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Early Start with John Berman and Zoraida Sambolin

U.S.-China Trade War Intensifies; White House Slams Democrats- Led House Investigations; House Representative Tlaib Under Fire for Holocaust Comment. Aired 5-5:30a ET

Aired May 13, 2019 - 05:00   ET

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

[05:00:00] CHRISTINE ROMANS, CO-HOST, EARLY START: China sells to the U.S. Now, the president falsely states that China pays those tariffs. His economic adviser Larry Kudlow reluctantly admitting on "Fox" Sunday what everybody else already knows.

U.S. companies pay tariffs, not China.

(BEGIN VIDEO CLIP)

CHRIS WALLACE, FOX NEWS: It's not China that pays tariffs, it's the American importers, the American companies that pay what in effect is a tax increase and often times passes it on to U.S. consumers.

LARRY KUDLOW, DIRECTOR OF THE UNITED STATES NATIONAL ECONOMIC COUNCIL: Fair enough. In fact, both sides will pay. Both sides will pay in these things.

WALLACE: But the tariff on goods coming into the country, the Chinese aren't paying.

KUDLOW: No, but the Chinese will suffer GDP losses and so forth with respect to a diminishing export market and goods that they may need for their own.

WALLACE: It's U.S. businesses and U.S. consumers who pay, correct?

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

(END VIDEO CLIP)

ROMANS: Breaking from his boss who falsely claimed the U.S. will be, quote, "taking in tens of billions of dollars in tariffs from China." OK, so this trade war is not over. The administration says it's begun the process of raising tariffs on everything else the U.S. imports from China. That's another $300 billion worth.

For now, iPhones, toys and tennis shoes, they've avoided taxes, but in a new round of tariffs, those will be included. And guys, this is what a trade war looks like. China's retaliation hitting U.S. farmers especially hard here at the worst possible time.

Farmers right now, first week of planting season, they 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, Trump has asked the USDA for a plan to help farmers affected by tariffs.

We don't know what that will look like. Is that going to be another bailout? Is this -- the American president picking winners and losers in the American economy. Something that the Obama administration and Republicans hated. He said "POTUS loves his farmers and will not let them down." Kudlow said Sunday, there's a strong possibility that Trump will meet with the Chinese President Xi Jinping at the G20 Summit next month in Japan.

This might have to be man-to-man from --

DAVE BRIGGS, CO-HOST, EARLY START: Yes, but that's late June. so this thing could go on for a while --

ROMANS: A lot of risk from investors --

BRIGGS: And now there's the question of how does China retaliate? What do they do, and what is the state of their economy? Let's go to Matt Rivers live in Beijing for us this morning. And Matt, necessary counter measures is what they're saying, but what does retaliation look like in this case, and what is the state of the Chinese economy?

MATT RIVERS, CNN CORRESPONDENT: Well, it could take a number of different forms, Dave. We're really just waiting on word from China's government exactly what their retaliation is going to look like. And they can do a number of different things. What they can't do is match the United States dollar for dollar when it comes to tariffs because the U.S. ships far fewer goods here to China than China ships to the United States.

And China has actually already put tariffs on the majority of American imports here to China. So what are they going to do? Well, you could see them certainly raise the existing tariff rates on American imports here. That's going to make those products more expensive.

They could also look at things like market access, make life harder for American companies here trying to do business in China. And they could also maybe put on more agricultural restrictions. You heard Christine just talk there about how this has been devastating this whole trade war for U.S. farmers.

Well, it could get worse if China wants it to be that way. So there's a number of different routes that they could take here. The fact that they haven't announced what they're going to do yet, I think it's interesting and it shows you that they're trying to figure out a relatively complicated way to respond.

As for the state of China's economy, Dave, look, most people I think would tell you that China's economy at least right now is in worse shape than the United States, and the Trump administration, if you believe what they're doing is the correct move is taking advantage of that, saying that the United States has never had more leverage to force China to the table than they do right now.

The question is, how is that going to continue long-term? China's government pretty resilient so far, not showing any signs of backing down. How long does that last? This is a question that we have been asking a long time, and with this trade war really having no end in sight at least at the moment, you know, it really is just one of these time will tell situations, Dave.

BRIGGS: Matt, and at the heart of this is what will China do in terms of implementing changes into law? Is that the big hang-up --

RIVERS: Yes --

BRIGGS: Between the two sides?

RIVERS: Yes, absolutely. The United States is basically asking China to change the way it has operated its economy for the better part of three decades now. I mean, you have state-run businesses that are given subsidies by China's government, and the United States and other countries around the world, is not just the United States says that is unfair, that China should not be allowed to do that because it gives Chinese companies unfair advantage over American ones.

It's a perfectly valid argument that the U.S. and others have made. But China, basically to change that would have to say you know what, we're going to let other countries write our laws for us. That's what the Chinese side is saying here. That's what they're balking at writing these kinds of structural changes that the United States wants into law.

[05:05:00] And because that is the main sticking point, it's unclear where the middle ground is --

BRIGGS: Yes --

RIVERS: Between the United States and China. How does this end? We just don't know.

BRIGGS: Terrific context there from Matt Rivers live in Beijing. Thank you, sir. Now, Romans, it would appear that Xi Jinping thought there would be a symbolic deal that President Trump would take the bait and take a win --

ROMANS: Right --

BRIGGS: And he's not. He's not backing down.

ROMANS: And look, trade hawks around the president are jubilant right now. Because the -- America has all kinds of negotiations with the Chinese for years, and the Chinese agree to something and then trade negotiators say, no they don't -- they back off. That's why they want it in law --

BRIGGS: And that's why you have to put it in law --

ROMANS: They want it in law because -- BRIGGS: Yes --

ROMANS: They want them to be able to, you know, to follow through.

BRIGGS: No backing down --

ROMANS: Right --

BRIGGS: In sight --

ROMANS: The White House has a new strategy to push back against the congressional investigations. It's accusing House Democrats of violating rules and norms of congressional oversight. 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 under the law.

The White House will not and cannot comply with unlawful demands made by increasingly unhinged and politically-motivated Democrats.

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

Democrats meanwhile angry at what they see as an unprecedented across the board stonewalling effort by the administration.

ROMANS: Last week, the president invoked blanket executive privilege to block Democrats' access to the full unredacted Mueller report. Here's House Intelligence Chairman Adam Schiff on Sunday.

(BEGIN VIDEO CLIP)

REP. ADAM SCHIFF (D-CA): 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 is 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 inapplicable to the privilege here. So they're just stonewalling.

(END VIDEO CLIP)

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

(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. That one is for Trump's tax returns.

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

(BEGIN AUDIO CLIP)

REP. RASHIDA TLAIB (D-MI): There's a 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 land and some lost their lives in the name of trying to create a safe haven for Jews post the holocaust, post the tragedy.

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 AUDIO CLIP)

BRIGGS: So two top House Republicans are falsely accusing Tlaib of using the term "calming feeling" to describe her view of the holocaust itself. Minority whip Steve Scalise says "there is nothing calming about 6 million Jews being murdered." And Liz Cheney of Wyoming is calling on Speaker Pelosi to take action against Tlaib for her quote, "vile anti-Semitism."

ROMANS: 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 tells CNN the request includes single occupancy tents for large numbers of migrants. Customs and Border Protection predicts it will surpass half a million migrants crossing into the U.S. so far this year.

The Pentagon says acting Defense Secretary Patrick Shanahan, he's considering a request -- he discussed additional ways to support the border mission with the acting Homeland Security Secretary Kevin McAleenan, and over the weekend 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 heart beat abortion bill into law. David Simon; producer of the "The Wire" and "The Deuce" tweeting, "we will pull Georgia off the list until we can be assured health options and civil liberties of our female colleagues are unimpaired."

And Christine Vachon of Killer Films says they will, quote, "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 is monitoring legal efforts to reverse the new anti-abortion law."

[05:10:00] ROMANS: Actress Felicity Huffman due to appear in federal court in Boston later today, she will formerly enter her guilty plea in the college admissions scam. Huffman is charged with conspiracy to commit fraud. She admitted paying 15 grand to a fake charity to facilitate cheating for her daughter on the SATs.

Huffman is one of more than a dozen parents who agree to plead guilty in connection with the scam, dubbed "operation varsity blues". Federal prosecutors plan to ask for a sentence of up to 10 months in jail for Huffman.

BRIGGS: All right, ahead international, tensions are rising, the Secretary of State canceling a planned trip to Moscow today. More on where he's headed and why? Next.

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

(COMMERCIAL BREAK)

[05:15:00] 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 is Iran. Pompeo will talk with Britain, Germany and France about what the U.S. views as an increasing threat from Iran to American forces and interests.

Meantime, the Pentagon announcing more patriot missiles will be deployed to the Middle East in response to the increased tension. Senior international correspondent Fred Pleitgen live this morning into Iran. Fred, good morning to you.

This feels like a very tenuous situation with remarks back and forth. Mike Pompeo putting all the blame here on John Kerry in a new interview with "CNBC", but what's the Iranian response?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, certainly, there's a strong response coming from the Iranians, Dave, and they are quite angry at the Trump administration. They accuse the Trump administration both of psychological warfare against Iran and economic warfare as well.

Claiming that the U.S. and the Trump administration wants to bring Iran to its knees. Now, it's interesting because they basically say this in two ways. On the one hand, the Iran's Foreign Minister says that he does not believe that President Trump himself wants an escalation, wants war with Iran. However, they say they do believe that for instance, Secretary of State Mike Pompeo, National Security adviser John Bolton are more so inclined to have a possible war with Iran.

Now, on the one hand, the Iranians say that's obviously not something they want, but on the other hand, they are also putting out some pretty tough talk themselves. There's some senior commanders of the Revolutionary Guard Corps who have come out and said that they see increased American forces in this region as an opportunity because they for instance think that the Abraham Lincoln carrier strike group is a sitting target there in the Middle East right now.

Of course, one of the things that they keep flagging is their ballistic missile program and all the missiles that they have. And all of this, of course, playing out in the region of the Persian Gulf. And speaking of that, Dave, it's a pretty big incident that happened there over the weekend.

Just yesterday, in fact, there were four tanker ships that apparently came under some sort of sabotage attack. Some of them were from Saudi Arabia, some from them were from the UAE. Those countries have condemned it, the Iranians have condemned it as well. It's not clear who is behind this yet, the U.S. has said that they believe the Iranians could resort to trying to disrupt commercial traffic to the strait.

However, at this point in time, no one being blamed for that. But again, an extremely tense situation taking place there, of course here in Tehran as well, Dave.

BRIGGS: To say the least, Fred Pleitgen live for us in Tehran this morning, thank you.

ROMANS: All right, breaking news. A Swedish prosecutor has announced a decision on whether she will reopen a preliminary investigation into rape charges against WikiLeaks founder Julian Assange. That sexual assault investigation is what prompted Assange to seek asylum there in the Embassy of Ecuador back in 2012.

You can see that video, he was evicted last month. CNN's Anna Stewart is live in London. What's the decision, Anna?

ANNA STEWART, CNN REPORTER: Yes, the decision is to reopen the investigation into the rape allegation from 2010. And this has been a very long case, there were several sexual allegations, some of which actually expired due to the statute of limitations while Julian Assange was seeking refuge in the Ecuadorian Embassy.

Now, the one that was outstanding was this rape allegation, that doesn't expire until next August. The Swedes had closed down the investigation because Julian Assange was in the embassy, so they were unable really to progress with the case. But they always said they could reopen it if new information came to light or if the circumstances changed.

Which of course, it has because in April, he was arrested, he was removed from the embassy, and currently he is facing 50 weeks in prison in the U.K. for skipping bail. Now, this is obviously incredibly complicated now because the U.S. want to extradite him on charges to commit computer intrusion related to WikiLeaks.

But now there's obviously the possibility that the Swedish will issue a European arrest warrant and then they may want to extradite him to Sweden as well. And in that case, the British Home Secretary will have to decide which takes precedence.

ROMANS: Yes, fascinating. All right, thank you so much for that, Anna Stewart for us in London. Thanks.

BRIGGS: Miraculous landing in Myanmar, the captain brings 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 from Yangon to Mandalay when the pilot realized there was a problem. He circled the airport twice before landing the plane --

ROMANS: Terrifying --

BRIGGS: A close call, but well done by that captain.

ROMANS: All right, thousands of hearts skipped a beat last night, watching this shot bounce. Coy Wire has this morning's "BLEACHER REPORT" next.

[05:20:00] (COMMERCIAL BREAK)

BRIGGS: Well, the NBA playoffs providing more drama than even the "Game of Thrones" episode last night. No spoilers on that one, but we will spoil the NBA playoff for you. Coy Wire has a pair of thrilling game sevens in the BLEACHER REPORT, some heartbreak on both sides. What a game last night in Toronto, my friend.

COY WIRE, CNN SPORTS REPORTER: Absolutely. This Raptors game winning buzzer beater, Dave, over the 76ers in Toronto. It was historic. It brought tears of joy and pain. Simply awesome. The scores all tied up with under 4 -- with about 4 seconds to go.

And the Raptors Kawhi Leonard, he tries to find a lane, but he is forced all the way into the corner, he rises at the buzzer and in. Look at the crowd. Leonard had to get past two defenders including over 7-footer Joel Embiid. The ball bounced on the rim four times before it dropped.

Raptors win 92-90. Listen to the reaction from the fans watching outside the arena. And afterwards, the emotions were raw, an outburst of tears from 76ers star Joel Embiid.

[05:25:00] And from the usually stalled Leonard, a rare outburst of a different kind, he unlocks legend status. His first shot in his first game seven, game-winning buzzer beater in NBA playoff history.

(BEGIN VIDEO CLIP)

KAWHI LEONARD, FORWARD, TORONTO RAPTORS: That's something I never experienced before, game seven, game-winning shot. So it was, you know, a blessing to just be able to, you know, get to that point and make that shot, and feel that moment. And it's something, you know, I could look back on in my career.

(END VIDEO CLIP)

WIRE: Rapper and Toronto sports fan Drake wasn't at the game. He's known for being the bad luck charm on his favorite teams and athletes. Well, he reversed the curse for one night at least, Drake posting a video on Instagram of him wearing a pair of 6ers shorts. We'll see if he shows up for Toronto's next series against Milwaukee in the Eastern Conference finals.

Now, another decisive game-seven thriller, Blazers on the road in Denver, finding themselves down 17 at the half as Portland has one of the most lethal back courts in the game. Damian Lillard struggled, but C.J. McCollum was lights out, 37 points on offence and that block on defense, the fourth quarter effort, chasing Jamal Murray to help seal the largest game seven comeback in the last 20 years.

McCollum compared this block to another memorable playoff block from his fellow Ohio native LeBron James swatting Andre Iguodala in his 2016 NBA finals.

(BEGIN VIDEO CLIP)

CHRISTIAN JAMES MCCOLLUM, PORTLAND TRAIL BLAZERS: I think they've got it, Brox(ph) star, shout-out to my guy Brox(ph).

UNIDENTIFIED MALE: It was a mini version of Bryan, block on Iggy some years ago. Definitely, it didn't get up as high, but it was a cool play, and something that I will remember forever. I might need a picture of that one, damn, they're growing up.

(END VIDEO CLIP)

WIRE: Blazers win to advance to the Conference finals for the first time since 2000, and that sets up an epic sibling rivalry. The Blazers Seth Curry taking on big brother and Warriors star Steph Curry. Their parents said they are going to flip a coin to decide which parent is going to wear which jersey. I guess, you know, a good predicament to be in if you're a parent.

BRIGGS: Pretty good genes in that family as well. The question though, will Kevin Durant return for that series? That may be the central question. But it's been an incredible NBA finals. Coy Wire, thank you my friend.

WIRE: You're welcome.

BRIGGS: Romans, what's coming up?

ROMANS: All right, a battle of a different kind. A trade war with China. It's not a game, it's intensifying here. How will Beijing retaliate and how will it hurt you? That's next.

(COMMERCIAL BREAK)

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