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Early Start with John Berman and Zoraida Sambolin

Awaiting President Trump In London; DOW Futures Fall As Trade War Escalates; Trump Denies Calling Markle Nasty; American People Will Not Pay Tariffs; Democrat Candidates Booed; Cruise Ship Crash; Democratic Candidates Make Their Case In California; America's Choice 2020; Cruise Ship Rams Tourist Boat In Venice Canal; Arkansas River Rising; Boeing 737 Max Jets May Have Defective Wing Parts. Aired 4:30- 5a ET

Aired June 03, 2019 - 04:30   ET

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

[04:30:00] (COMMERCIAL BREAK)

BORIS SANCHEZ, CNN HOST: President Trump just arrived in London, breaking diplomatic etiquette with remarks that risk insulting some of his royal hosts.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: There is no basis whatsoever for impeachment. None.

(END VIDEO CLIP)

CHRISTINE ROMANS, CNN HOST: And the president defiant as Congress returns to Washington today.

SANCHEZ: And boos for two 2020 Democrats at their own convention. What each candidate said to set off the crowd.

ROMANS: And these alarming moments caught on camera right before a cruise ship slams into a smaller boat and the dock. Welcome back to "Early Start" this Monday morning, I'm Christine Romans.

SANCHEZ: Great to be here with you, Christine.

ROMANS: Nice to see you.

SANCHEZ: I'm Boris Sanchez in for Dave Briggs. We are 32 minutes past the hour. And we start with President Trump, arriving in England for a three day state visit. Here's the president emerging from Air Force One just a few moments ago with the first lady. The president has already trampled on diplomatic etiquette, not only with remarks that risk insulting his royal host, but also by diving into the U.K.'s messy political landscape. Before President Trump left Washington he made these remarks about Brexiteer Boris Johnson, the front runner to become the next Prime Minister.

BEGIN VIDEO CLIP) TRUMP: Well, I may meet with him. He is been a friend of mine. He

is been very nice. I have a very good relationship with him. I have a very good relationship with Nigel Farage, with many people over there and we'll see what happens.

(END VIDEO CLIP)

SANCHEZ: President Trump also getting into a spat with London Mayor Sadiq khan, this is after khan called the president a global threat in an op-ed. Mr. Trump compared Khan to the mayor of New York.

(BEGIN VIDEO CLIP)

TRUMP: I don't think much of him. I think that he is the twin of De Blasio, except shorter.

(END VIDEO CLIP)

SANCHEZ: Shortly before arriving in London, the president sending out two tweets saying that Khan should focus on crime in London. Let's turn now live to Buckingham Palace and bring in CNN's Nic Robertson. Nic, we understand the president may hear some protesters on his way to Buckingham Palace.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, he may. There's definitely going to be a protest outside Buckingham Palace later this evening when he comes for the state dinner, in essence, to try to disrupt that state dinner. He takes obviously marine one, as we have seen to get to (inaudible) House, the ambassador's residence and he will from that location take the helicopter to Marine one again, to Buckingham Palace.

Probably little chance of him sort of running into protesters there, but as the afternoon wears on, he goes to Westminster Abby, he'll do that by road, we understand he'll go to Clarence's House to meet with Prince Charles and the Duchess of Cambridge there. So this move will likely possibly bring him into contact with crowds there, not clear how close they'll be able to get to him, but there's a big protest also planned for Tuesday at (inaudible) Square which is not so far from where he'll be meeting the Prime Minister at 10 Downing Street.

[04:35:03] But today, absolutely, there's quite a possibility that some of those protesters will get near enough to be heard or seen at least when President Trump moves by vehicle from Buckingham Palace.

SANCHEZ: Certainly a lot of people unhappy with the president breaking decorum. Nic Robertson, reporting from Buckingham Palace, thank you.

ROMANS: All right, speaking of breaking decorum, President Trump now denying he ever called the Duchess of Sussex Meghan Markle nasty. Here's what he told reporters before departing for the U.K.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Are you going to apologize for the royal family for your comments about Duchess Meghan Markle.

TRUMP: No, I made no bad comments, thank you.

(END VIDEO CLIP)

ROMANS: He made no bad comments. Now let's rewind to what the president said to the Sun on Saturday.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: She said she move to Canada if he got elected. Turned out she moved to Britain.

TRUMP: There are a lot of people moving here, so, what can I say, no I didn't know that she was nasty.

(END VIDEO CLIP)

ROMANS: President Trump also urge the U.K. to walk away from a deal to leave the European Union if Brussels does not give ground during Brexit talks.

SANCHEZ: Back in the states this morning, Congress is back in session as impeachment talks ramp up before leaving for his state visit to the U.K., President Trump had this to say about the possibility of impeachment.

(BEGIN VIDEO CLIP)

TRUMP: There is no basis whatsoever for impeachment. None. There was no collusion. There was no obstruction. There was no crime. The crime was by the Democrats. The crime was by the Democrats. There is no legal basis for impeachment. It's a big witch hunt. Everybody knows it including the Democrats.

(END VIDEO CLIP)

SANCHEZ: For more on the impeachment push, here's Sarah Westwood at the White House.

(BEGIN VIDEOTAPE)

SARAH WESTWOOD, WHITE HOUSE CORRESPONDET: Boris and Christine, as talk about impeachment among Democrats grows louder, a new CNN poll shows that the public support for impeachment could also be on the rise. Polls down about 41 percent of people support removing the president, that's up from 37 percent, but the majority of people still oppose removing President Trump, 54 percent of people said, they are opposed to impeachment.

Now, Democratic House Speaker, Nancy Pelosi has been resisting calls within her caucus to start impeachment proceedings. She said on Saturday the Democrats should continue their oversight, and that they should build an ironclad case against President Trump. Take a listen.

(BEGIN VIDEO CLIP) REP. NANCY PELOSI (D-CA), U.S. HOUSE SPEAKER: In the United States of

America, no one is above the law. Not even the president of the United States.

(END VIDEO CLIP)

WESTWOOD: And House Majority Whip James Clyburn told CNN's Jake Tapper on Sunday that he believes the president will be impeached, but he thinks that there first should be a shift in public opinion. Take a listen to what he had to say on state of the union.

(BEGIN VIDEO CLIP)

REP. JAMES CLYBURN (D-SC): We think that we have to bring the public along. We aren't particularly interested in the Senate. We do believe that if we sufficiently, effectively educate the public, then we will have done our job, and we can move on an impeachment vote and it will stand.

(END VIDEO CLIP)

WESTWOOD: Special Counsel Robert Mueller's emergence last week to emphasize that the obstruction part of his report does not exonerate President Trump and to announce his resignation from the Justice Department has fueled talk among Democrats of impeachment. A growing number of Democratic lawmakers and 2020 presidential candidates and one lone Republican, Congressman Justin Amash have expressed support for proceeding with impeachment base on what we all already know from the Mueller report, but other Democrats fear that moving too quickly while the majority of people oppose removing President Trump could ultimately backfire on Democrats and perhaps even help President Trump. Boris and Christine.

(END VIDEOTAPE)

ROMANS: All right. Thank you so much for that.

Let's talk about money this morning. Global markets and the Wall Street really bracing here for fallout from a worsening global trade situation. China's retaliatory tariffs on about $60 billion worth of U.S. exports, those went into effect Friday. We're talking cotton, machinery, grains and aircraft parts. And investors figuring Trump's threat of tariffs on Mexican goods will hurt American businesses and the economy, so you've got Mexico, you've got China, and these unexpected expansion of tariff threats all rattling Wall Street.

You can see DOW futures are down just about half a percent, a little more .5 percent here right now. Global stock markets also have been down around the world to start the session. You could see Hong Kong had some kind of a little bit of a recovery late to close flat. But everything else is leaning lower here. London stocks down almost 1 percent. Here's what the president said about tariffs Sunday.

(BEGIN VIDEO CLIP)

TRUMP: Everyone's coming through Mexico, including drugs, including human trafficking. We're going to stop it, but we're not going to do business and that is going to be it. It's very simple. They're sending a big delegation right here to the White House on Wednesday, as I understand it.

[04:40:05] And we'll see what can be done. But if it's not done, you know what we're going to be doing, and I'm really OK with that.

(END VIDEO CLIP)

ROMANS: Now, of course tariffs mean higher prices eventually for consumers, but the White House position is normal economic rules don't apply in Trump's economy. The president's acting Chief of Staff Mick Mulvaney explains.

(BEGIN VIDEO CLIP)

MICK MULVANEY, WHITE HOUSE CHIEF OF STAFF: We put tariffs on China. We're putting tariffs on Mexico. And inflation is still under control. American consumers have gone to products that are made in the United States, for example, that don't carry those tariffs. We think the same thing will happen here and American consumers will not pay for the burden of these tariffs.

(END VIDEO CLIP)

ROMANS: With all of the new fronts in the trade wars that are really concerning investors, you got tensions with Mexico and China, but then you also have on Friday, the president announced the U.S. would remove India from a special trade program which exempted Indian goods from import tariffs last year. India is America's 9th largest trading partner, its population crucial for American businesses.

And on the front page of the "New York Times," you got Maggie Haberman with a story for us the Trump administration had considered tariffs on Australian aluminum. Maggie Haberman reporting that it was under fierce opposition from state department and defense department officials in the United States, so the president dropped that plan, but all of these different fronts, and trade fights with our allies that is what has Wall Street so concerned.

SANCHEZ: Really confounding that you have a potential downturn in the economy, because of so much protectionism coming right as there is an election in 2020, and speaking of 2020, what does this say about the state of Democratic politics.

Two 2020 candidates booed by fellow Democrats. We'll take you to California next.

[04:45:00] (COMMERCIAL BREAK)

ROMANS: All right, 14 Democrats making their case for becoming the next president at the party convention in California this weekend. Now the common theme was change. Messages on gun control, immigration reform, and income inequality warmly received by California's Democratic delegates. One of the candidates, former Maryland Congressman John Delaney though was rallied booed when he criticized Medicare for all. And there was a lot of attention focused on one Democrat who decided to skip the event, the front runner, Joe Biden. Here's Kyung Lah.

(BEGIN VIDEOTAPE)

KYUNG LAH, SENIOR NATIONAL CORRESPONDENT, CNN: This weekend at the California Democratic Party Convention, it was progressives who ruled the floor, they believe the way forward in defeating Donald Trump will be to attack left. Senator Bernie Sanders though not using the former vice president's name pointed out his absence.

SEN. BERNIE SANDERS, (I-VT), 2020 U.S. PRESIDENTIAL CANDIDATE: As you all know, there is a debate among presidential candidates who have spoken to you here in this room and those who have chosen, for whatever reason, not to be in this room about the best way forward. So let me be as clear as I can be, in my view, we will not defeat Donald Trump unless we bring excitement and energy into the campaign and unless we give millions of working people and young people a reason to vote.

LAH: If you're a moderate, and you decided to show up and address this crowd, you certainly heard it when the crowd disagreed with you. Listen to what happened to former representative John Delaney.

REP. JOHN DELANEY (D-MD), 2020 U.S. PRESIDENTIAL CANDIDATE: Medicare for all may sound good, but it's actually not good policy, nor is it good politics. I'm telling you. I'm telling you -- a 100 -- we should have universal health care, but it shouldn't be a kind of health care that kicks 150 million Americans off their health care. That is not smart policy.

LAH: This is the spring convention, the state party will reconvene again in the fall in November, and at that point, this state party will decide who to endorse. Kyung Lah, CNN, San Francisco.

(END VIDEOTAPE)

ROMANS: All right, former Colorado Governor, John Hickenlooper heard some boos at that same location too. Listen.

(BEGIN VIDEO CLIP)

FMR. GOV. JOHN HICKENLOOPER (D-CO), 2020 U.S. PRESIDENTIAL CANDIDATE: If we want to beat Donald Trump and achieve big progressive goals, socialism is not the answer. I was reelected -- I was reelected in a purple state in 2014, one of the worst years for Democrats in a quarter century.

(END VIDEO CLIP)

ROMANS: Hickenlooper who's polling near the bottom of the Democratic field says Republicans could use claims of socialism to paint the entire party as outside the political mainstream.

SANCHEZ: It resembles a scene right out of a disaster movie. Watch this. An out of control cruise ship crashing into a tourist boat in Venice,

at least sending people on the dock running for their lives. It happened Sunday in one of Venice's busiest canals.

[04:50:05] The operator of the cruise ship, the MSC Opera said in a statement that the vessel experienced a technical issue while heading toward the terminal for more, officials at the local part authority say, four people suffered minor injuries. Yikes.

ROMANS: Wow.

All right. Boeing has another issue with its 737 Max planes. Those details next.

(COMMERCIAL BREAK)

SANCHEZ: We're following some severe weather and relentless flooding in the heartland at the Arkansas River rising to over 40 feet, a levee breached. The river from properties underwater commerce halted for hundreds of miles.

[04:55:02] The river is expected to crest by Wednesday. This flooding costing the state an estimated $23 million a day. We get more now from CNN's Natasha Chen in Dardanelle, Arkansas.

(BEGIN VIDEOTAPE)

NATASHA CHEN, CNN NATIONAL CORRESPONDENT: Christine and Boris, we are standing at the flooded Highway Seven. Right now, you can see there's a speed limit sign that says 55 miles per hour, but you can't even tell where this road is. The only living being we can see are a lot of spiders, snakes, worms, frogs right now. This over here is an example of the crops that are flooded out and ruined.

A lot of farmers here grow corns, soybeans and rice. We talk to a pilot who spray his fertilizer and pesticides over crops likes this. He tells us that he is going to be out of a job here. A lot of farmers are going to be financially impacted for quite some time. Now, the governor of Arkansas visited this area yesterday. He toured the area affected by the flooding. This is the beginning of damage assessment which is going to be quite a long process, because it's not until all of this water has receded that we can actually tell the extent of the damage and what kind of assistance is needed in each of these counties.

Now, 350 plus homes in this county could be threatened by either flooding or inaccessible because of road closures like this. And it's still a voluntary evacuation here, but the good news is that officials in Dardanelle feel even with the levee breach on Friday, they have stabilized the flooding situation for now. Christine and Boris, back to you.

(END VIDEOTAPE)

SANCHEZ: thanks for that, Natasha. Boeing has yet another issue with its grounded 737 Max airplanes. The FAA says a joint investigation with Boeing found more than 300 737 jets, including the Max and next generation aircraft may have faulty wing parts that don't meet strength and durability standards. The affected parts could be susceptible to premature failure.

The FAA says a part failure would not bring down a plane, but it could damage it in flight. Boeing has sent out a service bulletin, and the FAA will issue an air worthiness directive requiring that airlines inspect and repair slat track assemblies within 10 days. We get more now from CNN's Richard Quest.

(BEGIN VIDEOTAPE)

RICHARD QUEST, EDITOR AT LARGE: Christine and Boris, the issue with slat tracks, the slats are a very important part of the wing. They help control the aircraft and give it lift at slower speeds on landing, but it is by no means a disaster as they have had to announce this problem, and it will be quickly rectified.

In fact, airplane manufacturers are quite often having to tell airlines this needs to be fixed. We found a problem with this or that. After all, they're exceptionally complicated instruments. Now, what's really going on here, Christine and Boris is the issue Boeing is facing with its airline customers and with the traveling public on the 737 Max.

We will be wanting to know here with the slat tracks what did they know, when did they know it? What's the regulator, the FAA then? Have we been told the whole story? Is there more to come out. Is it part of a wider picture? These you wouldn't normally have asked, but the issues of the way the Max has been handled naturally leads to conclusions that we need to know more details fast.

As for the airlines, well, those that have got grounded 737 Maxes will not be pleased. They could have further grounded 737's as the repairs are done and all of this happens as the traveling summer season moves into peak gear. The good news perhaps is that the repair won't take that long, but for Boeing, the issue remains one of trust, Christine, Boris.

(END VIDEOTAPE)

ROMANS: All right. Richard Quest, thank you so much for that. Let's get a check on CNN Business this Monday morning. Global stock markets are down after Beijing says it will not back down in the trade war with the U.S. China squarely blames the U.S. for the breakdown in talks. On Wall Street you have futures leaning lower here again this morning, another triple digit decline for the DOW on deck.

The DOW fell 355 points on Friday on President Trump's threat to punish Mexico with tariffs. It was the DOW's 6th straight losing streak, the longest since June 2011. The S&P 500 lost 1.3 percent. The NASDAQ fell 1.5 percent. The DOW and the S&P 500 down 6 percent each in May. That is the worst month since December's awful route.

The NASDAQ in May fell a terrible 7 percent. Its worst May since 2010. Now, despite rising trade war tensions, stocks are about 21 percent higher since Trump's inauguration day, well off the best gains that we have seen.

All right. The high fuse fuel prices, trade tensions and the 737 Max grounding add up to a terrible year for the airline industry. The International Air Transport Association expects the aviation industry will earn $28 billion in profit this year, the lowest forecast for the industry.

END