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Key Resignations Deal Blow To Boris Johnson; Governor: Heavy Fighting Underway On Outskirts Of Luhansk; Ukraine Accuses Russia Of Selling Stolen Grain; Interview with Queen Mary University of London Lecturer Richard Johnson; Sri Lanka Financial Crisis; U.S. Easing China's Tariffs; Interview with Former U.S. Attorney, Former Deputy Assistant Attorney General Harry Litman; DOJ Sues Arizona Over New Election Law; Countries Moving to Clean Energy; New Subpoenas in Georgia Election Probe; Trump's Inner Circle Subpoenaed in Georgia; July 4th Parade Shooter Charged with 7 Counts of First-Degree Murder. Aired 2-3a ET

Aired July 06, 2022 - 02:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(COMMERCIAL BREAK)

[02:00:40]

MAX FOSTER, CNN ANCHOR: Hello and welcome to our viewers joining us from all around the world. You're watching CNN NEWSROOM. I'm Max foster in London. Boris Johnson fighting for his political survival. The British Prime Minister finds himself in yet another crisis of the two top ministers quit the candidate cabinet.

ROSEMARY CHURCH, CNN INTERNATIONAL ANCHOR: And I'm Rosemary church in Atlanta. Bloody battles rage in Ukraine's east as Russian forces claim games in the Donbas region. We will speak to an expert about Vladimir Putin's objectives for the region.

FOSTER: We begin though with a prime minister under mounting pressure. Boris Johnson now being dealt another serious blow after two senior U.K. ministers stepped down. More resignations followed including from the Solicitor General all in one day. Chancellor of the Exchequer Rishi Sunak, Health Secretary Sajid Javid were the first to announce they were quitting on Tuesday saying they can no longer work for a government hit with a series of scandals.

The latest controversy involves the handling of the deputy chief whips resignation last week, and claims of sexual misconduct. At first, Downing Street denied Mr. Johnson knew anything about previous allegations against Chris Pincher before later admitting the prime minister had been aware. On Tuesday he acknowledged pincher should have been appointed -- should never have been appointed to his government.

(BEGIN VIDEO CLIP)

BORIS JOHNSON, PRIME MINISTER OF THE UNITED KINGDOM: I think it was a mistake and I apologize for it. I think in hindsight, it was the wrong thing to do. I apologize to everybody who has been badly affected by it. And I just want to make absolutely clear that there's no place in this government for anybody who is predatory or who abuses their position of power.

(END VIDEO CLIP)

FOSTER: Over the last -- over the last few months, several scandals have rocked Mr. Johnson's government. The first came in early April after Conservative M.P. David Warburton was suspended following allegations of sexual harassment and drug use. In the same month, former M.P. Imran Ahmed Khan was found guilty of sexually assaulting a 15-year-old boy in 2008. Then M.P. Neil Parish resigned after admitting he twice watch pornography whilst in the House of Commons.

And now in the latest scandal involving Chris Pincher, the deputy chief whip who resigned nearly a week ago amid allegations that he groped two men at a private club. Let's bring in CNNM's Nada Bashir. Those are the scandals in the government. But this is a broad issue of competence, isn't it, in the Prime Minister after the Partygate scandal and the recent by elections which he lost and yet he's still here. And he's still confident.

NADA BASHIR, CNN INTERNATIONAL REPORTER: Yes, absolutely. It is a question of the trust in the prime minister not only within his own party and within government, but also with his own conservative voters. As you mentioned that we've seen scandal after scandal. Allegations of sleaze, the Partygate scandal which the prime minister is obviously directly implicated in. And we've also, of course, seen that vote of confidence in the prime minister a month ago today.

So clearly, the prime minister has faced real significant challenges and yet he's managed to survive all of these crises so far. This challenge, though, could prove insurmountable for the prime minister, two of his closest allies in the party to the senior cabinet ministers Rishi Sunak and Sajid Javid both announcing their resignation within minutes of each other yesterday. Both issuing pretty punchy statements as well.

Can we do it just a bit from Rishi Sunak, saying the public expect government to be conducted properly, competently and seriously. I believe these standards are worth fighting for. And that is why I am resigning . Former health secretary of course and Sajid Javid as well saying that he cannot in good conscience remain in his position. But of course, this is again coming off the heels of numerous scandals.

And the prime minister is now facing real questions over trust and integrity. And whether or not he is the right person to continue leading this party.

FOSTER: Yes. He's obviously confident. He obviously spoke to his allies last night and he appointed two replacements, so as immediately. So what's giving him this confidence that he can survive?

BASHIR: Obviously, the prime minister has time and time again sort of weather these crises and these scandals. And it hasn't seemed to impact. But of course now we have seen a bit of a shift.

[02:05:04]

BASHIR: We saw those historic local election losses as by election losses and previously, of course in the local council elections as well. That has really been a key point of concern for other conservative members of Parliament who do fear now that this could tarnish their reputation, their political careers and their seats as well.

FOSTER: So, in terms of the process for people trying to get rid of him, there can't be a confidence vote for another year. Although the system I understand it could be tweaked to allow that to happen. And that's the current focus for his detractors.

BASHIR: Absolutely. That is what backbench M.P.s will be focusing on particularly those who obviously want to see the prime minister announced his own resignation. We heard when that first vote of confidence was called a month ago from the chairman of the 1922 committee, that is the committee of backbenchers who oversee this process and who said that actually, the rules could technically be changed if the 1922 committee wanted them.

That is as a process that they are looking at potentially changing those rules in order to allow for another vote of confidence to be called within the next 12 months, which is unusual, of course. Alternatively, though, we have seen that buildup of senior ministers, junior ministers, but other members of Parliament resigning. That is putting a mounting pressure on the prime minister.

And of course, if we continue to see those resignations coming in, that could make this position for the prime minister untenable. We've already heard from the Labour Party leader Kier Starmer describing the government is collapsing in on itself. And it could well be the case.

FOSTER: It's interesting watching the pound last night, the pound initially rose in value, because it was -- it seemed clear that he was going to be replaced because it anyone he was replaced by would be more pro-European. And that was I think the thinking but then it fell back again, because it's pretty clear. This is going to stay for a few weeks at least. Everyone talking about him, you know, a matter of when not, if he goes. But actually he's so confident.

Perhaps he can make some sort of comeback. I think the issue though, surely is what the polls say about him and they're very negative right now, aren't they? The wider public away from the party.

BASHIR: Absolutely. Conservative voters, the wider public, there is growing distrust in the prime minister. Many see him as lacking integrity now. That is clear in the polls. And also questions about the party as a whole. The Conservative Party does appear to be engulfed in crises and crises and engulfed in this chaos that we've seen. The question is, even if the prime minister was to step down, who would replace him?

Would that be any better for the party or for the government in general? And of course, there are questions around whether the prime minister would take that step. We've seen him before denying allegations when we have seen scandals, denying allegations -- has been directly implicated in these scandals. And really he hasn't offered been forthcoming and those apologies.

The question is, whether he does plan to move forward business as usual, whether he will take this as a moment of reflection.

FOSTER: You'll see it's dealt with, that's my prediction for later on today when he appears. The prime minister's questions but she's seen that really emerging as the front runner now to replace Boris Johnson. And Boris Johnson in typical style, suggesting that this is all positive news because there was tension between him and Rishi Sunak. That's now gone away and the government could get on with business.

I'll be back in about 20 minutes to discuss the political turmoil in London with my guest Richard Johnson from Queen Mary University. For now, I'll send it back to you, Rosemary.

CHURCH: All right. Thank you so much, Max. We'll see you very soon. I want to turn now to Ukraine and the grueling battle for the country's Eastern Donbas region. On Tuesday, Ukraine reported heavy shelling in the city of Sloviansk in the Donetsk region. Local officials say at least two people were killed and seven wounded in the attack. Shelling was also reported in villages and towns across the region.

And the local governor says there's no longer anywhere safe in Donetsk. Ukraine says heavy fighting is also underway in Luhansk, the other half of the Donbas region. Russia's president declared victory in Luhansk on Monday after his troops captured the key city of Lysychansk. But local officials say fighting continues on the outskirts of the region. Meanwhile, Russian-backed separatists are accusing Ukraine of another attack on the city of Donetsk.

Part of the self-proclaimed Donetsk People's Republic. Officials there say a 10-year-old girl was killed in Tuesday's attack.

Well as the fighting rages in the east, Ukrainian officials have urged any remaining residents in that region to evacuate, but many either can't or won't, leaving them traps on the frontlines of Russia's brutal war. CNN's Phil Black reports.

(BEGIN VIDEOTAPE)

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT (voice over): There is no easy safe way to the most eastern front lines at the Donbas. Russia has cut the highways. So soldiers, weapons, locals and aid deliveries must all take the backroads.

[02:10:00]

BLACK: This Red Cross operation is to Siversk. The small town closest to the region's most intense fighting. The team unloads and very quickly families arrive to load up. The noise of war, close and loud no one reacts. Natalia (ph) is collecting food for her husband and two children. She says they can't leave the town because they fear losing their house and the vegetable garden they rely on to survive.

Only a fool isn't scared she says but there is no way out. We cannot leave our place.

Lyubov (ph) arrives with her young children. She says they have stayed as the Russians approach because she doesn't want to risk being separated from her eldest daughter who lives in a nearby village.

She says, I called her once. She told me they're not leaving. Then we lost connection. I don't even know if she's OK. Lyubov agrees to show us the home where she hopes they can safely wait out the war. It's a war to the other side of town. But we soon realize that won't be possible.

Their neighborhood is under fire, incoming artillery from somewhere close. So close you hear the artillery piece of fire and the projectiles flight before impact. The shells fall within the same tight area. Again, and again, we saw all of this while only a little further to the east Russian forces were claiming an important win taking the city of Lysychansk.

BLACK (on camera): Yes come to us. Good to go?

UNIDENTIFIED MALE: Yes.

BLACK: The battlefield in Lysychansk is only a relatively short distance from here. This is likely to be the front line very soon but already Russia has heavy weapons are falling among these people's homes in this town.

BLACK (voice over): It's not safe to stay close.

UNIDENTIFIED MALE: That was close. Hold on. Come on, come on.

BLACK: But all of these people remain scared, confused, hoping beyond reason the violence to come will pass them by.

Phil Black, CNN, Siversk, Ukraine.

(END VIDEOTAPE)

CHURCH: Jill Dougherty is a CNN contributor and CNN former Moscow bureau chief and she's also an adjunct professor at Georgetown University. Jill joins us now from Washington, D.C. Always good to have you with us.

JILL DOUGHERTY, CNN CONTRIBUTOR: Thank you. Glad to be here.

CHURCH: So when President Putin invaded Ukraine back in February, he thought he could take the country in just a matter of days, but instead met extraordinary resistance from the country's army and its people. Now of course, four months later, he is celebrating a much smaller victory taking over the Luhansk region. What does that indicate to you about his intentions for the Donbas?

DOUGHERTY: Well, I think what he's trying to do is go back to the original rationale for invading Ukraine, number one, and it was Donbas, you know, that Eastern, southeastern region of Ukraine, Russian-speaking under control of Russia and he alleged at the time that the people there were undergoing genocide. They were the victims of genocide and Russia had to grin and rescue them.

And then also, at the same time protect Russia. But then, as you mentioned, Rosemary, you know, the goalposts has shifted, then it became, well, let's move into Kyiv, take over Kyiv, have regime change and then try to take over the rest of the country. So, as he -- I think the object here is really to define or to redefine what he can depict to the Russian people as victory. That's extremely important because if there is no victory for him, then the Russian people could ask well, why did we do this?

So at this point, I think you know, he can say that was the objective. We have reached it, but there is a, you know, sizable body of opinion that doesn't feel that that is the end of it, that he actually does ultimately want all of Ukraine.

[02:15:05]

CHURCH: And do you think the domestic audience will buy that recalculation?

DOUGHERTY: You know, I think to a certain extent, some of them will, because don't forget that Putin controls the narrative in Russia, the -- because propaganda right now is that really fever pitch and it is constant. Now, some people are just kind of tuning out, young people don't watch TV for the most part, but older people and the people who are really the voters for Putin, the people who support him, do watch T.V.

And what they are seeing is essentially what the Kremlin wants them to see. And if the Kremlin wants to make the case that was what we wanted to do in the first place. President Putin came through and did it, then that will be the message 24/7.

CHURCH: So, is a Russian victory in the East inevitable, do you think?

DOUGHERTY: Well, I think, you know, I'm not a military expert but from the ones that I do speak with Luhansk was a slob. It was very, very difficult. And really, you know, both sides, sustaining very big losses, but they did it. And now they have to move on to the other self-proclaimed Donetsk people's Republic and try to take that. That will probably be just as difficult if not more.

So, it's hard at this point to say whether they can achieve that. But they are taking the technique that I remember from being in Russia as a bureau chief from Chechnya, which is just bomb, bomb, bomb, and keep moving and take huge losses if you have to.

CHURCH: And the meantime, of course, Russia is stealing and selling Ukraine's grain. Why haven't western nations done more to stop that from happening given the global ramifications in terms of food crises?

DOUGHERTY: Yes. It's very complex, because now you have Turkey, a member of NATO, trying to kind of broker some type of agreement to get that wheat and grain out of Ukraine. It's crucial for developing countries around the world. There can be starvation if that doesn't get out. So there have been reports, you know, about a ship that actually left the harbor in Berdyansk which is under Russian control.

Then the -- I noted that the foreign minister of Russia said no, no, it actually belong to Kazakhstan. I mean, essentially, what the Ukrainians are saying is that we are blockaded. The Russians were blockading us. And the Russians are saying no, no, you are mining the harbor. So right now, it does appear that Russia has taken grain out and is selling it. But it's murky that I think the main thing is for -- if Turkey can bring the sides together, it would be something because the two sides are not agreeing on anything at this point as this war just continues to grind down.

CHURCH: Yes, absolutely. Jill Dougherty, many thanks for your perspective. Appreciate it.

Well, time for a short break now. When we come back, remembering those lost in the Illinois parade shooting. We will tell you about this couple and their two-year-old son now left without his parents.

Plus, economies around the world are dealing with inflation as best they can. You will hear from an expert on where things go from here. We're back in just a moment.

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[02:20:52]

CHURCH: Authorities in Highland Park, Illinois have charged the suspect in the 4th of July parade shooting with seven counts of first degree murder. Investigators are combing through the crime scene gathering evidence. They say Robert Crimo III plan the attack for weeks and fired at least 70 rounds into the crowd. Surveillance video shows Crimo dressed in women's clothing as he left the scene.

Police were called to his home twice in 2019. Once when a family member says he attempted suicide. And again when he threatened to "kill everyone." U.S. Vice President Kamala Harris visited the scene of the shooting on Tuesday. Earlier she called for Congress to stand up to gun manufacturers and reinstate a ban on assault weapons.

(BEGIN VIDEO CLIP)

KAMALA HARRIS, VICE PRESIDENT OF THE UNITED STATES: The whole nation should understand and have a level of empathy to understand that this can happen anywhere in any peace loving community. And we should stand together and speak out about why it's got to stop.

(END VIDEO CLIP)

CHURCH: Seven families are now facing the unimaginable task of making funeral arrangements for their loved ones, while others are holding vigil at local hospitals hoping their family members will pull through. More now from CNN's Ed Lavandera.

(BEGIN VIDEOTAPE)

ED LAVANDERA, CNN NATIONAL CORRESPONDENT (voice over): Nicholas Toledo's family says they're broken and numb. The 78-year-old grandfather attended the Highland Park 4th of July parade with his family. It was supposed to be a day of fun. Instead it ended as a horrific nightmare. Investigators say the gunman fired more than 70 rounds from a rooftop into the crowd lining the parade route.

Jackie Sundheim was struck and killed by the gunfire. North Shore Congregation Israel says Sundheim had worked as a preschool teacher and events coordinator at the synagogue. In all, the gunman killed seven people with a high powered rifle. One authority say was similar to an A.R.-15 but declining to provide other details about it. Lake County officials identified four other victims as 64-year-old Katherine Goldstein, 88-year-old Stephen Strauss. Irina and Kevin McCarthy were also killed in the shooting.

Their two-year-old son Aiden was found alive in the aftermath. He's now being cared for by the couple's family. 39 other people at the parade suffered gunshot injury.

DR. DAVID BAUM, TREATED SHOOTING VICTIMS: The people who are gone were blown out by that gunfire.

LAVANDERA: Dr. David Baum helped treat some of those victims in the aftermath of the shooting as police say the gunman was blending into the crowd and escaping the mayhem.

BAUM: The horrific scene of some of the bodies is unspeakable for the average person. The bodies were literally -- some of the bodies were -- there was an evisceration injury from the power of this gun and the bullets.

LAVANDERA: Dr. Wendy Binstock Rush was a parade spectator. She saw a man with injuries and tried to save her.

DR. WENDY BINSTOCK RUSH, TREATED SHOOTING VICTIMS: People were holding pressure on abdominal wound that he was profusely bleeding from. The paramedics had what we call an Ambu bag which is a mask attached to a bag which I could then read for the patient, but unfortunately, he had lost way too much blood and his injuries were too severe and he did perish at the hospital.

LAVANDERA: During the barrage of gunfire, Barbara Medina was marching in the parade. She ran away from the scene with her seven-year-old daughter in the stampede of people running she tripped and fell. She knew instantly her arm was broken.

BARBARA MEDINA, WOUNDED IN JULY 4TH PARADE SHOOTING: I thought it was gunshots, but I didn't want to believe it. And then it almost I was trying to convince myself, no, it's got to be like a drum roll from the band up ahead of us. It's -- it was just like a prrr kind of noise. And then all of a sudden everybody started running from Central Street coming around the corner to where we were and that's when I realized, you know, we had to run and get out of there.

(END VIDEOTAPE)

LAVANDERA (on camera): About 39 other victims of the shooting needed hospital attention. The good news is the vast majority of those people have already been treated and released.

[02:25:00]

LAVANDERA: But we are told by hospital officials that at least nine other people are still receiving medical care in at least three different hospitals in the area. One of those includes a 69-year-old man who we are told is in critical condition. Ed Lavandera CNN, Highland Park, Illinois.

CHURCH: And we're going to head back to Max Foster who's standing by live in London. Max?

FOSTER: Thank you, Rosemary. Up next, Boris Johnson battles more political turmoil, after two senior ministers stepped down. What this could mean for his future as the British prime minister.

(COMMERCIAL BREAK)

FOSTER: Welcome back here in London Downing Street. This quickly filled key cabinet posts after two major resignations rocked Boris Johnson's government. Chancellor of the Exchequer Rishi Sunak and Health Secretary Sajid Javid announced on Tuesday they were quitting saying they can no longer work for a government mired in scandal. The British prime minister in a statement said he was sorry to see them go.

Already Nadhim Zahawi, previously the Secretary of State for Education has been appointed chancellor and Downing Street Chief of Staff Steve Barclay is the new health secretary. Joining me now is Richard Johnson, a lecturer at Queen Mary University of London. Thanks for joining us. What was your reaction first of all, when we had those shock resignations last night?

RICHARD JOHNSON, LECTURER IN U.S. POLITICS AND POLICY, QUEEN MARY UNIVERSITY OF LONDON: To lose the chancellor is probably the worst cabinet position that you want to lose because it speaks to the fundamentals of what your government is going to achieve. Now there have been prime ministers in the past who have lost chancellors and carried on Margaret Thatcher, lost Nigel Lawson 1989. She carried on for another year.

Harold MacMillan lost his entire Treasury team in 1958. He carried on for five more years. But I think what's really important about this is the context of this, right? It's not just a lone couple of resignations. This is in the background of Boris Johnson having over 40 percent of his M.P.s with no confidence in him last month, losing by elections in conservative held seats. Seats that Boris Johnson won for the first time the last election.

And majority of the country and conservative voters saying it's time for him to go. So this was, I think, possibly terminal for Boris Johnson's leadership.

FOSTER: Yes. He would have had conversations last night with his key allies (INAUDIBLE) there are meetings in Parliament around that and then he managed to appoint two senior figures to those senior positions. He's clearly still got a base of support. What do you think he's saying to those allies to keep them on board?

JOHNSON: Well, I think you can break up those in the cabinet into those who probably are there sticking around because they probably don't expect to get a better role under a different leader.

[02:30:05]

JOHNSON: And then I think there are those who are ambitious and think that Boris Johnson --

[02:30:00]

JOHNSON: And then I think there are those who are ambitious and think that Boris Johnson will go. But think that they can get something out of him in the meantime by, say getting a promotion from education secretary to chancellor, raising profiles to different members of the cabinet in advance of a leadership contest.

I mean, technically, of course, the prime minister doesn't have to go if his cabinet resigns. Even if everyone in his cabinet resigns, he could find more people to appoint them. Perhaps Boris Johnson is saying something like that. But it would be a pretty extraordinary set of circumstances if that's what he intends to do. To stay in, come what may.

FOSTER: So, what are the mechanics for him being forced out now then? Because you have to explain to the international audience. These are quite murky waters and we go -- get into when it comes to Tory Party leadership mechanics. But just explain what might happen in terms of the 1922 Committee, as it's called?

JOHNSON: That's right. So, let's say Boris Johnson says, I don't care if the majority of my cabinet resigns, I'm not resigning under my own accord. You're going to have to take me out. But what's the mechanism for doing that? It's a vote of no confidence from all of the Conservative MPs. They had one of those last month, and as I said, over 40 percent of Conservative MPs voted to get rid of him. So, not enough, but a very, very significant proportion.

Let's say that they wanted to do a vote of no confidence in him today which requires 15 percent of Conservative MPs to send in their letters of no confidence saying they want to -- a ballot. The problem is, the current rules say that if you want to vote of no confidence, you're safe for 12 months.

So, in order to have another vote of confidence before of June of 2023, the rules of governing the kind of caucus of Conservative MPs, for the international audience, has to be changed first. So, you have to appeal to those who sit on the executive committee, of what's called the 1992 Committee which governs -- rules at the Conservative MPs. They have the appeal too to change the rules first before you can have that vote of no confidence in Boris Johnson. FOSTER: If nothing else, we've got much-weakened prime minister, haven't we? A much-weakened leader of the UK. His backbenchers are much more powerful as well. They're not necessarily of one group either, are they? So, what's this mean for British leadership in the world?

JOHNSON: I mean I think Boris Johnson is -- obviously, he's tried to project strong leadership with, say, respect to the situation in Ukraine and on the international stage. And to an extent, I think that has had some effect in assuaging some concerns among some Conservative MPs. Certainly, perhaps back in the spring when things looked pretty bad in the Partygate situation.

But I'll tell you what, I think the problem for Boris Johnson and now is he has no real deep reservoir of support in the country. He doesn't have support from his own MPs, probably a majority of backbench MPs are against him now. He doesn't have support from Conservative -- voters or the majority of them tell pollsters they want him out. He probably doesn't have the majority of support of signed-up party members.

Really, the only people who are sticking with him at the moment are people he's appointed to government jobs. And I have to say that I think if you quizzed them in their heart of hearts, there's probably a much higher proportion of those who don't have confidence in him that we know at the moment.

So, I just think wherever he turns, he is pretty -- he's in a pretty bad situation. And even if he has this set of determination to carry on, I just can't see it anymore.

FOSTER: OK. Richard Johnson, thank you. These things can move very quickly as we've seen for the last 24 hours. So, we're going to keep across all those developments coming out from here in Westminster. Including the prime minister's appearance in parliament at lunchtime, UK time.

Meanwhile, Sri Lanka facing its worst financial crisis since gaining independence more than 70 years ago. The country's prime minister there says, reviving the economy will be no easy task. Rosemary Church picks up your coverage when we return.

(COMMERCIAL BREAK)

VERONICA MCDANIEL, TEACHER, ATLANTA INTERNATIONAL SCHOOL: My school has been involved in human trafficking awareness and taking action against human trafficking for about 13 years. My name is Veronica McDaniel. And I am a teacher supervisor of Atlanta International School against human trafficking.

I feel it's important to teach young people to know the signs of human trafficking. We can do a lot of prevention work. Just by opening their eyes to the problem. Hashtag My Freedom Day, means a lot to me. It actually fuels my work with young people at Atlanta International School and globally. Six years running, we've been able to really reach a lot of students. [02:35:00]

It's just become bigger than we think any of us really thought it would. And now we wanted to keep getting even bigger.

My hope for the future is that students are becoming so much more confident in this topic. That they are completely leading the charge. Where students are listening to other students and we're realizing that's the most effective way for kids to really hear about the issue. An idealist, I know, that we can't completely eradicate human trafficking in the next five years. But my hope is that over time, with this new wave of strong young leaders, that we are certainly diminishing.

(COMMERCIAL BREAK)

CHURCH: Welcome back, everyone. Well, out of the frying pan, into the fire. That is how Sri Lanka's energy minister has described the country's deepening financial crisis, it's worsened in decades.

On Tuesday, the prime minister said, talks with the International Monetary Fund to revive the economy are more difficult and complicated than before because the country is bankrupt. CNN's Vedika Sud is in New Delhi. She joins us now live.

Good to see you, Vedika. So, Sri Lanka's worst financial crisis in decades. What, if anything, came out of those talks with the IMF? And what possible solutions are there when a country is dealing with a collapsed economy?

VEDIKA SUD, CNN RESPONDENT: And when a country, Rosemary, has announced as of Tuesday, that it is bankrupt, not that is the headline and the big takeaway because this essentially makes it even tougher, more complicated by the newly appointed Prime Minister of Sri Lanka, Sir Ranil Wickremesinghe, while addressing the lawmakers in parliament, Tuesday. This makes it more complicated while dealing with the International Monetary Fund.

Now, we've heard Wickremesinghe, in the past, talk about how talks with the IMF will wrap up in June, then it was pushed to July. Now, it's being pushed to August, Rosemary. He has said in parliament that the government will present a debt restructuring program to the IMF in August and they're hoping for a bailout package after.

But until then, the crisis on the ground is simply unbearable for the 22 million people who live in Sri Lanka. There's a massive fuel crisis there. According to the power and energy minister who addressed the media on Sunday, it was just a days-worth of fuel left. And to get another shipment, they're struggling, really, to put that money together.

Now, because of this fuel crisis, Rosemary, obviously, it's having a cascading effect. You've usually heard of schools shutting down due to the pandemic or due to an extreme weather event. When have you ever heard of schools shutting down because of the fuel crisis? Well, you're witnessing that in Sri Lanka for a week. Until Sunday, schools have been shut down.

Fuel supplies are only being provided to essential services. And obviously, this is having a massive impact food inflation. Because even trucks that come into -- carrying fresh food and vegetable have been impacted. And the prices have been just spiraling out of control. And while all of this is happening, the president of Sri Lanka, Gotabaya Rajapaksa, is still refusing to step down despite the protests against him. Rosemary.

CHURCH: All right. Vedika Sud joining us live from New Delhi. Many thanks.

Well, the U.S. and China's top economic officials spoke on Monday to discuss challenges facing the global economy. The talks come amid growing speculation that some Trump-era tariffs could be lifted as early as this week to ease inflation and boost growth. Four years ago, the Trump administration put tariffs on $34 billion worth of Chinese imports. Tensions on both sides have ratcheted up with both sides imposing new tariffs on each other's exports.

Joining me now from New York is CNN Global Economic Analyst Rana Foroohar. She's also a global business columnist and associate editor at the "Financial Times". Great to have you with us.

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST, ASSOCIATED EDITOR, FINANCIAL TIMES: Thanks for having me.

CHURCH: So, high inflation is proving to be a global problem right now. But each nation is naturally blaming the current political leaders for the impact. So, which nation has the smartest solution in place to get their country back on track?

[02:40:00]

In the midst of this COVID pandemic and, of course, the resulting supply chain issues, as well as Russia's war on Ukraine?

FOROOHAR: Yes, it's a great question. I'm not sure that any country has a silver bullet for the inflationary problem right now. It's playing out in different ways, in different regions, you know. In Europe, for example, this is really a lot about the war in Ukraine. It's about a real-world energy shortage. Some really serious fundamental problems with commodities, food, and fuel inflation.

That's, of course, spilling over into emerging markets which are -- you know, many which are having a full-blown crisis at this point which is beginning to mirror some of the cause-and-effect scenarios that we saw in the run-up to the spring. You know, that was the last time that you had this kind of commodity price inflation. It actually set off political riots which led to regime change throughout the Middle East.

In the U.S., the situation is very, very unique in some ways because the U.S. has been propping up for a long time. Our asset markets with low rates. A lot of monetary policy that was already creating a kind of, inflationary pressure, certainly, an asset even before COVID and the war in Ukraine. And then you add into that supply chain issues, you add into that food and fuel inflation, and you get this very strange dynamic where there's just a lot of vectors all happening at once.

Now, you know, some countries are trying to move more quickly to clean energy, for example. That's one solution but it's not a short-term solution. In the U.S., you're seeing President Biden say, companies need to lower prices. I have a lot of sympathy for that view because corporate profits are still near record highs. But, again, it's not necessarily addressing the real underlining near-term issues. So, no silver bullet here.

CHURCH: And, of course, these mounting economic challenges are resulting in considerable chatter out there about a possible recession. There are different schools of thought on this, of course. But how inevitable is a recession given where things stand right now?

FOROOHAR: Well, again, we take that in regions. Many emerging markets are already in recession, if not, you know, full-blown economic crises. I think in Europe, you're probably going to see a recession this year unless something fundamental changes in the energy picture.

The U.S. is in a kind of a funny place, you know. I would say the majority of economists believe there will be a recession by 2023. But it may not look or feel like a typical recession, you know. You could have stagflation at the same time. You still see unemployment rates pretty low.

Again, it's just a lot of strange vectors, some of them long-term, some of them short-term that are really having policymakers scratching their heads about which way to go.

CHURCH: And so, how should people protect themselves from this possibility and likelihood of recession?

FOROOHAR: Well, one thing we know is that interest rates are going up. In the U.S., for sure, possibly in other places as well. And that's a good time to make sure that you have debt under control. Because whenever interest rates go up, debt gets more expensive. And so, you know, I would encourage individuals and I would say companies should also be getting their balance sheets in order. Try to pay down credit card debt, mortgage debt, you know, corporate debt if you're a corporation. And get ready for a period that's going to look very different than what we've seen, certainly for the last few years, if not the last few decades.

CHURCH: All right. Rana Foroohar, thank you see much for joining us. Appreciate it.

FOROOHAR: Thank you.

CHURCH: And thank you for being with us. I'm Rosemary Church. World Sports is up next. And I'll be back with more news in about 15 minutes. You're watching CNN. Do stick around.

(COMMERCIAL BREAK) [02:45:00]

COATES: New developments in the investigation into then-president Trump's efforts to overturn the 2020 election results in Georgia. Court filings revealing a special grand jury has subpoenaed some of Trump's inner circle, including his former attorney, Rudy Giuliani, and South Carolina Senator Lindsey Graham. Joining me now to discuss, former U.S. attorney and former Deputy Assistant Attorney General, Harry Litman.

Harry, nice to see you today. This is pretty big news. The fact that there is, one, obviously, we know there's a special grand jury. But perhaps many have thought about a Rudy Giuliani in the mix of things. But Senator Lindsey Graham is also on this list right now. Tell me what you think of when you think about how this investigation is unfolding. Is it surprising?

HARRY LITMAN, FORMER U.S. ATTORNEY, FORMER DEPUTY ASSISTANT ATTORNEY GENERAL, HOST, "TALKING FED" PODCAST: Well, sort of. I mean, she's casting as wide a net as the January 6th Committee. So, when you think of Georgia and what she's investigating, you think of that call with Raffensperger, the one that the January 6th Committee detailed. But here, she's called this and said she had to submit this to a judge who had to OK it because these seven people are from out of State. That we're talking about a multi-State, coordinated campaign to influence the results in Georgia and elsewhere, where that's a very broad net. And it starts, as you say, with Lindsey Graham on November 13th, and really goes all the way to Pence.

But the big heart of it is really Rudy Giuliani, who is called out for going down to Georgia three times. And remember the January 6th Committee hearing about the stolen ballots and the suitcase and Shaye Moss and Ruby Freeman. He tells these lies again and again before a legislature. They are debunked. He, nevertheless, keeps spreading them and defaming Moss and Freeman and goes all the way through after they've been debunked.

So, he's portrayed as the ringleader here and -- with his fingerprints over many episodes. And this is, as I say, a really broad net and he's at the center.

COATES: Well, you know, speaking of broad nets, my initial thought is that people, as a retort, might say this seems like a fishing expedition. I mean, how wide are you going to cast the net? You're going to throw all these people in there and you know that there are some allies of Trump that have tried to dodge or, at least, run out the clock on subpoenas from the Committee.

And we know that subpoenas suddenly don't mean the same things they meant when you and I were prosecuting. But this is still a criminal investigation. I want to walk through with you a little bit about what's different in this instance. I mean, unlike a January 6th subpoena, this is actually a criminal one. They've got something behind it in terms of being able to call you in and haul you in.

LITMAN: Yes, you're not going to casually disregard here. And you're right that it's many different, sort of, mini-episodes, but they've all been pretty well documented. For instance, the lies that Giuliani told. That they were responsible, in part, for his -- the loss of his license.

So, they are -- what we heard before -- and all she's saying for now is material and important witness. So, I -- you know, I think the case for that is made. Now, the real issue is going to be, are they going to resist? Are they going to come down? Are they going to testify? Are they going to take the fifth? You know, I think she's cast a broad net, and then what these seven people, Graham, a podcast person, and then five attorneys for -- John Eastman and Jon Elist included, how they are going to handle it.

COATES: You know, I think five attorneys -- I remember, I know you do as well, the duty of candor you owe to a court, to think that five attorneys are being subpoenaed in a case like this is really stunning to me. And we -- you talked about Rudy Giuliani. But, Harry -- and we're talking about people who've made representations to a court of law as well.

An important note for the audience, remember, this is a special grand jury. They're going to return a report. They're not -- their job is not to return an indictment in Georgia. That's for the actual grand jury down the line. Harry Litman --

LITMAN: Although -- very quickly, the founders (ph) isn't probably will be with Fani Willis.

COATES: Of course.

LITMAN: But you're right, they won't do it.

COATES: Fani Willis, the DA of Fulton County, very important point. Thank you, Harry Litman.

LITMAN: Thanks, Laura.

COATES: Look, the Justice Department is now suing Arizona. I'll tell you why and what it means for your right to vote after this.

(COMMERCIAL BREAK)

[02:50:00]

Tonight, the DOJ is suing the State of Arizona. Trying to block a new law that requires people registering to vote in federal elections in Arizona to prove their citizens. Now, right now, people who use a federal voter registration form are required to attest under penalty of perjury that they are in fact citizens. But proof of that, documented proof is not required.

The DOJ says the Arizona law said take effect in January, actually violates the National Voter Registration Act and turns back the clock by imposing unlawful requirements to block otherwise eligible voters from registering. It also argues that Arizona tried to impose a similar proof of requirement back in 2013, but that, as you recall, was blocked by the Supreme Court.

Well, seven counts of first-degree murder. And investigators say there are more charges are coming as they release new details about the shooter, his plans, and the red flags waving long before July 4th. Stay with us.

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[02:55:00]

The suspect in the July 4th parade shooting is charged with seven counts of first-degree murder, and we're told dozens more will be on the way. We are also learning disturbing new details about the suspect's past. As investigators try to piece together just why he could carry out this heinous attack. Killing seven innocent people and injuring dozens more. CNN's Drew Griffin has the latest.

(BEGIN VIDEO CLIP)

CHRISTOPHER COVELLI, DEPUTY CHIEF, LAKE COUNTY SHERIFF'S OFFICE: Good afternoon, everybody

DREW GRIFFIN, CNN CORRESPONDENT (voiceover): The Lake County Sheriff's office reveals two incidents involving the suspect, Bobby Crimo. The first in April of 2019. A suicide attempt that was handled by mental health professionals.

COVELLI: The second occurred in September of 2019. A family member reported that Crimo said he was going to kill everyone and Crimo had a collection of knives. The police responded to his residence. The police removed 16 knives, a dagger, and a sword from Crimo's home.

[03:00:00]