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Don't Expect Trade Deal Today; China Vows Countermeasures to Tariff Hike; McConnell on Trump Junior's Subpoena; Iran Won't Negotiate with U.S. Aired 12-12:30p ET

Aired May 10, 2019 - 12:00   ET

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

(COMMERCIAL BREAK)

[12:00:20] JOHN KING, CNN ANCHOR: Welcome to INSIDE POLITICS. I'm John King. Thank you for sharing your day with us.

President Trump slaps new tariffs on Chinese goods, and Beijing promises tough retaliation. Trade talks continue today, but no deal expected soon, so you should prepare to pay more for a host of made- in-china products.

Plus, tensions with Iran and North Korea, too. The secretary of state has a blunt new warning to Tehran. And the president changes his tune on whether Kim Jong-un is ready to make a deal.

And reality TV meets C-SPAN today on keeping up with the subpoenas.

(BEGIN VIDEO CLIP)

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Do you have confidence that McGahn is going to come?

REP. JERRY NADLER (D-NY): He will come if we -- we -- we will -- the answer is we don't know, and if we have to we'll subpoena him to come.

QUESTION: Are you confident that Mueller will (INAUDIBLE).

NADLER: Wait a minute, we did subpoena him.

RAJU: You did subpoena him.

NADLER: (INAUDIBLE). No, McGahn.

RAJU: McGahn.

QUESTION: Are you confident Mueller is --

NADLER: If we have to, we'll hold him in contempt if he doesn't obey the subpoena.

(END VIDEO CLIP)

KING: We begin this hour, though, in the throes of a trade war between China and the United States. Overnight, President Trump making good on his promise to hike tariffs on $200 billion worth of Chinese goods, taking the tariffs from 10 percent to 25 percent. China promises to strike back without saying yet when or how it plans to do that.

This as negotiations continue here in Washington. U.S. officials telling CNN they are not optimistic for a breakthrough.

President Trump, on a veritable Twitter spree this morning, clearly proud of his escalating tariffs and what he calls a long overdue, tougher approach, tweeting at least nine times on the topic, including this, quote, your all-time favorite president got tired of waiting for China to help out and start buying from our farmers, the greatest anywhere in the world.

You can take a look at the big board. The Dow Jones average down 258 points there, 259 points. Not in free-fall. But if you look at the decline over the last five days, investors have grown more and more nervous over what could happen next.

Kaitlan Collins joins us now live with the White House take on this.

Kaitlan, negotiating teams saying they don't expect to reach an agreement today. The president saying there's no rush. What's the holdup in the talks, and why no breakthrough?

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Well, John, what we're seeing is the Chinese delegation has now left the trade office. That was after about roughly two and a half hours of meetings this morning after those talks last night did not succeed in making any breakthroughs, and that's why you saw those tariffs go into effect at midnight.

But the people we spoke with this morning who were involved in this said they were not expecting any kind of an agreement to be reached today. Essentially these talks have started to break down last week. They didn't make a lot of progress, even though the trade delegation did still come to Washington, which they thought was successful because they weren't sure if they would after the president threatened those tariffs.

But what we're essentially seeing is that U.S. officials are blaming this on the Chinese president. They're pinning this, the reason that these talks have broken down on him. And even though their chief trade negotiator was here for the Chinese delegation, he essentially was communicating to the U.S. side that I can only do so much while I'm here, only what Beijing has allowed me to do. But, really, to get this solved, and it's going to be up to the two leaders, President Trump and President Xi Jinping.

Now, right now, the question about that is that there's no call scheduled between those two leaders. The president said he did get a letter from the Chinese president the other day. He said it was a beautiful left. But, John, that was essentially as far as he got in that. And right now we don't see that they are about to talk again. So it doesn't seem that this trade deal is anywhere in sight for right now, despite the optimism we had seen from the U.S. in the past several weeks. KING: We'll track those talks throughout the day, Kaitlan, but it

sounds a bit pessimistic, at least in the short term.

COLLINS: Yes.

KING: With me in studio here to share their reporting and their insights, Margaret Talev with "Bloomberg," CNN's Jeff Zeleny, Damian Paletta with "The Washington Post" and Seung Min Kim also with "The Washington Post."

Let's start on translating the president's tweets into facts in the sense that this is the issue on which he's been most consistent, going back to his days in the business community, well before he got into politics he has said China rapes the United States, someone needs to stand up to China, and now he says, I'm going to be the president to do it. So a lot of people cheering him saying this is overdue.

But one of the tweets says, $500 billion directly to the U.S. Treasury. Not the way it works, right?

DAMIAN PALETTA, WHITE HOUSE ECONOMIC POLICY REPORTER, "THE WASHINGTON POST": No. I mean the United States imports $500 billion in goods from China. Those are goods that we buy every day that are part of the economy, part of our houses, part of our schools, part of our cars. And we buy those from China because they make them at a price that the United States consumers we like.

Now, we export $100 billion or $200 billion more dollars of our goods over to China. SO just because we import more from China than we export doesn't mean that it's unfair.

Now there are plenty of things that China does that make the relationship unfair, but the president is really fixated on these numbers to try to prove his point, and I think that's what has a lot of people, you know, uncomfortable with the way he's approaching it. Maybe he's focusing on the wrong thing.

KING: Right. But he says -- he says, a, the economy can take it.

PALETTA: Right.

[12:05:04] KING: We have a very strong economy right now. So if you're going do it, this is the time to do it. His political advisers say, sir, we're heading into a re-election campaign, we'd actually like to not do to.

But these are numbers from the U.S. Chamber of Commerce. Look at this. Exports threatened by tariffs.

If you look at the states that are dark red, that means 10 percent or more extremely difficult damage to their economies, if you will. That's a lot of Trump country if you look at that. Every state gets hit and hurt by this. So it is, whether you agree or disagree with the president's perspective, it's as bold and a risky political move to do it now heading into re-election, at a time most of the economic numbers are great for him. MARGARET TALEV, CNN POLITICAL ANALYST: Well, yes. And I think if you

look at the tweets and the order in which they were tweeted, which gets confusing because there were some deletions and moving around on the board and then retwetations (ph), but -- but if you look at them in chronological order, you see him laying out very -- pretty explicitly his political case and then weaving it from, I know what I'm doing, the economy can take it, to, if things go a little sideways, I'm going to prop up the farmers so everyone in the Midwest chill out, to looping this in with the Obama administration, making a comparison between his foreign policy approach and the Obama's administration's approach, to tying Joe Biden to Obama. I think he called it like the sleepy Joe administration. He's given it a new name. And then, ultimately, by making the prediction that Joe Biden is the most likely Democrat to face him in the general election contest next year and that it will be a contest about his approach to China versus Biden's approach to China.

So this was not like the president woke up in a bad mood and decided to like mess with, you know, the talks. The tweet -- the timing of the tweet was very specific. It came early in the morning as the morning shows, you know, were really kicking into gear around 7:00 a.m., and before those talks resumed, and the president was pretty clearly signaling, you guys can meet today, but as far as I'm concerned, these talks are over for now.

KING: And so the question for several -- the past several administrations, will the Chinese move on any of these big structural issues, like intellectual property, like some of the other business practices? And now the question is, how long will the president hold out, because, again, this is from the trade partnership worldwide. Now, this is a pro-trade group. So, you know, but look at these numbers. These are just job losses. Job losses estimated, Florida, a big state -- these are all states that the president flipped in the last election from blue to red -- Pennsylvania, Ohio, Michigan, Wisconsin, Iowa. Will the president stay firm if this goes on for weeks and months and those states and those Republican senators from many of those states, Republican governors in several of those states start saying, sir, problem?

SEUNG MIN KIM, CNN POLITICAL ANALYST: And that's precisely the concern that a lot of Republican senators have voiced to the president in the last several of weeks.

I do think, though, with this particular trade standoff, there has been a little bit of nuance coming from Senate Republicans because even Republican senators believe there is a political advantage to the president showing that he's tough on China. And I've even talked to Democrats, for example, from, you know, Pennsylvania who say, my constituents like that tough approach. So there is a little bit of political thought kind of the other way, but writ large, you know, when you're talking about the ongoing concern with the steel and aluminum tariffs, when you're talking about proposed auto tariffs, there's no doubt that they would hit these key states hard and that Republicans senators are, you know, sounding the alarm to the president, even directly making that political argument. But when I talk to senators and I ask them, look, how does the president respond when you kind of make that electoral argument with them, and they say -- the president says, look, the president's -- the farmers love me and they'll stick with me and they trust me. And that's true for now. How long that lasts is yet to be seen.

KING: He's making a -- he's betting that they will stay with him. And as you -- as, Seung Min, I know you've been talking to people on The Hill as well.

I just want to say again, as this plays out, if you're watching this at home and say, how does this affect me, the average impact on a family of four, it would be $767. Now, some people might say, oh, that's only $800. For a lot of families, that's a lot of money. That is a lot of money. That's your summer vacation.

TALEV: That's the Trump tax cut. I mean it's --

KING: That's true. That might be your Trump tax cut. Right, again, but somewhere in the ballpark of a million jobs over the next three years if this plays out that long.

Now, again, no one -- it could be over in a couple of weeks. It could be over in a couple of months. But the president is -- he has been consistent on this for a long time and he says, we'll see if they get a deal in the end if he actually holds out and forces China to make giant structural changes. But he says, you know what, past presidents haven't had the courage to do it. I'm going to do it.

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: For sure. And it has been remarkable the resilience at which Trump supporters have been willing to say, you know what, I think in the end he is going to make this deal. There has always been kind of, you know, a split view of how a lot of the president's supporters view his business acumen versus, you know, the reality of some of his art of the deal. But they have been willing to be very patient.

But the uncertainty, you know, which is coming at the same time as planting season. Soybean prices are horrible. The floods in the Midwest -- I was talking to a Republican farm state senator this morning who said, I hope there is an endgame. Emphasis on hope. If there is, I don't know what it would be.

So the uncertainty over all of this is what worries Republicans. But I think it would be foolish to say that all of these Trump voters are suddenly going to stop supporting him because of this alone. So far they've been willing to give him the benefit of the doubt. We'll see how long that lasts.

[12:10:02] KING: And you mentioned the nervous Republicans. They included the top Republican, the Senate majority leader, who wants to protect his majority in 2020, who thinks, as of today, he could probably do that. Doesn't want uncertainty. Doesn't want a bad economy. He says, Mr. President, be careful.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY): The president is trying to get us in a better place with China. And he's hoping that levying these tariffs will get that done. In the meantime, it's a -- the tariff wars elsewhere, for example, against our friends in Europe and our friends in Canada and Mexico, it seems to me, have not been productive. The president takes my advice sometimes, not all the time. Frankly, I would have tried to unify the rest of the world against the Chinese because we all have the same complaints about them.

(END VIDEO CLIP)

KING: This is not Republican economic policy that the president is implementing here. So his party is sort of forced to go along.

To Leader McConnell's point, the president thinks he can fix there. Is there any indication on the table that China is ready to do the big things?

PALETTA: No, there's no indication. And I think one reason that there's so much anxiety is because there's two different ways people see this playing out. And one is, the president tried the same tactics during the NAFTA talks and he got Canada and Mexico to capitulate quickly because they were afraid of the economic blowback.

Also, he tried the same thing on the shutdown. You know, kind of barrel ahead, do it my way, and Republicans followed him off the cliff. And then after a couple weeks they said, we've got to get out of this. This is a disaster. They don't know which way this is going to play out.

The Chinese are very firm. They believe in things taking a long time. And they almost think they can wait him out as the economy starts to erode. He's so fixated on the stock market and jobs numbers that a couple of bad reports and maybe he flips.

TALEV: And they're all -- kind of -- the games that it has been for decades, which is like, you know, part of what made Trump and his team want to walk away this week is they think the Chinese have agreed to do somethings, and then the Chinese say, well, we're not actually going to change the law. I mean that's not the way our government works. We're going to -- it doesn't have to be codified. We'll just all agree that we're going to do it. And then they're like, wait, that's nothing if you do that. And so is that going to change?

So fundamentally the question is, is the endgame to actually fundamentally change that, or is it a political end game to show that he was very tough and maybe get some incremental progress.

KING: Well, we'll keep an eye on it. I mean it's just -- it's consequentially in every way, economically, politically, the relationship on security issues as well if it goes through trade. We will keep an eye on it.

Next, we come back to that same senator, Mitch McConnell. Can he keep everybody happy?

(COMMERCIAL BREAK) [12:17:04] KING: A balancing act today for the top Republican in the Senate, Mitch McConnell, sticking to his case closed line for the Mueller report, but also backing a Republican committee chairman who wants to keep a related investigation open. And by open we mean demanding new testimony from Donald Trump Jr.

Republicans are angry at one of their own, the Intelligence Committee Chairman Richard Burr, because he signed off on a new subpoena to compel the president's son to testify. Count the president among those angry Republicans.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, I was very surprised. I saw Richard Burr saying there was no collusion two or three weeks ago. He went outside and somebody asked him, no, there's no collusion. We found no collusion. But I was very surprised to see my son --

(END VIDEO CLIP)

KING: Many of Burr's colleagues are mad he won't adopt the party's nothing to see time to move on mantra. This morning in a radio interview with a local Kentucky station, McConnell predicted the anger will soon pass.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY): I know the president's upset about that, but I think he ought not to worry about it. The chairman of the Intelligence Committee has already said the committee, when it reports, will find no collusion. I think we ought to just take a deep breath and understand that this episode is coming to an end.

(END VIDEO CLIP)

KING: Melanie Zanona with "Politico" joins our conversation.

We were laughing into that because Seung Min has been trying to get the majority leader to talk a little bit. She apparently is -- you have to be a Kentucky radio reporter. You have to be a Kentucky radio reporter.

KIM: I know. Exactly.

KING: It is -- it is interesting to watch. It's always interesting to watch McConnell, who's kind of like a sphinx at times. But, case closed.

MELANIE ZANONA, CONGRESSIONAL REPORTER, "POLITICO": Yes, I mean --

KING: But you can keep your case open. How does he manage the family feud?

ZANONA: Well, he's a master of his caucus, right? I mean I think there's a lot of criticism that he made a -- made a mistake or an error by going out, saying case closed, when there was the subpoena by one of his own chairmen. But there's very little chance that McConnell didn't know about the subpoena when it happened. And I also think he's just navigating the political waters, the treacherous political waters, as he has been for the last two years. And behind closed doors, he's sticking up for Burr, saying I have faith in him. And in public he's saying, it's time to move on. And I think this is why he's probably the longest serving leader in the GOP in the Senate because he has backs of -- he has the backs of his rank and file.

KIM: But there's no doubt that there's deep division among the Republican caucus. And we -- if you -- if you look at where a lot of the concerns were coming from, it was a lot of senators who are up for re-election next fall. I mean I thought the most interesting rebuke or distancing of himself I thought yesterday was Senator Tom Tillis, who is Burr's fellow North Carolinian. And he proactively put himself out there and said in response to the subpoena news that I think it's time to move on. Mueller did his job.

You heard similar comments from Senator John Cornyn, although he kind of walked it back a little bit. And even Senator Lindsey Graham -- and we know him primarily as the Judiciary Committee chairman, but he himself is also on the ballot next year. So wait to see how much that pressure builds.

[12:20:00] Trump -- Don Junior has shown no indication that he's ready to comply for this subpoena just sent, so how much hardball does Richard Burr play and does Mitch McConnell back him up on that. And that's something that we have to watch for the next several weeks.

KING: Does he back them up? And so listen -- let's listen to a little bit more McConnell. This is on Fox News last night where he predicts, in the end, everyone will be fine.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY): I think this is going to have a happy ending. I understand the president's frustration here. But I think this is just a blip. I think the case is closed. I think the controversy has been concluded. I think it's over. And I think it's time to let it go and move on and try to deal with the people's business.

SEAN HANNITY, FOX NEWS ANCHOR: Specifically, is that your message to Senator Burr?

MCCONNELL: That's my message to the public.

(END VIDEO CLIP)

KING: He left out the Chairman Burr part, the Senator Burr part.

I want to make clear because the president says it, and Tom Tillis said in his tweet that, you know, Don -- Donald Junior was cleared. That's not what the special counsel said. The special counsel documented a number of examples where he was in touch with WikiLeaks, took the Trump Tower meeting, was eager to get dirt on Hillary Clinton. Then he said the government would be unlikely able to prove beyond a reasonable doubt that the June 9th meeting participants had general knowledge that their conduct was unlawful.

So Mueller didn't say these were saints. He said, there's not a case against them. Not a case you can prove in court.

ZELENY: And it's clear what Senator McConnell is trying to do, as he often does, is to send a message to everyone. It's, a, to the president that, yes, I think the case is closed, b, it's to other Republican senators to say, yes, the case is closed, and to give Senator Burr a bit of wiggle room to say, I'm not going to interfere yet.

But, look, Senator Burr is not up for re-election. I think that's the biggest thing of all. And a lot of his friends have already left Capitol Hill, have retired over the years, so who knows what he will do once he -- his time comes here. But he's going forward, as he has done methodically. He didn't talk about this yesterday on The Hill, as Manu Raju and others were trying to get him to talk about. He's like, look, I'm not going to discuss this.

So we will see why Senator Burr wants to hear again from him. But I think Senator McConnell, not surprisingly, is sort of trying to do a bunch of things with those very consistent words that he's saying.

KING: Trying to keep everybody happy in a situation where not everybody can be happy.

ZELENY: Just like daddy does.

KING: Right. We'll see. That was him who called you daddy. That wasn't -- that wasn't me, senator. That was Mr. Zeleny over there.

ZELENY: It's a compliment.

KING: Up next, President Trump tells Iran, call me. And Iran says, no thanks.

(COMMERCIAL BREAK)

[12:27:02] (BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We have one of the most powerful ships in the world that's loaded up, and we don't want to have to do anything.

What I'd like to see with Iran, I'd like to see them call me.

What they should be doing is calling me up, sitting down, we can make a deal, a fair deal. We just don't want them to have nuclear weapons. Not too much to ask.

(END VIDEO CLIP)

KING: That was this hour yesterday. A terse response today from Iran. Quote, negotiations with Americans will not take place, and Americans will not dare to take military action against us.

This comes This comes as more U.S. forces begin arriving in the region. And Secretary of State Mike Pompeo warns those forces are ready for a, quote, swift and decisive response to any attacks by Iran or Iranian proxies.

CNN's Kylie Atwood joins the conversation, as well as CNN military and diplomatic analyst Admiral John Kirby.

A lot of tough words, which some people just say are tough word. But sometimes tough words lead to miscalculations. What's the -- what's the endgame here?

REAR ADMIRAL JOHN KIRBY (RET.), CNN MILITARY AND DIPLOMATIC ANALYST: It could. I think the endgame is to, a, deter any attack by the Iranians. We haven't seen any indications now that they have changed -- the Iranians have changed their posture yet. So we'll see what happens as the carrier strike group gets into the region and, of course, the bombers are in there now. So we'll have to watch that.

Certainly there could be miscalculations with the proxy militias that Iran has some control over in Iraq, which I think precipitated the large issue here. But what bothers me here, John, is that the -- this idea that they can bully Iran into diplomatic negotiations and talks here. That's just not going to work. It hasn't worked in the past. It's certainly not going to work now.

There doesn't seem to be an endgame for how to take the pressure down, how to de-escalate the tensions that this administration, quite frankly, needs to take the responsibility for escalating. When they designated the IRGC as a terrorist group, the Revolutionary Guard, and when they upped the unilateral sanctions against Iran, they have created, in many ways, the tensions that we're now feeling.

KING: And so you have -- there's two sides to every argument. At least two sides. Sometimes in that region it's more than two sides. But from the Iranian perspective, it's the Trump administration being belligerent. The administration has said for several days now that it's getting signals that Iran is up to something, maybe about to attack U.S. forces, today a warning for the commercial shipping in the area to be on alert, but not a lot of specificity put out there by the administration. They just see -- they're seeing dangerous signs.

KYLIE ATWOOD, CNN NATIONAL SECURITY REPORTER: They do, and that's the question, I think, for a lot of people who have been watching this and watching this space for a long time now. I mean Brian Hook, just yesterday, was on CNN and talked about the behavior of Iran over years now, being a little bit broad in his strokes about the Iranian behavior. And because the administration hasn't put a specific figure -- finger on one thing that Iran is doing provocatively, saying they're going after U.S. military personnel, allied officials and also potentially the commercial shipping industry, members of Congress are now saying, hello, can you give us a briefing on this intelligence because they haven't yet gotten that briefing yet, and they're asking for it. [12:29:56] KING: And some people look at, like, why now? Why is this

happening? And some people trace it to the big changes. Now, they took place a while ago, but Rex Tillerson leaves, Mike Pompeo, more hawkish, goes to the State Department. John Bolton becomes the national security advisor.