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Early Start with John Berman and Zoraida Sambolin
China Poise to Retaliate for New U.S. Tariffs; Trump Surprised by His Son's Subpoena; James Comey Says Trump "Sure Looks Like" Had Criminal Intent; Co-Founder Calls for Facebook's Breakup. Aired 4:30- 5a ET
Aired May 10, 2019 - 04:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
[04:30:32] DONALD TRUMP, PRESIDENT OF THE UNITED STATES: They renegotiated the deal. They took many, many parts of that deal and they renegotiated. You can't do that.
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CHRISTINE ROMANS, CNN ANCHOR: A trade war that could hit your wallet. The White House raising tariffs on $200 billion of Chinese goods, and China vows to retaliate.
DAVE BRIGGS, CNN ANCHOR: Months before the deadly school shooting in Colorado, a parent warned school officials pressure cooker conditions could lead to another Columbine.
ROMANS: Extreme flooding in and around Houston. Dozens of water rescues, rivers over their banks, 100,000 customers in the dark.
BRIGGS: And a school bus driver takes off with a student's backpack caught in the door. The teen's mom says it was intentional and it was racist.
Welcome back to EARLY START, everybody. I'm Dave Briggs. Happy Friday, unfortunately this Friday comes at a cost.
ROMANS: Yes, happy tariff Friday. I'm Christine Romans. It is 31 minutes past the hour.
And, Dave, let's begin there.
It wasn't a bluff. President Trump jacked up tariffs on thousands of goods, dish washers, frozen fish, baseball caps. Right now about half of the products China sells to the U.S. now carry an import tax.
How did we get here? Three rounds of tariffs last year. First, the U.S. put tariffs on all foreign steel and aluminum including from China. Then in July, the U.S. singled out Beijing, slapping tariffs on $50 billion worth of high-tech Chinese exports.. China then hit back with $50 billion -- tariffs on $50 billion in U.S. goods. That's mainly Ag products, devastating American soybean farmers. But the biggest round yet -- the biggest round yet in September, $200 billion in Chinese goods. This included consumer goods like luggage, handbags and hats.
Beijing, guess what, retaliated with $60 billion worth of U.S. exports in response. That $200 billion -- that 200 billion back in September, that was originally taxed at 10 percent. Today it is 25 percent as of midnight. Now remember, it's U.S. importers, not China that pay these tariffs, and experts warn of an economic hit that Trump's tariffs could disrupt smaller American companies in particular. One analysis finds it could cost the U.S. about 900,000 jobs and raise prices for the average family of four by $767 a year.
And this trade war isn't over. There's the potential for more tariffs and problems with Europe, right, the president has threatened to tax nearly all Chinese imports and then he also has until May 18th to decide whether to impose global auto tariffs, which would likely make cars more expensive.
So what does it all mean for investors? We've got Dow futures lower here this morning. You've got four days lower for the S&P 500. A bit of a mixed response in Asia markets and European markets. They've opened slightly higher -- Dave.
BRIGGS: Haven't heard much from Republicans on this, but Democrats sure seem to support the move by the president.
ROMANS: And Republicans and business in general tend to hate tariffs here.
BRIGGS: Yes.
ROMANS: But you are hearing from Chuck Schumer and others who say, tell the president stay tough on China.
BRIGGS: Not a word from free traders like Ben Sasse. OK.
It takes two sides to have a trade war and Beijing has threatened to retaliate for the tariff increase.
CNN's Matt Rivers is standing by the Tianjin port in China.
Matt, what would retaliation look like here?
MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: It will take a couple of different forms more than likely, Dave. The Chinese government, the Commerce Ministry here hasn't formally announced what they're going to do but you can bet it's going to hurt American products that come into ports like this one here on the eastern coast of Tianjin, just behind me.
What China has already done is put a number of tariffs on the vast majority of American imports here to China. They could really round out, do another $20 billion more or so. But that's going to hit all American products. What they could do moving forward is increase the tariff rates that are already in existence. They could also do more regulatory things, like if you're a pharmaceutical company, for example. An American firm trying to license a product here in China, they could
delay that process and hurt American company's bottom line. And then they can do more informal things. So let's say you're an agricultural exporter, shipping perishable goods, food items here to docks like the ones behind me. Well, maybe customs inspectors let it sit on the dock for two weeks, let the food rot, and then you don't make any money as an American company.
Point is, China is going to find a way to hurt American companies as a result of this trade war. The U.S. says they've got leverage right now. China thinks they've got some as well.
BRIGGS: Hard to imagine what that leverage might be. It's going to be a fascinating two hours.
ROMANS: Yes.
BRIGGS: Matt Rivers, thank you, sir.
ROMANS: So supporters of the president keeps saying that look, there's a $20 trillion economy in the United States, and those 10 percent tariffs on so many of those goods absorbed fine by the U.S. economy.
[04:35:08] The economy is strong, it can take it, and it's especially good if you can get the Chinese to the table to make some concessions, but the Chinese aren't making concessions.
BRIGGS: Not even clear if they're at the table.
ROMANS: Yes.
BRIGGS: The vice premier has lost the title. Can he even negotiate on behalf of President Xi?
ROMANS: Stay tuned.
BRIGGS: Yes, stay tuned indeed.
All right. President Trump none too pleased about that subpoena his son Don Jr. That's from the Republican-controlled Senate Intelligence Committee, mind you.
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TRUMP: I was very surprised to see my son -- my son is a very good person, works very hard. The last thing he needs is Washington, D.C. He could rather not ever be involved. He's now testified for 20 hours or something. A massive amount of time. The Mueller report came out. That's the bible. The Mueller report came out, and they said he did nothing wrong.
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BRIGGS: The bible. Of course that claim not entirely true. Several people have contradicted Don Jr.'s claim under oath that he only told two people about his impending Trump Tower meeting with the Russians in June 2016. Now it's not clear whether the president's son will comply with the subpoena, not show up, plead the Fifth or choose another option.
ROMANS: Members of the president's inner circle are upset with Senate Intel chairman Richard Burr, a fellow Republican. They believe his decision to serve Don Jr. with a subpoena gives Democrats a valuable talking point, and the chair does not want to discuss it.
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UNIDENTIFIED REPORTER: The White House is taking a big swing at you, nothing, Senator Burr?
SEN. RICHARD BURR (R-NC): Nothing.
UNIDENTIFIED REPORTER: You made a big move.
BURR: No. Nothing. We don't -- we don't talk about any engagements we had in the committee. We never have. We're not going to start today.
(END VIDEO CLIP)
ROMANS: CNN has learned in a closed-door Senate Republican lunch Burr explained the back story of the subpoena and defended his committee's investigation. And Mitch McConnell is supporting Burr in private even though just days ago the Senate majority leader said case closed on the Mueller investigation.
BRIGGS: Add James Comey's name to the list of people who believe President Trump obstructed justice. The former FBI director was asked about the Mueller report in a live CNN town hall event last night. The report had several examples of possible obstruction by the president, but Attorney General Bill Barr decided not to bring charges because he could not determine the president's intent.
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ANDERSON COOPER, CNN ANCHOR: Do you think he had criminal intent based on what you have seen now in the Mueller report?
JAMES COMEY, FORMER FBI DIRECTOR: It sure looks like he did in connection with a couple episodes, the direction to Don McGahn to get the special counsel fired is to my mind a flaming example of --
COOPER: Of corrupt intent.
COMEY: Yes. Of corrupt intent.
(END VIDEO CLIP)
BRIGGS: We recently learned Mueller and his team took issue with how AG Barr summarized their findings. So does Comey.
(BEGIN VIDEO CLIP) COMEY: I think he acted in a way that's less than honorable in the way he described it in writing and described it during a press conference, and continues to talk as if he's the president's lawyer. That is not the attorney general's job.
(END VIDEO CLIP)
ROMANS: Comey also offered up this theory about why President Trump is so deferential to Vladimir Putin and the Russians.
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COOPER: And do you think the Russians have leverage over President Trump?
COMEY: I don't know the answer to that.
COOPER: Do you think it's possible?
COMEY: Yes.
(END VIDEO CLIP)
ROMANS: It appears President Trump may have been watching CNN despite constantly denying it. Last night he tweeted, "James Comey is a disgrace." Comey went on to say he would like to hear Robert Mueller testify to explain why he left the matter of obstruction up to Barr. The House Judiciary Committee is still trying to secure a date for the special counsel's testimony.
BRIGGS: Flash flood warnings in effect for the Houston metro area. Rains so intense the excess underground was pushing that manhole cover. About 40 people trapped by flood waters with rainfall rates of two to three inches an hour reported. Emergency crews saved a person trapped in this car that flipped and submerged in a flooded ditch. Hail and frequent lightning also part of the mix.
ROMANS: The flag poles even wobbling there with the roof closed at Houston's Minute Maid Park. Several creeks, rivers and bayous in the area have reached their banks with water flowing into homes and businesses. More than 100,000 customers were without power at the height of the storm. Schools closed today in Fort Bend, Lamar, Huffman, Montgomery and New Caney school districts. More than 20 million -- 20 million people in parts of southeast Texas, Louisiana and Mississippi are now under a flash flood watch.
BRIGGS: A startling -- revelation, excuse me, out of Colorado, months before that deadly shooting at STEM School Highlands Ranch near Denver. An anonymous parent said she was afraid another Columbine would happen there. The school board did ask for an investigation after the complaint. Now the woman who says she's the anonymous parent is talking exclusively to CNN. Here's what she told Scott McLean.
(BEGIN VIDEO CLIP) [04:40:09] UNIDENTIFIED FEMALE: When you mix a pressure cooker environment where students are stressed out and overworked and they don't get enough sleep, and they feel suicidal or they feel aggressive towards one another, and are not being disciplined for it. When you don't listen to parents' concerns, when you don't support teachers' concerns, when you don't give teachers the kind of training that they need or the support that they need. Those are the elements that we need for the perfect storm.
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ROMANS: The woman wants to stay anonymous because she fears retaliation, but CNN confirmed she does have a student in that school. She speaks of kids who had a rigorous math and science based academic program, little sleep and started out acting aggressively.
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UNIDENTIFIED FEMALE: I also saw violence against themselves happening, you know, with students, and threats of suicide, cutting, attempted suicide, drug use that was getting pretty serious. You know, numerous reports from my children as they witnessed it, experienced it firsthand, and other students that witnessed it or experienced it firsthand. So the pattern was pervasive.
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BRIGGS: The woman does say teachers were well-intentioned. The school's executive director told CNN through a PR firm the school found no evidence to support the allegations made by the parent. In a statement, she said, quote, "Like any school with more than 1800 students, we receive complaints, all of which we take seriously and investigate promptly." The suspects in the shooting are due in court today.
ROMANS: All right. Now to the 2020 presidential race, senator and presidential candidate Elizabeth Warren's focus on the opioid crisis takes her to West Virginia this morning. She announced a new plan this week to combat the economic by investing $100 billion in states and communities over 10 years. Her first stop at town hall in Kermit, West Virginia. The city was the subject of a 2016 Pulitzer Prize winning report which found at the time there were 30,000 hydrocodone tablet for every resident. Yes. Warren is on the cover of the latest issue of "TIME" magazine and she's betting her big policy ideas will win over voters.
BRIGGS: Rival Beto O'Rourke campaigned yesterday in Salem, New Hampshire. Following the latest school shooting, he was asked about fellow presidential hopeful Cory Booker's ambitious new gun control proposal requiring all gun owners to apply for a federal license.
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BETO O'ROURKE (D), PRESIDENTIAL CANDIDATE: And I think relying on the responsibility and accountability that gun owners feel, matching that with universal background checks, stopping the sales of weapons of wars, red flag laws, that's the perfect way to compliment the responsible gun ownership that we see in this country right now. I don't know that we need to take the additional step of licensing every single firearm.
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BRIGGS: South Bend, Indiana, Mayor Pete Buttigieg stopping in California. He responded to the president's claim he would not be able to negotiate with China by quoting a Chinese prophet.
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MAYOR PETE BUTTIGIEG (D-IN), PRESIDENTIAL CANDIDATE: When the wind changes some people build walls and some people build windmills. You've got to recognize we need something completely different than what we have in this White House. The negotiations that they are conducting whether it's on trade or things like North Korea are usually a personal high wire act with no safety net.
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ROMANS: All right. As of now, 18 of the 21 Democratic candidates qualify to be on the debate stage. Presidential candidate Marian Williamson announcing yesterday that she qualified after receiving campaign contributions from 65,000 unique donors.
BRIGGS: Interesting when you look at that whole field and how many policies Elizabeth Warren has rolled out and how few Joe Biden has, and he is running away at this point with the field. I mean, double- digit lead in every single poll we've seen.
ROMANS: And some of her supporters have complained that she dropped a substantive policy proposal that she has worked years or decades on.
BRIGGS: Yes.
ROMANS: And it doesn't get much media coverage because we're --
BRIGGS: Well, we just had a "TIME" cover.
ROMANS: Right. Exactly.
All right. The co-founder of Facebook wants the social network broken up. What Chris Hughes now says about Mark Zuckerberg and the company they created.
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[04:48:40] ROMANS: All right. The temp has been hired full time. Acting Defense Secretary Patrick Shanahan announced he's President Trump's permanent pick to head the Pentagon. Shortly after the announcement, Shanahan said in a statement he is honored and, quote, "committed to modernizing the forces so U.S. troops have everything they need to keep our military lethal and our country safe."
Shanahan cleared a final hurdle when the Defense Department's internal watchdog cleared him of allegations that claim he promoted the interests of his former employer Boeing.
BRIGGS: A call to break up Facebook now coming from a co-founder of the social network. Chris Hughes, who helped Mark Zuckerberg launch Facebook from a college dorm room, penning a "New York Times" op-ed. In it he writes, Zuckerberg's, quote, "unchecked power and influence far beyond anyone else in the private sector or in government."
Hughes says Facebook should be forced to reverse its acquisitions of both Instagram and WhatsApp. He says in part, "I'm worried that Mark has surrounded himself with a team that reinforces his beliefs instead of challenging them."
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CHRIS HUGHES, FACEBOOK CO-FOUNDER, ENTREPRENEUR: Every single time there's some new headline about a privacy scandal or an election that's going on, I do feel a sense of responsibility. I'm angry at Mark and I'm angry at a lot of Facebook's leadership for taking something that held so much promise and could have been so amazing and sacrificing quality, security, stability, for clicks.
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[04:50:08] BRIGGS: Hughes left Facebook in 2007 and sold all his sock in 2012, pocketing a half a billion dollars. Facebook responding, saying, quote, "It accepts that with success comes accountability but you don't enforce accountability by calling for the breakup of a successful American company."
BRIGGS: Renowned animal and wildlife expert Jim Fowler has died.
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JIM FOWLER, ANIMAL AND WILDLIFE EXPERT: The condor unexpectedly began flailing its wings and biting my hand with his razor sharp beak.
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ROMANS: Fowler was the longtime co-host of the popular TV series "Wild Kingdom." He was also a familiar face on Johnny Carson's "Tonight Show," appearing more than 100 times with his animal guests. Throughout his career, Fowler tried to educate the public about wildlife species and raise awareness about preserving environment. His son says Fowler had a heart ailment when he died at his home in Connecticut. Jim Fowler was 87.
BRIGGS: I can remember a lot of those Johnny Carson appearances.
ROMANS: Yes. Yes. There's a whole generation of us who were like -- oh, yes, he was really kind of an icon.
All right. Vaccine misinformation, it's still thriving on Instagram months after Instagram said it would block content promoting fake vaccine news. What Instagram says it's doing now. CNN Business is next.
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[04:55:52] BRIGGS: President Trump playing host to the 2018 World Series champion Boston Red Sox at the White House. The visit also highlighting the president's complicated history with athletes of color. Roughly a third of the team, including the manager, Alex Cora, and most of the black and Latino players skipped the event. The president hailed the Sox as, quote, "a very special group and a shining example of excellence." The players had just come from Walter Reed Hospital where they visited with wounded soldiers.
The White House had some other issues with the visit. Misspelling the "Red Sox," S-O-X, as Red Socks, S-O-C-K-S, on its Web site before the event, and afterward sending the full remarks of the president's meeting with "World Cup Series" champions.
Troubling video out of Utah. A bus driver closes the door on a student, closes the door on the student trapping him and dragging him by his backpack for about 20 seconds. The 14-year-old coming dangerously close to the tires. And now the student's mom, Brenda Mayes, is suing saying the driver did it because her son is biracial.
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BRENDA MAYES, STUDENT'S MOTHER: Something fell. They have a responsibility when I put my kids, send them off to school, they have a responsibility to make sure they're safe.
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BRIGGS: The suit argues the driver has a history of misconduct against kids of color. According to CNN affiliate KSTU, the driver, John Naisbitt, says he retired three days after the incident to avoid being fired.
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UNIDENTIFIED REPORTER: Would you say that you're racist?
JOHN NAISBITT, BUS DRIVER: Not at all, no.
UNIDENTIFIED REPORTER: Yes.
NAISBITT: Look at my dog, he's black as can be.
(LAUGHTER)
(END VIDEO CLIP)
BRIGGS: Wow. Naisbitt says the incident was staged because he has disciplined the boy's brother. In response to the suit the district says any claims of discrimination are being investigated.
ROMANS: All right. Let's get a check on CNN Business this morning. Global markets up despite President Trump's tariff hike on Chinese good. Taking a look around the world, Shanghai and Hong Kong up, Tokyo down. And European markets opening slightly higher. But Wall Street -- Wall Street looks like it's headed for another soft opening. You know, the S&P 500 has been down every day this week. Futures pointing lower here.
Look, uncertainties about the U.S.-China trade war weighing on investor sentiment and markets. The Dow closed down 140 points, the S&P and the Nasdaq both lower for the fourth day in a row.
Trade talks, they are still on today. Right now there are no plans for the president to meet with the vice premier Liu He.
The most hyped IPO turned out to be smaller than some expected. Uber priced its initial public offering at 45 bucks a share Thursday, raised about $8.1 billion, making it one of the largest U.S. public offerings ever. Now the amount is on the low end of its original proposed price range. At the top end, Uber would have been valued above $90 billion. Uber is expecting to make its Wall Street debut today.
Hash tags and content promoting vaccine misinformation are thriving on Instagram months after Instagram said it would block this content. Instagram said Thursday it will now block additional hash tags that surface vaccine misinformation. The change comes after CNN Business investigated and reported that the hash tag "vaccines kill" is still up on the app and appeared as a top result in a search for vaccines after anti-vaxx accounts. After the report vaccines kill is now -- is blocked now by Instagram. A spokesperson said the process or combating vaccine misinformation is ongoing and Instagram is considering additional ways it can address the issue.
BRIGGS: Well, as the classic nice work if you can get it, HushHush, a London based online store and concierge service, is seeking a professional yacht tester. The actual work, testing and evaluating every plug, socket, door, bed and shower to ensure the pleasure craft listed on the e-commerce site is up to snuff. Applicants must be willing to really rough at living, eating and sleeping on board a luxury yacht for a week. Each review pays about 1300 bucks with the potential to test as many as 60 yachts a year. That's potentially a cool 65,000 bucks.
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JEFF BEZOS, AMAZON CEO: It's time to go back to the moon this time --
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