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Trump Delays Tariffs; Rep. Diana DeGette (D-CO) is Interviewed on Vaping Ban and Impeachment Probe; Trump Could Tap Pompeo to Replace Bolton. Aired 9:30-10a ET

Aired September 12, 2019 - 09:30   ET




POPPY HARLOW, CNN ANCHOR: All right, so we may be seeing something really good this morning, a cooling of trade tensions between the U.S. and China. Maybe the president now delaying new tariffs on $250 billion worth of Chinese goods for two weeks. This follows China announcing a similar thing, a waiving of tariffs on some American products, such as shrimp and cancer treatment drugs. Not on the big ones, like pork and soybeans. We'll get into that in a moment.

But Kevin Hassett is here. He's the former chairman of the White House Council of Economic Advisers for the Trump administration. He is now a CNN economics commentator and contributor.



HARLOW: Welcome to the team. We're so --

HASSETT: Yes, what a studio, by the way.

HARLOW: Thank you. This is -- we're so glad to have you here, especially with where this economy may be going. We will see.

All right, so just -- just listen -- well, first, let's just begin on your read on that.

So Munching just said, the Treasury secretary, it's not a big deal delaying these tariffs. This is a goodwill gesture by the president. Does the president do goodwill gestures?

HASSETT: Well, he does, but this is really massively newsworthy to me. In fact, one of the first meetings we ever had on trade with the president in the White House, he told a story about how if he's in a tricky negotiation and he threatens a lawsuit, it never has any effect on the outcome of the negotiation. Before if before the negotiation you start a lawsuit and then offer to withdraw it, then you can get lots of concessions. And so he likes to go into the negotiation, you know, with a hammer. And so that's why I think before negotiations he's gone in with tariffs in place because he's got something that he can remove.

And so the fact that he's delaying --

HARLOW: So this tells you China's giving a lot?

HASSETT: Yes, and so I think that what's happening is that China has fundamentally altered course. I think the -- you know, I was on CNN last spring from the White House and I said that we're at that point, because I thought we'd have a trade deal at the wedding where we hoped Dustin Hoffman doesn't show up and drive off with Elaine. And I think that that's how close we really thought. I mean they were really talking about where are we going to sign the thing, and then the Chinese pulled away.

HARLOW: Sure. But you think they're back?

HASSETT: But now they're back and I think that they're back big time, otherwise we wouldn't have delayed the tariffs.

HARLOW: All right. All right, help me understand this. Let me play for you Treasury Secretary Munching, who you worked very closely with, on Monday on Fox talking about the lack of impact he thinks a trade war has on the U.S. economy. Here he was just a few days ago.


STEVEN MNUCHIN, TREASURY SECRETARY: It's fair to say it's impacted the Chinese economy. We have not yet seen any impact on the U.S. economy.


HARLOW: Any impact on the U.S. economy. You ask any farmer, even very Republican farmers in my home state of Minnesota, that is absolutely not the case.

HASSETT: Yes, I think --

HARLOW: Is he wrong?

HASSETT: Well, I mean there's some new studies out, the academic literature, you know, they haven't been peer reviewed yet, but I think that probably the mean estimate --

HARLOW: OK, but Kevin, Kevin, is the trade war having an impact on the U.S. economy?

HASSETT: No. I would say the mean estimate -- you know, my job, I work for CNN now, right? My job is to summarize literature. The literature probably suggests that they're a few tenths to half a percent off of this year because some capital spending has been put on hold because of the trade policy uncertainty.


HARLOW: Off of growth.

HASSETT: But that stuff is going to lift off if they have a deal.



HARLOW: So there's the if.

HASSETT: That's right.

HARLOW: We all hope there's a deal.

HASSETT: Yes, we do.

HARLOW: Everyone, regardless of politics, hopes that.

But some Republicans in Congress are really worried. Pat Toomey, quote, no question a trade uncertainty is contributing to the slowdown. Ron Johnson of Wisconsin, quote, the biggest risk to the economy is the whole trade situation.JP Morgan says it's costing average American households between $600 and $1,000 a year.

How bad could this get?

HASSETT: I think that when you talk about uncertainty, you have to remember that there's an upside and a downside. So if we flip a coin and then you give me $10 or I give you $10, then it's uncertain, right, that you could get $10. And I think that's what's happening is that we've introduced uncertainty into a relationship that was unacceptable and the odds are, you know, that things can only get better because, think about it, China was stealing so much intellectual property from the U.S. It was like about $500 million a day --


HASSETT: Three hundred and sixty-five days a year that if you can get that to slow down, then it's worth the cost of the uncertainty.

HARLOW: And I guess I'm wondering, from your perspective, Kevin, how deep could the cost get for the average American because you're looking at a manufacturing sector that is contracted for the first time in three years. You're looking at business investment that is -- has slowed for the -- you know, is growing, I should say, by the smallest amount since 2016. Consumer sentiment fell for the first time since 2016.

HASSETT: Right, you're seeing the uncertainty.

HARLOW: How much pain will we endure?

HASSETT: But -- but the thing to remember is that the tariffs that we put in place were designed by a big technical team of economists at the White House --

HARLOW: Yes. HASSETT: To put lots of pressure on them and little pressure on American consumers. And that's why the Chinese economy, as Secretary Munching said, was really heading south and there really weren't that many costs to consumers in the U.S. yet. But the last tranche of tariffs, if we were to put them in place in December, you know, they absolutely would be hitting things that it's hard to substitute away from and would seriously hurt the bottom line for consumers.

HARLOW: OK. Would hurt.

OK, so, let's get really wonky, OK?

HASSETT: Yes, my favorite thing to do.

HARLOW: Negative interest rates. I love this. Very creative "New York Times." Here's the front of the business section, negative interest rates. The president tweeted yesterday the, quote, boneheads at the Federal Reserve, quote, let me read it to you here, should get our interest rates down to zero or less. Japan and Europe did this in emergencies. Is this, a, an admission that we're in an economic crisis, a, and, b, is it a good idea to have negative interest rates in this country?

HASSETT: Well, I think the -- it's a bad idea for monetary authorities around the world to move to negative interest rates. And it used to be they thought you couldn't do that because people would just hold cash instead of getting a negative interest rate because everybody's so used to electronic things that they can go negative. And I think that the problem is that in the U.S., if we -- we've got a normal interest rate because we have normal growth, unlike Europe, then all of a sudden the dollar is skyrocketing because they've got negative interest rates and we've got positive ones.

HARLOW: Right.

HASSETT: And so it -- there used to be -- remember they used to -- the central bankers used to meet and coordinate monetary policy and --


HASSETT: And well were completely uncoordinated right now.

HARLOW: There was a time.

HASSETT: Yes. So they're completely uncoordinated. And it really is putting a lot of pressure on the Fed.

HARLOW: OK. So you don't like this idea? So why is the president saying we should think about it?

HASSETT: Well, I think it's because what the ECB did today, the European Central Bank --


HASSETT: Right, they cut rates and they're quantitative easing and -- HARLOW: But, I mean, Germany's almost in a recession. Is the president saying were that --

HASSETT: Right. And so what they need to do is -- I would use fiscal policy if I were them.

HARLOW: You wouldn't do this?

HASSETT: I wouldn't do this.

HARLOW: OK, so listen -- listen to Steve Mnuchin, also seeming to sound the alarm on this idea this morning on CNBC. Here he is.


STEVEN MNUCHIN, TREASURY SECRETARY: Yes, I think negative rates in Europe are concerning for them for two reasons. One, it's very hard for banks to make money in negative interest rates. And if banks can't make money, it's hard to have a good economy.


HARLOW: I mean if banks can't make money, it's hard to have a good economy. So if you were back in the Oval Office, where you spent a ton of time, what would you say to President Trump about this?

HASSETT: Well, again, my job at CEA was not to give Jay Powell advice, but to talk to the president. The president thinks that because everybody else is cutting rates that if we don't cut rates too, then the dollar's going to get too strong and it's really going to hurt manufacturing workers in the U.S.

HARLOW: And you would say to the president?

HASSETT: And I would say that if we're concerned about that, then what we need to do is think of policies that would help manufacturing in the U.S. And, you know --


HASSETT: Try to keep interest rates kind of normal because, again, imagine the economy, if there's a trade deal, we're cruising around at 2.5 percent now growth. And then if we suddenly jump up into the threes, then inflation is a problem and the Fed will have to lift rates.


HASSETT: And so if they cut rates now, then they're setting us up for something like a recession in 2021.

HARLOW: So -- so maybe the president's listening. We'll see.

HASSETT: We'll see.

HARLOW: Kevin, when you come back, because we're out of time, I want to talk about if anyone in Washington, anyone cares about debt and deficits anymore.


HARLOW: All right.

HASSETT: It's always the opposition party that cares.

HARLOW: Come back for that.

HASSETT: We'll do. Thanks.

HARLOW: Kevin Hassett. Again, welcome to CNN.

HASSETT: Thanks for having me. Thank you.

HARLOW: Thank you for being here.


JIM SCIUTTO, CNN ANCHOR: The White House says it wants to ban flavored e-cigarettes. And a Democratic congresswoman says this is one issue on which she actually agrees with President Trump. We're going to speak to her live. That's coming right up.



HARLOW: All right, so a major headline from the White House this morning.

The president says his administration is going to take action to reduce teen vaping and try to move to completely ban flavored e- cigarettes across the country. This follows the CDC linking six deaths to vaping this year, along with 450 cases of vaping-related lung illness. That includes 18-year-old Adam Hergenreder of Illinois. After vaping nicotine and marijuana for more than a year and a half, doctors now say he has the lungs of a 70-year-old.


ADAM HERGENREDER, VAPING ILLNESS PATIENT: I had the shivers, and it -- and it -- and I couldn't control it. So I would just randomly convulge (ph).


And -- and it was really scary.

I knew it wasn't a stroke, but it felt like that, because I couldn't control myself.


HARLOW: The FDA says vaping among high schoolers has soared 80 percent last year alone and nearly 50 percent among middle school kids, totaling more than 3.5 million students. Now the White House says specifics about how this plan will roll out will come in just a few weeks.


SCIUTTO: For more on this vaping fight, I'm joined now by Democratic congresswoman from Colorado, Diana DeGette. She also serves on the House Energy and Commerce Committee and has been a leader on this issue.

So I'm a parent. And I've had concern about this for a long time. For folks at home who are watching, talk about the danger here because the industry will say it's just faulty inserts, you know, the kind of capsules, it's not the actual vaping itself. You've talked to health professionals about this.

REP. DIANA DEGETTE (D-CO): Right. Right.

SCIUTTO: What do they tell you?

DEGETTE: Well, so -- so these vaping devices were sort of sold as safer than cigarettes.


DEGETTE: But the problem is, of course, we have -- we were really reducing teenage use of cigarettes. Now, as we just saw, the amount of vaping among high school students and even middle school students is skyrocketing. I mean I guess with the vaping devices you don't have the tar, you don't have the smoke. But you do have much higher concentrations of nicotine, which are highly addictive.

So you have high school students getting a much higher dose of nicotine than they would with a cigarette and becoming addicted.


DEGETTE: Plus, many of them are using these flavored brands to get into it. And the data shows that once you get into it with the vaping devices, with the bubble gum or the gummy bear flavored vaping, then your chances of becoming addicted are 81 percent higher.

SCIUTTO: Yes. I mean it tastes like candy, right? I mean that's what it's designed.


SCIUTTO: So you really have two dangers here, right? You have the idea of kids getting addicted to nicotine.

DEGETTE: That's right.

SCIUTTO: Not a good thing. Then you have this immediate danger, which is popping up in dozens of cases around the country. That poor kid, as a teenager, has the lungs of a 70-year-old now, which goes not just to the nicotine, but the actual vaping itself. DEGETTE: Right. So I was talking to some pulmonary doctors at

Children's Hospital in Denver. What they told me is the mechanism for the vaping, the very high temperature of oil to cause the vapor, to have the delivery system, is actually going into children's lungs. And children's lungs finish developing when they're 25 or 26 years old.


DEGETTE: So if you inhibit that, like the young man we saw, then he will never get the lung capacity of an adult.

SCIUTTO: Yes. Goodness.

DEGETTE: And a lot of this has not been researched. The FDA has not really researched how serious this is. So the vaping industry will say, well, it's THC or it's marijuana, but nobody really knows exactly what the extent of the damage that's happening to our children is.

SCIUTTO: Did they not do the necessary study before approving this?

DEGETTE: No, they didn't. And -- and now --

SCIUTTO: That's remarkable.

DEGETTE: You know, now, yesterday, President Trump said that he wants to ban the flavors --


DEGETTE: Which I'm very happy because in March I actually introduced a bill to do that. But I've been talking to the FDA for several years. And my chairman, Frank Pallone, who's the chairman of the energy and commerce committee that has jurisdiction, we've both been trying to get the FDA to tell us when they're going to take action on this. And it just hasn't happened.

SCIUTTO: Yes. Yes.

And, you note, you tweeted on Wednesday, I don't often agree with the Trump administration, but on this I do. The flavored nicotine products are causing real harm to the health of our children.

So this step is about banning the flavored ones --

DEGETTE: That's right.

SCIUTTO: Which is particularly about protecting children so they're not tempted to like kind of feel like this is just another form of candy. Is that enough?

DEGETTE: No. The other thing we need to do, we need to raise the smoking age to 21.


DEGETTE: And I actually have a -- SCIUTTO: To cover both old-school cigarettes and this kind of stuff.

DEGETTE: Old-school cigarettes and the -- the younger -- the younger people. I -- I -- I've been working on this for some number of years and what the data shows is, if you say that you're targeting 18-year- olds, really the industry is marketing to 15, 16, 17-year-olds.


DEGETTE: So if you raise the smoking age to 21, then that eliminates the marketing --


DEGETTE: To those high -- very vulnerable high school and even middle school kids.

SCIUTTO: Yes, I mean you had Juul, I mean, they were going into schools.


SCIUTTO: Just very quickly, because I do want to move on to another topic. If parents are watching at home who have got kids in this age group, based on what you know, and you've done your homework one this issue, would you tell them to keep their kids from vaping?

DEGETTE: What I would say to every parent in America is, you need to talk to your children, even your middle schoolers.


You need to talk to your children today. You need to tell them about the very real health risks just today and through their lives of nicotine addiction. And you need to be just as vigilant as you would be with illegal drugs to make sure your kids are not vaping.

SCIUTTO: All right. Well, listen, I'm listening as a parent.

I want to move on to another topic, impeachment, because there is understandable confusion now among folks at home, but even, it seems, within the Democratic Party. Is an impeachment inquiry underway now or no?

DEGETTE: Well, so I'm an attorney. I'm a former constitutional attorney. And I also was in Congress when the Republicans impeached Bill Clinton. This is a very serious issue and we need to take it seriously. That and a declaration of war are the two most serious things we do.

SCIUTTO: You support impeachment.

DEGETTE: So I support an impeachment inquiry. I think we need to get all of the facts.

I think what's happening now is the Judiciary Committee has realized that they need to call it an impeachment inquiry so that they can get the evidence they need, the witnesses, the documents.


DEGETTE: It's a higher standard. And I think we do have -- I think constitutionally we do need to do an inquiry.

SCIUTTO: You are a multi-term congresswoman. You know that the polls show there's not a great deal of public support for pursuing impeachment. Regardless of what people think of the president, is it smart, politically, for Democrats to pursue a formal inquiry, given they don't have that public support?

DEGETTE: I don't think that when you're talking about a find -- an investigation as to whether there are high crimes and misdemeanors, as the constitution requires, you can look at it through a political lens. I think that it's the responsibility of Congress to figure out, did President Trump engage in obstruction of justice and did that constitute a high crime or a misdemeanor. And I think, if you have the hearing, and the investigation, the public will understand what you're talking about. But I don't think you go into it with a foregone conclusion, yea or nay.


DEGETTE: You have to get the evidence and figure it out.

SCIUTTO: All right, Congresswoman DeGette, appreciate having you on and taking the time this morning.

DEGETTE: Great to be with you. Thanks.

SCIUTTO: Poppy, I mean you heard that warning about vaping there.

HARLOW: Yes. Totally.

SCIUTTO: You're a mom too. So it's --

HARLOW: Totally.

SCIUTTO: My ears certainly perked up.

HARLOW: A hundred percent. I mean I'm so glad people are talking about this now because the FDA has actually had the ability to regulate these things, Jim, to your good question to her about, well, didn't they study this? No. They had the ability in 2009. They got sued in 2010. And nothing happened since then.

SCIUTTO: Yes. Yes.

HARLOW: So hopefully someone from the FDA will join us. We'll stay on this story for sure.

OK, so, ahead, how many jobs can you hold in one presidential administration at once? Well, Secretary of State Mike Pompeo could soon add another major title to his list of duties.



HARLOW: So there is new reporting this morning that President Trump is said to be considering Secretary of State Mike Pompeo for a second full-time job. What would that job be? Maybe replacing John Bolton as national security adviser. It's not clear just how serious the president is about having Pompeo serve in dual roles, but it's happened, Jim, right, but it would be unusual.

SCIUTTO: With Henry Kissinger. You've got to look back a few decades.


SCIUTTO: Sources say Pompeo has also given the president a list of other potential replacements for Bolton. Trump and Pompeo, meanwhile, are scheduled to meet later today.

CNN national security reporter Kylie Atwood joins us now.

So there's not a lot of precedence for this. I mean the big key here, right, is you're removing another voice, right?


SCIUTTO: And Pompeo has shown his willingness to tow the president's line on a whole host of issues.

ATWOOD: Right. So the president would be consolidating the number of voices that he is hearing from. And our sources are saying this isn't the only option on the table, but it is one thing that's being discussed, that Secretary of State Mike Pompeo would assume the role of national security adviser.

It's pretty shocking that this conversation is coming to fruition just a day after the president ousted Bolton. He and Pompeo were known to not get along very well. And that's one of the reasons that we know that the president let go of Bolton.

When he was speaking to some reporters at the White House yesterday, he cited some policy differences, specifically on North Korea, but he also bluntly said that Bolton didn't get along with some very important people. We know one of those people is Pompeo.

SCIUTTO: OK, potential lists of replacements, who are we looking at, if it's not Pompeo?

ATWOOD: Right. So we've heard so many names right now. We have heard ten people being considered, but the president said that there are five who want the job. They are good, qualified people. And we know, according to some sources at the White House, that there are two that are leading the list right now.

It's interesting because they are both from the State Department. That's Brian Hook, who runs Iran policy, Steve Beegun, who is our U.S. envoy for North Korea. Those are both people that are close with Secretary of State Mike Pompeo. So even if he doesn't get the job, it looks like it could be possible that there is someone who's close to him in that job, which would then give him more control over foreign policy. We know that he's one of the most important voices right now, though, because he gets along so well with the president.


Kylie Atwood, thanks very much.

ATWOOD: Thanks.

HARLOW: All right, top of the hour. Good morning, everyone, I'm Poppy Harlow.


SCIUTTO: And I'm Jim Sciutto.

Right now the House Judiciary Committee is voting the ground rules for possible impeachment proceedings against the president. And we are learning this morning that some --