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Early Start with John Berman and Zoraida Sambolin

China Retaliates, Trump Defends Tariffs; Secretary of State Pompeo To Meet Putin Today; Is The U.S. Preparing For War With Iran? Aired 5:30-6a ET

Aired May 14, 2019 - 05:30   ET

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

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[05:31:06] (BEGIN VIDEO CLIP)

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

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DAVE BRIGGS, CNN ANCHOR: Well, investors, they disagree. Global markets plunge. Farmers and manufacturers feeling the pain of the president's trade war.

The attorney general launching 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. Why a flight control fix keeps getting delayed.

Fifty years after the U.S. put a man on the moon, the U.S. wants to put a woman on the moon. So how long might it take?

Welcome back to EARLY START on a Tuesday. I'm Dave Briggs, 5:31 Eastern time.

We're live in Beijing, and Moscow, and the UAE with the latest on Iran.

And we start with that trade war. Wall Street looking to recover after the biggest one-day drop since January.

Asian markets declined after China retaliates with higher tariffs on $60 billion worth of U.S. goods. European markets have opened slightly higher. On Wall Street, futures pointing to a 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 retaliating measures. Monday, Trump said he would use some of the tariff revenue, which is paid by U.S. importers, to help keep farmers afloat.

(BEGIN VIDEO CLIP) 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.

(END VIDEO CLIP)

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.

China's decision to retaliate against the Trump administration sent shivers through the markets.

Matt Rivers live in Beijing with more on how China is fighting back -- Matt.

MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: Dave, part of the reason now that China's decision to retaliate was felt so strongly on Wall Street is because China chose to make public its retaliatory measures about an hour before the opening bell. That was done by design. China wants to have as maximum of an impact on the American economy with these retaliatory measures as it can while not escalating the situation further.

Also to that point, look at the $60 billion of products -- worth of products that China chose to raise rates on. You've got things in there like corn flour, like grain, aircraft parts. These are the kinds of products that are oftentimes made in places -- parts of the U.S. that were pro-President Trump in the 2016 election.

The point there on China's side is to say look, we want to have as much political impact, as well, with these measures in order to put pressure on the White House.

Meanwhile, back here at home, the nationalist rhetoric has escalated, saying to the Chinese people and state media this is a fight against the United States. It's not just about the economics of it all, Dave.

BRIGGS: Neither side backing down.

Matt Rivers live for us, 5:34 p.m. there in Beijing. Thanks, Matt.

All right, staying abroad, 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.

Senior international correspondent Matthew Chance standing by live in Moscow with the latest -- Matthew. MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Dave, it will be about three hours before Mike Pompeo, the U.S. Secretary of State, arrives here in Russia. He's not coming to Moscow. He abandoned that leg of his visit much to the frustration of some Russian lawmakers who said that it was feverish actions being demonstrated by the U.S. Secretary of State and not stable diplomacy they expected from the U.S.'s top diplomat.

[05:35:10] But, Sec. Pompeo will be going straight to Sochi in southern Russia where he'll be meeting with the Russian foreign minister and the Russian president, Vladimir Putin.

The key issue at the top of their agenda, of course, is Iran. The Russian foreign minister saying he's wanting -- looking for clarification from Sec. Pompeo about how the U.S. plans to get out of this crisis that he says has been caused by unilateral American decisions, laying the blame at the foot of Washington for all this tension that's accumulating around Iran.

The foreign minister of Russia saying he expects those discussions to be frank, often diplomatic shorthand for heated discussions.

Remember, Russia and Iran have emerged as key allies. They fight side-by-side in Syria. Russia provides diplomatic and political support for Tehran.

And it is deeply suspicious about U.S. intentions when it comes to the Islamic Republic -- Dave.

BRIGGS: And yet, another opportunity to discuss Russian interference in our election.

Matthew Chance live for us in Moscow, thanks.

Staying abroad, is the Trump administration now 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.

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BRIGGS: "The New York Times" reports acting Defense Sec. Patrick Shanahan told top national security officials last week 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.

President Trump warning the Iranians they'll have a, quote, "bad problem" if they played a role in sabotaging two Saudi oil tankers in the Persian Gulf.

Joining us now with the latest on that, Nic Robertson at the port where the oil tankers were sabotaged. Nic, what are we learning? NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, Dave, what we're learning is the Emirates have called in the United States to help them in this investigation. Not just because they want that technical expertise, but they want to send that very clear and strong message across the Persian Gulf to Iran that the Emirates -- or Saudis, whose tanker was impacted by this sabotage as well, are not alone. The United States -- the United States is standing at their side.

And indeed, when we were out at the sea off the port here just yesterday you could see U.S. naval vessels around one of the Saudi tankers, and that -- those U.S. naval assets are based in this port facility here. So make no mistake, that's the message the Emirates are sending to Iran. They've got good allies and those allies are helping them.

But where is the investigation? Who was it who was behind the attack? That isn't clear.

But, the Emirates say they think that this could have been -- could have been a missile or rocket attack on the vessels.

We were looking at the back of one of the ships yesterday. The gash in the back of it was big enough. If you didn't mind getting caught on the jagged metal there you could swim from the outside into the hull of the ship. It was peeled open like you might peel open a tin of sardines.

What we're learning here, though, is that the intelligence that the Emirates have gathered in this region does seem to match the U.S. concerns that we've been hearing about that the Iranians might have been positioning themselves to threaten shipping in this area.

So, of course, tensions are high. The answer to the question who did it still an open mystery.

BRIGGS: Wow. All right, Nic Robertson live for us in the UAE, 1:38 p.m. there. Thank you, Nic.

Let's bring in "Washington Post" columnist Josh Rogin to talk about all of this. Josh, a CNN political analyst. Good to see you, my friend.

JOSH ROGIN, CNN POLITICAL ANALYST, COLUMNIST, THE WASHINGTON POST: Good morning.

BRIGGS: Let's circle back to the trade war with China. It appears that the Chinese are trying to wait out the clock on President Trump and have no plans of changing their laws in terms of how they do business.

So how do you see resolution between two of the world's biggest economies?

ROGIN: Well, it looks like in the last couple of weeks both the Chinese government and the markets both misunderstood President Trump's commitment to getting a strong deal on trade with the Chinese government.

The Chinese thought that they could change the terms and that Trump would be forced to accept it because they thought that time was on their side and that as the president heads closer to his election and as the U.S. economy perhaps slows down that they have more leverage.

The markets have always been very pro-deal and they were expecting a deal, whether or not it upheld to what President Trump has said he wants.

They were both wrong and now it looks like this is going to take a lot longer than both of them expected. President Trump simply believes that time is on his side. He thinks the U.S. economy is strong and he's willing to wait it out until he gets the terms that he demands. And that means we're all going to have to wait it out and see what happens.

BRIGGS: Yes, both sides appear to think they have the leverage.

We also talked about Mike Pompeo meeting with Vladimir Putin today in Sochi. We could use their help when it comes to Iran, North Korea, and in particular, Venezuela.

Do you expect the U.S. to get any help from the Russians on any of those fronts?

ROGIN: I don't see why the Russians would help the United States in any of those places at this moment. It's not like we have a lot to trade. It's not like we have a lot they want. It's not like we have a lot of leverage.

[05:40:00] The United States is looking to get out of Syria and hand over that problem to Russia. We'd love for them to take Iran out of the equation in Syria but there's no reason that they're going to do that.

And, Venezuela, we're trying to send a strong message that Russia should not interfere. But again, it's unclear what leverage we have to actually make that happen.

So as we look around the world there's a lot of things that the U.S. and Russia could cooperate on. But the Russians are not going to help us out of the kindness of their heart, OK? They're going to help us if it's in their interest or if we have some leverage to compel them to.

And what we're seeing is sort of that all of these problems that the Trump administration is involved in are all sort of piling up. And the Russians, because they're smarter, are willing to sort of let us stew. And if we give them concessions sure, they'll help us. But I don't see what exactly it is that Mike Pompeo's going to actually offer.

BRIGGS: OK, let's zero in, then, on Iran and the coming confrontation there. We have talked about in the past -- John Bolton has talked about striking Iran. He has talked about regime change in Iran. So it's tough to separate his intentions with the president.

From where you stand, what is our intention with the Iranians?

ROGIN: Well, yes. First of all, I think there's real credible threat reporting that the United States government is responding to. I don't think that's made up. I don't think that's part of some sort of secret effort to get us into war with Iran.

At the same time, there's a gap, as you mentioned, inside the U.S. national security system as to what it is we're really willing to do about it.

And when you see "The New York Times" comes out with a report like oh, 120,000 troops -- well, that's an extreme option, right, and that's meant to show sort of the most dangerous, the most serious scenario. Before that, there's a lot of other things we could do.

The problem here is that because we have confusion inside our own system and dysfunction inside our own system, our signaling is all messed up. And because the Iranian system is by its nature confusing and dysfunctional, their signaling is all messed up. And therein lies the risk of real miscalculation and a rising on this escalation ladder in ways that neither side wants.

So we're heading into a very dangerous period where the risk that something could happen goes way, way up because we don't have clear lines, they don't have clear lines. Everyone's afraid of backing down.

And so it's this off-ramp where we could all sort of take a breath and say OK, listen, let's not get into a war and see what's possible. It's not clear exactly where that off-ramp is right now.

BRIGGS: All right. Given the tense times, this should be a bigger story.

But yesterday in the Oval Office, the president meeting with the prime minister of Hungary said this -- listen.

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TRUMP: Highly respected -- respected all over Europe. Probably like me, a little bit controversial, but that's OK -- that's OK.

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BRIGGS: Probably a little bit controversial. Tell us more about the prime minister of Norway -- of Hungary -- excuse me.

ROGIN: Yes. I traveled in 2004 to Hungary with the late Sen. John McCain --

BRIGGS: Yes.

ROGIN: -- and watched him scold Viktor Orban on his democratic backsliding. And also watched him talk to the Hungarian opposition and ensure them that America would always stand up for the universal rights and democratic progress that they represented. That's all gone now.

And when President Trump embraces a faux democratic ruler like Orban he sends a signal to all of those opposition leaders all over Europe and all over the world who are fighting for democracy and freedom and human rights that the U.S. is no longer on their side. And it's also a big thumb in the eye of all of the European allies that we've traditionally stood by that Orban is fighting against.

So it's a huge departure in U.S. foreign policy. It's really a departure away from the values that bipartisan groups in Congress support and that American presidents for the last 70 years have supported.

And I think when we go to European countries and ask them for help on things like Iran, it -- they look at us and they say, well, while you're undermining our countries and wagging your fingers at us for doing the things that America's always stood for, and then you come ask us for help on something like Iran -- well, that makes it certain that we won't help you.

So I think it undermines American values and American interests at the same time.

BRIGGS: Yes. Reading from your piece on that McCain visit, "The late senator said America was watching. Now, they're embracing."

Josh Rogin, the perfect guest to discuss all of this. Thank you, sir.

ROGIN: Anytime.

BRIGGS: All right.

Well, if you're flying JetBlue today, get to the airport very early. The airline saying customers face longer than normal lines at airports across the country.

The airline putting the problem on Sabre, its booking technology system. It says the problem has been resolved and its systems are recovering.

Other airlines use Sabre. CNN checking to see if those carriers are affected.

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 the details, next.

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[05:49:08] BRIGGS: The investigators are being investigated again.

U.S. attorney John Durham now assisting Attorney Barr in his review of the origin 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 has Democratic Sen. Joe Manchin puzzled.

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SEN. JOE MANCHIN (D-WV): He sounds well qualified and has much experience. I just can't figure out what they're going to try to undo.

If you want to know what led to the investigation, it was the evidence. I was on Intel Committee. We watched all 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 spied on, a claim echoed by the president but called into question by FBI director Chris Wray.

[05:50:00] Durham is a Trump appointee who has investigated public corruption under Republican and Democratic administrations. His new role marks the third separate probe into the early days of the Russia investigation.

All right, 5:50 Eastern time and a check on "CNN Business."

Amazon wants its employees to quit their jobs and create their own delivery business. It turns out, though, that is 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 service off the ground.

The retail giant had announced the program last year but many who were interested simply couldn't afford it. Amazon says since it has started delivery service there have been more than 200 independent contractors. It hopes to add hundreds more this year.

We'll be right back.

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BRIGGS: 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.

[05:55:06] A flight operated by Taquan Air and sold through Princess Cruises was returning from a 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 to at least mid-August. Preliminary approval for a flight control fix could be ready by late May, according to "The Wall Street Journal." But engineering challenges and efforts to secure support for the fix are mostly responsible for the longer delay.

On top of all of this, the U.S. trade war with China coming at a terrible time for Boeing. That's because Boeing is the largest single American exporter in China, its most important export market. Boeing's orders from China had previously escaped earlier Chinese tariffs.

Their stock down nearly five percent yesterday.

Actress Felicity Huffman sobbing in court, admitting to a federal judge she is guilty of paying $15,000 to a bogus charity in a scheme to boost her daughter's SAT score. Huffman telling the court she feels deep regret and shame for what she's done.

She'll be sentenced September 13th. The D.A. recommends four months in prison and a fine.

The Supreme Court has ruled iPhone owners have a right to sue Apple for behaving like a monopoly. Conservative Justice Brett Kavanaugh sided with the court's four liberal judges and wrote a majority opinion.

A suit brought by four iPhone users claims Apple violates U.S. antitrust rules by requiring all apps to be sold through the iTunes store. And the suit says Apple uses that money to charge a higher than competitive 30 percent commission. And they say that market is often passed on to consumers.

The ruling tanked Apple stock down 5.3 percent on the news.

A warning about taking low-dose aspirin to prevent heart disease and stroke. According to a new study in JAMA Neurology, it can increase the risk of bleeding in the skull for healthy older adults.

Three recent studies already concluded 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.

NASA planning a 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 a $1.6 billion increase to the NASA budget so America can return to space in a, quote, "big way."

The space agency also revealed 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 Democratic hopeful Pete Buttigieg.

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UNIDENTIFIED MALE (Singing): Get 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: That's the honorable booty judge, in case you missed it.

Thanks for joining us. I'm Dave Briggs. Here's "NEW DAY." We'll see you tomorrow.

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BRIGGS: The top federal prosecutor in Connecticut assisting Attorney General Bill Barr in reviewing the origin of the 2016 Russia investigation.

UNIDENTIFIED MALE: The FBI acted lawfully. The whole thing was about Russia.

UNIDENTIFIED MALE: They're on much better footing with Mr. Durham. Some of the tactics used are going to be very difficult to defend.

UNIDENTIFIED MALE: China is already contemplating more tariffs.

TRUMP: There can be retaliation, but it can't be very substantial.

UNIDENTIFIED MALE: Given the rhetoric we are hearing, it's really hard to envision how they can resolve.

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ANNOUNCER: This is NEW DAY with Alisyn Camerota and John Berman.

JOHN BERMAN, CNN ANCHOR: Welcome to our viewers in the United States and all around the world. This is NEW DAY. It's Tuesday, May 14th, 6:00 here in New York.

Gird your loins and guard your 401(k).

ALISYN CAMEROTA, CNN ANCHOR: Oh, boy.

BERMAN: Twenty-four hours of turmoil on the world market that could get even more chaotic over the next few days.

This morning, President Trump is threatening to slap tariffs on all Chinese imports -- all of them -- after China announced a tariff hike on $60 billion worth of U.S. goods.

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