucuses, Buttigieg has staying power in the race, even if, for the moment, the polling has hit a plateau.
BUTTIGIEG: You need to have that kind of army of people who can spread the message. And often, they find ways that I wouldn't have even thought of to describe what's at stake and why this candidacy matters.
When they're -- when somebody's, you know, explaining what this campaign means to them, it creates a whole new way to bring it home that just multiplies what I'm able to do from the podium or in an ad.
MATTINGLY: And, Kate, it's the spreading of the message that the Buttigieg advisers made clear is so crucial at this point in time. Given where he came from, how small the campaign was, his limited name recognition, they need to spread the word. They feel like if people see him, they hear him, they will like him. And that's why the volunteers are so important.
It was so interesting in what we got to see. This wasn't calling names off a voter file, this wasn't door knocking necessarily. These were volunteers who were calling people that were close to them, using relationships.
And that is so important because, during the summer, when you have vacations and people in undated with 20-plus campaigns making phone calls. When you see the name pop up of a friend or relative, you're more likely to answer, then hear the pitch, then maybe join the team.
That's what they're going for right now. We'll see if it actually pays off in the months ahead -- Kate?
BOLDUAN: It is a great look at the fight, one campaign and all those campaigns are trying to wage and all of the groundwork that is required in those volunteers, that's the whole ball game.
Phil, thank you so much, man.
Coming up for us, President Trump twice throws out an attack with a message that's widely seen as a well-known anti-Semitic trope. And two of his closest advisers, his daughter, Ivanka, and his son-in-law, Jared Kushner, who have both Jewish, they are nowhere to be seen. Is that intentional? That's next.