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Early Start with John Berman and Zoraida Sambolin

National Economic Director, Larry Kudlow, Saus US-China Trade War Affecting U.S. Economy; White House Accused Democrats of Not Following Rules and Norms; House Republicans Criticizes Rep. Rashida Tlaib Over Remarks On Holocaust; Department of Homeland Security Asked Military for Help in Dealing with Influx of Migrants; Hollywood Producers to Stop Filming in Georgia After Abortion Bill Passage; Actress Felicity Huffman to Plead Guilty to U.S. College Admission Scam; Mike Pompeo heads to Brussels to Discuss Iran; Myanmar Plane Landed Without Front Wheels; U.S. 2020 Democratic Candidates Views on Facebook Break Out; TV actress and singer Peggy Lipton Dies at Age 72; A Texas High School Student Broke 29-year Record for 100-Meter Dash; Kawhi Leonard's Buzzer Beater Puts Toronto Raptors to Eastern Conference Finals. Aired 4-4:30a ET

Aired May 13, 2019 - 04:00   ET

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

[04:00:00] (COMMERCIAL BREAK)

CHRISTINE ROMANS, CNN HOST: Wall Street braces for China to retaliate as the Trump administration admits tariffs hurt American companies too.

DAVE BRIGGS, CNN HOST: Secretary of state Mike Pompeo right now en route to talks on Iran as the U.S. deploys more missiles in the Middle East.

(BEGIN VIDEO CLIP)

REP. ADAM SCHIFF (D-CA): I think if you fine someone $25,000 a day to their person until they comply, it gets their attention.

(END VIDEO CLIP)

ROMANS: Frustrated Democrats consider hefty fines for Trump officials who blow off congressional subpoenas.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Defended by Simmons. Is this the dagger?

(END VIDEO CLIP)

BRIGGS: This incredible bouncing buzzer beater gives Toronto a game seven playoff victory over Philly. Oh, the emotions of the Sixers and their fans swing the other way on a friendly roll. Look at the fans there.

Good morning, everyone, welcome to "Early Start." Happy Belated Mother's Day to all you wonderful moms. ROMANS: Thank you.

BRIGGS: And you, my friend, hope you had a good one. I'm Dave Briggs.

ROMANS: I did. And I'm Christine Romans. It is Monday, May 13th. It is 4:00 a.m. in the east, 4:00 p.m. in Beijing, and let's begin with stock futures pointing sharply lower right now.

Let's take a look at how the world is reacting to those tariffs, the Trump tariffs, Tokyo, Shanghai down; Hong Kong up a little bit. European markets looks like they're all down slightly here. They're opening just now for London folks. So, they're starting to react here.

And Dow features pointing to a 300-point decline. Look, you've got the reality here that Americans are going to have to start dealing with more expensive goods. Tariffs on thousands of items including dish washers, frozen fish, handbags and clothes jump to 25 percent on Friday. Right now, tariffs hit roughly half of the products that China sells to the U.S. And President Trump's economic adviser, Larry Kudlow, admitted on Fox Sunday that it is American companies who pay those tariffs.

(BEGIN VIDEO CLIP)

CHRIS WALLACE, FOX NEWS SUNDAY HOST: It's U.S. businesses and U.S. consumers who pay, correct?

LARRY KUDLOW, DIRECTOR, NATIONAL ECONOMIC COUNCIL: Yes, to some extent. Yes, I don't disagree with that. Again, both sides -- both sides will suffer on this.

(END VIDEO CLIP)

ROMANS: The president still claimed falsely the U.S. would be taking in tens of billions of dollars in tariffs from China. No, they're taking those tens of billions of dollars of tariffs from you. And this trade war is not over. The administration says it has begun the process on raising tariffs on all remaining imports from China, about $300 billion worth.

So, for now, today, iPhones, toys and tennis shoes have avoided these extra import taxes. But in a new round of tariffs, those will be included.

Folks, this is what a trade war looks like. China's retaliation hitting U.S. farmers really hard at the worst possible time. Farmers -- this is the first week of planting season, right? Farmers can't get into the fields because of flooding. And last year's soybean crop is rotting in storage.

Until last year, one in three rows of soybeans grown in the U.S. was shipped to China. The trade war ended that. Agricultural secretary, Sonny Perdue, said Friday the president has asked the USDA for a plan to help farmers affected by tariffs, adding POTUS loves his farmers and will not let them down. Now, Kudlow said Sunday there is a strong possibility that Trump will meet Chinese President Xi Jinping at the G20 Summit -- Economic Summit in Japan next month. Dave, this might have to be mano-a-mano to figure out next steps here in this trade way.

BRIGGS: We're doubling down on the chemistry between two world leaders, sounds similar to the North Korean situation. China has threated to take necessary countermeasures in response to the U.S. escalation of this trade war.

Matt Rivers joins us live from Beijing. Matt, good morning to you. Chinese, have they offered anymore specifics about what this retaliation might look like?

MATT RIVERS, CNN CORRESPONDENT: Not yet, Dave, almost somewhat surprisingly, I think. But I think it goes to show you that China is trying to figure out exactly how they're going to retaliate because they can't match the U.S. in terms of dollar for dollar tariffs.

The U.S. sends a lot fewer goods here to China than the opposite, China sending to the United States. So, if China wants to retaliate, they can't just put the same amount of tariffs on the equivalent amount of U.S. products. They have to get more creative than that.

We've talked a lot over the last couple of days about what that might mean. It might mean taking existing tariffs on American imports here to China and raising those rates. It could mean market access issues for American companies, all the issues that Christine just laid out. That's what's going to hurt the American consumer just because of what the U.S. Side has done so far.

That's not to say what's going to hurt both sides after the Chinese government goes forward with their retaliation, and we need to see exactly what that's going to look like going forward.

[04:04:56] But one interesting thing is that Chinese state media has already picked up on Larry Kudlow's comments in the U.S. on Sunday, basically saying, look, even the president's top economic adviser saying this is going to hurt the American economy.

So, Chinese state media using that as a propaganda point, certainly not talking about how it's going to hurt the Chinese economy, which it absolutely will, but Larry Kudlow's remarks reverberating worldwide here on Monday in Beijing.

BRIGGS: That's what I want to follow up here, is the Chinese economy. What's the backdrop there? How has their economy taken to these tariffs? I know transparency is often not their strong suit, but how is the economy there?

RIVERS: I mean, I think most economists will tell you the Chinese economy is doing worse right now than the American economy. And that is actually the U.S. that has more leverage given what we're seeing in China. The Chinese can afford to deal with a drawn out trade war as long as the United States could, for example. Now, you could find others that would make the counter point there, Dave, that the Chinese economy can withstand that because of different political systems and whatnot. But that's the broader point here is that this is going to hurt the Chinese economy.

And if you are in favor of what President Trump is doing, he is saying -- people would say now is the time to fight China on this kind of battle to get them to make the kinds of structural economic changes the Trump administration wants them to because China -- Chinese economy -- the China economy can't hold up as well as the U.S. economy at least in this moment.

BRIGGS: Right. They'll continue to push a stimulus into the economy. Matt Rivers live for us in Beijing. We'll check with you next half hour. Thank you.

ROMANS: And Dave, one wonders how much the president will tolerate in terms of the stock market tumbling, right? If you're down a couple percentage points today, you know, down a little more next week, I mean this is a real uncertainty for investors, how much -- because he looks at the stock market like it's his personal score card.

BRIGGS: And bare minimum to your point, it looks like late June, this could go on at least then the next time Xi and Trump could meet.

ROMANS: I will say there are market participants who keep saying people who, you know, market professionals who say the president looks strong and that's something that might play for him.

(CROSSTALK)

BRIGGS: Politically he's got support from both parties.

ROMANS: All right. The White House taking a new attack, pushing back against widening House investigations, accusing Democrats of refusing to abide by rules and norms of congressional oversight authority. It's a mouthful.

A White House statement says Democrats are demanding documents they know they have no legal right to see, including confidential communications between the president and foreign leaders and grand jury information that cannot be disclosed according to the law. This White House will not and cannot comply with unlawful demands made my increasingly unhinged and politically motivated Democrats.

President Trump mocking Democrats' claim the country is heading into a constitutional crisis with this tweet. The Democrats new and pathetically untrue sound bite is that we are in a constitutional crisis, calling the whole thing as sad joke.

The ramped up White House campaign comes amid frustrating -- increasing frustration among Democrats over what they see as unprecedented across the board stone walling by the administration. Last week, the president invoked blanket executive privilege to block Democrat's access to the full unredacted Mueller report.

Here's House Intelligence chairman, Adam Schiff, on Sunday.

(BEGIN VIDEO CLIP)

SCHIFF: Here, the Trump administration has decided to say a blanket no, no to any kind of oversight, whatsoever, no witnesses, no documents, no nothing, claiming executive privilege over things that it knows there is no basis for. There's no executive privilege over the hundreds of thousands of documents regarding events that took place before Donald Trump was president. You can't have a privilege -- an executive privilege when you're not the executive. So, they know that vast categories are in applicable to the privilege here. So they're just stone walling.

(END VIDEO CLIP)

ROMANS: Schiff telling ABC News that Congress has other tools to break through the stone walling.

(BEGIN VIDEO CLIP)

SCHIFF: Look, we are going to have to consider other remedies like inherent contempt where if the courts take too long, we use our own judicial process within the Congress.

Look, I think, if you fine someone $25,000 a day to their person until they comply, it gets their attention.

(END VIDEO CLIP)

ROMANS: Among the oversight action coming this week, a federal judge is set to rule Tuesday on a House subpoena of the president's financial records. And Friday is the deadline for the IRS to respond to another subpoena, this one for Trump's tax records.

BRIGGS: House Republicans denouncing Congresswoman Rashida Tlaib for comments the Michigan Democrat made about the holocaust on a Yahoo News podcast. Listen.

(BEGIN VIDEO CLIP)

RASHIDA TLAIB, (D-MI): It's kind of a calming feeling I always tell folks when I think of the holocaust and the tragedy of the holocaust and the fact that it was my ancestors, Palestinians, who lost their lands and some lost their lives, in the name of trying to create a safe haven for Jews post the holocaust post the trap (ph). And I love the fact that it was my ancestors that provided that, right, in many ways. But they did it in a way that took their human dignity away.

(END VIDEO CLIP)

[04:10:00] BRIGGS: But two top House Republicans are falsely accusing Tlaib of using the term calming feeling to describe her view of the holocaust itself. I know it already whipped (ph). Steve Scalise said there's nothing calming about 6 million Jews being murdered and Liz Cheney of Wyoming calling on Speaker Pelosi to take action against Tlaib for her, quote, "anti-semitism."

ROMANS: All right. The Department of Homeland Security asking the military for more help to deal with the influx of migrants coming to the U.S. Administration officials tell CNN the request includes single occupancy tents for large numbers of migrants.

Customs and Border Protection predict it will surpass half a million migrants crossing into the U.S. so far this year. The Pentagon says acting defense secretary, Patrick Shanahan, is considering the request. He discussed additional ways to support the border mission with Acting Homeland Security Secretary Kevin McAleenan as they flew to Texas to inspect the border area.

BRIGGS: Some Hollywood producers vowing to stop filming in Georgia after Governor Brian Kemp signs a controversial new fetal heartbeat abortion bill into law. David Simon, the producer of The Wire and the The Deuce tweeting, "We will pull Georgia off the list until we can be assured the health options and civil liberties of our female colleagues are unimpaired."

And Christine Vachon of Killer Films says they will no longer consider Georgia as a viable shooting location until this ridiculous law is overturned. The MPAA, representing the five major film studios, says it's monitoring legal efforts to reverse the anti-abortion law.

ROMANS: All right. Actress Felicity Huffman is due to appear in federal court in Boston later today to formally enter her guilty plea in the college admission scam. Huffman is charged with conspiracy to commit fraud. She admitted paying $15,000 to a fake charity to facilitate cheating for her daughter on the SATs. Huffman is one of more than a dozen parents who agreed to plead guilty in connection with the scam. The scam's name, Operation Varsity Blues. Federal prosecutors planned to ask for a sentence of 4 to 10 months jail for Huffman.

BRIGGS: All right. Ahead, the secretary of state cancelling a planned trip to Moscow today, more on where he is headed and why.

ROMANS: And a passenger jet lands without its front wheel.

[04:15:00] (COMMERCIAL BREAK)

BRIGGS: Secretary of State Mike Pompeo cancelling a planned trip to Moscow and instead making a last minute detour this morning to Brussels. At the top of the agenda, Iran. Pompeo will talk with Britain, Germany, and France about what the U.S. views as an increasing threat from Iran to American forces in interest.

In the meantime, the Pentagon announcing more patriot missiles will be deployed to the Middle East in response to the increased tensions with Iran. Senior international correspondent, Fred Pleitgen, on the phone with us from Teheran. Fred, good morning to you, what is the response there?

FRED PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (on the phone): Hi, Dave. Well, the Iranians have been extremely angry. On the one hand, they're accusing the Americans of being the ones who were ratcheting up the tension, especially Secretary of State Mike Pompeo and also National Security Adviser John Bolton.

Of course, Iran's foreign minister, he came out not too long ago and said he believes that President Trump does not want war, but he believes some of his advisers do want war. At the same time, of course, you do have some pretty bellicose rhetoric coming from the Iranians as well, especially over the weekend, Dave. There were some pretty senior Iranian military commanders have come out and said that they could if they did have an escalation with America hit American bases in the Middle East and also American naval assets as well.

Of course, we have been talking about at the fact that the Abraham Lincoln strike group is in the area of the Persian Gulf. So, that's certainly one of the things that the Iranian commander said that they could it.

And speaking of that waterway, the Persian Gulf had troubling incidents that took place there on Sunday. There were some tanker ships that were apparently sabotaged, some of them Saudi, some of them from the UAE, both nations condemning that. The Iranians saying they weren't behind it. But at the same time, of course, the U.S. did warn on Thursday that one of the retaliation methods that the Iranians might have might be to attack merchant ships in the Persian Gulf. Dave?

BRIGHS: All right. Fred Pleitgen live for us in Teheran this morning. Thank you, sir.

Back here, a pilot for a regional subsidiary of American Airlines is charged in a triple homicide in Kentucky, 51-year-old Christian Martin accused of killing a couple and their neighborhood back in 2015. He was arrested Saturday at the airport in Louisville.

A lawyer representing the family of the couple who was killed says the husband, Calvin Phillips, was due to testify against martin in a court case in 2015 when he and his wife were murdered. Martin is being held without bond. He is being placed on administration suspension by PSA Airlines pending the outcome of the investigation and court proceedings.

ROMANS: A miraculous landing in Myanmar, the captain bringing a passenger plane down on its rear wheels after the front landing gear failed. None of the 89 passengers on board were hurt. They scrambled off the plane after a 25 second long skid on the nose of the aircraft. Myanmar Airlines Flight 103 was headed form Yangon to Mandalay when the pilot realized there was a problem. He circled the airport twice before landing the plane. Wow.

BRIGGS: Shocks. OK. Coming up, two 2020 candidates give their take on breaking up Facebook, next.

ROMANS: And the fastest high school kid in history, watch him in action, ahead.

[04:20:00] (COMMERCIAL BREAK) ROMANS: 2020 presidential hopefuls weighing in on a "New York Times" op-ed by Facebook co-founder Chris Hughes calling for the social network's break up. During an interview on ABC's This Week, Senator Cory Booker said the call to split up the company sounded more like a Donald Trump thing. Instead, he framed Facebook's dominance as part of a wider issue.

(BEGIN VIDEO CLIP)

SEN. CORY BOOKER (D-NJ), 2020 PRESIDENTIAL CANDIDATE: I don't care if it's Facebook, the pharma industry, even the agricultural industry. We have had a problem in America with corporate consolidation that is having ill effects. We need a president that's going to enforce antitrust laws in this country. I will be that person.

(END VIDEO CLIP)

ROMANS: Senator Kamala Harris raised the possibility of a major regulatory change by treating Facebook as a public utility. Here's what she told CNN's Jake Tapper on State of the Union.

(BEGIN VIDEO CLIP)

SEN. KAMALA HARRIS (D-CA), 2020 PRESIDENTIAL CANDIDATE: There are very few people that can actually get by and be involved in their communities or society or in whatever their profession without somehow, somewhere, using Facebook.

[04:25:04] It's very difficult for people to be engaged in any level of commerce without it. So, we e have to recognize it for what it is. It is essentially a utility that has gone unregulated. And far as I'm concerned, that's got to stop.

(END VIDEO CLIP)

ROMANS: The Federal Trade Commission also debating what to do with Facebook. The company set to pay a fine up to $5 billion to the agency over its handling of user data and privacy violations following the Cambridge Analytica scandal.

BRIGGS: Peggy Lipton, the actress and singer best known for her role in the groundbreaking TV series, The Mob Squad, has died. The Mob Squad, if I said mob, Lipton rocketed to fame playing one of the three undercover hippy cops in a series that ran from 1968 to 1973.

Her role earned her four Golden Globe and Emmy nominations including a win a Golden Globe win in 1971. She later married Quincy Jones and had two daughters who both became actors. Lipton returned to TV in 1990 starring in the original Twin Peaks series. She was diagnosed with colon cancer in 2004. Peggy Lipton was 72.

ROMANS: All right. A Texas teenager just broke a 29-year-old national high school record for the fastest 100-meter dash in history. That is Matthew "the White Lightening" Boling of Houston Strake Jesuit High School crossing the finish line in 10.13 seconds, breaking the old mark by 2/100 of a second. Boling actually ran a 9.98 two weeks ago, but it was wind aided remember?

BRIGGS: Right.

ROMANS: And didn't count. He'll be attending the University of Georgia in the fall. Blink and you miss it. Congratulations.

BRIGGS: All right. Game seven of the NBA playoff series between the Toronto Raptors and Philadelphia 76ers ending in dramatic fashion.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's off to Leonard, defended by Simmons, is this the dagger?

(END VIDEO CLIP)

BRIGGS: Needed a little help, didn't it? Kawhi Leonard's remarkable bouncing buzzer beater giving Toronto a 92-90 win and sending his team to the Eastern Conference finals. Leonard was awesome, 15 of his game high 41 in the final quarter. There's the fans outside. The Raptors now move on to play the Milwaukee Bucks in the conference finals. Portland Trailblazers will face Golden State in the west starting on Tuesday.

ROMANS: All right. The U.S. trade war with China about to ramp up again. How will Beijing retaliate and how will it affect you? That's next.

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