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Early Start with John Berman and Zoraida Sambolin

U.S.-China Trade War Escalates; Heavy Flooding In Houston; Mother Says She Warned Of Another Columbine. Aired 5:30-6a ET

Aired May 10, 2019 - 05:30   ET

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

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[05:31:52] (BEGIN VIDEO CLIP)

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.

(END VIDEO CLIP)

CHRISTINE ROMANS, CNN ANCHOR: A trade war that could hit your wallet. The White House raising tariffs on $200 billion worth of Chinese goods, and China is vowing to retaliate.

DAVE BRIGGS, CNN ANCHOR: Months before the deadly school shooting in Colorado this week, 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. Why the teen's mom says it was both intentional and racist.

Welcome back to EARLY START and happy Friday. I'm Dave Briggs.

ROMANS: Happy tariff Friday.

BRIGGS: That's right.

ROMANS: I'm Christine Romans. It is 32 minutes past the hour.

Let's begin there, folks. It wasn't a bluff.

President Trump jacked up tariffs on thousands of goods -- dishwashers, frozen fish, baseball caps. Right now, about half of the products China sells to the U.S. now carry an import tax.

How we got here. Look, 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. And, China hit back with $50 billion in U.S. goods as well. These are

mainly ag products, devastating American soybean farmers.

But the biggest round yet came in September -- $200 billion in Chinese goods. Consumer goods like luggage, handbags, and hats. Beijing hit back with tariffs on $60 billion in U.S. exports in response.

Now that $200 billion in September, that was originally a 10 percent tax. Today, as of midnight, it's now 25 percent.

Now remember, it is U.S. importers, not China, who pay these tariffs and experts warn that there could be 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, guys, is not over. The president says he has started the paperwork for 25 percent tariffs on $325 billion more in Chinese imports. That would be every shoe, every pair of blue jeans. Everything you buy from China would cost 25 percent more.

He also has -- also has until May 18th to decide whether to impose global auto tariffs if he declares that car imports are a national security risk.

OK, so what are markets thinking about his right now? You really have a mixed picture here.

Asia, mixed. London, Paris, Frankfurt -- European markets up, bouncing back after several days of gains. But in the U.S. it still looks a little soft after four down days, Dave.

BRIGGS: Yes, but to your point, the Dow, Nasdaq, S&P 500 futures -- these are the two biggest economies on the planet and they're barely shrugging at a trade war?

ROMANS: It would suggest -- it would suggest that there could be investors who think the president's negotiating tactic might work. That he might end up actually getting a deal.

There are others -- supporters of the president -- who say look, it's a $20 trillion economy. The U.S. economy is strong. This is exactly the time to be hitting China.

[05:35:07] And, you know, but U.S. consumers eventually --

BRIGGS: Yes.

ROMANS: -- will pay. I mean, there's no question. But is the U.S. economy strong enough to sustain a -- withstand higher prices?

BRIGGS: It does have the leverage in this case.

Thank you, my friend.

It takes two to have a trade war. Beijing has threatened to retaliate for the tariff increase.

Matt Rivers is live for us at the Tianjin Port in China. Matt, what would retaliation look like in this case?

MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: It will take a couple of different forms Dave, but I think more likely than anything else is the amount of American goods coming into ports like this behind me. There's tens of billions of good that get shipped here from America. Well, they're going to get higher taxes.

Just like the U.S. raised taxes from 10 to 25 percent, I think you can expect China to do something very, very similar, raising its own tariff rates from 10 to maybe 25 percent.

We don't know exactly. Beijing hasn't said yet what they're going to do. That could come in a couple of hours, it could come tomorrow, but it will come soon.

The other thing they could do is look at market access-type issues for American companies.

So if you're an American pharmaceutical company, for example, and you're trying to license a new product with the Chinese government here -- well, perhaps they won't license that for you. It will make a delay and that could hurt your profit margins.

And then the other thing they could do would be more informal. If you're an agriculture producer and you get your product here to the port, maybe they let it sit on the docks and let the food spoil.

So there's a number of different ways Beijing could hurt the U.S. here. Rest assured they are going to try and do it.

BRIGGS: So there was that beautiful letter from Xi to Trump earlier in the week. What will be the message later today?

Matt Rivers, thank you, my friend -- appreciate it.

ROMANS: Yes, and they could also try to block mergers. They could also try to limit American investment in certain parts of its economy. And, China is a big part of sort of the global supply chain, so that could --

BRIGGS: Nonetheless, the leverage is on the U.S. side --

ROMANS: At this point, yes.

BRIGGS: -- at this point.

ROMANS: Well, let's talk about it. Let's bring in CNN's Michael Warren, live in Washington. Good morning, Michael. Nice to see you this morning.

BRIGGS: Good morning.

MICHAEL WARREN, CNN REPORTER: Good morning. ROMANS: I want to listen to -- I want to listen to something that the president said yesterday, explaining why he is being so tough on China and why he loves tariffs.

(BEGIN VIDEO CLIP)

TRUMP: I'm different than a lot of people. I happen to think that tariffs for our country are very powerful. You know, we're the piggy bank that everybody steals from, including China. We've been paying China $500 billion a year for many, many years.

(END VIDEO CLIP)

ROMANS: So, we know that the president has framed this incorrectly. It's not a piggy bank that other countries reach in and take the money. They -- we buy stuff from them. We get stuff in return for that. We get cheap shoes, we get cheap clothes, we get all these other things.

So, the president -- but the president's been consistent on how he frames it and he feels like America is losing to China.

At what point do you think, if American consumers start paying more for everything -- you know, 10, 15, 25 percent more for everything -- that it backfires on him?

WARREN: I think it's a real problem. You know, the president's right. He is different from most other people in that he views tariffs as a useful tool.

That's not really in line, as you said Christine, with sort of the reality of who ends up paying, right? It's consumers.

And I think that's the question that a lot of people, including supporters of the president, including people sometimes within the administration who say oh, these are simply negotiating tactics -- what the president really wants is free and open trade.

And I don't think that actually reflects the president's view. The president views tariffs and trade wars as an ability to sort of get back value from countries that are taking it from us.

I think where, sort of, the rubber might meet the road here is when consumers really do feel that squeeze. We do have a strong economy right now --

ROMANS: Yes.

BRIGGS: Yes.

WARREN: -- but I think people in Washington around the president are worried that that could -- that could trigger a contraction. We're not seeing it in the markets now but the political fallout from this -- we don't know what's going to happen in a year when an election is coming up.

ROMANS: Which, ironically, it could mean that you have to have the Fed cut interest rates. If you weaken the economy with tariffs --

BRIGGS: Boy, would that be ironic.

ROMANS: -- then the president gets what he wants twice.

BRIGGS: But more on the politics of this, Michael. We saw yesterday even baseball is divisive in this Washington, D.C. Everything fractures us in half, but not this issue.

You've got free trade conservatives who are gone --

ROMANS: AWOL.

BRIGGS: -- without a whisper. You've got fiscally conservative conservatives who are gone in Congress.

Is this the one issue the president may have found unity?

WARREN: Well look, I think that there's some pushback you get, particularly in the Senate among Republicans, and even now some Democrats which is interesting because Democrats have long been the much more skeptical of the kind of free trade regime that emerged out of the Cold War.

So you are seeing some Republican senators push back on this here and there.

BRIGGS: Who?

WARREN: Well, yes. You're seeing some from this agriculture states, like Joni Ernst from Iowa --

ROMANS: Yes.

WARREN: -- for instance.

The question, again, really is, is there going to be some sort of big action from Capitol Hill to really push back? It's really difficult because the president has so much authority on making these trade agreements and trade deals. There's not a lot Capitol Hill can really do.

[05:40:08] BRIGGS: And Ben Sasse, not a whisperer. That's --

ROMANS: Yes.

BRIGGS: -- surprising.

ROMANS: I don't know --

BRIGGS: New true (ph) fair trade.

ROMANS: When I -- when I talk to Midwesterners who -- you know, whose families are supported by farming or who have ties to farming, they still are giving the president a lot of leeway.

BRIGGS: A long leash.

ROMANS: You know, they think no one's had the nerve or the gall to take on China for --

BRIGGS: Yes.

ROMANS: -- multiple administrations. And they think he looks tough --

BRIGGS: Sure.

ROMANS: -- and that plays. I mean, honestly, that plays among his base in the Midwest.

Let's talk about the subpoena of Don, Jr. here. There -- what's going on? Give us the backdrop of --

You know, just a couple of days ago we heard from Mitch McConnell that the case is closed -- the case is closed. But now we know -- now we know that there has been a subpoena.

WARREN: That's right. Richard Burr, the Republican senator who is the chairman of the Senate Intelligence Committee, pushing for this subpoena and really cutting against where the majority leader is.

There's been a lot of unity among Senate Republicans on calling for the Mueller investigation to be protected, for Mueller to have some -- you know, have the room to do his investigation. Now that that's over, that's really given people like Mitch McConnell the sort of breathing room to say let's move on.

And I think what happened with Richard Burr calling for this subpoena has really sort of shaken things up. Yesterday, the senator from North Carolina spoke to the fellow Republican senators and made his case for it.

I think we're going to see a lot more divide and it's a difficult political move for him and for Republicans because this isn't, again, a dispute about trade or about a nominee that the president's put up for some position. This really touches the president's family. And if we know anything about President Trump, he's very sensitive about the sense that he personally is being attacked.

BRIGGS: Yes.

WARREN: Coming from a Republican senator, that's going to be a difficult row to hoe.

BRIGGS: Yes. This is the one issue you do not touch to this president and it should be interesting to see where this heads.

Michael Warren, great to see you, my friend. Enjoy the weekend.

ROMANS: Yes, have a great weekend, Michael.

WARREN: Thanks. ROMANS: Thank you.

BRIGGS: OK.

Flash flood warnings in effect for the Houston Metro area. Rain so intense the excess underground was pushing that manhole up. About 40 people trapped by flood waters with rainfall rates up to two to three inches an hour reported.

Emergency crews saved a person trapped in this car that had flipped and been submerged in a flooded ditch.

Hail and frequent lightning also -- lightning part of the mix.

ROMANS: Several creeks, rivers, and bayou in the area have reached their banks with water flowing into homes and businesses. More than 100,000 customers without power at the height of the storm. And schools are closed today in Fort Bend, Lamar, Huffman, Montgomery, and New Caney school districts.

More than 20 million people in parts of southeast Texas, Louisiana, and Mississippi all under a flash flood watch.

BRIGGS: All right. Coming up, imagine if you went on leave to fight cancer and had to pay the salary for your fill-in at work. This is happening to one California teacher.

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[05:48:00] ROMANS: A startling revelation out of Colorado. Months before the 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 is the anonymous parent is talking exclusively to CNN. Here's what she told Scott McLean.

(BEGIN VIDEO CLIP)

ANONYMOUS PARENT OF STEM SCHOOL STUDENT: 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.

(END VIDEO CLIP)

BRIGGS: The woman wants to stay anonymous because she fears retaliation. But, CNN confirmed she does have a student in the school.

She speaks of kids who had a rigorous math- and science-based academic program, little sleep, and started acting out aggressively.

(BEGIN VIDEO CLIP)

ANONYMOUS PARENT OF STEM SCHOOL STUDENT: I also saw violence against themselves happening with students and threats of suicide, cutting, attempted suicide, drug use that was getting pretty serious. Numerous reports from my children as they witnessed it and experienced it firsthand, and other students that witnessed it or experienced it firsthand. So, the pattern was pervasive.

(END VIDEO CLIP)

BRIGGS: The woman does say teachers were well-intentioned.

The school's executive director told CNN through a P.R. firm the school found no evidence to support the allegations made by the parent. In a statement, quote, "Like any school with more than 1,800 students, we receive complaints, all of which we take seriously and investigate promptly."

[05:50:04] The suspects in the shooting are due in a Colorado courtroom today.

ROMANS: All right, let's get a check on "CNN Business" this Friday morning.

The most-hyped IPO of the year turned out to be smaller than some expected. Uber priced its initial public offering at $45.00 a share, raising $8.1 billion. That made it one of the largest U.S. public offerings ever.

But that $45.00 is on the low end of its original proposed price range. At the top end, Uber would have been valued at $91 billion.

Uber is expected to make its Wall Street debut today.

Hashtags and content promoting vaccine misinformation still thrive on Instagram months after it said it would block that content.

Instagram said Thursday it will now block additional hashtags containing misinformation after "CNN Business" investigated and reported the hashtag #vaccineskill was still up on the app and appeared as a top result if you went on Instagram and searched for vaccines. After the report, #vaccineskill is now a blocked hashtag.

A person for Instagram said the process for addressing misinformation is ongoing.

We'll be right back.

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[05:55:03] 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. He says, in part, "I'm worried that Mark has surrounded himself with a team that reinforces his beliefs instead of challenging them."

(BEGIN VIDEO CLIP)

CHRIS HUGHES, CO-FOUNDER, FACEBOOK, ENTREPRENEUR: Every single time there's some new headline about the 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.

(END VIDEO CLIP)

BRIGGS: Hughes says Facebook should be forced to reverse its acquisitions of Instagram and WhatsApp.

Facebook responding, saying it "...accepts that with success comes accountability. But you don't enforce accountability by calling for the breakup of a successful American company."

ROMANS: All right.

It's not just measles making a comeback. According to the Centers for Disease Control, 736 cases of mumps have been reported in the U.S. so far this year. There have been 310 cases in just the last month.

Mumps is a vaccine-preventable illness and can be spread through saliva or mucus by coughing, sneezing or talking.

Also from the CDC, there's been a dramatic resurgence in hepatitis A among adults in the U.S. The report says hepatitis A infections increased by nearly 300 percent between 2016 and 2018.

Now, this is a highly-contagious virus also preventable by a vaccine. It is transmitted by eating contaminated food, through close personal contact or through drug use.

BRIGGS: Troubling video out of Utah. A bus driver closes the door on a student, trapping him and dragging him by his backpack for about 20 seconds. The 14-year-old coming dangerously close to the tires.

Now, the student's mom, Brenda Mayes, is sueing, saying the driver did it because her son is biracial.

(BEGIN VIDEO CLIP)

BRENDA MAYES, STUDENT'S MOTHER: Something failed. They have a responsibility when I put my kids -- send them off to school, they have a responsibility to make sure they're safe.

(END VIDEO CLIP)

BRIGGS: According to our CNN affiliate KSTU, the driver, John Naisbitt, says he retired three days after the incident to avoid being fired.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Would you say that you're racist?

JOHN NAISBITT, BUS DRIVER: Not at all, no.

UNIDENTIFIED FEMALE: Yes.

NAISBITT: Look at my dog. He's as black as can be (laughs).

(END VIDEO CLIP)

BRIGGS: That happened.

Naisbitt says the incident was staged because he had disciplined the boy's brother.

In response to the suit, the district says any claims of discrimination are being investigated.

ROMANS: A San Francisco teacher on medical leave battling breast cancer -- she's being forced to pay for her own substitute at the Glen Park Elementary School.

All district teachers get 10 paid days of medical leave each year. They can get another 100 sick days but the cost for the substitute teacher is deducted from the teacher's salary. In San Francisco, that's more than $200 a day.

The teacher in question has chosen to remain anonymous, but parents are speaking out.

(BEGIN VIDEO CLIP)

ABBY HIPPS, PARENT: She's wonderful. She's a beautiful, lovely, great teacher. She's one of the best teachers, so it's terrible.

(END VIDEO CLIP)

ROMANS: A GoFundMe page for that teacher has now stopped accepting donations. It received $13,000.

BRIGGS: Nice work if you can get it. HushHush, a London-based concierge service, is seeking a professional yacht tester. The actual work, testing and evaluating every socket, door, bed, and shower to ensure the yachts listed on the e-commerce site are up to snuff.

Applicants must be willing to really rough it though, living, eating, and sleeping aboard a luxury yacht for a week. Each review pays about $1,300, potentially up to $65,000 a year. And by the way, no prior yachting experience is needed.

And with that, I've got to run. Have a nice weekend (leaves his chair).

ROMANS: Sign me up.

BRIGGS: And with that, I'll see you.

(LAUGHING)

ROMANS: All right, Briggs just went to get another job.

Thanks for joining us. I'm Christine Romans. Dave Briggs will be back on Monday because I know he has to be back on Monday.

"NEW DAY" starts right now.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The U.S. tariffs have kicked in. China will now have no choice but to retaliate.

TRUMP: I'm representing the USA and we're not going to be taken advantage of anymore.

UNIDENTIFIED MALE: Nobody's going to get off lightly. At the end of the day, the consumer in the U.S. is going to feel most of the brunt of it.

COOPER: You think the evidence is there to prosecute?

COMEY: It sure looks like it's there.

UNIDENTIFIED MALE: With the president's supporters it doesn't make any difference. Comey has been tarnished and discredited.

UNIDENTIFIED MALE: But we have to take his word and his weight here seriously. He's not out of line.

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY with Alisyn Camerota and John Berman.

JOHN BERMAN, CNN ANCHOR: Welcome to our viewers in the United States and all around the world. This is NEW DAY. It's Friday, May 10th, 6:00 here in New York.

The breaking news this morning, you are waking up to a trade war. It's on and it's bigger than when you went to sleep, and it has the potential to explode over the next several hours.

So, at the stroke of midnight, the president raised tariffs to 25 percent on $200 billion worth of Chinese.

END