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CNN International: Pentagon: Russian Jet Hits U.S. Drone, Forces It Down; Russia Denies Jet Came Into Contact With U.S. Drone; Ukrainian Soldier Fighting In Bakhmut: It's Hell On Earth; Credit Suisse Shares Crash As Investor Rules Out More Funds; Dozens Injured As Police Clash With Imran Khan Supporters; Khan Warns Violence Could Escalate If He's Arrested; Harry Potter Studio Tour To Open In Japan This Summer; NASA And SpaceX Send Experiments And Supplies To ISS. Aired 8-8:30a ET

Aired March 15, 2023 - 08:00   ET

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

[08:00:07]

MAX FOSTER, CNN ANCHOR: Hello, welcome to CNN Newsroom. I'm Max Foster in London. Just ahead, the Pentagon says a Russian fighter jet hit a U.S. spy drone and forced it to crash. The latest on the Black Sea incident.

Also ahead, shares in Credit Suisse crashed a record low, as worries about the Swiss lender grow. More details on that. And a standoff outside Imran Khan's residence in Lahore, as crowds prevent police from arresting the former prime minister over corruption charges.

The Kremlin wants relations with the U.S. are at their lowest level and in a deplorable state following a dramatic instance over the Black Sea. The Pentagon is accusing a Russian fighter jet of hitting an American spy drone's propeller, forcing it to crash into international waters on Tuesday. It's the first known direct physical confrontation between Moscow and Washington since Russia invaded Ukraine more than a year ago.

And any moment now, the Ukraine contact group is set to meet at the Pentagon. The U.S. says it's a sensitive situation.

(BEGIN VIDEO CLIP)

JOHN KIRBY, U.S. NATIONAL SECURITY COUNCIL COMMUNICATIONS COORDINATOR: It could lead to miscalculations between, you know, two militaries that are operating not obviously in Ukraine together but certainly in proximity in the region. And we don't want to see this war escalate beyond what it already has done to the Ukrainian people. And so this is clearly, this was inappropriate, unsafe, unprofessional conduct by the Russian pilots.

(END VIDEO CLIP)

FOSTER: CNN's Natasha Bertrand joins us live at the Pentagon. I mean, these sorts of incidents do happen. We don't always hear about them, do we, but this one has really blown up. NATASHA BERTRAND, CNN WHITE HOUSE REPORTER: That's right, Max. Russian fighter jets do try to intercept U.S. drones over the Black Sea quite regularly. But the behavior of the pilots in this situation was just very, very rare, according to the Pentagon.

What the pilots actually did was they moved very, very close to the drone and they actually began dumping fuel on it before moving around to the back of the drone and actually hitting the propeller, that in turn forced the U.S. military to take the drone down over international waters because it was essentially not able to operate anymore.

Now, the White House and the Pentagon are issuing very, very sharp statements this morning saying that this kind of behavior is unacceptable. And we're learning that the White House now is saying that they may never be able to recover the drone. John Kirby, the NSC spokesperson, saying just a short time ago, that the wall they are assessing whether or not that would be feasible, the waters of the Black Sea are very deep, and it's just unclear at this point whether they will actually be able to recover the device.

However, they are taking steps according to Kirby to minimize the potential intelligence collection that Russia could glean from potentially seizing that drone themselves. He said that they are taking steps to protect the United States' equity. But look, this is just an unprecedented situation over the course of the war. Two Russian -- a Russian and American aircraft coming into direct contact with one another at a very sensitive moment, when the risk for escalation, potential miscalculation is very high.

And we should note that there was no communication between the Russians and the Americans while this confrontation actually took place raising even more questions about whether the lines of communication are effectively open to avoid this kind of confrontation and potential escalation in the future, Max.

FOSTER: OK, Natasha, thank you. Salma is also here, looking at this from the Russian perspective, because they denying that anything happened here at all.

SALMA ABDELAZIZ, CNN CORRESPONDENT: It's a completely different narrative when you ask the Kremlin. They say there was no physical confrontation between these two aircrafts, with the Kremlin says took place is that an intruder was detected over the Black Sea where the Russian military operates, that Moscow scrambled its fighter jets.

It came across this drone in whatever way, it says that the American drones transponders were turned off and that that would be a violation of international standards, international norms. And it goes on to say that the drone, then went into an unguided lowering its altitude and went into an unguided flight again, without any physical confrontation from a Russian fighter jet.

In fact, Russia goes so far as to blame the United States as to point the finger at the U.S. and say it is the United States that was behaving dangerously over the Black Sea. They accused the U.S. of flying this drone too close to the Russian border. They say this is a drone that is capable of carrying up thousands of pounds worth of explosives and so they felt threatened, Russia felt threatened and acted in that moment but say, again, no physical confrontation.

But what is something that both sides agree on right now, at least publicly is no one wants to escalate this any further. Russia's ambassador was summoned to the State Department. There was at least a 30-minute conversation that took place. He described it as concern tractive and went on to say of course that they don't want to see a further escalation.

[08:05:04]

But I think as you heard there from our colleague, Natasha, all eyes right now are on the Black Sea as to whether or not the United States could recover that drone. Important to note, of course, that Russia very much operates in the Black Sea --

FOSTER: International waters, isn't it? So there's a mad dash to get the wreckage, presumably?

ABDELAZIZ: International waters, but the Black Sea again has been used by Russia --

FOSTER: Yes.

ABDELAZIZ: -- throughout this conflict. It is a place where their warships are in place, where they launch missiles towards Ukraine from. It is an area absolutely of conflict, very much a flashpoint in this war. It will be extremely difficult to obtain the remnants of this drone, if at all.

FOSTER: OK, Salma, thank you.

Within the next month or so, Ukraine's military could get some extra muscle in the sky. That's the word from the Polish Prime Minister who says a transfer of MiG-29 fighter jets to Ukraine may happen in the next four to six weeks. On the ground in Ukraine, the battle for Bakhmut appears to be centered around an industrial plant in the north of that city.

The country's Deputy Defense Minister says fighting across Bakhmut is still raging. And that is too early to draw conclusions about the outcome. One Ukrainian soldier who posted videos of himself in the trenches spoke to CNN about what he's been experiencing in Bakhmut.

(BEGIN VIDEO CLIP)

ROMAN TROKHYMETS, UKRAINIAN SOLDIER FIGHTING IN BAKHMUT: It's really hell on earth, that what I can say. Just a few words. They have some units that stand near the -- behind the back, and they should all of them who tried to return. So Wagner have only -- or only one chance to survive is to take our position, our trenches, that's all. They have no choice to to return to their position because they will be killed from their fellows.

(END VIDEO CLIP)

FOSTER: Global markets still very rattled after the abrupt collapse of Silicon Valley Bank. Meanwhile, take a look at this. European markets are still trending down, the mood is still really wary. But these are quite significant numbers if you look over the past year or so, if you're talking more than 2 percent or 3 percent in a day, it's a cause for alarm.

There are concerns about another big bank now. We were talking about small banks before, now we're talking about Credit Suisse.

Clare Sebastian watching all this from our London newsroom. I mean, late yesterday, early this morning, it did look as though things were correcting. And then we hear about Credit Suisse share price falling, right. And this is one of the big banks and this is when big investors start get worried.

CLARE SEBASTIAN, CNN CORRESPONDENT: Yes, Max, you know, a lot can change in a couple of hours on these markets. Credit Suisse, as of yesterday, the bank disclosed that it had found, quote, material weaknesses in its financial reporting, it might have to restate financial results.

Today, in an interview with Bloomberg, its biggest backer, the Saudi National Bank said it was basically closing its checkbook and won't be putting any more money into the company. That led the share price essentially to fall off a cliff dragging down with it much of the European banking sector.

Now this is a bank that has had a lot of concerns around it for some time. It's in the midst of a turnaround. It's been cutting jobs, all kinds of things. You can see there the numbers are pretty stark. And obviously, these are two separate issues, right, with Silicon Valley Bank too.

Idiosyncratic issues, Credit Suisse has its own problems. But this is, of course, an interconnected international banking system, Max. Secondly, all of these issues seem to involve some element of internal mismanagement. So that's going to invite scrutiny of other banks.

And as we've been discussing, all of these banks are facing the same macro issue, which is this climate of rising interest rates. And now after Silicon Valley Bank renewed scrutiny on how well they've prepared their balance sheets to weather this, that situation could of course get even more difficult in the coming days.

We have the ECB set to potentially announce another rate rise tomorrow. The Fed could do the same next week. There's new U.S. data out this hour. So that will be closely scrutinized as well, Max, but a lot of concerns around the banking sector this morning.

FOSTER: Incredibly hard, isn't it, for most central bankers trying to not give another shock effectively to the market. If we look at the U.S. futures right now, we can see that they are also tracking down quite significantly, aren't they, Clare? More than 1 percent. Is that off the back of what's happening in Europe? Are we hitting a cycle here?

SEBASTIAN: Yes, I think the concerns are on Credit Suisse, which also has a big U.S. presence, by the way, has retriggered those banking concerns. We also get retail sales, producer prices out this morning. So investors might be taking some money off the table and an expectation of those numbers just to wait and see what happens.

But this is clearly a very volatile time and a lot of focus, as you say, will now be on those central banks. The Fed, in particular, has an incredibly delicate balancing act when it meets next week. On the one hand, it has to look at financial stability. It has to consider the impact of further rate rises on these already pressured balance sheets.

[08:10:05]

Moody's has just cut the outlook for the entire U.S. banking sector on concerns of what Fed rate rises could do to those balance sheets. And on the other hand, it has to worry about inflation. Even though it's moderating, it still tripled at 6 percent the Feds target, so it has to tackle that, otherwise, its reputation is at stake as well, Max.

FOSTER: OK, Clare, thank you. We'll keep watching it, especially that market open in Wall Street.

Increasingly volatile situation in Pakistan meanwhile. Police and supporters of the former Prime Minister Imran Khan, clashing for a second day outside Khan's home in Lahore. Officers firing tear gas there into the compound, into his compound as Khan's supporters throw rocks and other projectiles back.

Dozens of people including more than 30 officers reported injured. The tensions ramping up after authorities tried to arrest Khan for being a no show at his court appearance. He's been accused of corruption but says the charges are politically motivated. Khan claims the current government is trying to keep him out of upcoming elections.

(BEGIN VIDEO CLIP)

IMRAN KHAN, FORMER PAKISTANI PRIME MINISTER: They know that if I come to power, they will be held accountable. So they don't want me alive. They also know that even if I go to jail, we will sweep the elections, no matter what they do. At the moment, I mean, you all you have to do is look at any of the opinion polls. This party is going to sweep the elections.

(END VIDEO CLIP)

FOSTER: CNN's Sophia Saifi is the one who did that interview with Khan. She joins us from Islamabad. He's not going to give himself up, is he? So what's his strategy do you think?

SOPHIA SAIFI, CNN PRODUCER: Max, that's exactly what I asked him. We got this call out of the blue, the police had arrived at his residence yesterday. The reason why these arrest warrants are out for him is because he has repeatedly not made any appearances in court ever since those different cases were filed against him since August of last year.

Now, Khan said that the reason why the government, according to him, is attempting to arrest him is because they want to incite violence. They want to incite violence amongst his protesters and then put him away and make sure that those elections don't happen. Now, Khan did say that -- I did continuously ask him if he -- why does he need to stop this and go out and just give himself up? And he refused to answer that really.

He said that it's beyond the courts. He spoke about police brutality against his supporters. He also spoke about a conspiracy against him in which the government and the military have colluded to get rid of him from power, to get rid of him from the political arena. The Pakistani Information Minister has been making rounds on television and refuting Khan's claims.

She said that the arrest warrants have not been put out by the government. They've actually been put out by the courts that Khan really must respect the rule of law. The foreign minister appeared on television earlier today and said that the only thing stopping Khan from a bearing in court is his ego. Khan's lawyers have made the case that ever since there was an assassination attempt against Khan in November last year, so it's not safe for Khan to appear in court.

And he's willing to come up there via video link. So the electricity was shot early morning at around four in the morning at Khan's residence. The internet in that area of Zaman Park, a posh neighborhood in the city of Lahore. There is no internet, that jam is everywhere in that area. There is an ongoing situation.

It has -- there is a bit of a lull at the moment. So we're waiting to see what the courts decide as an appealing. And we're just going to have to wait and see whether Khan will be behind bars by the end of the day. Max?

FOSTER: Sophia, thank you for joining us from Islamabad.

Still to come, the U.S. says Russia forced down one of its drones over the Black Sea. How and why did it happen? What are the ramifications?

(COMMERCIAL BREAK)

[08:16:12]

FOSTER: Welcome back. We're going to take a closer look now that drone incident over the Black Sea. The U.S. military saying that a Russian fighter jet forced down a U.S. Air Force drone on Tuesday in this area after damaging the propeller of the American MQ-9 Reaper. Russia denies it, though, saying their jets were scrambled to, quote, identify the intruder.

Adding that the drone went into unguided flights and lost altitude. The Russian ambassador to the U.S. also saying U.S. aircraft have no business being near the Russian border.

Chief U.S. Security Correspondent Jim Sciutto joins me now. I mean, the details of this are almost academic to some extent, aren't they, because it wasn't a big incident, but it's very telling.

JIM SCIUTTO, CNN CHIEF U.S. SECURITY CORRESPONDENT: No question. Listen, we're more than a year into the largest war in Europe since World War II, with Russia on one side having invaded Ukraine and the U.S. and its allies backing Ukraine in its defense. And both those countries, the U.S. and Russia and their allies, naturally, have taken great pains to avoid a direct conflict between U.S. and Russian or NATO and Russian assets in the region.

And there are lots of them flying around there providing intelligence, et cetera. They've avoided it until this point, and now they've come into direct conflict. It's the U.S. position that Russian -- this Russian jet deliberately buzzed the drone, circled it, dumped fuel on it, clipped it, and that's what brought it down. And that is quite a superpower confrontation.

And remember, it's not the first time this has happened. Early last month, you had the U.S. shooting down a Chinese surveillance balloon over the U.S. And these are incidents ripe with the potential for escalation.

FOSTER: We obviously had the balloon incident, didn't we? We're seeing that balloon. This was shot down by the Americans and it was obviously in relation to China. But do you think there's a link between the way these two instance were handled?

SCIUTTO: Well, there's at least a factual link and that is that the U.S. has an enormous number of surveillance aircraft, both manned and unmanned, flying around Chinese territory. China has an enormous number of aircraft flying around U.S. territory, as does Russia. And the U.S. and Russia have an enormous amount of surveillance aircraft flying around Europe, Northern Europe, as well as the area of Ukraine war.

And this provides multiple opportunities every day for potential interactions. And perhaps, even as we've seen here, violent interactions to date, both of the aircraft taken down, this one over the Black Sea and of course, that Chinese surveillance balloon. Thankfully, they're unmanned, uncrewed aircraft. Thing is you have a lot of crewed aircraft flying in similar airspace that get buzzed, that gets challenged in the air.

The concern is that if you have a violent interaction between those aircraft, the potential for escalation is greater. So you have a very tense time between these powers. And it's -- if it was not intentional, it at least a situation where we have the circumstances around the world for more interactions like this going forward, and there's a great deal of nervousness.

FOSTER: The U.S. very quick to try to get hold of a balloon wreckage so they could, you know, look for --

SCIUTTO: Yes.

FOSTER: -- any signs of intelligence that they could gather from that. Do you think that the Russians are going to be trying to do the same with this drone?

SCIUTTO: Well, for sure, and of course, Russia has an advantage in the Black Sea and that it has an enormous presence there on the surface and in the air. U.S. officials acknowledging they may very well not be able to get this and this is something that happens. We -- CNN was reporting last week that Russia had picked up some U.S. weapons.

U.S. provided weapons in Ukraine, which they've said then sent to Iran for the potential of reverse engineering, so that is a concern. When you have aircraft, assets, weapons in hostile territory or contested territory that you lose some of them, and the other side picks them up, and they learn something from them.

[08:20:12]

That's certainly the reason that you had the U.S. so aggressively looking to pick up pieces of that Chinese surveillance balloon. This is a world we live in now and with more tense relations between the U.S., China and Russia and more cooperation between China and Russia, you have more chances for interactions like this that, well, the worry is they could lead to escalation. And I know that U.S. officials are watching very closely.

FOSTER: OK, Jim Sciutto, really appreciate your expertise on this. Thank you for joining us.

SCIUTTO: Thanks.

FOSTER: Still ahead, the Hogwarts Express on Platform 9 and Three Quarters. The magic of Harry Potter coming soon to Tokyo. A preview of the studio tour just ahead.

(COMMERCIAL BREAK)

FOSTER: The wizardry of the World of Harry Potter heading to Japan this summer. Warner Brothers which shares the same parent company as CNN is launching a new studio tour in Tokyo showcasing the massively popular film and book franchise. CNN's Marc Stewart has a preview.

(BEGIN VIDEOTAPE)

MARC STEWART, CNN CORRESPONDENT (voice-over): Harry Potter's magic --

UNIDENTIFIED MALE: You're a wizard, Harry.

STEWART (voice-over): -- is transporting to Tokyo. It's on this massive lot where fans will see some of the series most iconic sets like the Great Hall at Hogwarts and the Forbidden Forest. It's part of the new Warner Brothers studio soon to open in Japan.

(on-camera): What goes through your mind when you see the train, you see the sets, you see the costumes?

JEFF NAGLER, PRESIDENT, WORLDWIDE STUDIO OPERATIONS, WARNER BROTHERS: Wow, I can't believe it. And when I come here, I have to remember that I'm here on a business trip and not to be looking at this as if I'm just a fan.

STEWART (voice-over): Jeff Nagler is President of Warner Brothers Worldwide Studio Operations.

(on-camera): Why Japan?

NAGLER: I think that was one of the easiest decisions for us actually because of the whole global interest in Harry Potter after the United States and after the U.K. Japan is the third best area for Harry Potter fandom.

STEWART (voice-over): The Tokyo studio is modeled after the one in London and will be larger. A big draw the Hogwarts Express train that was made in London transported by land and by sea to its new home here in Japan.

(on-camera): It's not just about the sets, it's about the accessories, the costumes, the props, like the ones you've seen in the movies.

UNIDENTIFIED FEMALE (through translation): We normally don't get to see what goes on behind the scenes in movies. But here we get to see how films get made. For example, it shows us how the people who work in the costume, props, movie set departments, all work as a team.

STEWART (voice-over): A glimpse into Movie Magic far from Harry Potter's roots in the U.K.

(on-camera): Do you see Asia as a growth market for experiences like this?

NAGLER: Absolutely. We do look at China and we look at Japan, we look at South Korea. We have a big fan base in Australia, New Zealand as well. All of -- it's not Asia, it's the whole Asia Pacific region.

STEWART (voice-over): Stories of imagination appealing to audiences around the world.

Marc Stewart, CNN, Tokyo.

(END VIDEOTAPE)

[08:25:07]

FOSTER: Facebook's parent company Mehta plans to lay off another 10,000 workers this year marking the second round of mass job cuts at the tech giant in just four months. Between this round of layoffs and 11,000 employees who lost their jobs in November, Mehta has quickly cut its workforce by about 25 percent.

In the Facebook post on Tuesday, CEO Mark Zuckerberg explained the decision writing, "Last year was a humbling wake-up call. The world economy changed, competitive pressures grew and our growth slowed considerably. At this point, I think we should prepare ourselves for the possibility that this new economic reality will continue for many years."

A spectacular light show lit up the skies over Florida

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Power and lift off a CRS 27. Go Falcon, go Dragon.

(END VIDEO CLIP)

FOSTER: And that's a SpaceX Falcon 9 rocket boosting a Dragon cargo ship into orbit is carrying some 2,800 kilograms of science experiments, supplies and other gear to the International Space Station. This marks the 27th SpaceX cargo delivery mission to the ISS.

Meanwhile, the James Webb Space Telescope has captured a rare sight some 15,000 light years away. This image shows a star in the Sagittarius constellation on the brink of exploding in a supernova. The star is about 30 times the mass of our very own sun. It's surrounded by a halo of gas and dust as the outer layers break off. That cosmic shedding is one of the last stages before the star explodes.

Studying rare moments like this helps astronomers understand what happened in the early days of the universe.

Finally, this Thursday is My Freedom Day. CNN is partnering with young people worldwide for a student led day of action against modern day slavery. These students in Kosovo are pledging to take action.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Small actions go a long way. Let's stay united and fighting against human trafficking.

UNIDENTIFIED FEMALE: Knowing the science saves lives. Let's take action together.

UNIDENTIFIED FEMALE: Let's end modern day slavery.

UNIDENTIFIED SPEAKER (in unison): My Freedom Day.

(END VIDEO CLIP)

FOSTER: Join CNN tomorrow for My Freedom Day. Tell us what freedom means to you and share your message on social media using the hashtag My Freedom Day. Thanks for joining me here on CNN Newsroom today though. I'm Max Foster in London. World Sport with Amanda is up next.

(COMMERCIAL BREAK)

[08:30:00]