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State of the Union

Blue Wave Coming?; Trade War Fears; Can EPA Administrator Scott Pruitt Survive?; Interview With National Economic Council Director Larry Kudlow; Interview With Maine Senator Susan Collins; Trump Throws Out "Boring Script" To "Tell It Like It Is"; Top Republicans Warn Of "Blue Wave" In Midterms; Trump: "We Are Sealing Up Our Southern Border"; Chief Of Staff Kelly Losing Influence In The White House; 2016 Newspaper Front Page Parody Predicts Trump's Moves; "Trade Wars" In This Week's "State of the Cartoonion". Aired 9-10a ET

Aired April 08, 2018 - 09:00   ET




JAKE TAPPER, CNN ANCHOR (voice-over): Escalating threats. President Trump warning China about new tariffs.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: No president wanted to go against China, and we are going to do it.

TAPPER: And China vowing to fight back.


TAPPER: Global fears escalating of a trade war. Will either side back down? President Trump's brand-new chief economic adviser, Larry Kudlow, responds next.

Plus: On thin ice. President Trump tweeting his continued support of his EPA chief.

TRUMP: I think that Scott has done a fantastic job.

TAPPER: As even more questions are raised about Scott Pruitt's inappropriate spending of taxpayer dollars. Can Pruitt hold on to his job? Republican Senator Susan Collins weighs in.

A blue wave coming? Republican now leaders openly expressing fear about losing their majority in the House, as President Trump tries to rally his base.

TRUMP: We have to get Republicans in office.

TAPPER: Can he stop a Democratic sweep?


TAPPER: Hello. I'm Jake Tapper in Washington, where the state of our union is horrified by the reports coming out of Syria, where dozens have been killed after an apparent chemical attack.

The president tweeting just seconds ago -- quote -- "Many dead, including women and children, in mindless chemical attack in Syria. Area of atrocity is in lockdown and encircled by Syrian army, making it completely inaccessible to outside world. President Putin, Russia and Iran are responsible for backing animal Assad. Big price" -- unquote.

Reports of this bloodshed comes just a week after President Trump unexpectedly announced that the U.S. will withdraw from Syria -- quote -- "very soon."

This devastating news as the president is ramping up a battle on the economic front, continuing to escalate the confrontation with China over trade. The president tweeting Saturday -- quote -- "The United States hasn't had a trade surplus with China in 40 years. They must end unfair trade, take down barriers, and charge only reciprocal tariffs. The U.S. is losing $500 billion a year and has been losing billions of dollars for decades. Cannot continue."

This morning, the president tweeting that he and Chinese President Xi will -- quote -- "always be friends no matter what happens on trade."

But the back and forth has grown into a tit for tat of threats. Thursday, President Trump threatened to bring $100 billion more in tariffs against Chinese imports, on top of the $50 billion he announced earlier in the week.


TAPPER: Here with me now is the top White House economic adviser, Larry Kudlow.

Larry, thanks so much for being here.

KUDLOW: Thanks, Jake.

TAPPER: Really appreciate it.

KUDLOW: Appreciate it.

TAPPER: So, one of the great frustrations in covering this issue of trade deficits is that the way the president talks about it sometimes frustrates people who are experts on what a trade deficit actually is.

There is consensus we should put on the table that China has unfair economic barriers up right now. But it is false to say, as the president tweeted this morning -- quote -- "The U.S. is losing $500 billion a year."

As you know, the number is actually $375 billion, according to the Department of Commerce, but, more to the point, it is not that the U.S. is losing it. Americans are getting goods and services in exchange for that $375 billion."

Before you took this job, you said -- quote -- "The trade deficit is not a reflection of a bad economy. In fact, it's the opposite."

Do you think there is a danger here that, if the president continues to talk about it this way, as if it's a zero sum game, the American people will think the goal is to have a zero trade deficit, and which is never going to happen with China?

KUDLOW: Well, I don't think it is a problem.

Look, the president expresses himself as the president expresses himself. I think, personally -- and I'm a big supporter of this -- China -- look, we have had to go in and fire a shot across the bow. China's behavior is 20 years now. It's -- it's more than unfair trading practice. It is illegal trading practices, because they are -- they are stealing our property rights, our intellectual property rights.

They are forcing technology from our companies to be open, so they can get it. And they have tall trade barriers. The president is, to some extent, right about the trade deficit. They have high barriers. They have high tariffs. This stuff has got to stop.

No president has had the backbone to take it up publicly before. So, I think he is exactly right. And I say to everybody on this, the problem here is China. It is not President Trump. China has been getting away with this for decades. Past American presidents refused to take them on.

I think President Trump is doing exactly the right thing. And I think it is going to generate very positive results, which will grow our American economy. It will help grow China's economy. It will help grow the world economy.

TAPPER: I'm not taking issue with the idea that China is the root of the problem here. There's consensus, and there has been for a long time.


And you're right. President Trump is doing something, where previous presidents haven't.

The question is whether this threat of hundreds of billions of dollars of tariffs is the right approach. Just in the last couple months, before you took this job, you said the tariffs were -- quote -- "prosperity killers." You pointed to them as one of the causes for the Great Depression.

You wrote an op-ed titled -- quote -- "Mr. President, Tariffs Are Really Tax Hikes."

Wouldn't tariffs, if President Trump pulled the trigger, be a huge mistake?


By the way, we -- Steve Moore and Art Laffer and I wrote that piece. We didn't like the blanket tariffs. We didn't like the blanket tariffs, which would hurt our allies as much or more as our enemies. So, we didn't like that. And we think there might have been some downstream problems for the U.S. economy.

This one is different. Look, we...

TAPPER: You support -- you would support if the president pulled the trigger on the -- on the hundreds of billions of dollars of tariffs against China?

KUDLOW: Yes, I would.

TAPPER: You would?

KUDLOW: I absolutely would.

No free market guy, no free trade guy disagrees on this subject. The guild, if you will, the brethren of the economic profession, have all agreed that something has to be done.

Now, Jake, remember, this is a process. Right? No tariffs have been implemented that. Very important.

TAPPER: I get that. Yes.

KUDLOW: And this last round that was announced late last week, president asked Bob Lighthizer, our trade diplomat, to consider whether an additional round of tariffs would be necessary or useful.

And part of that is because, after we made the first round, the Chinese response was unsatisfactory, to put it least. So, the president is trying to get their attention again. The process may include tariffs. I cannot rule that out. It may rest eventually on negotiations. We will see how the president wants to do it.

He is pretty good at negotiating, but he is also pretty good at standing his ground. And, again, this -- you know, look at this way. The American economy, what are we? We are driven by advances in technology, which are the backbone of our entrepreneurship. They are the backbone of our ingenuity. That is the reason the American economy is number one in the world.

And, by the way, we should talk about this, because it's really flourishing under Trump policy. But I'm just saying, China...

TAPPER: But don't these...

KUDLOW: ... cannot be allowed to steal our technology, because that's the bread and butter of our economy.

TAPPER: I hear what you are saying, but -- but you also seem to be saying two things here. One is that this is a negotiation, and the process is healthy.

KUDLOW: It could be. TAPPER: And then the idea that, ultimately, if you pull the trigger,

even though you have spent a lifetime deploring and condemning tariffs, that that would be a good thing.

The rhetoric -- even though the trigger hasn't been pulled, the rhetoric has had a big economic impact. You talked about all the good things that Trump has done for the economy. The Dow fell almost 600 points on Friday. It's down 10 percent over the last two months under the threat of this trade war, the threat of retaliation causing problems for farmers especially, people in Trump country, soybean prices down 4 percent this week, costing soybean farmers $1.7 billion in crop value.

What do you say to those farmers who say, you know, ultimately, I don't like this negotiation; it's hurting my bottom line?

KUDLOW: Well, we're -- we are talking to them, by the way, on a daily basis to see.

So far, I don't really think it is fair. I mean, you're right. There has been a bump-down in farm commodity prices. I agree. I -- I'm not at all sure that this is going to last.

And I don't know how this is going to -- again, this process may turn out to be very benign. OK? You have to take certain risks as you go in. We are taking them. We are making our case. Nothing has happened so far. We are looking at future actions.

You have got comment periods for another couple of months on our proposals. We will see which -- maybe China will want to come around and talk in earnest. So far, it hasn't. I hope it does.

American economy is so resilient, Jake. We are growing at 3.1 percent annual rate. I used to do this for a living, 3 percent annual rate last three quarters.

TAPPER: Right.

KUDLOW: Business investment is booming right now.


TAPPER: But aren't you threatening -- you are threatening to undermine all of that with this trade war.

KUDLOW: And the stock market is still up, I don't know, 25 percent- plus since the election.

Here's the deal. You talk to a Wall Street guy, earnings -- this is a Kudlow-ism -- profits are the mother's milk of...



KUDLOW: Profits are coming in like gangbusters. I'm not going to predict the stock market. I don't think they want me to. I have some thoughts on the matter.


TAPPER: Right. I'm sure you do.

KUDLOW: We are going to do fine with these earnings.

TAPPER: I want...

KUDLOW: Earnings are everything.

TAPPER: As a business guy, I also want to ask you about President Trump calling on Amazon to pay billions of dollars to the federal government, accusing them of bankrupting the U.S. Postal Service.

It's not accurate. But it is true that they pay a lower rate in postage, as do all bulk providers -- bulk users.

While under attack from President Trump, Amazon's stock -- and this an -- they employ more than half-a-million people -- has fallen 11 percent in the last two weeks.

You're a believer in free markets. I can't imagine that you support a president, any president of the United States singling out an American company and just bad-mouthing it for weeks while its stock goes down.


KUDLOW: Well, the issue here, as I understand it, is to have a level playing field with regard to tax collection. That's the issue.

TAPPER: They support the tax bill that is going through Congress, Amazon.

KUDLOW: Yes, sometimes.

And they're doing more in states now than they were, although they have not been collecting local tax.

TAPPER: So, you support the president bad-mouthing this private company?

KUDLOW: It's not so much bad-mouthing a company, Jake.

It's, let's have a level playing field for all of the new Internet retailing that is going on. The industry is changing fundamentally. It is going to continue to change like that. But you should pay taxes in whatever jurisdiction you are operating in.

That was the original beef that the president had with Amazon. Amazon, look, it's a strong company. It's going to remain a strong company. Lots and lots of retailers are going to become Internet retailers. Let's have the tax situation apply to everybody.

We have been protecting some, and we can't keep doing that.

TAPPER: They pay the taxes they're required to pay.

I want to ask you one last question. CNN, the Associated Press, "Washington Post," "New York Times," lots of media outlets reporting that it seems that Chief of Staff John Kelly's influence has been waning in the West Wing, with the president working around him, not including him in policy and key personnel decisions, Kelly threatening to quit multiple times during his tenure.

It doesn't sound like a great relationship between the president and his chief of staff. What is your impression, now that you're in the building?

KUDLOW: So, I have been on the job five days.

John Kelly has been great to me. He is in charge. He is operating a much improved process. And every time the president and I talk, and that subject comes up, the president has nothing but good things to say about General Kelly. That's what I say.

I don't -- I don't personally think this is a real story. The president trumped about it -- the president trumped -- the president tweeted about it

TAPPER: You're using Trump as a synonym for tweet now?


KUDLOW: He did. Trump tweeted on it, and it didn't sound like he is pushing Kelly out.

Kelly has been great to me. All I can tell you is five days. I have to do five more days to beat Anthony Scaramucci's record. I'm really working on it.

TAPPER: I think you will.

KUDLOW: Today is day five. I think I can do it.

TAPPER: I think you got it in your grasp.


TAPPER: And I hope you will come back again. It's good to have you on.

KUDLOW: Any time.

TAPPER: Larry Kudlow, thank you so much.


TAPPER: President Trump this morning reacting to the horrific chemical attack in Syria, blaming President Putin, Russia and Iran for backing Syrian President Assad. Will President Trump respond with any military action, as he did one year ago?

Republican Senator Susan Collins is here to react next.



TAPPER: Welcome back to STATE OF THE UNION. I'm Jake Tapper.

A horrific scene out of Syria Saturday.

And I must warn you, we are about to show you some graphic images that might be difficult to watch, the video showing multiple people, including children, whom activists say were attacked with a suspected chemical agent.

The attack took place in Duma, in Eastern Ghouta, near the capital of Damascus. You can see women, children and men now lifeless. The foam on their noses and lips appears to be a telltale sign of a chemical weapon, a chemical attack. Local doctors say that dozens have died. That number, of course, could rise.

CNN cannot independently verify this video, which was taken by anti- government activists and doctors. The Syrian government denies any involvement in the attack, as well as in at least three other chemical attacks in the past six months.

President Trump took to Twitter to respond directly to the attack this morning, writing -- quote -- "Many dead, including women and children, in mindless chemical attack in Syria. Area of atrocity is in lockdown and encircled by Syrian army, making it completely inaccessible to outside world. President Putin, Russia and Iran are responsible for backing animal Assad. Big price to pay. Open area medical help and verification. Another humanitarian disaster for no reason whatsoever. Sick."

Joining us now is Republican Senator Susan Collins. She's a member of the Senate Intelligence Committee.

Senator Collins, always -- always good to see you.

The White House homeland security adviser this morning says nothing is off the table, including a potential military response, to this chemical weapons attack in Syria, an apparent weapons attack.

Would you support a military response to this?

SEN. SUSAN COLLINS (R), MAINE: This attack with chemical weapons, which are banned by international conventions, is absolutely horrific and, as your video indicates, was aimed at civilians in Syria.

Last time this happened, the president did a targeted attack to take out some of the facilities that may be an option that we should consider now. But it is further reason why it is so important that the president ramp up the pressure and the sanctions on the Russian government, because, without the support of Russia, I do not believe that Assad would still be in office. TAPPER: President Trump, of course, announced about a week-and-a-half

ago that he plans to withdraw U.S. troops fighting ISIS out of Syria -- quote -- "very soon."

Obviously, only the perpetrators of this horrific attack are responsible for violence, but a Syrian human rights activist contacted me and said -- quote -- "This is what happened when Trump says pull out and let another take care of it" -- unquote.

Do you think it is possible that Trump's announcement to withdraw might have emboldened some bad actors here?

COLLINS: No, I don't.

But I think the president is going to have to reconsider his plan for an early withdrawal, in light of what has happened.

TAPPER: Turning to the other news out of the White House this week, you just heard White House chief economist Larry Kudlow defending these new potential tariffs against China.

The stock market, of course, dropped almost 600 points on Friday amid fears of a possible trade war. Farmers are worried that retaliatory tariffs on soybeans will end up costing them billions of dollars.

I know you have farmers in Maine. Do you support what the president is doing here with regards to China?

COLLINS: I think we need a more nuanced approach.

But I give the president credit for levying these tariffs against the Chinese, who -- with whom we talked for a decade about their unfair trade practices and theft of intellectual property from American firms.


This is costing us jobs in this country. And we do need to get tough with China. But we need to do so in a way that we do not spark a trade war -- war and retaliation that will end up with our European and Asian competitors getting business that otherwise would have come to American farmers and American manufacturers.

So, it is a very delicate balancing act that we have to undertake. But we cannot ignore the looming trade deficit with China and the fact that China does not abide by the labor and environmental laws that protect our workers, and thus subsidizes major industries in a way to undercut American producers.

TAPPER: On another note, President Trump tweeted last night that EPA administrator Scott Pruitt is doing -- quote -- "a great job."

The president excused a number of controversies. Some of the controversies include that Pruitt rented a room from an energy lobbyist for $50 a night, which is well below market value, he asked for a private charter plane membership, costing $100,000 a month, although they didn't actually do that, he wanted to buy a bulletproof desk which would cost $70,000, he requested sirens in traffic because he was late for dinner, he reassigned staffers when they raised ethics concerns about Pruitt's actions and spending.

This is, of course, in addition to what we learned from the AP this week, that the EPA has spent almost $3 million on Pruitt's security detail.

You were the only Republican senator to vote against Pruitt's nomination in the first place. Do you think he should resign or be fired?

COLLINS: Well, first of all, let me say that the actions taken by Scott Pruitt in the environmental arena, whether it is trying to undermine the Clean Power Plan, or weaken the restrictions on lead, or undermine the methane rules, are reasons enough to validate my decision to oppose his confirmation.

This daily drip of accusations of excessive spending and ethical violations serve to further distract the agency from accomplishing its very important mission.

I think Congress needs to do some oversight. After all, we don't know the extent of the recommendations made by Mr. Pruitt's security team. But, on policy grounds alone, I think Scott Pruitt is the wrong person to head the EPA.

TAPPER: So, should he resign or be fired?

COLLINS: Well, that is a position that only the president can take at this point.

The Congress has no role as far -- now that he has been confirmed. I voted against confirming him, but I believe that my position was the correct one and has been validated by his actions.

TAPPER: You voted for the Republican tax reform plan in December, for a number of reasons, but one of the reasons was that you had been assured by the Senate majority leader, Mitch McConnell, that fixes to Obamacare would pass before the end of the year.

In your statement explaining your vote, you pointed directly to those fixes as a main reason you supported the tax plan, writing -- quote -- "Having secured these key improvements in the bill, as well as a commitment to legislation to help lower health insurance premiums, I will cast my vote in support of the Senate tax reform bill" -- unquote.

It is April now. You haven't gotten the health care bills that you wanted. Do you think that you were lied to in order to get your vote?

COLLINS: No, I really don't.

I had a number of concerns about the tax bill, but I support lowering taxes. We have doubled the standard deduction. That is going to help some 72 percent of American taxpayers. We have made the child care tax credit refundable for the first time.

That's going to help that single mom who is making $35,000 actually get money back from the federal government, rather than owing taxes.

TAPPER: Right, but...

COLLINS: So, there is a lot in the tax bill that is good.


TAPPER: That you support. I understand that you support it.

But you did say on the Senate floor that repealing the individual mandates, which was in the bill, would almost certainly lead to higher premiums.

And a study from the Kaiser Family Foundation shows premiums are expected to climb 52 percent in Maine this year. This is exactly what you warned about, exactly what you were afraid about.

Haven't these leaders who promised you that this legislation that would help bring relief to them for premiums, haven't they failed your constituents?

COLLINS: Well, first of all, let me say that I had the opportunity just two weeks ago to bring a package to the Senate floor with Senator Lamar Alexander.


So, the majority leader kept his promise to me.

Unfortunately, and much to my surprise, because this was an opportunity to not only prevent those egregious premium increases, but actually to lower insurance rates by some 40 percent over the next two years, and expand coverage to 3.2 million people, and, much to my surprise, it was blocked actually by senators on the other side of the aisle.

That was something that I never anticipated. I think it is very unfortunate.

I don't support the individual mandate. I never have. I don't think, however, it should have been included without offsetting changes.

The reason I don't support it, it is highly regressive. The families -- 80 percent of the families who pay the penalty for not buying unaffordable insurance make less than $50,000 a year.

So, the individual mandate is not the answer. Lowering the cost of insurance is the answer. That's what our package would have done.

We tried to bring it to the Senate floor, attach it to the spending bill, and, regrettably, we were blocked.

TAPPER: All right, Senator Susan Collins of Maine, thank you so much. Always good to see you.

COLLINS: Thank you, Jake.

TAPPER: Republicans clearly concerned about a potential Democratic wave in the midterm elections. The Senate majority leader is even saying it could be a Category 5 hurricane, possibly.

Is there anything President Trump can do to stop it? Well, he is sure trying, and that is next.




TRUMP: You know, this was going to be my remarks. It would have taken about two minutes.

But that would have been a little boring. A little boring. I'm reading off the first paragraph and said this is boring.

Come on we have to say -- tell it like it is. We have to get Republicans in office.


TAPPER: That was President Trump literally throwing out the script on electing Republicans in 2018.

Since he made those remarks in West Virginia he has tweeted attacks on Justice Department and the FBI and Hillary Clinton. Tweeting -- quote -- "What does the Department of Justice and FBI have to hide? Why aren't they giving the strongly requested documents (unredacted) to the HOUSE JUDICIARY COMMITTEE? Stalling, but for what reason? Not looking good!" Among his many, many tweets.

Let me start with my panel here. Linda, there are those who think that President Trump appealing to his base in the various ways he has been doing so in the last couple of weeks saying outrageous things in some instances is a good strategy that he's going to rally his political base and get them to the polls in the same way Democrats are very motivated to get to polls. What do you think?

LINDA CHAVEZ, CHAIRMAN, CENTER FOR EQUAL OPPORTUNITY: Well, the problem is he's not on the ballot and so rallying his base may not impact transfer to support for Republican candidates and frankly the base is not enough. It's not enough to win in the general election.

And I think it is actually a very bad strategy. I think that his being off script, his not talking about his policy accomplishments, the tax cut, some of the other accomplishments he has had, deregulation et cetera that is bad for Republican candidates. That's what they have to run on not run on supporting the president. This isn't a presidential election. It's a midterm election.

TAPPER: Dr. Ward, you are actually on the ground here running for -- in a Republican primary for the Congress and for the Senate.

What do you think? You are in deep red Arizona.


TAPPER: But what is your take? Is this the right strategy for the president?

WARD: Well -- I mean, I think that he is -- he is rallying the base to a point but he also is delivering on so many promises that he made on the campaign trail.

The America first agenda. He is working to secure the border. He is working to get rid of Obamacare and replace it with free market in medicine. The tax cuts, you know, that was amazing.

And I think that the brand of Republicanism that like my opponent Congressman Martha McSally who voted for the huge omnibus spending bill is the wrong way to go. And I think that the president is directing people to look for candidates who are competent, qualified, and capable but also want to continue down the path of the America first agenda.

TAPPER: Let me just say it to Congresswoman McSally, you now have an invitation to be on our panel in the interest of equal time.

Jen, what do you think? Is the Trump strategy going to help possibly fend off a blue wave?

JEN PSAKI, CNN POLITICAL COMMENTATOR: Well, look, I think that how a Republican primary is being run in a very red state is not an indication of trend lines running in the country obviously but it's a troubling trend line for the Republicans across the board.

If you look historically it is always tough for sitting incumbents and it was for Obama.

TAPPER: I remember the slogan of 2010.


PSAKI: There was -- it certainly was and only three times in the last 90 years has the sitting president not lost seats. But we can also -- Democrats can also thank President Trump for reinvigorating and energizing the base and really unifying the party in a way that it wasn't in 2016 and it hasn't been in some time.

And we have seen that in primary -- in special elections. We have seen that in elections that Democrats have had no business winning. So, look, it's not over until it is over and there is a lot of work left to do. And anybody who is saying Democrats are absolutely going to win back the House have never been through a tough election before.


But things are getting better for Democrats. They're getting worst for Republicans. And that is a place that I think Democrats should be happy to be in.


TAPPER: Karine, what do you think? Is President Trump -- all the things he is doing to rally his base are they helping to rally your base?

JEAN-PIERRE: Absolutely. I mean, just look at Wisconsin.

Wisconsin we were able to -- we were able to win a Supreme Court seat there just this past week and the candidate that won, the Democrat that won there, she ran against the civil rights and the values of Donald Trump. And it helped her. Her opponent was backed by NRA.

So I think the data points are there for Democrats that shows enthusiasm. And it is a base election this year in the midterms. And right now our base is excited and Republicans are just not. And we saw that in Rural PA just recently.

And the interesting thing about Rural PA is the Republican there three fourths of his ads was about the tax plan. And guess what? It didn't connect.

And what did Conor Lamb do? He talked about health care. He talked about protecting, securing -- making sure Social Security, Medicare, Medicaid and that did resonate.

And so we have a message that we can run on and the tax plan -- guess what? It's not working for Republicans --

TAPPER: The president is -- I'm going to come to you in one second. The president is running on his tougher immigration measures tweeting over the weekend -- quote -- "We are sealing up our southern border. The people of our great country want Safety and Security. The Dems have been a disaster on this important issue."

Might play great in Arizona in the Republican primary. You are worried that it's going to hurt Republicans in the general election.

CHAVEZ: Absolutely. Absolutely. And frankly, immigration -- illegal immigration is down to a 46-year low.

So this idea that we have some invasion of people coming into the United States, illegal immigration has not been this low since the early 1970s. Some of the people on the panel were not even born at that time.


So, you know, I just think it is a bad issue and it turns off Hispanics. And Hispanics have been trending Republican for years. What has turned them around has been this hard line immigration and particularly those people who oppose illegal immigration.

We can fix the illegal immigration quite easily. We need a legal immigration system that gives the chance of people who simply want to come here to do work that Americans won't take to come in legally.

TAPPER: Dr. Ward?

WARD: What we are seeing on the ground and, Karine, you are right because in Pennsylvania the Democrat kind of ran on a Trump platform. And he was more energized and more energetic.

And so what the Republican electorate is looking for is someone that is inspiring, that's motivating that is going to go to Washington, D.C. and do something different than what the insiders in Washington and the Republican Party have been doing. And when people like Mitch McConnell and Chuck Schumer on both sides of the aisle try to meddle in our state election that is when people get upset.

And on the border, you know, I'm in a border state. I was just down at the border a couple of weeks ago with a rancher Jim Chilton (ph). His ranch is -- has 25 miles of the border with Mexico and he took me to the border. And we are supposed to believe that the four flimsy strands of barbed wire that are there are supposed to protect our country from invasion.

Now he says over that over the last decade -- he has been there for about 30 years -- over the last decade he has seen a lot of changes because he says before it was immigrants. It was people coming that wanted to do work. But now he is seeing a problem with what he calls the druggers, that's the drug cartels who bringing dangerous drugs, who are bringing illegal weapons, who are human trafficking -- they are smuggling people.

And what the people have to go through, the women and the children in particular who are trafficked across that border is unthinkable. And so that's why we have got to secure the border, that's why we got to build the wall.

TAPPER: Let us all take a break here. At the time it was a joke. A fake "Boston Globe" front page from 2016 envisioning what a Trump presidency would look like. Except now the fake headlines could actually be on the front page news.

We'll look at that next. Stay with us.




REINCE PRIEBUS, FORMER WHITE HOUSE CHIEF OF STAFF: I think you have to adapt. And I think he is adapting to the president's style. And the president wants to call the shots. And he also wants people to know that he is calling the shots. And if something gets in between that it becomes a problem.


TAPPER: That was President Trump's first chief of staff Reince Priebus giving his successor John Kelly some friendly advice, let President Trump call the shots. The "Washington Post" is reporting this morning that Kelly's power is waning in the White House and he may have threatened to quit. They wrote -- quote -- "In less than two weeks ago, Kelly grew so frustrated on the day that Trump fired Veterans Affairs Secretary David Shulkin that Homeland Security Secretary Nielsen and Defense Secretary James (ph) Mattis both tried to calm him and offered pep talks, I'm out of here, guys," Kelly said.

A comment some interpreted as a resignation threat. I'm back with my panel.

Jen Psaki, you worked in the Obama White House. You saw a number of chiefs of staff. Some very successful like Denis McDonough, working well with the primary, some not so successful. What do you think of when you hear these stories about Kelly's power waning, the president making decisions and not including him whether it's policy or personnel.

PSAKI: Well, you basically have two big values when you're the White House chief of staff, your credibility to the external audience whether that's Congress or the public or, you know, other members of the cabinet, and you have your influence with the president.

And for Kelly just from the outside it is clear that both are waning. Now credibility you can blame in part on things he has done to himself which include obviously backing Rob Porter and really being his biggest advocate publically. But influence internally, all of the reporting suggests that he is just not as influential with Trump as people thought he might be, as Trump said he might be.


And if you don't have those two things you basically just have a nice office. So that is the tough part for him at this point.

TAPPER: What do you think? You worked in administration.

CHAVEZ: I did. I worked for Don Regan who was not an easy chief of staff.

Frankly, I believe that Kelly and Trump were never a good match. I think a lot of people had hope in Kelly that he would bring order and discipline. But you have got the most undisciplined person who has ever occupied the Oval Office in office right now.

And I think that they just raid (ph) against each other. It's a really tough job. I think that Trump wants to be his own chief of staff. And I don't think anybody is going to be able to fill that role satisfactory for him.

TAPPER: I know that you're a big supporter of the president, Dr. Ward, but I do wonder, you are also a leader. (INAUDIBLE) know that it is important to have people around you who can tell you when you are messing up, when you're going too far et cetera.

I know I feel that way --

WARD: Yes.

TAPPER: -- here at CNN in terms of having people around me telling me to cut it out. What advice would you give the president in terms of his chief of staff?

WARD: I think General Kelly has done an amazing job. He is a great patriot. He has got years of military leadership experience.

My husband is a military man himself serving 33 years in our armed forces. And so I understand what he brought to the table and I think that president Trump likes to have people who provide a descanting opinion.

And so I think having that around is good. And I think he has done a great job. I think it will remain to be seen whether he stays or goes.

But you are exactly right you have to have people who will tell you when to push forward, when to pull back, give you great advice. And I think that President Trump had (ph) that in General Kelly.

TAPPER: What's your take on General Kelly?

JEAN-PIERRE: Well, I think that General Kelly unfortunately is not the solution. He is the problem not just with Rob Porter but also -- let's not forget he lied about an African-American woman -- congresswoman, Frederica Wilson. And so he constantly finds himself in the press for bad reasons.

But back to what Linda was saying, yes, I think that Donald Trump wants to be his own chief of staff. He wants to be his own communications director. He believes that he can do the job better than everybody else.

And so that is the place that we are in. We have a president who likes to lead with chaos. And, you know, infighting in your own administration is not the way to do this.

TAPPER: One of the interesting stories that we are looking at right now is the "Boston Globe" had a fake issue -- let's put it up on the camera -- in April of 2016 jokingly anticipating what it would look like under a Trump presidency. An editorial and (ph) saying (ph), "Markets sink as trade war looms." It also had deportations to begin, "U.S. soldiers refuse orders to kill ISIS families." Obviously not all of those things have happened exactly as they are. But a lot of issues in terms of deportations, in terms of the trade war looming are actually in the news today.

PSAKI: That's true. And supporters will probably say these are things that he talked about on the campaign trail and predicted.

I remember being in the White House the day after the election and had a lot of staff crying in my office about the impact this would have on them as human beings because they are African-American, because they're Latino, because their parents are immigrants, because they are Muslim. And we've seen all of that play out.

So it's not surprising I think to people who were shocked and dismayed by his election. It is probably not surprising to people who were his strong supporters. There's (ph) probably some people in the middle who are surprised and frankly there are people that Democrats hope to steal back in the next election.

TAPPER: Dr. Ward, you're probably looking at some of those headlines and thinking, good, we need deportation.

WARD: Well, I mean, I think that the headlines obviously go a bit far.

TAPPER: A little far.

WARD: I think that we need a secure border. I think that we need to stop the sanctuary city madness.

I think that we need to end chain migration. I think we need to end the diversity lotto.

I think there's (ph) a lot of things that we need to do first and foremost building the wall making sure that we have a symbol of a right and wrong way to come into the country as well as a barrier that significantly slows down the transit of illegal things coming across our borders so our border patrol can do the job.

TAPPER: Thanks one and all for being here. Really appreciate it.

Really, who can keep track of all the "Star Wars" prequels and sequels? Have you heard of the latest one? Trade wars. The Chinese empire strikes back. And that's the subject of this week's "State of the Cartoonion."

Next. Stay with us.



TAPPER: Welcome back. A phantom menace to the east leads to a struggle of galactic proportions. It's almost as if President Trump's escalating battle with China over trade could be a George Lucas film if President Trump were the one writing the script and that's the subject of this week's "State of the Cartoonion."


TAPPER (voice-over): In a galaxy not so far, far away, a rebellion sparks a drama launching a different saga, "Trade Wars."

The force was strong in Trump but it needed to be honed through training with tariff master Wilbur Ross.

Finally Padawan Trump was ready to correct the trade imbalance.


YODA, STAR WARS CHARACTER: No. Try not. Do or do not. There is no try.

TAPPER: Jedi Trump's first adversary? A notorious trade gangster to the south.

SKYWALKER: Jabba, this is your last chance. Free us or die.

HAN SOLO, STAR WARS CHARACTER: Great, kid. Don't get cocky.

TAPPER: But the rebellion faced its most formidable foe in Chinese President Xi, the Darth Trader.

DARTH VADER, STAR WARS CHARACTER: I am altering the deal. Pray I don't alter it any further.

SKYWALKER: You can either profit by this or be destroyed. It's your choice, but I warn you not to underestimate my power.

TAPPER: The Chinese empire strikes back, bringing new tariffs against the rebellion and it may not have the upper hand.

Now the rebellion retreats to plan its next move.


C-3PO, STAR WARS CHARACTER: What could possibly have come over Master Luke? Is it something I did? He never expressed any unhappiness with my work.

TAPPER: All those aboard Millennium Falcon one can do is hope the trade wars end in galactic harmony.

LEIA ORGANA, STAR WARS CHARACTER: You don't have to do this to impress me.

TAPPER: For now the saga continues.

YODA: Impossible to see where the future is.


TAPPER: My apologies to George Lucas. Secret talks between the U.S. and North Korea are happening right now in preparation for a meeting between President Trump and Kim Jong-un. Could this be a sign the meeting could happen soon?

That's next.