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White House: Tentative Deal Reached to Avoid Freight Rail Strike; World Leaders: Putin's View of Ukraine Unchanged Despite Setbacks. Aired 5-5:30a ET

Aired September 15, 2022 - 05:00   ET

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CHRISTINE ROMANS, CNN ANCHOR: Here we go. It is Thursday, September 15th, 5:00 a.m. exactly here in New York. Thanks for getting an EARLY START with us. I'm Christine Romans.

All right. Marathon talks still underway right now between freight railroad carriers and union representatives in Washington.

Here's a live look at the Labor Department. Talks have been going on inside there for about 20 straight hours now. If no deal is reached today, the first national rail strike in 30 years starts at midnight tonight.

A walkout by 60,000 workers could derail the U.S. economy. The Biden administration is considering executive action to avoid a shutdown.

Let's get the latest right now from CNN's Pete Muntean.

(BEGIN VIDEOTAPE)

PETE MUNTEAN, CNN CORRESPONDENT (voice-over): It is the latest effort to put the brakes on a possible rail worker strike that could deal a major blow to the economy. Bosses representing unions and railroads met with the labor secretary in a last-ditch effort to reach a deal by midnight Thursday. That's when 60,000 workers could walk off the job in solidarity with train engineers fighting for sick time.

A strike will mean freight rail, which makes up 40 percent of all freight in the U.S., will grind to a halt impacting everything from parts for cars to fertilizer for farming.

UNIDENTIFIED MALE: Transportation is a big part of the cost to the consumer and I don't believe there's one person in the country that it won't affect.

MUNTEAN: Starting Thursday, some railroads will stop accepting shipments of grain critical to feed livestock and driving up costs at supermarkets. Rail passengers will be impacted, too.

Amtrak is canceling all of its long distance routes outside of the northeast corridor. In Chicago, 9 of 11 commuter lines will stop when a strike begins. NIGEL JOHNSON, RAIL COMMUTER: I've been commuting from the suburbs to

Chicago now for over 30 years. I can never remember this happening. It could take two hours if I'm driving. On train, it's 40 minutes.

MUNTEAN: With mid-term elections on the horizon, the pressure is on Biden administration to reach a resolution. The president himself has called unions and employers, pushing them to resolve their differences. If a freight rail shutdown does happen, trucking companies say they cannot pick up the slack.

PATRICK ANDERSONM, CEO, ANDERSON ECONOMIC GROUP: It starts very small but grows geometrically.

(END VIDEOTAPE)

MUNTEAN (on camera): One more potential impact here. Water treatment facilities are worried they will not be able to get chlorine, which is critical for cleaning water. It's often sent by rail. That's why they're warning many municipalities nationwide will have to issue boil water advisories if this rail strike does, in fact, happen.

Pete Muntean, CNN, Washington.

ROMANS: Look, the rail system an artery for the American economy here. No question.

Here are other ways a nationwide freight rail strike could affect you, the consumer. Higher gas prices, about 300,000 barrels of crude oil moved by rail every day. That's enough to supply two mid-sized refineries. If the refineries can't get the crude they'll be forced to cut production, and they won't be able to ship already refined oil either.

Higher food prices as well here, shortages potentially on shelves just harvested crops like corn, soy beans and wheat. They won't get to food processors. Not just here in the U.S. U.S. corn exports to China a huge amount of grain move out of the Pacific Northwest, a long way by rail to the Midwest. Right now, meat packers are also very concerned they can't have their fresh meat packed into rail cars to be struck, right?

Beyond food, you're looking at high process, potential shortages of other goods, you buy in stores and online, like house wares and hardware and clothes, you name. If distributors and stores can't get them, you can't buy them. And holiday shopping season, by the way, is right around the corner.

And manufacturing, the same logic here. If factories can't get parts, can't get raw materials, and assembly lines grind to a halt, and they can't ship that. It would put a pinch on cars and trucks, SUVs, automakers already struggling to rev up production due to a part shortage left over from the pandemic, new car supplies already limited and prices are at record highs there, pausing factory production would only make it worse.

All right. We just heard how the president is trying to avert a crippling rail strike. Could Congress step in and try to put a stop to this?

[05:05:01]

CNN's Daniella Diaz live on Capitol Hill for us bright and early this morning.

Daniella, where do lawmakers stand on this?

DANIELLA DIAZ, CNN CONGRESSIONAL REPORTER: Christine, it's been more than 30 years since Congress has had to intervene in some sort of railroad strike. Democrats who, of course, have the majorities in the House and Senate are hoping that the administration officials can solve this issue, negotiate with these railroad workers, prevent a strike before they have to intervene.

Of course, as Pete Muntean said in his package that aired before me. It's a really partisan and trying to negotiate and pass legislation to prevent a labor strike, just yet. A group of Republican -- two Republicans specifically, Roger Wicker and Richard Burr actually tried to force a resolution Monday to try to prevent a railroad strike.

Senator Bernie Sanders blocked the measure, arguing that it did not go far enough to protecting rail porters' rights.

So, Democrats, of course, waiting to see whether administration officials can negotiate on behalf of Democrats, the Biden administration prevent a strike, the clock is ticking, of course, Christine. Less than 24 hours before a strike is supposed to happen.

Take a listen to what House Speaker Nancy Pelosi said yesterday, told during her press conference on where Democrats stand on this issue.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA): We are hoping that negotiations will continue so there is no rail strike. The main area of disagreement is that there's no sick leave for the workers and that's a problem.

(END VIDEO CLIP)

DIAZ: Christine, the bottom line is Congress is of course in session again today. Right now they are not eager to cost them that they are having become local workers and the rail and the administration, but, of course, we could hear later today whether they plan to step in should a deal not be reached -- Christine.

ROMANS: All right. Daniella, thank you so much for that.

Let's dig in here with Abe Eshkenazi, CEO of the Association for Supply Chain Management.

I've got tell you, the timing here, two years of snarled supply chains and now we've got the potential for a rail strike here, from food to construction parts to paper. Long range routes are already suspended.

So, we're already seeing the effects of this. Talk to us a little bit about the significance of the potential disruptions here to the economy.

ABE ESHKENAZI, CEO, ASSOCIATION FOR SUPPLY CHAIN MANAGEMENT: Yeah. You've highlighted a number of the issues that we're dealing with, and it's important to recognize, we're still in recovery from the bullet (ph) effect, and the excess inventory resulting from the pandemic, conflict in Ukraine, whether-related issues, all leading to labor shortages, congestions at the ports, trucking issues, finding enough individuals.

Add on, as you pointed out, the holiday shopping and limited warehouse capacity. This is a perfect storm for the global supply chain, and how it's interconnected between shipping, rail, and trucking and all the consumer, and retail outlets.

Any discussion will have an impact both downstream and upstream on the supply chain.

ROMANS: What's the worst case scenario here? We know there's a deadline to reach an agreement with labor unions, midnight tonight. So, they are still talking. I mean, everyone wants to get this resolved no question.

But what's the worst case scenario here?

ESHKENAZI: Well, in the short term, some companies may have already taken action, anticipating this, supply professionals evaluate their risk profiles and take the necessary steps.

In the short, some companies were some companies may weather there. As you pointed out, can't get the raw materials, they're going to shut down the lines and individuals will be laid off. Others may find alternative modes. Higher costs, obviously inflationary impacts we see.

The direct impact from a rail to commuters as well as Amtrak, as we've already identified is already causing disruptions. We're seeing much higher prices at every stop along the away, trucking and other forms of logistics for transportation are just in the option for the volume and the costs that are associated with trail.

ROMANS: Yeah. I mean, you think about corn for example, coming from the Midwest to the Pacific, northwestwards, going to loaded on to ships sent to Asia, right? This is a huge powerhouse export. It doesn't make sense to pack it all into trucks and try to truck it. Plus, you don't have the trucks and drivers to do that anyway. Some areas there aren't ways to mitigate it.

ESHKENAZI: Exactly right, the criticality of the rails to our economy can't be overstated here. The movement of goods and people, it's difficult to see how we don't take some action, either legislative or from the administration, to force all this -- either force an agreement or to get the parties to the table to make an agreement here.

[05:10:11] Rail affects almost every aspect of our economy from agricultural, to coal, to lumber, to chemicals, as well as finished goods. If we can't get them to the retailers, shortages, inflationary amp index, these are significant issues.

ROMANS: Abe, let me tell you about worker shortages. I know we're seeing it tracking. I know we've seen it ion a lot of different areas of the economy. How does that play into here, the strain on workers in the supply chain field over the past couple of years? What's the labor situation there?

ESHKENAZI: On the supply chain, good news. These are committed individuals. However, when we're seeing the extent of job shortages in almost every aspect of our supply chains now.

We had a labor shortage prior to the pandemic in supply chain. It's even been exasperated by the pandemic, weather related issues, the conflict in Ukraine. We are just barely getting into some normalcy of supply chains and balancing it.

We're not there yet. It's clear that getting a rail disruption is going to impact raw materials, manufacturing, to the consumers. This is where uncertainty comes in for a lot of supply chain professionals. We count on data. We count on reliability of systems.

We're removing a major component in the global supply chain, it will have a significant effect both downstream and upstream on almost every employee and job function.

ROMANS: All right. Stakes are high. Thanks for laying it out for us.

Abe Eshkenazi of the Association for Supply Chain Management in Chicago this morning, thank you so much. Nice to see you.

All right. Right now, thousands of mourners lined up in London to say farewell to their queen.

Plus, the highest ranking Trump official complying with a Justice Department subpoena about January 6.

And the leaders of Russia and China meeting face to face. How could Putin and Xi help each other?

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[05:16:16]

ANNOUNCER: This is CNN breaking news.

ROMANS: Breaking just moments ago, a statement from the White House that a tentative deal has been reached to avert a strike in the railroad impasse here. Marathon negotiations through the night, some 20 hours.

The White House saying a tentative agreement has been reached tonight. That's an important win for the American economy and people. Rail workers will get better pay, working conditions and peace of mind for their health care costs at the same time saying it is a win for railroad companies. They can retain and recruit workers that is the backbone of the American economy.

This had been something that was really an important development here because 30 percent of goods in this country are carried on the railroad lines. Already companies have been moving, even Amtrak canceling all of its long haul routes here because, of course, Amtrak passenger trains ride on those rails.

So, everything from gasoline to food, consumer goods, just about everything are carried on those railroad lines. The White House is touting a deal. Check on futures. See if the markets are moving on this. This takes a big uncertainty out of the market mentality there.

Okay. So, narrowly mixed. We'll continue to watch and see if this could be good news for the stock market.

Let's move onto the leaders of Russia and China. They'll meet face to face in Uzbekistan. President Putin and President Xi expected to discuss Ukraine and Taiwan.

CNN's Steven Jiang joins us live from Beijing. Stephen, this is the first time the two leaders have met since the start of the war in Ukraine.

STEVEN JIANG, CNN BEIJING BUREAU CHIEF: That's right, Christine. Also, this is the first time Xi Jinping left China since the pandemic. Just like he's doubling down on his zero COVID policy at home, he's going to double down on his commitment with no limit partnership with Russia, and with Putin personally. That's something he could use now given all of the developments on the battlefield.

Now, this summit is taking place despite Ukraine's position on neutrality on the war. That position, though, betrayed by Xi's most trusted senior officials last week when he told his Russian counterpart that said China understands why Russia wants the war and even pledged to further strengthened coordination actions between the two sides. That is very much a reflection of what's been going on in the past few months with the two countries not only maintaining but expanding their cooperation upon all grounds, diplomatically, militarily with their two strongman leaders, very much sharing this sense from the west and eager to promote a new world order without the U.S. being in the leadership.

That's what this regional summit in Uzbekistan where the two men are is very much about. Xi's challenge is many central Asian nations, China's trying to cultivate closer ties is Russia's backyard by Putin. Many have strong suspicions of Putin's intentions there.

So, how Xi Jinping is going to strike a delicate balance there watched very closely by people around the world.

ROMANS: Absolutely, all right. Thank you so much, Steven, for that.

Ukrainian forces mounting a strong counter offensive. It's an embarrassing setback for Putin's forces. Will that do anything to change his mindset?

Let's bring in CNN's Clare Sebastian in London.

We're hearing from two world leaders who have spoken to the Russian president. Clare, what are they saying?

CLARE SEBASTIAN, CNN CORRESPONDENT: Yeah, Christine, we've had from the U.N. secretary general, Antonio Guterres and the German chancellor Olaf Scholz, who told journalists after his call with Putin on Tuesday, there is no indication he said that new attitudes are emerging.

[05:20:04]

So, unequally both got the scenes that to Putin has in now had this resolved weakened by the rout that his forces are seeing in the east of the country as Ukraine mounts this counter offensive.

Now, look, yes in Russia we are suddenly seeing as a result of the defeats on the battlefield, we are seeing more debate on television. More debate in political circles, how the intelligence might have been flawed, about how NATO was involved in some way in this rout that they're seeing in the Kharkiv region. Some suggesting now we should call it a war like the head of the Russian commentary said this week.

But, no, this is not a sort of sweep of anti-Kremlin sentiment across Russia's 11 time zones. So, for the moment right now. The question is how long do I continue and what does this mean? Does this set up a dangerous moment for Ukraine on the battlefield? Christine?

ROMANS: Yeah. Absolutely.

All right. Clare, thank you so much for that.

Let's bring in CNN political analyst and "Washington Post" columnist Josh Rogin.

And, Josh, you've got this meeting happening between the Chinese president and the Russian president. At the same time Russia is struggling with a humiliating loss in Ukraine right now at least. What kind of assistance do you think Putin is seeking here?

JOSH ROGIN, CNN POLITICAL ANALYST: Well, Christine. I think Putin is seeking diplomatic, economic and information warfare assistance. He's getting all of that from the Chinese communist party.

In other words, while China claims to be neutral, they're supporting Putin's war effort in every way except for giving them weapons directly because if they gave them weapons directly they would be sanctioned by the United States. More broadly, Putin and Xi have a shared interest in promoting a new world order that would make the world safe for repression and autocracy and they are partners in that effort, the other autocratic efforts in North Korea and Iran.

And what we're seeing is the formation of an autocratic bloc that's meant to not only help Putin in this war, but also to help Xi and China in the potential next coming war if and when he decides to attack Taiwan.

So, whatever help Putin is getting from Xi now, he'll be expected to return in time.

ROMANS: Yeah, tell me more about that. Putin reaching out not just to China but North Korea and Iran. That potential collaboration must concern the west.

ROGIN: As well it should, Christine. I mean, right now, we're seeing massive military exercises involving several of these dictatorships off of Russia's far east. Last week, we had a major economic regional conference hosted by Putin and the eastern Russian city of Vladivostok.

The bad guys are teaming up, right? If you ask the Biden administration, they'll say, I guess they have to team up because they're losing. Sure, there's something to that argument. And some will say, well, if Putin, Xi, Kim Jong-un and the ayatollah want to be friend, let them have at it because we don't want to be friends with them anyway.

But the bottom line is once they begin to share resources and work strategically on things like energy, and currency, evading financial sanctions, and food, and gold, and various other crimes and corruptions, not to mention protecting each other in diplomatic areas from any effort to stop the atrocities against their own people, it's going to be a lot harder for the free and open societies led by the United States to impose basic rules of the road and to keep a world that where atrocities are punished and where peace is maintained.

So, I think this is a growing trend that's going to get worse before it gets better and I do think that the Western World has to do more to respond.

ROMANS: You know, Putin's foreign policy aide says that the two leaders will also discuss Taiwan. Can Russia help China tighten control of Taiwan?

ROGIN: I think absolutely that they can and that they will to the extent that they can. It's not just about the military dynamic because what President Xi is learning from the Russia/Ukraine war is how to avoid the punishment. That means how to avoid sanctions. How to make sure they can still operate their economy, military, supply chains if the United States and Ukraine cut them off from critical technologies.

And right now, those are the exact things that China is helping Putin with. And later, if an when China attacks Taiwan, I hope they don't, but they just might, Putin will be able to return that favor. So, basically, they're building an infrastructure to protect each other so they can continue to commit the crimes, and corruptions and atrocities that make up these regimes' strategy. We have to notice that and we have to respond because it's not enough to win battles on the battlefield, we have to look down the road and realize that these countries are getting worse.

ROMANS: Yeah, one wonders if China would have paused for some kind of tightening control over Taiwan because of what's happened in Ukraine, but who knows.

Josh Rogin --

ROGIN: Depends how the Ukraine war ends.

ROMANS: That's right, and when. Thank you so much for that. Josh, nice to see you.

All right. CNN has learned former White House chief of staff Mark Meadows complied with a subpoena from the Justice Department's January 6th investigation. That makes him the highest Trump ranking official to have responded to a subpoena in that federal probe. A source tells CNN Meadows turned over the same materials provided to the January 6 House Select Committee.

Last year, Meadows turned over thousands of text messages and emails to the House committee before he stopped cooperating.

Special counsel John Durham's office is finishing up a report on investigation into potential misconduct during the Trump Russia probe. The Trump administration appointed Durham to investigate the investigators. Probe has mostly fizzled out. Republicans hoped Durham would expose some sort of conspiracy against the Trump White House.

But in his three-year investigation, Durham has not charged any government official with a crime.

All right. We are about to learn new details about next week's funeral for the Queen Elizabeth and President Biden and Prime Minister Truss making plans to meet in person.

And just moments ago, the White House announcing this tentative deal to avert a nationwide freight rail strike. Full coverage ahead on "NEW DAY".

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