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Early Start with John Berman and Zoraida Sambolin
China Retaliates, Trump Defends Tariffs; Investigating the Investigators, Again; Boeing 737 MAX Delay; A Giant Leap for Womankind; 4 Dead, 2 Missing in Alaska Midair Collision; Amazon to Pay Employees to Start Business. Aired 4:30-5a ET
Aired May 14, 2019 - 04:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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[04:31:02] 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.
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 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 it take?
Welcome back to EARLY START on a Tuesday. I'm Dave Briggs. Christine Romans should be back tomorrow.
We start on 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 slowly higher as trading begins there. And on Wall Street, futures point to a slightly positive open after Monday's decline.
U.S. China trade war raising costs for Americans but President Trump defending his tariffs even though he admits farmers could get hit by retaliatory measures. Monday, Trump said he would use tariff revenue 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: Trump also said the U.S. could impose stronger tariffs to the tune of another $300 billion and he added he'll meet with Chinese President Xi Jinping at the G20 summit in Japan late next month.
With each hike in tariffs comes a greater burden on U.S. consumers, but many business owners are being forced to make adjustments, too. The cost of bringing their products to market skyrockets.
Nick Valencia has more from Georgia.
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NICK VALENCIA, CNN CORRESPONDENT: Is it panic button (ph) yet?
KISHORE VASNANI, NOMAD LANE OWNER: Yes, we're like teetering on the edge of panic.
VALENCIA (voice-over): Kishore Vasnani and his wife Vanessa Jeswani owns the successful travel bag company Nomad Lane.
It's been around for two years but with the current China trade war, the U.S. based small business is taking a big hit. Vasnani, a registered Republican, blames President Trump and the new tariffs policy. He calls it a gut punch to the American public.
VASNANI: It makes us wonder what justification is, and the reason behind it. You know, we're trying to find our way at the moment.
JESWANI: Yes, I think it's tough because he's supposed to be, you know, pro-business but this was not the pro-business move, especially for small businesses like us.
VALENCIA: The company is based in New York but their bag is manufactured here in Guangzhou, China. After getting the news on Friday that the bags will be hit with huge tariffs when they come back into the U.S., the couple are now on their way back to Asia to find a new supplier outside of China. With an upcoming production order, they have to figure it all out in less two weeks.
VASNANI: It's going to have a downstream effect on not just us but on a wide swath of industries, accessories, products, et cetera.
VALENCIA: The couple is now debating between absorbing the costs or leaving that to the consumer. They have been severely impacted and as a new business aren't sure how much more cost they can take on. Before President Trump, the tariff for bags was 17.6 percent. Then it increased to 27.6 percent in the summer of 2018. As of last Friday, it's 15 percent more, bringing the tariff to a
whopping 42.6 percent.
[04:35:03] VASNANI: Americans love, you know, being able to find high quality products at a reasonable price. And so, I think the new reasonable, you know, now has a 25 percent mark up on it.
VALENCIA: Which in the end may leave the couple holding the bag.
Nick Valencia, CNN, Jonesboro, Georgia.
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BRIGGS: OK, Nick, thanks.
China's decision to retaliate against the Trump administration sent shivers through the markets. Investors realizing the trade war between the world's two largest economies could be long term.
Matt Rivers is live for us from Beijing with more on how China is fighting back -- Matt.
MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: Dave, it was no coincidence that when China decided to release exactly how it was going to retaliate against this latest move from the Trump administration, it chose to do so an hour before the opening bell. That was definitely a pointed move by China, and that follows a pattern here when China makes moves, they are doing so to try and extract a political cost.
So, look no further than some of the items that saw their tariff rates, American imports to China risen yesterday as a result of China's moves. You had things like cotton, grains, corn flour, aircraft parts. A lot of those products come from parts of the country that voted for President Trump. We have seen China doing that before, targeting things like soybeans, for example. And that is continuing.
And speaking of soybeans, in addition to not buying as many soybeans, China has ramped up soybean production here domestically. So, it's kind of a one-two punch, they produced more domestically last year than they had before, and that shows you China is trying to extract as big a cost as possible out of this trade war. Yes, is it going to hurt the Chinese economy? Without question, but both sides lose in a trade war, Dave.
BRIGGS: President Trump said yesterday that the deal was 95 percent done. What are we to believe the 5 percent remaining was?
BRIGGS: You know, I think probably it has to do with structural issues, economic issues, the codification of the language that, you know, the United States wants to see China completely change the way they do business here with this state-run economy. I think ultimately, Dave, if you're looking at where this might come together in terms of a negotiations, where the middle ground might be found is going to be in June in Osaka at the G20 when Xi and Trump meet on the sidelines.
BRIGGS: Comes down to chemistry yet again. Matt Rivers live for us at 4:30 p.m. in Beijing, thank you.
He'll be a day late, but Secretary of State Mike Pompeo heads to Russia this morning. In just a few hours, he's set to meet with Vladimir Putin on a wide range of issues, including Iran, arms control and Ukraine.
Senior international correspondent Matthew Chance live in Moscow with the latest -- Matthew.
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Dave, thanks so much. It will be 3 1/2 hours before Mike Pompeo, the U.S. secretary of state, arrives in Russia for his first visit here officially. He was meant to Moscow first, but he delayed that, went straight to Sochi in southern Russia, will be having meetings with the Russian foreign minister, Sergey Lavrov, and, of course, the Russian president, as you mentioned, Vladimir Putin.
All range of issues being discussed from Venezuela to Syria, to all sorts of other issues, arms control and the possibility of a meeting on the sidelines of the G20 summit next month in Japan as well. But the key issue is going to be Iran. The Russian foreign minister saying he'll be seeking clarification from Secretary Pompeo about how the United States plans to get out of this crisis that he says has been caused by unilateral American decisions.
The foreign minister of Russia is saying he expects those discussions to be frank. Russia and Iran, of course, are key allies. They fight side by side in Syria. Russia provides Iran with nuclear technology, and the Kremlin is deeply suspicious about U.S. motives when it comes to the Islamic Republic -- Dave.
BRIGGS: OK, Matthew Chance live in Moscow.
Let's stay with that Iran story. Is the administration preparing for a 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.
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BRIGGS: U.S. has expressed concern about Iran and its proxies, threatening American forces and interest in the region. Well, now, "The New York Times" reports acting Defense Secretary Patrick Shanahan told top national security officials last week that as many as 120,000 troops could be sent to the Middle East if Iran attacks American forces. Not clear if the president would agree.
Let's go live to Tehran and bring in Fred Pleitgen.
Fred, good morning. FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, good
morning, Dave.
Certainly, the situation seems to be heating up in the Middle East, specifically around Iran. One of the reasons that Mike Pompeo, secretary of state, delayed his visit to Russia was because he was speaking to European allies, apparently giving new intelligence about what he thinks Iran is doing here in this region. Not clear how much Secretary of State Pompeo achieved in his meetings with the Europeans.
[04:40:03] There was no joint press statement afterwards and the Europeans pretty much sticking to the line that they've always been prodding, saying they still believe the nuclear agreement is something that needs to be preserved and they're also calling on all sides, not just the Iranians but also the U.S. to tone things down here in the Middle East.
Now, at the same time, of course, you have had those incidents in the Persian Gulf where four tankers were apparently sabotaged in what the Saudis call a sabotage attack. They were Saudi tankers, tankers from the UAE, and one from Norway as well. The Emirates have now requested technical assistance from the U.S. and while no one has yet said they believe Iran is behind it, the U.S. in the past has said that there could be Iranian attack against merchant vessels if things heat up in the Middle East.
The Iranians are condemning the attack and saying it might have been a false flag attack, Dave.
BRIGGS: All right. The third of three hotspots around the globe.
Fred Pleitgen live at 1:10 p.m. there in Tehran, thank you.
Back here in D.C., the investigators being investigated once again. U.S. attorney John Durham now assisting Attorney General Bill Barr in his review of the origin of the 2016 Russia investigation. Durham, the top federal prosecutor in Connecticut, he will be looking into intelligence collection activities of the U.S. government prior to election day to determine whether they were lawful.
And that has Democratic Senator Joe Manchin 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.
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BRIGGS: Attorney General Barr recently suggested the Trump campaign was spied on, a claim echoed by the president but called into question by FBI Director Chris Wray. Durham is a Trump employee who has investigated a number of corruption cases in the Republican and Democratic administrations. His role marks the third separate probe into the early days of the Russian investigation. And with the Justice Department's internal watchdog, and the U.S. attorney in Utah, John Huber also tasked with investigating.
New details about why the Senate Intelligence Committee decided to subpoena Donald Trump Jr. Two sources telling CNN the president's son involved in answering more questions about his 2016 Trump Tower meeting with the Russians as well as his pursuit of a Trump Tower Moscow project. Chairman Richard Burr told his colleagues he had been engaged in talks with Don Jr. in September. Burr said Trump Jr. agreed to be interviewed twice before backing off each time.
A source familiar with the discussion says it's possible the president's son might agree to provide written answers. That's something the committee has rejected in the past. One Republican had this piece of advice for Don Jr.
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SEN. KEVIN CRAMER (R-ND): I'm not a big advocate of ignoring the subpoenas. Pleading the Fifth, if he's comfortable doing that, that I think would be better way to go than to simply ignore subpoenas.
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BRIGGS: The ball is now in Burr's quote. Will the Senate Intel chairman hold the president's son in contempt of Congress and risk further Republican backlash or give Trump Jr. a pass and trigger outrage over favoritism?
Former Deputy Attorney General Rod Rosenstein taking aim at James Comey after the former FBI director questioned Rosenstein's character in a CNN town hall last week. Here's what Comey said.
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JAMES COMEY, FORMER FBI DIRECTOR: I think people like that, like Rod Rosenstein, who are people of accomplishment but not real sterling character, strong character, find themselves trapped, and then they start telling themselves a story to justify their being trapped, which is yes, he's awful but the country needs me.
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BRIGGS: On Monday, speaking to a group of business and civic leaders in Baltimore, Rosenstein fired back at Comey.
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ROD ROSENSTEIN, FORMER DEPUTY ATTORNEY GENERAL: I do not blame the former director for being angry. I would be too if I were in his shoes. But now the former director seems to be acting as a partisan pundit, selling books and earning speaking fees while speculating about the strength of my character and the fate of my immortal soul, speculating about souls is not a job for police and prosecutors. Generally, we base our opinions on eyewitness testimony. (END VIDEO CLIP)
BRIGGS: A bit of laughter there. Rosenstein's speech is the most public retelling yet of the twists and turns in the Russia investigation by the man who oversaw it. He told the audience why he disagreed with Comey's handling of the Hillary Clinton e-mail investigation but criticized the way President Trump went about firing Comey.
Ahead, some breaking news overnight, a deadly midair collision off the coast of Alaska.
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[04:49:07] BRIGGS: Breaking news overnight: four people are dead and two missing after two floatplanes carrying cruise ship passengers collided head on off the coast of Alaska. It happened near the town of Ketchikan, a flight operated by Taquan Air and sold through Princess Cruises which returning from a shore excursion.
Ten people and a pilot onboard. 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 yet again. It's unlikely the aircraft will be back in air from mid to late August. "The Wall Street Journal" reports regulators are aiming for a preliminary approval of a fix to flight control software by late May. Engineering challenges and efforts to secure support for the fix are mostly responsible for the delays. Serious questions remain about how and why the FAA approved the 737 MAX for flight, and whether it rushed the certification process.
[04:50:08] On top of all of this, the U.S. trade war with China is coming at a terrible time for Boeing. That's because it is the largest single American exporter in China, it most important export market. Boeing's orders from China had previously escaped the earlier Chinese tariffs, their stock down nearly 5 percent on Monday.
Former vice president turned 2020 candidate Joe Biden joining the growing call among Democrats to consider breaking up Facebook. He tells the "Associated Press" that splitting up Facebook is something we should take a really hard look at. Democratic presidential hopeful Elizabeth Warren has called for it, and rival candidate Kamala Harris said it's something to look at. Biden also addressed the opioid crisis in New Hampshire, calling for an end to drug companies advertising tax breaks. Their ads totaling $6 billion in 2017.
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JOE BIDEN (D), PRESIDENTIAL CANDIDATE: There is not a willingness on the part of the drug companies to spend the money it takes to get engaged in this effort, because either they find a cure, there's not enough people to justify being able to make that much money off of it. And we should be driving incentives. I won't go into them now, but how they in fact should be awarded if they invest, so it is financially worth their while.
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BRIGGS: Biden also taking heat from more progressive Democrats on climate change. Last week, "Reuters" reported that he suggested he would take a middle ground approach. Democratic presidential candidate Bernie Sanders responded with this.
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SEN. BERNIE SANDERS (I-VT), PRESIDENTIAL CANDIDATE: When you're dealing with the future of the planet and making sure that our kids and our grandchildren have a healthy and habitable world in which to live, I don't know how you go too far.
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BRIGGS: Meantime, Elizabeth Warren prioritizing education in Philadelphia. In a speech to the country's second largest teachers union, she said she would choose a former public schoolteacher to lead the Department of Education.
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SEN. ELIZABETH WARREN (D-MA), PRESIDENTIAL CANDIDATE: I want someone who has seen tattered text books or tried to manage when there are too many kids in a classroom, but I also want someone who has actually been there and taught a child to read.
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BRIGGS: And Beto O'Rourke conceding that he's having trouble connecting, telling Rachel Maddow, quote, I need to do a better job talking to a national audience. The latest polls show him sleeping in a very crowded Democratic field.
Ahead, Amazon wants its employees to quit their jobs and start their own delivery business. It's paying them to do so. CNN Business has your details, next.
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[04:57:17] BRIGGS: Nearly one week after a person was killed and eight wounded in a Denver area school shooting, officials in Douglas County, Colorado, voting unanimous to commit $10 million to school safety and mental health services. The suspects in the shooting at STEM school highlands ranch, 18-year-old Devon Erickson and 16-year- old Alec McKinney due in court tomorrow to face formal charges.
Also tomorrow, a celebration of life is planned to remember victim Kendrick Castillo. He threw himself at one of the gunmen to stop the shooting.
A warning about taking low dose aspirin to prevent heart disease and stroke. According to a new study in the "Journal of Neurology", increase the risk of bleeding in a skull for healthy older adults. Three recent studies conclude a daily low dose aspirin is at best a waste of money for healthy older people and at worst, it may raise the risk of internal bleeding and premature death.
The American College of Cardiology and the American Heart Association no longer recommend low dose aspirin as a preventative measure for older adults who do not have a high risk of heart disease.
NASA is 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 announcing $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 lunar mission, Artemis, after the Greek goddess of the moon and twin sister of Apollo.
Four-fifty-eight. A check on CNN Business this morning.
Investors around the world reacting to China, striking back at the U.S. with higher tariffs on American goods. Asian markets closed lower for a second day. European markets opened slightly higher as trading begins there. Wall Street looking to recover after one of the biggest one day drop since January.
Futures pointing to a slightly positive open. U.S. stocks ended Monday sharply lower, the Dow closing down 617 points, the S&P 500 fell 2.4 percent, and the Nasdaq dropped 3.4 percent. It was the worst day for the Dow and S&P 500 since January and the biggest one day drop for the Nasdaq since December 4th, 2018.
Another rough day on Wall Street for Uber as well, falling almost 11 percent after a disappointing debut Friday. The stock is now down 17 percent from its initial public offering. Uber is facing skepticism about its ability to make money as it battles with its rival Lyft. Lyft, though, also struggling, dropping nearly 6 percent Monday. Lyft is now down more than 33 percent from its March debut.
Amazon wants its employees to quit their jobs and create their own delivery business. Turns out that's awfully expensive, so it's raising the stakes. Amazon says it will give employees up to $10,000 and three months salary to get their delivery services off the ground.
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