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Trump Proposes Additional Tariffs on China; Trump Stands by Embattled EPA Chief. Aired 7-7:30a ET

Aired April 06, 2018 - 07:00   ET

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

MARIE LAMAN, SON, KYLE, SHOT IN PARKLAND SHOOTING: -- do bad. And I mean, it stinks that it takes something so tragic to see all that.

ALISYN CAMEROTA, CNN ANCHOR: Yes.

[07:00:08] LAMAN: But, I mean, we do try to stay positive. I try to keep him upbeat. You know, we try to keep everything as normal as possible. It's sometimes a little bit challenging, but overall, you know, we've been trying to do the best we can.

CAMEROTA: Well, Kyle, Marie, you guys have a great message of positivity. We know that obviously, you have lots of hospital bills, and you have a Go Fund Me page people have been contributing to. I think we're going to put that up on the screen for a second so that people who want to can help. They can find you. Go Fund Me -- well, I'll put it out on Facebook. It's hard for me to read the small print there. But obviously, you've raised money. And there is Kyle giving the thumbs up.

Kyle, Marie, thank you both so much for telling us your story.

And thanks to our international viewers for watching. For you, "CNN TALK" is next. For our U.S. viewers, NEW DAY continues right now.

And good morning, everyone. Welcome to your NEW DAY. Chris is off. David Gregory joins me. Happy Friday.

DAVID GREGORY, CNN POLITICAL ANALYST/ANCHOR: Thank you.

CAMEROTA: Great to have you here.

We do begin with breaking news for you this hour. President Trump amping up the rhetoric, now threatening China with an additional $100 billion in tariffs. Beijing is vowing to fight the U.S., quote, "at any cost."

The White House is also facing an ethics scandal involving the president's cabinet. Sources tell CNN that officials at the EPA were demoted or sidelined after raising questions about Secretary Scott Pruitt's spending. Despite Pruitt's mounting ethical issues, CNN has learned that President Trump floated the idea of having Pruitt replace Attorney General Jeff Sessions.

GREGORY: And on the Stormy Daniels story, the president is speaking out about it for the first time, breaking his silence. And it could have legal indications. The president says he did not know about his attorney, Michael Cohen's $130,000 hush payment to Stormy Daniels. The attorney for Stormy Daniels, Michael Avenatti, will join us live in just a few minutes to discuss that.

We want to begin, however, with CNN's Ivan Watson. He's live in Beijing with with our top story concerning a new potential round of tariffs coming from this administration.

Ivan, good morning.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Good morning, David.

This is why everybody is talking about the risk of a trade war between the world's two largest economies. Let's just look back at this week. Starting on Monday, China imposed tariffs on $3 billion worth of U.S.

goods in retaliation for U.S. tariffs on imported steel and aluminum.

Then on Tuesday, the U.S. threatened tariffs on $50 billion worth of Chinese goods amid accusations of theft of intellectual property. On Wednesday, China retaliated with tariffs on $50 billion tariffs worth of U.S. goods.

And then on Thursday, the White House issued a threat of $100 billion worth of tariffs on Chinese goods in retaliation for that. The White House saying that this is because of threats to American farming from the Chinese threats of tariffs.

The response from the Chinese government so far is to call this latest move a provocation and saying, quote, "We don't want to fight a trade war, but we are not afraid of it."

Now, there are fears now from what China has already threatened. There are fears, certainly, within states that have a great deal of agriculture. And we're hearing those concerns echoed by some top lawmakers within the Republican Party.

Among them, Senator Ben Sasse who said, "Hey, this looks like President Trump is threatening to light U.S. agriculture on fire." Here's more of his statement. "Hopefully, the president is just blowing off steam again but if even he's half serious, this is nuts. Let's absolutely take on Chinese bad behavior, but with a plan that punishes them instead of us. This is the dumbest possible way to do this."

There is a trade imbalance, and if China seeks to retaliate, as they've pledged in the past, they're running out of U.S. exports to China to slap tariffs on. We'll just have to see if this is more posturing or will somebody follow through and actually impose these tens of billions of dollars of tariffs.

CAMEROTA: That is the question. I'll take it. Thanks so much.

The White House embroiled in a series of controversies as the president stands by the embattled head of the EPA.

CNN's Abby Phillip is live at the White House with the latest.

What's happening there, Abby?

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Well, good morning, Alisyn. The controversy around EPA administrator Scott Pruitt continues to grow today. But President Trump for now is standing by him, in part because he's happy with what Pruitt is doing over at the EPA.

The question is now how many more scandals will come out and how much longer can Pruitt hold onto this job?

(BEGIN VIDEOTAPE)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: I think that Scott has done a fantastic job. I think he's a fantastic person.

PHILLIP (voice-over): President Trump defending scandal-ridden EPA chief Scott Pruitt, telling reporters that, despite a growing list of controversies, he thinks Pruitt will be fine.

UNIDENTIFIED MALE: Do you still have confidence in Scott Pruitt?

TRUMP: I do.

[07:05:07] PHILLIP: CNN learned Thursday that multiple senior officials were sidelined or demoted at the agency after raising concerns about Pruitt's pricey travel, office spending and management of the agency, allegations an EPA spokesman disputes.

Separately, multiple sources tell CNN that, after Pruitt took over at the EPA, he asked his 24/7 security detail chief to use lights and sirens to avoid traffic. After telling Pruitt no, that agent was reassigned.

Also under scrutiny, a massive pay hike totaling more than $80,000 for two of Pruitt's closest aides. "The Washington Post" reporting that Pruitt endorsed the raises last month, despite having said that he was not aware of the raises until this week.

ED HENRY, FOX NEWS REPORTER: Did you go around the president and the White House to give pay raises to two staffers?

SCOTT PRUITT, EPA ADMINISTRATOR: I did not. My staff did. And I found out about that yesterday, and I changed it.

PHILLIP: Pruitt also coming under fire for renting a D.C. condo for just $50 a night from lobbyists who donated money to his past political campaign. President Trump was asked if he was bothered about these reports.

TRUMP: I have to look at it close. You know, I hear different versions of it. But I'll make that determination.

PHILLIP: Sources close to the president tell CNN that as recently as this week, the president floated the idea of replacing Attorney General Jeff Sessions with Pruitt.

UNIDENTIFIED FEMALE: Are you thinking about switching him out for attorney general?

TRUMP: No. No. No, Scott is doing a great job where he is.

PHILLIP: This as President Trump breaks his silence on his alleged affair with Stormy Daniels and the payment to keep her quiet days before the election.

UNIDENTIFIED FEMALE: Mr. President, did you know about the $130,000 payment to Stormy Daniels?

TRUMP: No. No. What else?

UNIDENTIFIED FEMALE: Then why -- then why did Michael Cohen make those if there was no truth to her allegations?

TRUMP: Well, you have to ask Michael Cohen. Michael's my attorney, and you'll have to ask Michael Cohen.

UNIDENTIFIED FEMALE: Do you know where he got the money to make that payment?

TRUMP: No, I don't.

PHILLIP: Daniels's attorney telling CNN Trump's comments help his case.

MICHAEL AVENATTI, ATTORNEY FOR STORMY DANIELS: You can't have an agreement if one party claims they knew nothing about the -- one of the principle terms of the agreement. So the president has just shot himself in the foot, thrown his attorney, basically, Michael Cohen, under the bus in the process.

PHILLIP: The president escaping these controversies at a speech in West Virginia. Mr. Trump literally tossed out his prepared remarks about tax reform.

TRUMP: That would have been a little boring.

PHILLIP: Choosing instead to resurrect some of the unproven immigration rhetoric he used on the campaign trail.

TRUMP: Everybody said, "Oh, he was so tough." And I used the word "rape." And yes, they came out where this journey coming up, women are raped at levels that nobody has ever seen before.

(END VIDEOTAPE)

PHILLIP: President also announced yesterday that he wanted to send between 2,000 and 4,000 National Guard troops to the border with Mexico.

Meanwhile, Mexico responding defiantly to the president's harsh rhetoric yesterday. They're going to need to cooperate with this -- with the president if they're going to control this immigration situation at the border.

Meanwhile, President Trump has no events on his public schedule today. But there is a White House briefing scheduled for later this afternoon, Alisyn and David.

CAMEROTA: Abby, you're giving us too much to talk about. But thank you for all of that reporting.

Joining us now for analysis, CNN political analyst John Avlon; and CNN political commentator and host of CNN's "SMERCONISH," Michael Smerconish. Great to see both of you.

So John Avlon, Dow features are only down 200 points. And that is better than the first time that the president floated the tariff idea -- the tariff threat idea, where they were even more rattled. Is Wall Street becoming inured to the idea that these things go up and down and fluctuate with the Trump administration, these threats?

JOHN AVLON, CNN POLITICAL ANALYST: Well, you know, my deep belief is insane is the new normal. And the markets seem to have acclimated to a level of fundamental uncertainty when it comes to Trump and the prospect of trade wars.

Look, the administration has been trying to message that this is negotiation. This is brinksmanship. There's no question over the course of this week it's escalated.

And what's really stunning about it isn't -- you know, we can debate the merits of whether we're getting tough on China. You saw Ben Sasse, conservative senator from Nebraska, saying, you know, "We should be tough with China, but this is the dumbest possible way to do it."

Why is he saying that? Because the impact in China's proposed tariffs on manufacturing, on agriculture, it actually ends up impacting Trump's base. Eighty-two percent of the prospective jobs lost by this trade war, if it goes into effect, will affect Trump's base.

GREGORY: Well, and Michael, this is the point. That China has a way to respond that really hurts American consumers. That's the bottom line. It doesn't change the fact that this president wants to do things much differently. A lot of other people have come on the program saying we should talk, we should engage, we should apply pressure. I think the president would argue we've tried that for many, many years, and it's put us in a disadvantageous position.

So there's two things. One, is the lesson of the weak that this is really the prelude to a grand bargain, or is the president prepared to tell his voters, "Look, you've got to be prepared to take some pain on this if we're going to win the overall war with China."

[07:10:10] MICHAEL SMERCONISH, CNN POLITICAL COMMENTATOR: I think, to your point, when the cost of retail goods impacts his constituency, that's when there will be some political consequence for the president. But up until that time, he's responding, in their eyes, to an issue that's been out there for a long time, which is that figuratively, the Chinese have been eating our lunch by flooding our markets with cheap goods, hurting U.S. manufacturing in the process, frankly, in much the same way as another issue that you have been talking about, which is porous borders.

So they see him taking action on on two longstanding issues that, up until now, no one else, in their view, has been willing to address.

CAMEROTA: Yes. And I already hear the director of Office of Trade framing it for the American people of, "Yes, you should be upset about all of this and look to China for who you -- don't look to the president. He's trying to fix this."

Listen to how they're spinning it.

(BEGIN VIDEO CLIP)

PETER NAVARRO, DIRECTOR, OFFICE OF TRADE AND MANUFACTURING POLICY: What we have here is a situation they've been basically punching us in the body and the face for years. All we're doing is self-defense, defending ourselves. And the way they expect us to react is to punch us some more and, basically, try to hit American farmers most directly. And I don't think the American people are going to respond very well to those kind of threats.

(END VIDEO CLIP)

CAMEROTA: So John, what do you think of that? Will American farmers blame China because, you know, the U.S. has been their punching bag? Or will they blame the president for this tariff escalation?

AVLON: Look, I think people ultimately vote with their pocketbooks. And if people start feeling it in the economics of it. I mean, part of the reason free trade is good isn't only that it helps stop wars. It tends to lift all boats eventually. But there are imbalances.

I think people are sympathetic to the idea that it's time to get tough with China, that they have been flooding U.S. markets. Not only with cheap imports but also with counterfeit goods, which is why the international property argument's probably strongest.

But what Navarro was doing was actually classic tactic. This goes right out of Trump's crippled America playbook. "We've been taken advantage of, we've been humiliated. And the fact we're taking initial action on this is really self-defense."

But if the impact ends up hurting the people he's trying to defend, that won't fly politically.

GREGORY: Well, and so this is -- so if we turn to Scott Pruitt at the EPA, Michael, this is another kind of classic case of tension in Donald Trump's brain. One the one hand, this is a tough guy who is doing things that the conservative base loves with regard to rolling back EPA regulations, helping the businesses that they regulate.

And yet he's getting all this negative attention, making a lot of mistakes and new reporting about pushing people out who called him on that. What does he do? What's Pruitt's future?

SMERCONISH: So I think that the more that we talk about it. And the more that Pruitt becomes a lightning rod by critics of the president without there being one real tangible example. I mean, heretofore, what's the worst of it? It's probably that $50 a room -- $50 a night room.

I think the president becomes emboldened. And if he were -- I know this sounds odd. But if he were inclined to cut him loose, he doesn't want to do that in the face of criticism. He wants to do it on his terms. And so oddly, the more hot the guy becomes, the more longevity he might have in the short-term.

GREGORY: Especially, John, if the rap against the critics is that they're basically criminalizing his ideology. Which in this -- there's already people making that --

AVLON: Yes. Because that's the argument you've got. I mean, look, there is a series of ethical scandals and problems, and distractions. One thing the president doesn't like is when people get too high a press and then start distracting from the administration's message. And he apparently did interviews without White House countenance.

The White House is sending mixed messages behind this on Pruitt behind the scenes. Trump supporting him publicly yesterday. In Normalville, that would be a positive thing. Except, you know, that's usually a precursor to being fired by tweet.

CAMEROTA: But just one thing, Michael. I terms of -- it's beyond the just $50 a night for the room. We now know from "The New York Times" that five of his staffers, four of them high-level advisers, have been reassigned, have been moved out when they've tried to raise questions about his spending and management. So that sounds like retaliation. That sounds like an ethical spider web beyond just getting a sweetheart deal at a friend's house.

SMERCONISH: Understood. But I'm just saying that, in order for this to be saleable as scandal, there needs to be something tangible that people can understand and appreciate, right? I mean, we all understood the Watergate burglary. Because a burglary is something we don't want to happen at our house.

Whitewater, it was always more ephemeral, and you really couldn't wrap your head around a land transaction that went south.

I'm not sure yet within the Pruitt issue what that one item might be.

CAMEROTA: Maybe it's the forcing his staff to drive through the streets with sirens and lights.

[07:15:06] SMERCONISH: I don't think so. I don't think so. That's my point.

CAMEROTA: I hear you. But there is a drunk-with-power feeling.

AVLON: Yes. There's arrogance of power, abuse of power, and also one of the classic problems is death by a thousand cuts.

Michael raises the point, is there an ideological element to this? Yes. There are a lot of people who see an EPA administrator who sued the EPA 14 times as sort of a fundamental problem. But I think it's the distraction and the constant drip, drip, drip of ethical problems and allegations of abuse and arrogance of power that may ultimately --

GREGORY: The question is for whom? I mean, we come back to the beginning, which is President Trump would be willing to withstand that, if he -- but you know, I don't think he's so worried about it, unless it gets to a point where it's so distracting to him or that he's getting too much attention that it interferes with stealing his thunder.

CAMEROTA: OK. There's -- Michael, there's a new tweet that the president has just put out about what we've been talking about in terms of tariffs. "Despite the aluminum tariffs, aluminum prices are down 4 percent. People are surprised. I'm not!" exclamation point. "Lots of money coming into the U.S. coffers and jobs, jobs, jobs."

Your thoughts?

SMERCONISH: Well, he had a carve-out for aluminum and steel, right? I mean, this is part of the contradiction of what he does. He announces something with such a bold vision and then immediately negotiates back from it.

And the question is whether the issues that we're discussing today, these new tariffs that are proposed, not initiated, will ever come to pass. And you just don't know. I'm sure that President Xi doesn't know either.

AVLON: Yes, but when two leaders of the two most powerful nations on earth don't know the outcome, that's usually a bad thing, because things can get out of control.

Michael makes a good point. The president's negotiation strategy isn't simply carrot and sticks. It's begin with a big stick, and then offer a bunch of little carrots. But there's also a healthy dose of reality distortion field. And simply saying jobs, jobs, jobs is about as convincing as trade wars are good and easy to win.

CAMEROTA: John, you were pointing out that the tariffs would mostly hit Trump country that voted for him. We have an actual traffic of that that illustrates. So there were these counties, 200 -- sorry, 2,783 that went for him. And the -- 82 percent of those counties are the ones that would be directly affected by China's tariff, if it all happened. So there you go.

All right. Gentlemen, thank you both very much.

GREGORY: So the president is also breaking his silence, not just on tariffs this morning but on Stormy Daniels. Did he hurt his own case by what he said yesterday? That's coming up next.

(COMMERCIAL BREAK) [07:21:28] GREGORY: We've been talking a lot -- we've been talking a lot this morning about President Trump breaking his silence on Stormy Daniels. This is what he said.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Mr. President, did you know about the $130,000 payment to Stormy Daniels?

TRUMP: No. No.

UNIDENTIFIED FEMALE: Why did Michael -- why did Michael Cohen make this, if there was no truth to the allegations?

TRUMP: Well, you'll have to ask Michael Cohen. Michael is my attorney, and you'll have to ask Michael Cohen.

UNIDENTIFIED FEMALE: Do you know where he got the money to make that payment?

TRUMP: No. I don't know.

(END VIDEO CLIP)

GREGORY: I just want to say, I spent eight years covering President Bush. And he never came back on Air Force Once. So I get so excited to see the president coming back, taking reporter questions.

This made a bunch of news. Let's bring back John Avlon and Michael Smerconish.

Michael, this was seen as a big deal if you're Stormy Daniels's legal team. That somehow he's opening the door here to -- yes, right. To being deposed or to somehow changing the story. You go. You go. You do you.

SMERCONISH: Michael Avenatti, I think that Michael Avenatti is really a skilled trial lawyer and has emerged as an enormous burr in the saddle of President Trump.

But at this point what are we fighting over? Stormy Daniels is seeking to get out of a nondisclosure agreement. For what? So that she can tell her story? What did I see on "60 Minutes" three weeks ago with with Anderson Cooper? She's already told her story, apparently without any blowback. Because as far as I know, there hasn't been an attempt by Michael Cohen to collect from her the million dollars that the contract speaks to.

I don't know that it's all that surprising what the president said. He's trying to thread a needle. I mean, what he's trying to say is "I wasn't a part of that agreement. That was Michael Cohen's business. I wasn't in the loop. And I don't know where the money came from. But nevertheless, it's a valid contract. And Stormy Daniels needs to be held accountable for that contract, regardless of whether I was in the loop." I don't think that this necessarily gives Mike Avenatti the

opportunity to take the deposition of President Trump, much as he would like to do.

CAMEROTA: Well, look, you've heard Avenatti in our interviews with him. He says this is about the truth. The American people need the truth, and there is more to the story, Michael, than Stormy Daniels told on "60 Minutes."

Here is Michael Avenatti. Michael Avenatti was very, very pleased that the president even alluded to this yesterday. Here he is last night on CNN.

(BEGIN VIDEO CLIP)

MICHAEL AVENATTI, LAWYER FOR STORMY DANIELS: You can't have an agreement if one party claims they knew nothing about one of the principle terms of the agreement.

So the president has just shot himself in the foot, thrown his attorney basically, Michael Cohen, under the bus in the process, put him in dire straits with the state bar of New York because, according to the president now, Mr. Cohen was negotiating this agreement and doing this all on his own without consultation with the president.

(END VIDEO CLIP)

GREGORY: Rare public comments from Michael Avenatti.

John, it is -- but I go back to Michael's point, which is, you know, what is it that we're trying to get to here? There's nothing that we don't know about this situation from Stormy Daniels. So is it just now, at this point, to say that she shouldn't be held accountable for that financially?

AVLON: I think there are deeper principals at stake, even if you take a generous discount for Michael Avenatti's self-interest here.

The president is not trying to thread a needle. That's far too precise. He's trying to avoid stepping on land mines. But he couldn't resist talking about this when asked, even in a limited fashion.

[07:25:03] And the reason is matters, and don't take Michael Avenatti's word for it. "The Washington Post" had a quote by a contracts lawyer of Georgetown, named Dave Super (ph), who actually said this was a problem. For the very reasons that Avenatti sketched out, which is that Trump basically said, "I had no knowledge." Therefore, if he didn't sign and had no knowledge, is it binding?

All these things get elevated when you're the president. Paying hush money to a porn star is never a best practice, especially in the final weeks and days of an election. But there are consequences to that kind of attempt to intimidate. Whether it will lead to a deposition, that's premature. But I think the president, you know, the reason he's been quiet is he

knows there's a problem. But he walked right into it, because he couldn't resist commenting yesterday.

CAMEROTA: But Michael, I mean, Michael Cohen, the president's attorney, has always maintained that this was just a deal between he himself, Michael Cohen, and Stormy Daniels. And that's why the president doesn't know anything about it. That's why he was able to reiterate yesterday that he doesn't know anything about it, didn't know anything about the hush money. And of course, there is a law involved here that is the Federal Election Commission, if he was doing it to try to not sway the election or to sway it, obviously, in Donald Trump's favor.

So that's what the issue continues to be. And I don't know what changed yesterday.

SMERCONISH: So you're absolutely right, Alisyn, in saying that there might be a Federal Election Commission issue for Michael Cohen distinctly different from those issues that may surround the president.

I think that Michael Cohen -- who by the way, as you know, has not been out defending himself in this regard, sometimes gets undersold. I scrutinized that settlement agreement. I myself have negotiated and litigated settlement agreements much less sophisticated than the one that was used to resolve the case with Stormy Daniels.

In fact, Alisyn, I'll tell you something. What strikes me about it is that this was negotiated about 10 days before election day. Presumably, Michael Cohen was a very busy man at that time. And yet, it's a very sophisticated agreement. It's not boiler plate. It kind of makes me wonder if it had been used in the past. And it has language in it expressing "and/or." It has language in it that allows Donald Trump not to be a part of the contract.

And by the way, why didn't Stormy Daniels, at the time she was given a check for $130,000, say, "Oh, I'm not going to take this check until you sign the contract"? When she took the check and she cashed it, there was a binding agreement.

CAMEROTA: Right.

AVLON: Look, I think the obvious larger problem is simply paying off people for their silence in these NDAs. But to Michael's point, you know, this has all the heraldry of almost a form letter for Michael Cohen and the Trump Organization. This is not something that was written up on the fly. It was thoughtful. And that gives the impression that perhaps it had been used before. That's one of the many reasons this is valid and relevant.

The FEC complaint is serious. But, you know, that ain't Watergate, folks. FEC is deadlocked for a bunch of different reasons. That's its own disgrace.

But this is worth pursuing. The president has shown unusual message discipline on it, because he understands some of the implications. But moth to a flame, he couldn't resist yesterday, and there will be implications.

GREGORY: More on tort law on our website. But I also think there's other things.

CAMEROTA: Let's talk about -- let's talk about policy and immigration, Michael, and what the president has been saying about this caravan of what we think are 1,000 people from Central America, mostly Honduras, that are heading to the U.S. border. They are asylum seekers. They say that they are fleeing violence and persecution. And so what to do about it?

The president is apparently sending 2,000 to 4,000 National Guardsmen to the borders. You know, look, people are debating whether or not that's a military response to what should be a paperwork response, when people are coming here seeking political asylum.

But then he also said this about, I think, what's happening on the caravan he was trying to suggest? So listen to this.

(BEGIN VIDEO CLIP)

TRUMP: And remember, my opening remarks at Trump Tower, I used the word "rape." And yesterday it came out where this journey coming up, women are raped at levels that nobody has ever seen before.

(END VIDEO CLIP)

CAMEROTA: Michael, these women and children are fleeing rape. They're not being raped on the caravan.

SMERCONISH: Right. And -- and it's a reminder to me that the campaign tone and the campaign process has really never ended. We had an election. The election had an outcome. The pace, the tonality, he's never stopped running. Witnessed yesterday when he was threw out the remarks as he was delivering that speech in West Virginia. That's not a criticism. I'm just making an observation that for him, it's a continuum here. And he feels vindicated, despite the point, Alisyn, that you just made as to what these individuals are fleeing and trying to get away from, not what they're being subjected to now.

AVLON: Yes. He sees himself as the greatest show on earth. This is a performance.

SMERCONISH: Right.

AVLON: But that's why we need to reality check his statements. And from the rape comment to the allegation, the conspiracy theory he repeated yesterday that millions and millions voting illegally, is just false. And folks need to hear that and understand it.

CAMEROTA: John Avlon, Michael Smerconish, thank you both very much.

So the controversies around EPS Chief Scott Pruitt continue.