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Early Start with John Berman and Zoraida Sambolin

Trade War Fallout; Investigating the Investigators, Again; Boeing 737 MAX Delay; A Giant Leap for Womankind. Aired 4-4:30a ET

Aired May 14, 2019 - 04:00   ET

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

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[04:00:20] DONALD TRUMP, PRESIDENT OF THE UNITED STATES: And I think it's working out very well.

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DAVE BRIGGS, CNN ANCHOR: Investors disagree. Global markets plunge, farmers and manufacturers feeling the pain of the president's trade war.

The attorney general launches a third investigation into the origins of the Russia probe. We'll tell you who he's bringing in.

And, it will take longer than expected for the Boeing 737 Max to get back in the air while a flight control fix keeps getting delayed.

And after 50 years after the U.S. put a man on the moon, the U.S. wants to put a woman on the moon. How long will that take?

Good morning, everyone, and welcome to EARLY START. I'm Dave Briggs, Tuesday, May 14th, 4:00 a.m. in the east.

We have live reports from Beijing, Moscow, and Tehran.

We start this morning what looks and feels an awful lot like a trade war.

Wall Street looking to recover after the biggest one day drop since January. Asian markets still feeling the pain after China retaliates with higher tariffs on roughly $60 billion worth of U.S. goods. European markets have opened slightly higher as trading begins there.

On Wall Street, futures pointing to cautious positive open after Monday's sharp decline. The U.S./China trade war will raise costs for Americans but President Trump is defending his tariffs even though he admits farmers could get hit by retaliatory measures.

Monday, Trump said he would use some of the tariff revenue which is paid by U.S. importers to help keep farmers afloat.

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TRUMP: And out of the millions of dollars that we're taking in, a small portion of that will be going to our farmers because China will be retaliating probably, to a certain extent, against our farmers.

And so our farmers can do well. They'll be planting. They'll be able to sell for less and they'll make the same kind of money until such time as it's all straightened out.

So our farmers will be very happy. So I think it's working out very well.

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BRIGGS: More from the farmers in a moment. Trump also said the U.S. could impose stronger tariffs to the tune of another $300 billion, and he added he will meet with Chinese President Xi Jinping at the G20 Summit in Japan. That's late next month.

You may have heard President Trump touted support for and from the farmers. But there are signs their patience is wearing out. Soybeans are a critical crop in the Midwest with huge exports to China. Soybean prices just hit a ten-year low.

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UNIDENTIFIED MALE: We need help now. We have been dragging along here for a little while, and we understand in agriculture there's no trade deal that's going to be a perfect trade deal for everybody. Ag has been the sacrifice here so far.

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BRIGGS: The problem exacerbated by Midwest flooding. Last year's soybean crop is rotting in storage. Previously one in three rows of soybeans grown in the U.S. were shipped to China, but the escalating trade war with China ended that, and soybean farmers are hurting.

CNN's Ryan Young spoke with some in Illinois.

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RYAN YOUNG, CNN NATIONAL CORRESPONDENT (voice-over): Jim Schielein says the U.S. trade war with China and the tariffs are decreasing their revenue on his Illinois farm by 30 percent.

JIM SCHIELEIN, SOYBEAN FARMER: It's really hitting us in the pocketbook pretty hard.

YOUNG: Other farmers are much more critical of President Trump.

JOHN WESLEY BOYD, JR., SOYBEAN FARMER: The president is playing footsy with China while America's farmers are on the losing end of the stick, and quite frankly, I don't know why more Midwestern farmers are not outraged.

YOUNG: The trade wars are taking a tool of markets already hit hard by low commodity prices and devastating floods across the Midwest. There's been a wave of farmers declaring Chapter 12 bankruptcy. Here in the Midwest, district of Illinois, Wisconsin and Indiana, the

number of those farm bankruptcy cases doubled in 10 years, according to the District Seven Appeals Court.

Jim Schielein says farmers are taking extreme measures to survive, including when to buy critical machinery.

SCHIELEIN: You put off equipment purchases, you tighten the belt on your expenses. This equipment wears out. It's complex.

YOUNG: The hope for some in the Farm Belt is that the tariffs go away, the trade war ends and farmers are no longer caught in a global crossfire.

(on camera): The soy beans end up equaling billions of dollars, you think about the trade between the U.S. and China, and then the idea that so many parts of the middle part of this country make soybeans and grow soybeans, send them over to China, the tariffs are having a real impact, and a lot of people are holding their breath to see how long this will take.

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[04:05:00] BRIGGS: They sure are. Ryan Young, thanks.

China's decision to retaliate against the Trump administration sent shivers through the markets. Investors realizing the trade war between the two largest economies on the planet could be long-term.

Matt Rivers live for us from Beijing with more on how China is now fighting back.

Matt, good morning.

MATT RIVERS, CNN CORRESPONDENT: Good morning, Dave.

And look no further than the fact that when China announced its retaliations yesterday evening here in Beijing, it chose to do so about an hour before U.S. stocks opened for the week. That was not by accident, and look at where they chose to retaliate. They raised tariff rates on American imports here like, the list is cotton, grains, corn flour, aircraft parts.

And what China is doing there is picking products that will have a political impact. That's why farmers are being targeted here, Dave, because they know, the Chinese government knows that's where Trump's base is. Farmers voted for Trump overwhelmingly, and so, as a result, that's where they're going to target to have a political impact here. And at the same time, we're also seeing here in China is the manufacturers here in the mainland actually leading, looking at other places like Cambodia, India. I spoke to one person who's considering moving his factory, so the effects of China's retaliation and his trade war are being felt.

BRIGGS: And, Matt, it sure feels and looks like the leverage on the side of President Trump due to the health of our economy. What is Chinese state media saying about that?

RIVERS: They are absolutely not backing down. They would argue the opposite that China has a ton of average, and we have seen nationalistic rhetoric within Chinese state media soar over the last two days basically posing this as a threat to China saying in a nationalistic way that they want the Chinese people backing China's government against this threat from the United States.

BRIGGS: Escalation on both sides. Matt Rivers, thank you.

He will be a day late but Secretary of State Mike Pompeo heads to Russia this morning. In a few hours, he's set to meet with Vladimir Putin on a range of issues, including Iran, arms control and Ukraine.

Senior international correspondent Matthew Chance standing by live in Moscow with the latest.

Matthew, what do they expect to discuss beyond those topics?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, beyond those topics, it's not clear though there may be decisions made on a meeting between Vladimir Putin and President Trump on the sidelines of the G20 Summit next month in Japan. That's yet to be confirmed by the Kremlin, though.

But the key issue being discussed in this first meeting, this first visit, rather, by Secretary Pompeo to Russia is the issue of Iran amid a growing nuclear and economic confrontation between the United States and the Islamic Republic.

The Russian Foreign Minister Sergey Lavrov saying he will be seeking clarification from Mr. Pompeo about how Americans, as he praised it, are planning to get out of the crisis with Iran who he says been created by American unilateral decisions. The Russian foreign minister saying the discussions are likely to frank, which obviously diplomatic shorthand for quite heated at times, I expect.

So there is a real sense of frustration in Russia about the fact, for instance that Secretary Pompeo changed his visit to Moscow. He didn't come to the Russian capital. He's going straight to Sochi to meet with the Russian president -- Dave.

BRIGGS: President Trump punts on Russian interference in our elections. Perhaps Pompeo will follow suit.

Matthew Chance live for us in Moscow, thanks.

Is the Trump administration preparing for war with Iran?

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TRUMP: Hearing little stories about Iran. If they do anything, they will suffer greatly. We'll see what happens with Iran.

(END VIDEO CLIP) BRIGGS: In recent weeks, the U.S. has expressed concern about Iran and its proxies threatening American forces and interest in the region.

Let's go live there to Tehran and bring in Fred Pleitgen.

Fred, good morning.

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, good morning, Dave. Of course, one of the interesting things that Matthew was just talking about was the fact that Secretary of State Mike Pompeo cancelled his visit to Moscow, and went to Brussels instead to meet with European leaders to try to convince them to toe America's line as well. Unclear what exactly he reached there. Afterwards, there was no press statement between the two sides and the Europeans are continuing to stick to their line saying they believe the nuclear agreement between Iran and powers is still important, and their needs to be a diplomatic way out of the crisis.

In the meantime, the situation in the Persian Gulf heated up with four ships that were sabotaged in the area. Just on Sunday, the UAE, the United Arab Emirates has asked the United States for technical assistance to find out what happened and what technical weapons may have been used in all of this. No one at this point in time yet has officially said they believe Iran is behind it.

The interesting thing is that Iranians themselves have condemned the attack, and put out a statement insinuating it might be some other force trying to magnify the situation and make it worse in the Persian Gulf. So, a lot of unclear still there.

Meanwhile, the Iranians absolutely lashing out at the U.S. for sending an aircraft carrier to the region, calling it, quote, theatrical, Dave.

[04:10:07] BRIGGS: One of the several hotspots around the globe this morning. Fred Pleitgen, live for us in Tehran, thank you.

Investigators are being investigated once again. U.S. Attorney John Durham now assisting Attorney General Bill Barr in his review of the origins of the 2016 Russia investigation. Durham is the top federal prosecutor in Connecticut. He's looking into intelligence collection activities by the U.S. government prior to Election Day to determine whether they were lawful and that as Democratic Senator Joe Manchin a bit puzzled.

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SEN. JOE MANCHIN (D-WV): John is well-qualified and has much experience. I just can't figure out what they're going to try to do. You know, you want to know what led to the investigation, it was the evidence. I was on Intel Committee. We watched this thing unfold. And it was the evidence that led us in the direction we went.

(END VIDEO CLIP) BRIGGS: Attorney General Barr recently suggested the Trump campaign was in his words spied on. A claim echoed by the president but called into question by the director of the FBI, Chris Wray. Durham is a Trump appointee who has investigated a number of public corruption cases under Republican and Democratic administrations. His new role marks the third separate probe into the early days of the Russia investigation. With the Justice Department's internal watchdog and the U.S. attorney in Utah, John Huber also tasked with investigating.

Breaking overnight, a deadly midair collision off the coast of Alaska. We'll have the latest for you ahead on EARLY START.

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[04:16:12] BRIGGS: Four-fifteen Eastern Time.

Four people are dead and two missing after two float planes carrying cruise ship passengers collided head on off the coast of Alaska. It happened near the town of Ketchikan. The flight operated by Taquan Air and sold through Princess Cruises who's returning from shore excursion. Ten people and a pilot were on board. The second plane was carrying four passengers from Royal Princess on a separate tour. Right now, the Coast Guard is actively searching for two missing people.

The return of Boeing 737 MAX has been delayed further, posing further headaches for the airline. Right now, it's unlikely the aircraft be back in the air before mid to late August, which much of the summer season is over by then.

"The Wall Street Journal" reports regulators are aiming for the preliminary approval to fix the flight control software by May 23rd. That's when a safety summit with aviation authorities is planned but final approval is likely to take significantly longer. Engineering challenges and efforts to secure support for the fix are mostly responsible for the delays. The flight control system has been implicated in two fatal crashes. Serious questions remain about how and why the FAA approved the 737 MAX and whether it brushed the certification process.

On top of all of this, the U.S. trade war with China is coming a terrible time. That's because Boeing is the largest single American exporter in China, it's most important export market. Boeing's orders from China had previously escaped earlier Chinese tariffs, whether Boeing has to pay higher import taxes could be an important shift in the trade war negotiations. Boeing's stock down yesterday down almost 5 percent.

Ahead, another major ruling against the maker of a popular weed killer. More than $2 billion awarded to a couple who claims Roundup caused their cancer.

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[04:23:06] BRIGGS: Four-twenty-two Eastern Time. And actress Felicity Huffman sobbing in court, admitting to a federal judge she is guilty, paying $15,000 to a bogus charity in a scheme to boost her daughter's SAT scores. That charity had ties to Rick Singer, the central figure in the college admission scandal. Huffman telling the court she is in full acceptance of her guilt and feels deep regret and shame for what she's done. The former "Desperate Housewives" star will be sentenced September 13th. Prosecutors are recommending four months in prison and a fine.

A jury in Oakland, California, awarding $2 billion to a couple who say their cancer was caused by long-term exposure to Monsanto's popular weed killer Roundup. The verdict include an additional $55 million for pain and suffering.

The plaintiffs Alva and Roberta Pilliod were each diagnosed four years apart with non-Hodgkin's lymphoma. They are both in remission. This is the third straight ruling that go against Monsanto's parent company Bayer. Thousands of similar cases are pending at the federal or state level. Bayer says they plan to appeal the jury verdict.

Hollywood paying tribute to Doris Day, the legendary actress and singer died Monday at her home in California. She was 97 years old.

Doris Day was the major box office draw in the late 50s and 60s, famous for her wholesome girl next door characters in musicals like "Calamity Jane", comedies like "Pillow Talk" or thrillers like Hitchcock's "The Man Who Knew Too Much."

Actor William Shatner said she was the world's sweetheart and beloved by all. After retiring, Day devoted her life to the protection of animals. Upon news of her death Monday, flowers were placed on Doris Day's star on the Hollywood Walk of Fame.

NASA planning to return to the moon. It hopes to send the first woman ever and first man in nearly five decades to the lunar surface by 2024. President Trump Monday announcing a $1.6 billion increase to the NASA budget so America can return to space, quote, in a big way.

The space agency also revealing the name of its new lunar mission Artemis, after the Greek goddess of the moon and twin sister of Apollo.

And while you were sleeping, Jimmy Fallon's latest slow jam featured 2020 presidential candidate Pete Buttigieg. Here are your late-night laughs.

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UNIDENTIFIED MALE (singing): He's ready and prepared for a primary battle, whose name is worth 800 points in Scrabble.

JIMMY FALLON, HOST, NBC "THE TONIGHT SHOW STARRING JIMMY FALLON": Now, I've got a question for your, marvelous Mr. Mayor. You may run a city but what makes you think you can measure up to the presidency? Aren't you worried about performance anxiety? MAYOR PETE BUTTIGIEG (D), PRESIDENTIAL CANDIDATE: Actually, I'm not. As mayor of South Bend, I reenergized the economy and invested in the industries of tomorrow.

I'd support getting rid of the Electoral College, even if it means fighting these issues out in court.

FALLON: Court is in session and the honorable booty judge is presiding.

BUTTIGIEG: I want to invite everyone to join this campaign -- Democrats and Republicans.

FALLON: Democrats and Republicans? So what you're saying is you go both ways?

BUTTIGIEG: No, I'm just gay.

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BRIGGS: And with that, the crowd went wild. Ahead, Wall Street looking for a bounce back after the Dow's worst day since January. The president's trade war spooking markets, farmers, consumers, and more.

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