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First Move with Julia Chatterley
A Major Reshuffle Of The Kremlin; U.S. Keeps Text Of China Trade Deal Under Wraps Until Signed; Democrats Add New Evidence To Impeachment Case. Aired 9-10a ET
Aired January 15, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:36]
ANNOUNCER: This is CNN breaking news.
JULIA CHATTERLEY, CNN INTERNATIONAL HOST: Welcome to the show. We begin with Breaking News. A major reshuffle of the Kremlin. Russia and the Prime
Minister Dmitry Medvedev has just announced that he and the entire Russian government will resign.
Fred Pleitgen is live in Moscow for us. Fred, huge development here. Talk us through what more we know at this stage.
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes. You're absolutely right, Julia, it certainly is a massive development. And it is
really one that came absolutely surprising to folks here in Russia, to everybody who is observing Russia as well.
I can tell you that when this announcement happened, Russian state-TV didn't even break into it. They continued their regular programming,
because even they hadn't heard and they hadn't been informed that this was going to happen.
Then a couple of minutes later, there was some video of Vladimir Putin speaking with Dmitry Medvedev, and then he made this announcement saying
that he and his entire government would resign.
Now, I have his statement here. I'm going to paraphrase it a little bit. So forgive me for not looking up the camera the entire time.
He said that significant changes not only to a number of Articles of the Constitution, but to the balance of power as a whole were announced.
Vladimir Putin had his State of the Union address today, where he called for some changes to Russia's Constitution to give actually the Parliament
more power and less power to the presidency, which some people see as Vladimir Putin preparing for 2024 when his term runs out, and when normally
he would have to leave power as far as the Constitution of this country is concerned.
So he announced some things that he wanted to happen, and part of that pertain to the way that the Prime Minister is elected, which he says in the
future should happen by the Parliament and not by the presidency as it has been in the past. So those were some fundamental things that Vladimir Putin
said earlier today.
And Dmitry Medvedev, in his statement, he said, in the context of that, we as the government should provide the President of our country with the
opportunity to make all the decisions necessary for this and in these conditions, I believe it would be right in accordance with Section 1-117 of
the Constitution, the government would resign.
So Dmitry Medvedev there announcing his resignation, announcing the entire government's resignation. Vladimir Putin was actually seated next to him as
he made this announcement on national TV then, and Vladimir Putin then accepted that resignation. He said not everything had gone well, but he did
thank the government.
And then Vladimir Putin said that this current government is going to stay in power in a caretaker function while Vladimir Putin speaks with every
single minister personally, and then decides whether or not these ministers are going to be able to continue or get back into their portfolios, or
whether they will leave.
Now, as far as Dmitry Medvedev himself is concerned, who of course for four years was also the President of this country, there is already talk of him
going on Russia's National Security Council.
But right now, what you have here is a massive shake up in the government, a massive shake up possibly also in the power structure here as well. But
of course, Vladimir Putin is still very much in the driver's seat, as far as Russian politics is concerned and as far as the Russian state itself is
concerned as well -- Julia.
CHATTERLEY: Absolutely. And we look ahead as well. The belief here is perhaps this is again, Vladimir Putin, working towards the future, what
life looks like beyond his presidential term here in 2024.
But for me, critical in the short term -- foreign relations -- Sergey Lavrov, the face of Russia outside to the international community. Do we
think he remains?
PLEITGEN: Yes, look, Sergey Lavrov, that's going to be one of the big decisions that we're going to be waiting for as well. He has obviously been
the Russian Foreign Minister for an extremely long period of time. He is also someone who is very much the face of Russian foreign policy as well.
As Vladimir Putin was saying there, he is going to see, he is going to talk to all these ministers, one by one. He is then going to see whether or not
they're going to continue their portfolios.
Sergey Lavrov is one of the ones that we're certainly looking at very closely, the Russian Foreign Minister. He is I believe, 69 or 70 years old
already. Again, he's been in power for an extended period of time, whether or not he is going to continue on that was something, that was a question
already going into this and has been a question for a while whether or not he would finish the governmental terms -- the term until its end or whether
or not he would resign or step down before go into retirement before.
So that's certainly going to be one of the main questions, but in general, this is a big shake up of Russian politics, and of Russian policy. Also as
far as financial politics is concerned as well, of course, it's a key thing for the Russians with this country under some pretty immense sanctions from
the United States and from the international community as well.
[09:05:11]
PLEITGEN: Of course, financial policy and keeping this country running economically is something that's also a very, very big deal and is going to
be very key looking forward and moving forward to see how that's going to evolve -- Julia.
CHATTERLEY: Absolutely. The domestic story and of course, Foreign Relations hereto. Fred, great to have you with us. Fred Pleitgen there.
Once again, that breaking news story: The resignation of the Russian government.
All right, let's bring it back to FIRST MOVE now because there are other big stories going on. We are counting down to today's it ceremonial signing
of the U.S.-China trade deal, Phase 1, of course.
We've also had more U.S. bank earnings today, too. It's another busy day -- not really. But you can tell that from looking at the futures.
Take a look at Wall Street right now. We are a little bit softer here as you can see. Two tenths of one percent pullback. It adds to this softening
that we saw from record highs in Tuesday's session, too.
This, after Treasury Secretary Steven Mnuchin suggested that tariffs on Chinese goods will remain until after the 2020 elections. I have to say
that's not entirely unexpected, but it remains a concern there for global trade. We did see the Dow breaching at 29,000 once again, but it did fail
to hold there, just like many others, you know, the Dow just seems nervous the closer it gets to 30.
Yes, we've been on and perhaps, no surprise, exports and stocks across Asia also softened in Wednesday's trade. Chinese stocks were the
underperformers, in fact, as you can see there, down over half a percent. What everyone is waiting for at this moment -- details. Details on just
what is contained within that 86-page of trade agreement.
President Trump reportedly called it a big beautiful monster. Not so monstrous when you consider that the Brexit divorce deal was over 500
pages. I mean, they're barely trying. The question is, will it have substance? That's something other countries want to know, like Germany.
New numbers today showing the German economy grew just 0.6 percent last year, that's the weakest growth in six years and yes, exports dragged. This
is the story. Let's get right to our drivers where we're talking trade and so is the Treasury Secretary Steve Mnuchin, once again, listen to what he
said about the Phase 1 trade deal just moments ago.
(BEGIN VIDEO CLIP)
STEVEN MNUCHIN, U.S. TREASURY SECRETARY: I think it's a very significant deal. It's the first time we've ever had an encompassing agreement with
China on all of these issues. It deals with Intellectual Property, forced technology transfer, deals with agricultural structural issues, financial
services, currency, purchases, and a fully enforceable agreement. So there's a dispute mechanism.
(END VIDEO CLIP)
CHATTERLEY: David Culver is in Beijing for us.
David, great to have you with us. The U.S. administration is saying this is a huge win for the United States. How is Beijing and the government there
spinning this?
DAVID CULVER, CNN CORRESPONDENT: It is interesting to note here, Julia that it has been a rather muted reaction from Beijing and from officials
here in China. They have kept, to be blunt, quiet on this.
The last of any substance that we've seen was, I was looking back, about a month, December 13th, when this was initially announced, and that was just
kind of a vague relaying of what the nine chapters would be in this 86-page document. As you laid out, the details still remain a mystery.
But what we are hearing from the U.S. side of things is that this obviously will have the substance of $200 billion worth of purchases. Now, they're
saying everything from manufacturing, to the service sector, to energy, to agriculture, of course, that's huge for the farmer constituency that
President Trump has continued to push on.
But you heard Secretary Mnuchin say there that this goes beyond that. You know, that this goes into currency manipulation. They just this week
removed China from that designation as a currency manipulator. That is something here that I've noticed has been harped on in state media.
It's been several op-eds that have come forward saying that China should have never been put in that position. And that finally, the U.S. is making
a move that is, in their words, the right move that will get them on a path towards perhaps seeing some sort of resolution between the two countries
going forward beyond Phase 1, because after all, there are still deeper structural issues, Julia that we're looking at.
But Secretary Mnuchin also hit on the fully enforceable factor because that's also been a big question. How is it that you can keep China from
reneging on their promises here?
The Secretary has maintained that this is something that they're confident will be enforced and that they will take proportionate action if China does
not live up to this agreement. What would that look like? Perhaps laying back on some of these tariffs. China seems to now be just avoiding all the
details and the talk so far, they want to see this come to ink, and once that happens, we'll see how they react.
[09:10:01]
CULVER: But it'll be interesting to note if they really put much detail out there in the official format, Julia, because, you know, as of now
they're keeping quiet. So just maybe a couple of things. One is that the Trump administration is right in saying that this is a win for Trump, or
perhaps that they've seen this tumultuous relationship go back and forth so many times, that it's not until things are solidified and signed upon do
they feel like they can breathe easy, somewhat, at least.
CHATTERLEY: Yes, you raise some really great points, David. I have to say and actually, the first of its kind, this this deal and try to tackle some
of those imbalances, so we shouldn't take it away from the administration here and the United States, too. David Culver, great to have you with us
over in Beijing there.
All right to our next driver now, to the banks. Goldman Sachs beating expectations for quarterly revenue is it joined its rivals in posting
pretty strong bond trading results in particular, but its profits did fall some 26 percent from a year earlier, missing estimates there. The
comparables were tough.
Bank of America, meanwhile, its profits also dropped to four percent from a year ago. BlackRock, meanwhile reporting a 40 percent jump in quarterly net
income.
Paul La Monica joins us now to break down all the details. Let's go with the banks first here and there specifically, I think, we'll begin with what
we saw from Goldman Sachs here.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, Goldman Sachs, the revenue did top forecast. But earnings, as you pointed out, was a bit disappointing.
Part of that was what the bank described as a bit of a slowdown in M&A activity in the fourth quarter, which hurt fees but also, the bank had to
incur higher legal costs.
They are bracing for a potential fine tied to that one MDB Malaysian money laundering scandal. We have had reports that Goldman Sachs is likely to pay
more than a billion dollars, perhaps as much as $2 billion to settle these charges and Goldman Sachs obviously putting some money away in its legal
reserves to prepare for that and that's hurting profits in the short term.
CHATTERLEY: Yes, it makes perfect sense. And I want to skip on now to BlackRock as well, because they made a bit of a splash yesterday with their
shift to more sustainable investing. And I think the whole market was talking about what this means for other asset managers. A bit of a splash
here too, in terms of the numbers that they have produced today as well.
LA MONICA: Yes, definitely, Julia. Obviously, Larry Fink really making some big news yesterday by talking about how BlackRock was going to focus
increasingly on you know, the environment and sustainability with regards to their ESG investments.
And you know, let's be honest here, BlackRock can move the markets because they are the owner of the gigantic iShares family of funds and ETFs which
many retail investors love. These index ETFs and iShares ETFs continued to pile in a lot more money attracting you know, $25 billion more in new
assets during the quarter and that is one of the reasons why BlackRock reported results that topped forecast.
CHATTERLEY: Paul La Monica, great to have you with us. Thank you for that. All right, let me bring you up to speed now with some of the other stories
making headlines around the world.
New video appears to show two missiles striking a Ukrainian passenger jet in Iran. The video published by "The New York Times" shows the missiles
hitting the plane around 20 seconds apart. So as you just saw, that was the first missile streaking towards the plane with the impact there noted on
the screen.
Now, if you keep watching a second missile appears heading in the same direction. "The Times" says this is security camera footage that it was
able to verify. But I have to say CNN has not yet independently confirmed the video. There you go. There's the second missile.
All right, let's move on. The U.S. House is set to send the Impeachment Articles against President Trump to the Senate today. Democrats plan to add
new evidence when they send the Articles to the upper chamber.
Athena Jones is live in Washington with the latest we're set to hear, Athena -- and great to have you with us -- from Nancy Pelosi at 10:00 a.m.
Eastern this morning, but what are we talking about here as well in terms of new evidence?
ATHENA JONES, CNN NATIONAL CORRESPONDENT: Well, first of all, in a little under an hour, we're going to hear from Speaker Pelosi who will be the
House Impeachment Managers, those are the people who will be prosecuting the case against President Trump in the Senate. So we'll learn those names
in just under an hour from now, and a little later, the House will vote to approve those Impeachment Managers and to formally transmit the Articles to
the Senate.
But you just mentioned this new evidence that has just become now a part of the record that's going to be handed over to the Senate. This is evidence
from Lev Parnas who was an associate of Rudy Giuliani, who is of course, President Trump's personal lawyer.
Lev Parnas was part of Giuliani's efforts in Ukraine to try to get the Ukrainian President Volodymyr Zelensky to open an investigation or announce
an investigation I should say into the Bidens and this company, Burisma.
[09:15:01]
JONES: So, among these documents, we're talking about phone records, text messages, even letters and handwritten notes. For example, there is a
previously undisclosed letter that Giuliani sent to the President-elect Zelensky before he was sworn in, in May, asking for meeting that Giuliani
wanted to meet with the President in his role as President Trump's personal lawyer, and at President Trump's direction and with his consent, so we have
that letter.
There's also, interestingly, a handwritten note on Ritz Carlton Hotel stationery, the Ritz Carlton in Vienna, this note written by Lev Parnas,
and it says get Zelensky to announce investigation into the Biden's. So this is the kind of information that certainly Democrats feel supports
their case against the President. They're looking to add this to the evidence, to the record they sent to the Senate.
Now, of course we don't know for sure, and this is going to be learned from the Intelligence Committee Chairman Adam Schiff on the House side. He said,
we don't know for sure whether the Senate will allow new evidence that wasn't part of the House's earlier hearings. They didn't vote on this
because this is new evidence that that Parnas was just able to release or hand over to these House Committees. So that is one question we'll have to
see.
But Representative Schiff said, look, it's going to be difficult for this Senate to ignore this new relevant evidence here -- Julia.
CHATTERLEY: Yes. And it's going to be fascinating to see about witnesses as well. Athena Jones, we will continue to watch. Great to have you with
us. Thank you for that.
Now, in Tuesday's Democratic presidential debate, this was the moment that has people talking. It's Senator Elizabeth Warren, seemingly refusing to
shake Bernie Sanders hand.
Six Democratic rivals sparred in Des Moines with less than three weeks until the Iowa caucuses. The panel was asked about Warren's claim that
Sanders told her privately, a woman cannot win a presidential election.
(BEGIN VIDEO CLIP)
QUESTION: I do want to be clear here. You're saying that you know told Senator Warren that a woman could not win the election.
SEN. BERNIE SANDERS (I-VT), PRESIDENTIAL CANDIDATE: That is correct.
QUESTION: Senator Warren, what did you think when Senator Sanders told you a woman could not win the election?
SEN. ELIZABETH WARREN (D-MA), PRESIDENTIAL CANDIDATE: I disagreed. Can a woman beat Donald Trump? Look at the men on this stage, collectively they
have lost 10 elections. The only people on this stage who have won every single election that they've been in, are the women. Amy and me.
SEN. AMY KLOBUCHAR (D-MN), PRESIDENTIAL CANDIDATE: So true. So true.
(END VIDEO CLIP)
CHATTERLEY: All right, we're going to take a break here on FIRST MOVE, but coming up, as the celebrations commence for the signing of the Phase 1
China trade deal, we look ahead to the prospects of Phase 2. Stay with us. We're back after this.
(COMMERCIAL BREAK)
[09:20:50]
CHATTERLEY: Welcome back to the show. I just want to remind you of a breaking news this morning out of Moscow. Russian Prime Minister Dmitry
Medvedev announcing that he and the entire Russian government will resign in a major reshuffle at the Kremlin.
Medvedev made the statement on Russian state TV sitting next to President Vladimir Putin. Medvedev said the government was resigning to give Putin
room to make changes to the Constitution. The President thanked members of the government for their work.
This comes after the President proposed constitutional amendments that would weaken his successor. His term, of course, ends in 2024.
All right, let's take a look at what's going on in Wall Street as well. The U.S. shocks remain on target for a lower open this morning as the U.S. and
China get set to try to sign -- my apologies -- that Phase 1 of the trade deal. News that billions of dollars' worth of tariffs will remain in place
well into 2020 has dampened the mood a little bit and did in the session yesterday, too.
Now quite interesting, as we were discussing with David earlier on in the show, Chinese media seemingly spinning this trade deal as a big win for
consumers and assuring the public that it will get fresh U.S. products on the shelves.
Kristina Hooper, Chief Market Strategist at Invesco joins me now. Great to have you with us. You've said that the most important thing I think about
this deal actually is the psychology that comes with the signing of this deal and the ratcheting down of tensions.
KRISTINA HOOPER, CHIEF MARKET STRATEGIST, INVESCO: Oh, absolutely, because keep in mind that what we've seen really over the last few years is a real
ratcheting up of economic policy uncertainty, and that causes companies to be a lot more apprehensive, reluctant to spend, and I think that's why
we've seen CapEx spending lower than one would assume, given the 2017 Tax Reform legislation. So this could be a game changer.
CHATTERLEY: Do you think it kicks back in? I mean, we saw a bit of a softening in market activity yesterday, just in light of Treasury Secretary
Steve Mnuchin's comments that look, the tariffs are going to remain. We want to sign a Phase 2 trade deal here and until we see follow through on
this promise and action from the Chinese here, including agricultural purchases, those tariffs remain.
HOOPER: Yes, we could certainly see economic policy uncertainty go back up if tensions flare up again, and there's certainly that potential. And keep
in mind, we still don't know what's in the agreement yet.
CHATTERLEY: Yes.
HOOPER: We've gotten some indication of what will be in there, but we really don't know. And in fact, as of yesterday, it was reported that it
was still being translated into Mandarin.
So this is something that could be a surprise to many. We'll have to wait and see what actually is delivered once it is signed.
CHATTERLEY: Chances of Phase 2 in 2020 being agreed?
HOOPER: Slim to none and slim just left town.
CHATTERLEY: Yes. I mean, to be fair, you've been a skeptic all the way along and you're saying this is really not happening. It's going to be
interesting to see because -- what about for markets more broadly? I mean, one of the markets I think that's been most beaten up as a result of this
actually is China and the comparison between what we've seen for stock markets in the United States versus in Asia and China are related actually
--
HOOPER: Well, China has experienced a bunch of headwinds over the last few years and not the least of which, of course, is the trade war. But we've
also seen a general slowdown in the Chinese economy, largely due to deleveraging and the effects of that.
But China has actually gotten a very nice boost over the last few months. I certainly would point to specifically the end of balance sheet
normalization.
CHATTERLEY: Yes.
HOOPER: That occurred in September and then fourth quarter was a great quarter for emerging markets, which coincidentally outperformed U.S.
stocks, but China was a standout within EM equities.
CHATTERLEY: And does it continue?
HOOPER: I think it could very well continue. Certainly, Chinese equities would get a very nice boost from this Phase 1 trade deal. So if it holds,
if we see that tensions still flare up, I think that's enough, coupled with that and the balance sheet normalization to continue to propel Chinese
equities forward.
CHATTERLEY: And markets in Southeast Asia, too? Very much connected to the economy.
HOOPER: Yes, absolutely. I mean that's one area where we're actually seeing not just monetary stimulus, but fiscal stimulus. We've got India set
to deliver corporate tax cuts in April.
[09:25:07]
HOOPER: China is certainly throwing fiscal and monetary stimulus at its economy, and you also have Japan planning some fiscal stimulus.
CHATTERLEY: Yes. It's also about the domestic stories, and very important to put that out there. What about Russian assets at this moment? I mean,
we've been talking about the breaking news this morning and the resignation of Dmitry Medvedev, the Prime Minister and the entire Cabinet. I mean,
that's politics. And that's one thing. But what are your views as a house here on Russian assets in general?
HOOPER: Well, Russia, I think is emblematic of one of the key risks of emerging markets, which is that geopolitical instability, right, and we've
certainly seen that this morning with what I think is a very significant change to the Russian government, so that always introduces a layer of
risk.
So I would be apprehensive about Russia assets, with the exception of if we see any kind of increase in tensions between the U.S. and Iran. If this
were to actually really become something like a full scale war or something similar, that could mean that oil producing countries outside the Middle
East benefit.
CHATTERLEY: Yes, energy. Energy producers in the end benefit most or damaged least.
HOOPER: Exactly.
CHATTERLEY: Yes. Kristina Hooper, great to have you with us. Thank you so much for that.
HOOPER: Thank you so much.
CHATTERLEY: Kristina Hooper, Chief Market Strategist at Invesco. All right, we're counting down to the market open this morning, a slightly
softer start expected. Lots to come today. Remember the signing of that trade deal, the details as Kristina mentioned, let's have some details on
exactly what's in this Phase 1 trade deal.
And of course, we'll hear from Nancy Pelosi at 10:00 a.m., too, so plenty more to come and discuss on the show. The opening bell is next.
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back to FIRST MOVE live from the New York Stock Exchange and the opening bell here in New York this Wednesday morning. U.S.
stocks set to pull back a little bit further from record highs.
But hey, let's call that unchanged, just two hours to go before the U.S. and China sign their Phase 1 trade deal. Treasury Secretary Mnuchin touting
the deal today calling it a landmark agreement. It is the first of its kind, arguably, trying to tackle some of the asymmetries here. The question
is how much bite does it have? He said also and reiterated that the tariffs won't be rolled back anytime soon.
New evidence for U.S. inflation today as well and the data this morning, prices on the wholesale level ticking up just slightly in December, that
follows the weakened and unexpected read on consumer prices, too. Encouraging news. The U.S. policymakers hoping to keep rates on hold steady
at this stage.
What about our Global Movers this morning. Shares of Goldman Sachs and Bank of America trading lower in this session this morning so far after the
release of mixed Q4 results, both companies enjoyed a strong fixed income revenues, but Goldman profits missed estimates and Bank of America results
also underwhelmed.
Shares of Target meanwhile, down by 6.6 percent. The retail giant reported weaker than expected Holiday sales numbers. Target says its Q4 earnings
outlook however remains unchanged.
What about Beyond Meats? Lower by more than five percent this morning, too. It's been a hot stock rising more than 50 percent in January so far. Wow.
The volatility on this one. This time it's analysts at Bernstein, they lowered their rating today, citing high valuation, so not necessarily about
the story here, just about the valuation.
All right, let's bring it back to trade. In a few hours, the President of the United States and China will sign a Phase 1 deal following 18 months of
a simmering trade war.
Joining me now is Leland Miller. He is the CEO of China Beige Book, great to have you with us. You actually call this Phase 1-A. Why?
LELAND MILLER, CEO, CHINA BEIGE BOOK: Well, they were originally contemplating a bigger deal. So the original deal was going to be a bunch
of tariff rollbacks, pulling things back, not just from the September tariffs, but maybe even the May tariffs. In return, you're going to get
more IP promises, more things on tech transfer.
And what happened at the end was that the two sides couldn't get together on where they should meet, and there was also a domestic problem for
President Trump. He was trying to say I'm giving this away and then I'm giving that away and his allies were saying, look, this is too much. It's
an election year. Be careful.
So they pared the deal back. It's now very heavy purchases. That's what this essentially is -- a purchase deal, and in return the Chinese are going
to get a respite from an escalation.
And the two sides don't see this as a beautiful deal, despite what they're saying. But it's a good enough deal and it's a stalemate.
CHATTERLEY: Do you think China actually fulfills its promises to buy $40 billion to $50 billion worth of agriculture per year? I mean, we're talking
double effect to what we've seen particularly if you look at the 2017 numbers. Is that ultimately feasible and in particular, given it's an
election year, 2020? If they don't follow through, what does the President of the U.S. do here?
MILLER: Yes, it's really not feasible that they adhere to the terms of the deal over a two-year period. But I think the goal for the Chinese is to be
a very good year one. So there's a major incentive for the Chinese to be very restrained up into the election. They don't get any more trade
escalation. They look like they put a big, you know, the front loading of their commitments early on, and they get some piece to go back and fix
their domestic economy for a year.
Beyond that, the numbers are nearly impossible. So I think that this is about having a trade truce for as long as you can, and then you move into
the second year, the Chinese maybe get a little bit respite from some more tariffs because they've been promised that this will be reviewed after the
election. And then you see where they are.
But this is a one-year deal. It's not a two-year deal, despite the fact of what is being advertised now.
CHATTERLEY: Are we being too harsh on President Trump? I mean, this is the first deal where you're talking at least about greater purchases, you're
talking about technology, at least the discussion is being had. Are we giving him a tough ride here? Because he is trying to tackle asymmetries
that have grown up over several decades here?
MILLER: Yes, it completely depends on how you frame the conversation. He needs to be given a great deal of support for the fact that he has actually
brought these issues to bear for the first time in a serious way.
And also, what he is giving away in this particular deal is tariffs that he rolled on and now, he is rolling off, so the Phase 1, he is not giving away
much. So there's a lot of reason to say look, this is a pretty good deal, and it is a pretty good political deal for him.
[09:35:00]
MILLER: Now, if you start pulling this back and you start saying from the very beginning, we went into a trade war with certain goals, how far are we
in terms of structural reform? Then you can go the other direction.
But in terms of just looking at this from Phase 1, if this is in fact, Phase 1 of many, it looks pretty good.
CHATTERLEY: We're calling it a fragile truce. Do you think the war continues in different ways in 2020? Because it was something that had
bipartisan support. Tackling China in various different ways have bipartisan support.
One of the things perhaps that's being discussed behind the scenes is restricting U.S. pension fund money from investing in Chinese assets,
Chinese listings in the United States. I mean, that would be explosive.
MILLER: Yes. So we are moving off the trade battle ground and into the financial battleground and the tech battleground, and what you said about
government pension money could very well be a major issue in 2020.
And what the U.S. is actually talking about doing is restricting a fairly small amount of money with, you know, $50 billion or so of government
pension money from investing in an index that has a high -- a relatively high exposure to Chinese companies, including some that are on the sanction
list. It's very explosive politically.
Now, if they did something on the government pension money alone, that's not going to ruffle too many feathers in the relationship.
CHATTERLEY: Even a symbolism of it?
MILLER: The symbolism will -- and I think markets will be rattled and they'll say, is this the first of many steps in financial decoupling? So
that happens. Maybe I'm on here while markets are going absolutely nuts -- you know, they're going crazy because of the news that this is the
beginning of a financial warfare.
It won't be, but I think markets will interpret it when they see it as something very dangerous.
CHATTERLEY: And that's key. Huawei?
MILLER: So Huawei is the battle that will not go away no matter what. Congress is laser focused on cracking down on Huawei. Look, this is not
just about a tech company. It's about the future of 5G and Huawei is the Chinese vehicle for having spread this digital wall around countries going
forward.
So, you know, President Trump has created a piece right now. They supposedly separated the Huawei concessions to the Chinese from the trade
deal. But there's a lot of wink-wink going on there.
So for now you're seeing Huawei being kept out of the news. But I think going forward, Huawei is something that both sides of the aisle and
Congress want to go at. It's a very big, long term security issue for the United States, and we're going to be hearing a lot about Huawei in 2020.
CHATTERLEY: It is going to be interested to hear what we get from the President this afternoon as well this morning when they actually sign that
deal. And of course the details, Leland Miller, great to have you with us. Thank you.
MILLER: My pleasure.
CHATTERLEY: As always, the CEO of China Beige Book there. All right, we are going to take a break, but coming up on FIRST MOVE, biting at Apple.
President Trump wants Cook to concede and help unlock the iPhones of criminal suspects. The latest details on that story after this. We're back
in two.
(COMMERCIAL BREAK)
[09:40:10]
CHATTERLEY: Welcome back to the show with a recap of our breaking news out of Moscow. Russian President -- sorry -- Russian Prime Minister, Dmitry
Medvedev has announced that he and the entire Russian government will resign in a major reshuffle at the Kremlin. Medvedev made the statement on
Russian state TV sitting next to Vladimir Putin.
Fred Pleitgen is in Moscow. Fred, and as you were saying to us earlier, state TV, everybody astonished by the announcement and the timing of it
hereto.
PLEITGEN: Yes, astonished by the timing. Really, really caught off guard by all of this. No one really saw this coming. It was interesting because
then at some point, we saw that video of Dmitry Medvedev and Vladimir Putin together in a room of first chatting and then Medvedev announcing his
resignation and clearly seeming to pin that on the State of the Union address that Vladimir Putin to delivered earlier today, where he proposed
new constitutional changes that would move power away from the Russian presidency towards the Russian Parliament, essentially allowing the
Parliament to name the Prime Minister and members of the government as well.
Right now, it's the President who actually does that. There are some who believe that this might be Vladimir Putin preparing for 2024 when his
fourth term in office, his second of his second around as being President will come to an end and where he is then supposed to step down off power.
There are some who believe he is carving out a role for himself. It's unclear whether or not that's what's behind this move. But that could
certainly be the case.
Then Putin and Medvedev, again, were on TV together with Medvedev saying that he believed that the constitutional changes that Vladimir Putin called
for today changed the balance of power in the country, and therefore he saw it as important to give Vladimir Putin the opportunity to name a new
government to see through that transition period until those constitutional changes can be put in place.
Vladimir Putin actually said that he called for a referendum here in Russia, to see whether the people here actually want those constitutional
changes. That's going to be something interesting to see whether or not that kind of referendum takes place. It would actually be the first
referendum in Russia since 1993.
Vladimir Putin also briefly spoke, but he really didn't say very much or offer very much in the reasoning behind all this or any sort of
information. He just thanked Dmitry Medvedev, said that by and large, he is very satisfied with the work of the government. He said, not everything
went well, but that's not something that he expected.
He also then said that he was going to carve out a new role for Dmitry Medvedev, possibly as the Deputy Head of Russia's National Security
Council, so dealing with mostly with a defense matters here in Russia.
And then finally, and I think this is something that's also key as well, Julia. He also said that he was going to speak to all current members of
the Russian government, they're still there in a caretaker function before everybody steps down and see whether or not some of them will retain their
roles.
Of course, that's something that we talked about before. It would be interesting to see if senior figures like for instance, Sergey Lavrov, the
Foreign Minister will stay on board or whether or not he too, will then eventually leave his office and whether someone new will appear on the
scene as the face of Russian foreign policy -- Julia.
CHATTERLEY: Fred, if we take a step back here as well and just look at the relationship between these two men over the past years. I mean, Dmitry
Medvedev, Prime Minister since 2012. Before that, four years as President, an effective role swap that we saw. To your point about the referendum,
what do you think ordinary Russians think of this or do you think they are just perhaps resigned to consolidation of power and power plays for the
future?
PLEITGEN: Well, yes, I think a lot of it, people are just going to see this as another power move, and not really knowing what exactly the end
result of this is going to be. It's going to be interesting to see whether or not that referendum actually takes place.
But it's also quite interesting that you point out the relations between Vladimir Putin and Dmitry Medvedev. They were obviously big political
allies for a very long time with Medvedev first being Vladimir Putin's Prime Minister when he had his, I think, his second term as President and
then stepping up and becoming President himself when they did that swap -- Putin and Medvedev.
There was however somewhat of a rift between these two, reportedly, around the time of the Libya crisis in 2011, when Vladimir Putin was very much
calling for Russia to veto a resolution allowing for a no-fly zone over Libya, which then of course, turned to NATO, essentially bombing Muammar
Gaddafi's military, that's something that Vladimir Putin criticized in a major way.
He felt that Medvedev had been fooled by the West, and he never really seemed to have forgiven Dmitry Medvedev. His role as Prime Minister really
changed a great deal when he went back into that office.
In many ways, he is seen as kind of a weak political figure right now. He has taken a blame for a lot of the social inequality, the social problems
here and if you look at a lot of the demonstrations that take place in Moscow and in other cities, when it comes to things like economic issues,
Dmitry Medvedev very often the fall guy and the target for that -- Julia.
[09:45:11]
CHATTERLEY: Fascinating and it will be fascinating to watch. Fred Pleitgen, great to have you with us. Thank you for that.
President Trump, meanwhile targeting Apple for what he called their refusal to unlock phones used by suspected criminals. The President's criticism
comes during the investigation into the fatal shootings of three Americans at the U.S. Naval Base in Florida last month.
Clare Sebastian joins us now.
Clare, we were talking about this on the show yesterday, Apple's argument straight down the line here, look, simply a backdoor for one person can be
exploited by bad actors hereto. But that's not stopping President Trump.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Absolutely, Julia. In this tweet, which we should show the viewers now adds an extra layer of
complexity to an already a very complex situation. He is setting this up as sort of a quid pro quo on the issue of trade.
He says, "We're helping Apple all of the time on trade and so many other issues and yet they refuse to unlock phones used by killers, drug dealers
and other violent criminal elements. They will have to step up to the plate" he says. So reinforcing the sense that we see fairly regularly from
the President that he is willing to use trade and tariffs as a political tool.
Now, Apple hasn't responded specifically to this tweet, but as you said, they have responded earlier in the week to pressure from the Attorney
General William Barr to unlock these phones. They said in a statement that they have complied with the investigation, but that this is the red line
for them. "We have always maintained there is no such thing as a backdoor just for the good guys. Back doors can also be exploited by those who
threaten our national security and the data security of our customers."
So the Trump administration says they need to unlock these phones in this investigation to make the country more secure. Apple says that will make
the country less secure because once this tool is out there, once a locked encrypted iPhone can be opened then that means that the security of all of
iPhone users could be compromised.
They did say they have complied with multiple requests for information in this investigation, including providing information such as iCloud backups,
account information, and transactional data for multiple accounts, but they are not budging on the issue of these phones -- Julia.
CHATTERLEY: Yes, it's an interesting one. And I do think it divides public opinion, privacy paramount, and Apple sees this ultimately, but I can't
help but fear, even from my own personal point of view, if it makes the country safer, if it makes people safer. Yes, I'm not sure whether I'd
argue against it.
Clare Sebastian, thank you for joining us on that story.
All right, so let me bring you up to speed with today's Boardroom Brief. Delta Airlines is facing questions after a plane dropped jet fuel over Los
Angeles on Tuesday dousing five elementary schools and one high school. Sixty people receive treatment in the aftermath, but no one needed to go to
hospital.
The Delta Airlines jet was forced to release the fuel as it prepared for an emergency landing at LAX Airport.
Amazon Founder, Jeff Bezos announcing a billion dollar investment in India. It comes as the company faces an antitrust probe from the country's
Competition Commission. Amazon says their investment will help bring 10 million Indian businesses online.
Yamaha is warning customers not to climb into musical instrument cases. Yes, the disclaimer comes off the multiple reports that the former Nissan
boss, Carlos Ghosn was smuggled out of Japan inside one such case. Not to be recommended, it seems.
All right, we're going to take a break here, but after this, U.S. House Speaker Nancy Pelosi set to announce the Impeachment Managers in the
upcoming Senate Impeachment Trial. We will take you live to Capitol Hill for a preview. Stay with us. We're back after this.
(COMMERCIAL BREAK)
[09:50:21]
CHATTERLEY: Welcome back to FIRST MOVE. House Speaker Nancy Pelosi is scheduled to hold a press conference in around 10 minutes' time to announce
the Impeachment Managers for the Senate trial of President Trump.
Lauren Fox is live in Washington with the latest. We can see they're setting up there on Capitol Hill. Lauren, what are we expecting from Nancy
Pelosi? What about the one month almost delay that we've seen in handing over these Articles to the Senate here, but also who is going to lead it?
LAUREN FOX, CNN POLITICS U.S. CONGRESSIONAL REPORTER: Well, Julia, that is the big question right now and we are just minutes away from getting an
answer.
Of course House Speaker Nancy Rosie keeping very closely held who she would choose to be the House Impeachment Managers and these are the Democrats who
are going to go over to the Senate to make the case for why President Trump should be removed. It's a very important job, and I'll tell you that a lot
of members who were interested in being Impeachment Managers and their aides had not heard yet as to whether or not they would be chosen. That was
as of last night.
So she has really kept this going until the very last minute, and again, it has been almost a month of that standoff between Nancy Pelosi and Majority
Leader Mitch McConnell. She announced last week that her plan was to bring the House Managers to the floor today. They will have that vote and I will
tell you, then this evening, we will see some pomp and circumstance on Capitol Hill.
The House Managers will walk over those two Articles of Impeachment and deliver them to the Senate essentially passing the baton for what the House
has done over the last several months to the Senate where they will take up their trial.
There may be a swearing in of senators and the Chief Justice John Roberts tomorrow, but those formal arguments you might expect to see in a trial
aren't expected to begin until next Tuesday -- Julia.
CHATTERLEY: Okay, so let's say they kick off next Tuesday and we see this Senate trial begin, talk to me about fresh evidence, and talk to me about
witnesses here because there's been back and forth. Do they have the numbers of senators here to say, look, we actually do need to hear from
witnesses, whether it's John Bolton, of course, former National Security adviser, and then whether the Republicans turn around and say, okay, if we
have to hear from him, we want to hear from Joe Biden's son, Hunter Biden. Risk on both sides here.
FOX: Well, Julia, yes, I'll start with the evidence -- the new evidence and whether it would be included in the Senate trial. We know that
yesterday, Lev Parnas's lawyers -- information that he delivered from Lev Parnas's cell phone was delivered to the House Intelligence Committee. They
released some of that information yesterday and my colleague, Jeremy Herb just ran into Adam Schiff, the Chairman of the House Intelligence
Committee. He said we should expect that that new evidence could be used in the Senate trial.
Now as to the question of witnesses. What we know is that there will eventually be a vote on witnesses. Now, whether or not there are enough
Republicans, four of them to get people like John Bolton or Mick Mulvaney to come to the Senate, either be deposed behind closed doors, or come to
the Senate and have a live witness in the well of that chamber is still another question entirely.
But you know, I've been talking with moderate Republicans over the last several weeks. And one thing that we do know about people like Senator
Susan Collins, a moderate from Maine, who's up for reelection in 2020, and she told me this two days ago was she prefers more information than less.
Now, it's very easy to see how you might get three senators to agree to witnesses, people like Susan Collins, people like Lisa Murkowski and Mitt
Romney. It's a little harder to see how you get to that fourth, so a big question remains whether or not witnesses will be part of that Senate trial
-- Julia.
CHATTERLEY: Yes, it depends on which side of the aisle you sit as well. Lauren Fox, great to have you with us. Thank you for that.
That just about wraps up the show. You've been watching FIRST MOVE. Our impeachment coverage and the speech by Nancy Pelosi continues after this.
(COMMERCIAL BREAK)
[09:58:01]
ANNOUNCER: This is CNN breaking news.
POPPY HARLOW, CNN ANCHOR: Top of the hour. A big morning. Good morning, everyone. I'm Poppy Harlow.
JIM SCIUTTO, CNN ANCHOR: Breaking news this hour. You're going to hear it here on this broadcast, Nancy Pelosi making her move. Any moment, the House
Speaker will announce her picks for Impeachment Managers. This is important. These are the people who will prosecute the case against
President Trump in the Senate trial. This is the official beginning of the trial process.
HARLOW: Yes. And then a few hours from now, the House will vote on those managers before actually walking the two Articles of Impeachment across the
capital to the Senate chamber.
Let's go straight to Manu Raju. He is live on Capitol Hill. Do you have any sense of who's going to be picked? Do we know the names yet?
MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, Nancy Pelosi has kept this process completely secretive. She's told virtually nobody, but I
did spot several House members going into her office at about half an hour ago before this press conference and these individuals potentially could be
Impeachment Managers.
I asked each one of them if they've been selected. They've been asked to come as part of this meeting, they all refused to comment. The people
include Adam Schiff, the House Intelligence Committee Chairman. He has long been suspected who is probably going to lead this case, as well as House
Judiciary Chairman Jerry Nadler. He also was walking in.
But I also saw Hakeem Jeffries, a member of the House Judiciary Committee, a member of the Democratic leadership in the House. I saw Jason Crow who is
a freshman, a Democrat who's not on either the House Judiciary Committee or the House Intelligence Committee.
He is on the House Armed Services Committee. He's a freshman. He's a former Army Ranger. He served in Iraq and Afghanistan. He's someone who came and
got behind the Impeachment Inquiry in the aftermath of the revelations about Ukraine and also Val Demmings, who serves on both the House Judiciary
and House Intelligence Committee.
She had long been suspected as a possible Impeachment Manager. I asked Demmings for instance, when I asked her if she has been picked, she said,
I'm certainly going to find out.
So it's not certain if she was told ahead of time, but we'll see if Nancy Pelosi decides to pick these individuals or more individuals.
The Clinton impeachment trial had 13 people who prosecuted the case. There's been some expectation on Capitol Hill that it would probably be
fewer than 13 individuals. We'll see how high it goes, how many individuals will come.
[10:00:10]
END
