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Early Start with John Berman and Zoraida Sambolin
U.S.-China Trade War Continues; U.S. Sending Patriot Missiles To The Middle East; Sweden Reopens Rape Case Against Julian Assange. Aired 5:30-6a ET
Aired May 13, 2019 - 05:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(COMMERCIAL BREAK)
[05:02:12] CHRISTINE ROMANS, CNN ANCHOR: Wall Street braces for China to retaliate as the Trump administration admits tariffs hurt American companies, too.
DAVE BRIGGS, CNN ANCHOR: Secretary of State Mike Pompeo, right now, en route to talks on Iran as the U.S. deploys more missiles to the Middle East.
ROMANS: Breaking news on Julian Assange. Prosecutors in Sweden will reopen a rape case against him.
(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)
BRIGGS: Frustrated Democrats consider hefty fines for Trump officials who blow off congressional subpoenas.
Welcome back to EARLY START on a Monday. I'm Dave Briggs.
ROMANS: It is Monday.
BRIGGS: It feels it.
ROMANS: A whole week of opportunity.
I'm Christine Romans, 32 minutes past the hour.
Let's begin here with the world bracing for a sell-off in global stock markets. Global markets are falling here. The Hong Kong stock market, it's green there only because it's closed for a public holiday.
On Wall Street, futures are decidedly lower. You're looking at a 300- point decline for the Dow at the opening bell. One percent or more losses forecast here for the day.
The U.S-China trade war will raise costs for Americans and creating uncertainty for investors. Tariffs on thousands of items, including dishwashers, frozen fish, handbags, and clothes all jumped to 25 percent Friday. Right now, tariffs hit roughly half of the products that China sells the U.S.
The president falsely states that China pays those tariffs. His economic advisor, Larry Kudlow, reluctantly admitted on Fox Sunday that -- what everyone else already knows. U.S. companies pay tariffs, not China.
(BEGIN VIDEO CLIP)
CHRIS WALLACE, HOST, "FOX NEWS SUNDAY": 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 oftentimes passes it on to U.S. consumers.
LARRY KUDLOW, DIRECTOR, 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 -- yes. I don't disagree with that. Again, both sides -- both sides will suffer on this.
(END VIDEO CLIP)
ROMANS: So everybody loses.
Breaking from his boss, Kudlow -- you know, look, his boss says this. The U.S. will be taking in tens of billions of dollars in tariffs from China.
OK, so this trade war is not over, though. The administration says it has begun the process of raising tariffs on all remaining imports from China worth approximately $300 billion.
For now, iPhones, and toys, and tennis shoes, they have avoided taxes. But if there's a new round of tariffs those would be included.
This is what a trade war looks like. China's retaliation hitting U.S. farmers hard at the worst possible time. Farmers can't get into the fields because of flooding. This is the first week of the planting season.
[05:35:09] Last year, soybean crops didn't get sold to China. It's 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. Agriculture Sec. Sonny Perdue said Friday, Trump has asked the USDA for a plan to help farmers affected by tariffs, adding, "POTUS loves his farmers and will not let them down."
Kudlow said Sunday there's a strong possibility Trump will meet with the Chinese president at the G20 summit next month.
BRIGGS: That's still a long way off.
China has threatened to take necessary countermeasures in response to the U.S. escalation of this trade war.
Matt Rivers live in Beijing. Matt, what would retaliation look like in this case?
MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: Well, there's a lot of different forms it could take, Dave. China hasn't specifically said what kind of measures they're going to take as of yet.
The Foreign Ministry, earlier today when asked that question, would only say that China is not going to bow to external pressure and said tariffs aren't a good thing. Pretty standard language there from the Chinese.
So we're really just waiting -- well, what is China going to do? And there's a couple of things that we would expect.
One is that they could raise tariff rates on American imports here to China. They've already put tariffs on the majority of American imports here, so they could take those rates and make them higher. That makes those products more expensive, of course.
They could also do things like Christine said -- actually make life harder for American farmers by placing more restrictions on buying American agricultural products. That's certainly something they could do.
And they could also just generally make life harder here for American companies that rely on China for their bottom lines. Think Starbucks, Nike, Apple -- major American companies like that.
But interestingly, Larry Kudlow's comments where he specifically said that it would be the American consumer and American businesses that are end up -- that end up paying the costs of those tariffs the Trump administration has put in place, China state media has said look, that is going to make life harder for the American consumer. It will also make life harder for the Chinese consumer.
BRIGGS: In spite of that, it appears the leverage is on the U.S. side, at least for now.
Matt Rivers live for us in Beijing, thanks.
ROMANS: All right.
Back home, the White House has a new strategy to push back against congressional investigations. It is 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.
This White House will not and cannot comply with unlawful demands made by increasingly unhinged and politically-motivated Democrats."
BRIGGS: President Trump mocking Democrats' claim the country is setting into this constitutional crisis with a tweet. "The Democrats new and pathetically untrue sound bite is that we are in a constitutional crisis," calling the whole thing "a 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)
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 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)
BRIGGS: All right. Let's discuss all of this with "CNN POLITICS" reporter Jeremy Herb, live in Washington. Good to see you, sir. JEREMY HERB, REPORTER, CNN POLITICS: Good morning.
BRIGGS: So the possibility of $25,000 fines -- and not just a contempt citation but from what I understand, a group discount on contempt citations. Is that where we're headed?
HERB: Yes. You know, we're certainly seeing the rhetoric rise on both sides.
One of the things we just heard from Chairman Schiff is the idea of fining members -- people who defy these subpoenas. We have Attorney General Bill Barr who has been held in contempt by the Judiciary Committee, and that could go the floor.
And the Congress is preparing for other potential contempt citations. There's now talk of so-called "package of contempt" citations. White House -- former White House counsel Don McGahn could be on that list. There are others in Schiff's committee.
And so, this is all going to come to a head in some way --
ROMANS: Yes.
HERB: -- and it's not clear exactly what happens here. But fines and even jailing people who defy subpoenas are being tossed around right now by House Democrats as potential options.
[05:40:06] ROMANS: You know, Sen. Lindsey Graham, the latest in the Trump v. Congress or Congress v. Trump battle -- some blowback over the subpoena for Don, Jr. Listen to Sen. Graham.
(BEGIN VIDEO CLIP)
SEN. LINDSEY GRAHAM (R-SC): As I understand it, this subpoena relates to what Michael Cohen said about some meetings and about the Trump Tower in Russia.
And if I were Donald Trump, Jr.'s lawyer I would tell them you don't need to go back into this environment anymore. You've been there for hours and hours and hours and nothing being alleged here changes the outcome of the Mueller investigation. I would call it a day.
(END VIDEO CLIP)
ROMANS: Call it a day. Democrats don't seem to want to call it a day. And, in fact, it was a Republican chairman of that committee who issued the subpoena.
HERB: Yes, exactly, and that's what makes this subpoena for Donald Trump, Jr. so interesting is that this isn't the Democrats trying to go after the White House and go after the Trump administration. This is the Republican-led Senate Intelligence Committee.
Senator Richard Burr of North Carolina is the one who put forward the subpoena and he's facing intense blowback from members of his own party. Senator Graham and others have gone even more strongly against Sen. Burr, saying he's overstepping his boundaries.
We don't know how this is going to end. Right now, the committee and Donald Trump, Jr. are in a standoff. Donald Trump, Jr. is considering his options. He could try to plead the fifth in a letter, he's considered written answers.
But I think the pushback we're now seeing from Republicans, and particularly those like Lindsey Graham who are up for reelection in 2020, could make it harder for Burr to continue on this subpoena.
BRIGGS: So, it's Trump v. Congress on these 20 different investigations. But as for the trade war, our lead story this morning, it appears that the president has an awfully long leash from Congress --
ROMANS: Yes.
BRIGGS: -- and almost bipartisan support on this issue.
HERB: Well, you know, I think this is -- it's interesting. The trade issues, particularly with tariffs in China, it's one of those things where it makes a lot of Trump's allies in Congress nervous. A lot of Senate Republicans, for instance, who have farmers as their constituents.
ROMANS: Oh, yes.
HERB: States like Iowa -- things like that.
They don't like the idea of the tariffs, of a trade war that will -- could hurt -- you know, hurt people in their state.
But there's not a ton that Congress really can do on this issue. The president sort of has his own -- he's out here on his own and Congress is kind of just watching and commenting and it's hard for them to necessarily push back.
ROMANS: Jeremy, it's so interesting to me. It reminds me of when the president said he could shoot somebody on Fifth Avenue and nothing would change.
It's like those are soybean farmers, you know. Soybean farmers -- this is the first week of planting. Soybean growers -- I don't even -- I can't even tell you how dangerous this moment is for so many farmers, especially small farmers, in the Midwest.
And the president is making it worse for them with these tariffs but he doesn't get any blowback about it. I mean, political blowback for it.
BRIGGS: Nothing.
ROMANS: I mean, that's -- and the other thing that really, I think, is so fascinating. You have the president -- the president's allies, like the USDA secretary, right, talking about doing some kind of package to make farmers whole again. So now, you're talking about a trade strategy that picks winners in the American economy, right?
Where are Republicans on this -- transferring wealth from consumers to farmers? I mean, if that were Obama doing that their heads would be exploding.
HERB: Yes. You know, this is certainly one of the things I think we're going to pressing Republicans in the Senate on this week.
But don't forget, we are heading into the 2020 election season and the president is going to need votes from those Midwestern states. The Senate seats are going to be open.
And so, we're going to -- one of the things I think we're going to be watching is how this -- the trade politics sort of coalesce with the 2020 campaign and whether there are decisions that are made with the election in mind.
BRIGGS: Yes, it's just fascinating. You've got John Thune from South Dakota, the senator, voicing concern about the farmers, but no criticism of the president -- not from Ben Sasse. None of the normally typically free-trade conservatives.
But we shall see. Maybe that changes at some point.
Jeremy Herb, thank you, sir -- appreciate it.
ROMANS: It's really wealth redistribution in the American economy.
BRIGGS: These are strange political times, to say the least.
ROMANS: Taxing consumers, bailing out farmers. It may be too late for some. It's just really interesting.
BRIGGS: All right. Ahead, the Secretary of State canceling a planned trip to Moscow today. More on where he's headed and why, instead.
ROMANS: And a prosecutor just made a key decision on Julian Assange. A live report ahead.
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[05:48:30] ROMANS: Secretary of State Mike Pompeo canceling 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 -- a threat to American forces and interests.
Meantime, the Pentagon announcing more Patriot missiles are being deployed to the Middle East in response to this increased tension with Iran.
Let's go there. Senior international correspondent Frederik Pleitgen is standing by live for us this morning. He is in Tehran.
Fred, what's the response?
FREDERIK PLETIGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hi, Christine.
Well, a pretty staunch response coming from the Iranians. They accuse the U.S. of escalating the situation of delving into psychological and economic warfare against Iran, trying to bring Iran to its knees.
But also, some pretty tough talk coming from Iranian senior commanders of the Revolutionary Guard. They have called the fact the U.S. is deploying an aircraft carrier, for instance, to the Persian Gulf as an opportunity, saying that with their ballistic missiles they believe that an aircraft carrier would be a sitting target that they could hit. So, the Iranians certainly saying they believe they are capable of taking on the U.S. in that area.
At the same time, of course, you do have a lot of opposing assets in a very narrow waterway there in the Persian Gulf. The Iranian navy beefing up its forces. That carrier strike with the Abraham Lincoln there as well.
And then an incident that happened yesterday which would insense the situation even more. There were some tanker ships that apparently were sabotaged. No one blaming the Iranians just yet but certainly, something that could heat up the situation even more, Christine.
[05:50:03] ROMANS: All right. Fred Pleitgen for us in Tehran where it's just after two in the afternoon. Thanks, Fred.
BRIGGS: All right, some breaking news.
Sweden reopening the rape investigation into Julian Assange. That investigation is what prompted the WikiLeaks founder to seek asylum in the embassy of Ecuador back in 2012. He was finally evicted just last month.
CNN's Anna Stewart live for us in London with the latest. Good morning.
ANNA STEWART, CNN REPORTER: (Audio gap) this case into the allegation of rape and only that allegation.
There were three others that have actually expired since he's been in the embassy over the last few years. There was the one count of unlawful coercion and two counts of molestation. The rape allegation, however -- that doesn't expire until August next year and they are reopening the case.
Julian Assange, it's important to remember, has denied all of the allegations.
Now, no decision yet on the charges that the Swedish prosecutors may bring forward, but they will issue a European arrest warrant and they will request extradition once he has served time in a U.K. prison, as he is at the moment, before skipping bail. He was given 50 weeks and he won't be eligible for early release until he serves 25 of those. Now, after that, of course, there will be the issue of an extradition request from both Sweden and the U.S., and the British government will have to decide which takes precedence.
BRIGGS: OK. Anna Stewart live with the breaking news for us in London. Thanks.
ROMANS: All right, to "CNN Business" this Monday morning.
Global stock markets sharply lower. Investors are bracing for China to retaliate on the president's tariff hike.
Markets in Hong Kong were closed for a public holiday but in Asia, selling. London has just turned higher, so finding some resilience here.
Futures in the U.S. -- let's look at those right now. They are still lower. More than one percent losses forecast by Dow futures this morning.
You know, the Dow, Friday, ended up 114 points. But for the week it was down 2.1 percent, the Dow's worst week since March. The S&P 500 and the Nasdaq both had their worst week since December last week.
Stocks are still resilient for the year, though. Two things here. Markets may be underestimating the pain of a protracted trade war or investors may be betting the U.S. and China will get a deal this summer.
All right, a disappointing Wall Street debut for Uber. Shares down 7.6 percent Friday. It was the end of a turbulent week filled with headlines about striking workers and steep losses in the ride-hailing industry, and broader market jitters over an escalating trade war.
Uber did succeed in raising $8.1 billion in one of the largest public offerings ever.
Its competitor, Lyft, also closed down more than seven percent.
All right. The "Avengers" cannot be stopped. No tears, no regrets.
"Avengers: End Game" won the domestic box office for the third weekend in a row, bringing in an estimated $63.1 million.
Warner Brothers "Pokemon" detective Pikachu, starring Ryan Reynolds, took the number two spot -- $58 million.
"End Game" is the second-highest grossing film of all time behind 2009's "Avatar."
So, can "End Game" stay on top? Big movies, including "Aladdin", "Rocket Man", Godzilla: King of the Monsters" are all set to debut later this month.
BRIGGS: Looking forward to those.
ROMANS: It's going to be a good summer for movies, I think. I loved "Endgame."
BRIGGS: The countdown to $3 billion.
All right, we'll be right back.
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[05:57:32] ROMANS: Who knew the president's trade war with China was so funny? Here are your "Late-Night Laughs."
(BEGIN VIDEO CLIP)
KYLE MOONEY, CAST MEMBER, NBC "SATURDAY NIGHT LIVE": Let's try Lindsey Graham. After opposing tariffs for decades, why do you suddenly support them from President Trump?
KATE MCKINNON, CAST MEMBER, NBC "SATURDAY NIGHT LIVE": Chuck, listen, when you have a president who's a financial genius and a business Jesus, like Donald Trump, you've just got to trust him. This man has lost a hundred times more money than I've ever made.
MOONEY: You've done a complete 180 on the president, even after calling him a jackass during the campaign.
MCKINNON: Chuck, listen, I am a man of convictions and principles unless he can help me -- and then, it's new Lindsey, who dis?
COLIN JOST, CAST MEMBER, NBC "SATURDAY NIGHT LIVE": But somehow, there are still Trump supporters who are trying to spin this as a good thing. Look at this clip from "FOX & FRIENDS."
AINSLEY EARHARDT, HOST, "FOX & FRIENDS": If anything, you read this and you're like, wow, it's pretty impressive, all the things he's done in his life. It's beyond what most of us could ever achieve.
JOST: Come on, blonde lady. Even you -- even you don't believe that. I mean, you said the last part into your hand.
It would be like if I said, "Oh, Donald Trump, he's just such a hardworking president."
(END VIDEO CLIP)
BRIGGS: You'd have to be impressed by losing $100 million.
ROMANS: Oh, there was a lot of funny stuff this weekend. But now, it's Monday. Have a great rest of your day. I hope you have a great start to your week.
I'm Christine Romans.
BRIGGS: I'm Dave Briggs. We'll see you tomorrow.
(BEGIN VIDEO CLIP)
BRIGGS: Secretary of State Mike Pompeo canceling a planned trip to Moscow and making a last-minute detour to Brussels.
MIKE POMPEO, U.S. SECRETARY OF STATE: Our aim is not war. Our aim is a change in the behavior of the Iranian leadership.
WALLACE: It's U.S. consumers who pay, correct?
KUDLOW: Yes, I don't disagree with that.
UNIDENTIFIED MALE: American consumers will pay more. The president is wrong about this economically.
ANNOUNCER, NBA EASTERN CONFERENCE SEMIFINALS: Is this the dagger? No!
(END VIDEO CLIP)
ANNOUNCER: This is NEW DAY with Alisyn Camerota and John Berman.
ALISYN CAMEROTA, CNN ANCHOR: We want to welcome our viewers in the United States and around the world. This is NEW DAY. It is Monday, May 13th, 6:00 here in New York.
And we begin with breaking news because Secretary of State Mike Pompeo abruptly canceling a trip to Moscow to meet with European allies about the escalating tensions with Iran. A key ally is already warning of the unintended risks that this conflict could have.
JOHN BERMAN, CNN ANCHOR: And we are learning the United States is ratcheting up its military presence in the Middle East, including a new deployment of Patriot missiles. Defense officials say intelligence indicates that Iran and its proxies could be planning to threaten.
END
