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China Slaps A New Round Of Tariffs On $75 Billion Worth Of U.S. Goods; President Vladimir Putin Has Ordered His Military To Prepare A Symmetrical Response To A U.S. Missile Test; Campaign Adviser For Senator Kamala Harris Says This Week Was Their "Lowest Point" In The Campaign So Far. Aired 2-2:30p ET
Aired August 23, 2019 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BRIANNA KEILAR, CNN HOST: ... for more information. This all comes as President Trump argues that Democratic lawmakers cannot access his financial records through those banks. And that is it for me. NEWSROOM with Brooke Baldwin starts right now.
ANNOUNCER: This is CNN Breaking News.
BROOKE BALDWIN, CNN HOST: Brianna, thank you so much. Hi, everyone. I'm Brooke Baldwin. You're watching CNN on this Friday. Thank you for being here. Let's take a look at the Dow. The Dow in a nosedive. Look at that, this Friday as China slaps a new round of tariffs on $75 billion worth of U.S. goods.
And President Trump is responding in a way that has become all too familiar. He is lashing out. Hours before jetting off to France for a G7 Summit that will be at best, tense, Trump announced on Twitter that U.S. companies are his words, hereby ordered to look for alternatives to China, including leaving the country altogether.
And then there's the President's other favorite economic target, the Federal Reserve who he blasted yet again for, in his opinion, doing nothing and being weak. He even went so far as to ask who was the nation's biggest enemy -- as in the United States' biggest enemy -- Fed Chief Jerome Powell or Chinese President Xi? Chairman Powell is speaking out today and we'll have more on that in just a moment.
All of this is coming at us as "The Washington Post" today is reporting that Trump has been dismissing warnings of an economic slowdown from his own aides, believing that he can persuade Americans that everything is fine.
But according to "The Post," he plans to do this through a public messaging campaign. With about an hour to go in the trading day, it doesn't look like Wall Street has received the message just yet.
So let's dig into this more now on the Chinese tariffs which we will get into effect in two stages, September 1st and December 15th. Those by the way are the same days as President Trump's tariffs on Chinese goods. So with me now Steven Jiang, CNN's Senior Bureau Producer there in
Beijing. So Steven, China says it was forced to take action; $75 billion worth of goods are impacted. What are they?
STEVEN JIANG, CNN SENIOR BUREAU PRODUCER: That's right, Brooke. These new Chinese tariffs cover a wide range of American goods. We're talking about agricultural products, seafood, meat, but also nuts and fruits; but also chemicals, electronics and also automobiles.
So for anyone who had been listening to Chinese official speaking for the past two weeks, this was not a surprise because ever since President Trump announced his new tariffs on $300 billion of Chinese imports, the Chinese had been saying, "We would retaliate because we want to defend our national and economic interests." So here, they have announced their newest tariffs.
But you know, this is also going to cast huge doubts over the ongoing trade talks between the two sides. The next round is supposed to take place in Washington in September. Remember, one of the preconditions the Chinese have set to reach any deal is the removal of any existing U.S. tariffs. So these latest back and forth is certainly making that goal even more elusive -- Brooke.
BALDWIN: Yes. Not helping that. Steven in Beijing. Thank you very much. Back here at home, the mood has gotten to be pretty awkward in Jackson Hole, Wyoming today. That is where Fed Chief Jerome Powell is speaking at an Annual Economic Forum on the same day that the President of the United States questioned whether Powell or the President of China was the nation's biggest enemy.
We should note that President Trump handpicked Jerome Powell to run the Fed. That was back in 2017, saying at the time that Powell had, quote, "the wisdom and leadership to steer the economy through any crisis."
CNN Business correspondent, Alison Kosik is tracking the action at the New York Stock Exchange. And so Alison, what are the details on Jay Powell's speech today? And how are investors reacting?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: You know, I think you're seeing investors really react when you look at this selloff, they're reacting to President Trump's tweets as a whole. They're reacting to his tweets about China and his attacks on Fed Chief, Jerome Powell as well.
What I find interesting about that attack on Jay Powell for not taking any action as usual, one thing to keep in mind, historically, at the Jackson Hole, Wyoming conference that happens which by the way is with Central Bankers around the world, it's with economists to discuss monetary policy and economies around the world.
It's not for the U.S. Fed Chief to go ahead and make a monetary policy decisions historically. Usually, when you see a Fed Chief here in the U.S. make a rate change, which is outside of the regular meeting, it is because of an emergency. Last time I checked, we're not in an emergency. So there's really no
expectation except for President Trump to expect that the Fed Chief was going to make some sort of announcement about rate hikes.
Now, investors were looking for hints, and they did get some hints from Fed Chief, Jay Powell. He did acknowledge that there is turbulence in the economy in the three weeks since the Fed went ahead and cut rates. That is showing that the Fed is concerned about the direction that the economy is going.
As for the selloff we're seeing right now, we are seeing the Dow down 496 points. A big part of that is because of the wild card that President Trump threw in the mix, him tweeting that the response to China's retaliatory tariffs today is going to happen this afternoon.
The problem with that book is that it is a wild card, it is uncertainty. And investors as you know, do not like uncertainty. It's part of the reason you are seeing the selloff right now.
[14:05:25] KOSIK: Another reason we are seeing the inverted yield curve, it is that term again coming up again, multiple times showing that there's less faith in the economy in the short term than the long term. And that's what the inverted yield curve essentially says -- Brooke.
BALDWIN: Got it. We wait for that wildcard, announcement, tweet -- what have you -- TBD, Alison Kosik, thank you so much. Lindsey Piegza is Chief Economist at Stifel Nicolaus and Lindsey, nice to talk to you and as best as you can, you know, if you're China, and you do what they've done now, what must they be thinking about us? About the United States?
LINDSEY PIEGZA, CHIEF ECONOMIST, STIFEL NICOLAUS: Well, I think they're trying to amp up the pressure on the United States. They know that these back and forth retaliatory actions on both sides are having a very significant negative impact on the Chinese economy.
But they also know that it's hurting the U.S. economy and with the 2020 election coming up, they're hoping that this pressure will compound and force the administration to bend to some of their stipulations to come into the table in reaching a lasting trade deal.
BALDWIN: Do you think they sense a weakness on our side?
PIEGZA: I don't think they sense a weakness quite yet, but I do think that they're trying to continue the pressure on the Trump administration, continuing to meet every tweet, every retaliatory action with their own retaliatory action, again, amping up that pressure and essentially hoping to force the Trump administration's hand to bend on some of these hard lines.
BALDWIN: So we're more than a year and a half into this fight with China. Is there any hope of a deal being made because that is the biggest immediate economic boost we could get?
PIEGZA: Well, right now, we are seeing very significant negative impacts on both economies. When we look at manufacturing hiring, this has slowed from an average pace of around 22,000 down to 6,000.
When we look at the pace of domestic manufacturing, it is closer, it's nearing that contractionary breakeven point. So we are seeing this have a very dire impact.
And as we heard from the Fed, this is one of the biggest wildcards weighing on the outlook for the domestic economy.
So I do think that the Trump administration has incentive to try and reach a lasting deal, but it really depends whether or not we're going to see cooler heads prevail, and come to the negotiating table.
BALDWIN: On the incentive piece, I thought our friends over at Axios did a really good job of pointing out today that, you know, aside from doing a trade deal, there's just a handful of things that can be done to really help the economy and stave off a recession.
They talk about, you know, tax cuts, infrastructure, maybe another round of rate cuts from the Fed. But will any of that A. happen, Lindsey? And B. will any of it juice the economy?
PIEGZA: Well, I do think that we will see additional rate cuts from the Fed. We are anticipating another 25 basis point cut at the September meeting. That being said, rates are already extremely low. So an additional 25 basis points may not be enough to buoy the economy back into three to four percent territory, but it will be enough to help stabilize the market and increase confidence in the Fed's ability and willingness to step up and help at least support the economy.
As far as the fiscal side, I do think that a stimulus program, i.e. structure investment would be a very solid case to help boost the economy. And certainly, I do think that would be enough if we saw a sizable infrastructure spending bill that would be enough to stave off a recession at least a quarter or two.
BALDWIN: Got to everyone together to agree on that, which is a whole other conversation.
PIEGZA: That's the hard part.
BALDWIN: We know that Trump is demanding U.S. companies abandon China. Realistically, these are the two biggest economies in the world. No one is pulling out. So what are the implications when U.S. business people don't listen to the President? Does it show even more weakness on behalf of the U.S.?
PIEGZA: Well, this isn't something that's going to happen overnight, and we've heard from a number of businesses talk about looking for alternatives, like Vietnam, et cetera, and the problem is the infrastructure, the skills, they're just not in place at this point.
Even if the factories are available to produce the goods, they're lacking a railway system or a highway system to get those goods to the ports.
So this is something that's going to take a lot of investment and a lot of time and unfortunately, businesses simply cannot make those decisions overnight.
That being said, independent of the trade war, this has been a priority for the Trump administration to try and incentivize businesses back to the U.S. to create jobs and income for American workers.
So we saw this now more recently through trade, but of course the tax cut initially was trying to create that carrot to bring businesses back home.
But again, this will take quite some time. This is not something that will happen overnight.
BALDWIN: Lindsay Piegza, thank you for the education. Appreciate it.
PIEGZA: Thank you.
[14:10:06] BALDWIN: Russian President Vladimir Putin is angry, he is taking action. He has ordered his military to prepare a symmetrical response to a U.S. missile test. Are we looking at an arm's race now?
Plus, as the President gets ready to leave for the G7 Summit tonight, CNN is reporting that he has been questioning aides why he has to go at all?
And why a campaign adviser for Senator Kamala Harris says this week has been the campaign's lowest point so far. David Axelrod will join me to chat about that. You are watching CNN. I am Brooke Baldwin.
[14:15:27] BALDWIN: China, not the only country to retaliate against the Trump administration. Today, in an angry televised announcement, Russian President Vladimir Putin ordered his military officials to prepare a quote, "symmetrical response" to a U.S. missile test that was conducted in California just this week.
(BEGIN VIDEO CLIP)
VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): Given the newly emerging circumstances, I instruct the Ministries and relevant Departments to analyze the level of threat posed by the actions of the United States to our country and take a comprehensive measures to prepare a symmetrical response.
(END VIDEO CLIP)
BALDWIN: Around the same time, the Pentagon celebrated the successful test of Sunday's modified Tomahawk cruise missile tweeting, quote, "Can you believe it accurately impacted its target after more than 500 kilometers of flight?" Samantha Vinograd is with me. She is the former senior advisor to the National Security adviser in the Obama administration. She's a CNN analyst. Always good day when I get to see you.
First just on this story, when Putin claimed that their weapons development was quote unquote, "unparalleled," but based upon what we have seen very recently, is that the case?
SAMANTHA VINOGRAD, CNN NATIONAL SECURITY ANALYST: Well Putin is playing to a domestic audience here. As much as he is trying to issue propaganda globally, he is under pressure at home and he plays the tough guy card on the military front and on the missile front when he is feeling pressure at home.
But let's think about why we got here. Russia violated this INF Treaty, and that's why the United States ostensibly ...
VINOGRAD: ... withdrew. The United States withdraw, which NATO supported by the way, the United States --
BALDWIN: And he is complaining about the U.S. missile launch.
VINOGRAD: Which is exactly what Putin does though. Putin likes to blame everybody for the actions that he takes. He is saying that this is a tit-for-tat response, when in fact Russian violations are why we withdrew from this treaty.
So it is a symmetrical response because we tested a missile, but we got here because Russia was doing what they do best, which is violating international law.
BALDWIN: Exactly. Yes. Couldn't have said it better myself. On to you and your experience. We know you've been to G8, you've been to G20. We know the President will leave for France to go to the G7 this evening, and we have new reporting here at CNN that the President is complaining about the trip.
He is questioning why does he need to go? Let me read this line I was just handed. Our CNN reporting. "To help make his attendance this week more palatable, aides lobbied to add the Sunday morning session on the economy as a venue for him to brag about the U.S. economy to leaders of nations where the growth is slowing." This is the response from former Secretary of State Madeleine Albright via tweet. She says, "The G7 shouldn't be an ego trip even those who think they are chosen need friends."
VINOGRAD: Well, Trump questioning the value of going to the G7 really speaks to how productively he used his time last time, right? This isn't his first rodeo. He was there before and if he doesn't find value in it; that speaks to how he used his time on the ground.
But Trump is eager to go meet Kim Jong-un and even Vladimir Putin. He likes to surround himself with sycophants, and other G7 leaders like Chancellor Merkel and Macron aren't afraid to voice their disagreements with the President.
BALDWIN: You think that's why he doesn't want to be there.
VINOGRAD: I think that he doesn't -- he doesn't like to travel. He likes to stay home and tweet and watch television, but at a broader level, he is fine getting on a plane to go see Kim Jong-un when he is going to be complimented. And we know that Merkel and Macron and the Chinese who will also be there has strong disagreements with the president. He can dish it, but he can't take it.
BALDWIN: As we talk about the G7, I can't help but think of this now iconic photo from last year's Summit because we all know -- we will throw it up there -- because we all know that the French President has decided to abandon signing that final, you know --
VINOGRAD: Communique --
BALDWIN: Communique, thank you -- at the Summit calling it quote "pointless." What does that say about like leaders expectations around Trump?
VINOGRAD: It shows the G7 has already been watered down because of the President's presence. The G7 can be like the best group date you ever had. You have so many opportunities to interact --
BALDWIN: It's a group date.
VINOGRAD: It is. I've been -- you see leaders from the most powerful countries in the world, you can work on every issue. And it's really a high value opportunity. This communique is a final document that is meant to promote stability and cohesion. And to talk about the value of working together.
The fact that the G7 is not even doing that means that they're already trying to work around President Trump and really diminishing the message that there is cohesion when it comes to the world's largest economies.
BALDWIN: Thank you, Sam Vinograd and thank you for your French. I appreciate it.
VINOGRAD: Thanks, Brooke.
BALDWIN: Now to Elizabeth Warren. She says it is not enough for Democrats to beat President Trump, which is a sharp contrast to what we heard from Joe Biden and even Dr. Biden's pitch over this week to voters; plus, a campaign adviser for senator Kamala Harris says this week was their quote, "lowest point" in the campaign so far. Hear why.
[14:24:30] BALDWIN: And then there were 21. The latest Democratic presidential candidate to drop out of the race, Congressman Seth Moulton, the Massachusetts Representative will instead focus on campaigning to get reelected to a fourth term in Congress.
And so as the field narrows, one of the front runners is now struggling to hold on to supporters. A new CNN poll shows Senator Kamala Harris, which is five percent of support from Democratic voters. That is a huge drop from late June when she was polling it 17 percent after a breakthrough debate performance. The 12-point plunge is so alarming, a campaign adviser for Harris
telling CNN the day that CNN poll came out, that day was the quote, "lowest point" of the campaign so far.
David Axelrod is a former senior adviser to President Obama, host of "The Axe Files" and a CNN political commentator, so it's always a pleasure and a privilege.
Listen, we are five months away from Iowa. Team Harris now saying that this is their lowest point. You've been through, you know -- you know campaigns. How do they reconcile this?
DAVID AXELROD, CNN SENIOR POLITICAL COMMENTATOR: Yes, maybe they just haven't had a lot of low points. I don't know.
You know, look, the campaigns are full of ups and downs, and you have to navigate them. I remember so well, the 2007 race, and we were being pummeled by the national pundit core around this time.
In fact, in the fall of 2007, I believe we were maybe 30 points behind Hillary Clinton, but we had a plan and that plan was to win the Iowa caucuses, and we focused there, spent 87 days there, and we did win, and that changed everything.
Kamala Harris still has time to make a play in this race. And, you know, we ought to remember, as we look at these national polls, this is a sequential process. It begins in Iowa, it runs through New Hampshire, Nevada, South Carolina, and then on to the other states and Iowa, and these early states is going to make -- are going to make a decision as to who shall live politically and who shall not in this race.
BALDWIN: I know you talked to a bunch of candidates in Iowa and we will get to that in just a second. But I want to hone in on Elizabeth Warren, you know, she has been rising, rising, rising, and I want to play this clip, she has been talking about what it would take to be Trump in 2020. And listen for a subtle shot at former Vice President Joe Biden.
(BEGIN VIDEO CLIP)
SEN. ELIZABETH WARREN (D-MA), PRESIDENTIAL CANDIDATE: We can't expect to win by ignoring the problems that got Donald Trump elected in the first place. For us to win, win the White House, and win up and down the ticket, we must play out our vision for this nation.
We must show America that we understand what is broken, and that we will provide the big structural changes that will make our government, our economy and our country work for everyone.
(END VIDEO CLIP)
BALDWIN: So you know, David, we were just talking earlier this week about how Dr. Biden sat in front of that group of teachers in New Hampshire and said, "You know what, my husband, maybe he is not your top choice. But he is the guy to be Donald Trump." And then you listen to Senator Warren saying, you know, it's not just about electability to get someone elected --
AXELROD: Right, I mean, these are two very much competing visions for this campaign and two different strategic theories. Joe Biden's theory is that Democrats view Donald Trump as sort of an existential crisis and that beating him takes precedent over everything else.
Elizabeth Warren is appealing, particularly to the left of the party, and people who are looking for deep structural change. Now, the challenge he has is there was a poll last week in which Democrats were asked, which would they choose a return to common normalcy or big, bold structural change? And it went 60-36 in favor of the first.
It doesn't mean it's going to turn out that way. And of course, she is right that there are deeper problems that led to the election of the President, and that needs to be addressed. But she -- you know, she may be swimming upstream in this particular electorate at this particular time.
BALDWIN: Just pivoting to President Trump briefly that when he was speaking from the South Lawn earlier this week, it was a wild Q&A session is how I'll put it right now. But I want you to listen to one of the biggest themes.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: We can treat the United States of America, the way they treated us under President Obama. China has been ripping us off for many years. President Clinton, President Bush and President Obama and others should have done this long before me.
The fact is President Putin totally outsmarted President Obama on Crimea and other things including the red line in the sand. All right. He outsmarted -- he made a living on outsmarting President Obama.
President Obama built the cells, he built the cages that you people always talk about and attribute them to me. So President Obama had separation. I'm the one that brought them together.
President Obama had zero interest rates. I don't have zero interest. I have real interest rates. And despite that, I have a strong economy.
(END VIDEO CLIP)
BALDWIN: You see where I'm going? Why can't he --
AXELROD: No, no. Explain it to me.
BALDWIN: So there's this guy who was President -- no -- I mean, he can't let go of the man. Why?
AXELROD: Well, because I think he knows that Obama was a popular President. He left with nearly 60 percent approval rating and he continues to be popular and that legacy bothers -- [14:30:10]