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EARLY START

Trump Edging Toward Obama Foreign Policy; Cabinet Nominations in Polarized Washington. Aired 4:30-5a ET

Aired February 3, 2017 - 04:30   ET

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


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[04:30:36] CHRISTINE ROMANS, CNN ANCHOR: After all the divisive rhetoric of the campaign, would you believe President Trump is now starting to align with President Obama on some key areas of foreign policy? Major developments around the world. We are live with the newest developments.

Welcome back to EARLY START this morning. I'm Christine Romans.

MIQUEL MARQUEZ, CNN ANCHOR: I'm Miguel Marquez. Happy Friday to you.

ROMANS: You too.

MARQUEZ: It is 30 minutes past the hour on this lovely Friday.

We begin with a remarkable turn of events at the White House. After more than a year campaigning against almost every part of Barack Obama's foreign policy, President Trump, post-inauguration, seems to be adopting or at least accepting some of those very policies. The administration taking a tougher stance on Israeli settlements issuing a stern warning to Russia and blaming it for surging violence in Ukraine, threatening new sanctions against Iran without directly targeting the nuclear deal.

ROMANS: This amid diplomatic efforts to soothe rattled nerves in Asia. And to patch things up with Australia, after a heated call between Mr. Trump and that country's prime minister. All this on Secretary of State Rex Tillerson's very first day on the job.

We have live coverage this morning from Europe to the Middle East to Asia.

We begin with our Ian Lee in Jerusalem with that surprising White House pivot on Israeli settlements.

Good morning, Ian.

IAN LEE, CNN REPORTER: Good morning, Christine. Yes.

For many of us who cover Israel, this did come as a bit of a shock especially since it seemed like the Trump administration was giving the Israeli government the green light to expand settlements in the west bank and east Jerusalem. They have announced over 6,000 settlement units since Trump came into office.

But then, we get this statement from the White House, "While we don't believe the existence of settlements are an impediment to peace, the construction of new settlements or the expansion of existing settlements beyond their current borders may not be helpful in achieving that goal."

We are now starting to hear from Israeli officials. The deputy foreign minister came out shortly and said that the current Israeli government was elected to act on the Jewish people's right to build in all parts of the country. He went on to say that the White House itself holds that the settlements are not an obstacle to peace. He is translating this as saying it must concluded that the expansion or construction is not a problem. Although we just heard from the White House statement which says the expansion is inhibits the goal of achieving a peace deal.

Now, we do know that yesterday that Rex Tillerson talked to Prime Minister Netanyahu. We do not know what came from that conversation. Also, President Trump talked to King Abdullah of Jordan, likely talking about not only the settlements but moving the U.S. embassy from Tel Aviv to Jerusalem. But Prime Minister Netanyahu and President Trump will be meeting on February 15th. Expect to get more clarification about what the White House means.

ROMANS: Yes. What the White House means, it sounds like some folks are listening to the first part of the statement, while the second part that statement certainly looks like a shift in tone, saying it could not be helpful expanding the settlements. Ian Lee, thank you so much for that.

Thursday also marks the first appearance of the United Nations Security Council by the new U.S. ambassador to the United Nations. Nikki Haley took the opportunity to pivot away from President Trump's cordial rhetoric toward Russia, going right after Moscow on its renew aggression in Ukraine.

(BEGIN VIDEO CLIP)

NIKKI HALEY, U.S. AMBASSADOR TO THE U.N.: This escalation of violence must stop. The United States stands with the people of Ukraine who had suffered for nearly three years of Russian occupation and military intervention. Until Russia and the separatists it supports respect Ukraine's sovereignty and territorial integrity, this crisis will continue.

(END VIDEO CLIP)

ROMANS: Haley also disappointing Kremlin hopes that sanctions would be curbed under this new administration.

CNN's Clare Sebastian joins us live now from Moscow with the very latest. And certainly, as many of us here, many at the U.N., many I'm sure in Moscow were listening to Nikki Haley's comments yesterday. It was a bit of surprise. It was a much sharper tone than what we've heard from this administration. CLARE SEBASTIAN, CNN INTERNATIONAL CORRESPONDENT: Absolutely,

Christine. This sets up the exact clash we saw repeatedly between Russia and the Obama administration. The U.S. blaming Russia for the violence in Ukraine and for the Russian foreign minister coming out just a few moments ago overtly blaming Ukraine for that escalation.

[04:35:09] But it's worth pointing out that despite a small modification in U.S. sanctions on Russia overnight, they do remain in place. The White House saying not only that there is no easing in sanctions, but also crucially saying they knew about Nikki Haley's speech at the U.N. in advance of that happening. As for Russia's response, however, the Russian ambassador to the U.N. saying after the meeting and putting a positive spin on it, if you could do that. He said that this actually showed a noticeable change in the tone from the U.S. and that this is a long road ahead and he hopes it will lead to a more constructive relationship.

But the back drop to this, Christine, is one of increasing violence in Eastern Ukraine. We heard more shelling, this coming from the Organization for Security and Cooperation in Europe monitor. They say that they saw civilian casualties. They don't know yet how many. And we know there is a humanitarian crisis. People in that losing access to crucial infrastructure, water and electricity. And so, that's something both sides can agree on, is that the situation is increasingly desperate for the people there.

ROMANS: All right. In Moscow for us this morning Clare Sebastian, keeps us to speed if there are any developments from Moscow -- thanks.

MARQUEZ: Turning to Iran. The White House is expected to announce new sanctions possibly as soon as today. The additional sanctions are a response to Iran's ballistic missile test on Sunday. But even though the president campaigned hard against the nuclear deal, sources say these new sanctions are not expected to affect that agreement.

Joining us live is Thomas Erdbrink, Tehran bureau chief for "The New York Times", reporting for us this morning from Iran.

Thomas, interesting pivot from the Trump administration after a year and a half vowing to shred that nuclear deal with Iran, now imposing new sanctions, but not touching the deal. What are the tea leaves there in Iran likely to say?

THOMAS ERDBRINK, THE NEW YORK TIMES: Well, absolutely. There is confusion here over this as well. The Iranians have been sort of preparing themselves for the Trump administration to possibly cancel or renegotiate the nuclear agreement. And now, what we're seeing is that the Trump administration is doing exactly what the Obama administration did after every missile test. They imposed sanctions on Iranian entities.

Now, those sanctions will be announced later today is our understanding at the White House. We don't know what they will mean exactly. What we do know is that the Iranians have been as usual harsh in their response to Mr. Trump. One senior aide to Ayatollah Ali Khamenei, supreme leader over here,

has called Mr. Trump's words and tweets hollow claims. And he has also said that his own country will suffer from his decisions. At the same time, we can see that the Iranians are getting a bit nervous of other remarks made by Mr. Trump. And there was the remark saying that no option is off the table.

Now, the Iranians have done a lot of negotiating to get the nuclear agreement. They gave up a large part of their nuclear program in order to prevent conflict with the United States. With Mr. Trump now announcing that no option is off the table, that this is something that will worry Iran's leaders over here, absolutely.

So, all in all, I think they're waiting to see what these measures will detail exactly.

MARQUEZ: Very, very interesting. Thank you very much for being on with us this morning. And we will come back to you for more -- thank you.

ROMANS: All right. Leaders from the European Union are meeting for the first time since Trump took office, 27 E.U. leaders taking part in a summit. What is on the agenda?

Let's bring in CNN international diplomatic editor Nic Robertson live at those meetings. He is in Malta for us. Fascinating potpourri of headlines potentially out of this meeting here, especially yesterday from Nikki Haley at the U.S. ambassador to the U.N. talking tough on Russia.

What is top of mind there?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, Christine, I mean, it is amazing to be at a summit and there is so much to talk about and you can't quite see which direction they're going to go. What we heard this morning from the French president when he arrived, talking about the White House, talking about President Trump, he said -- you know, we just don't know where the White House stands on NATO. He said the one thing which is clear from is, you know, if Donald Trump doesn't want to deal with the European Union as a united group, that is the fear here that he doesn't, he said, then, we'll have nothing to do with President Trump. That was quite a strong line.

But for the Europeans, yes, looking at what Nikki Haley, that is a strong position what she said. Nothing to do with president Trump. That was quite a strong line. But for the Europeans, yes, looking at what Nikki Haley said, that's a very strong language, that seems to be a change of position.

You know, you're going to have Theresa May here this morning.

[04:40:03] She obviously met with President Trump just last week. She said that she's going to come and explain to the other European leaders what President Trump said, what they discussed about NATO, about these countries, the other European countries, you know, raising the financial contribution to NATO. The migrant crisis, obviously, a key and important thing to President

Trump as well. That's going to be a central plank of suggestion here. But one of the themes that's emerging really and echoes what the French president said, this is a leader from the European Parliament, from the sort of left, center and right parties across the broad political spectrum, they are writing to the president of the European Council, the president of the European Commission, to reject President Trump's pick for the United States ambassador to the European Union because they say he is outrightly hostile to the E.U.

That's the real worry here. How does the United States and President Trump want to deal with the European Union, Christine?

ROMANS: All right. Nic Robertson for us in Malta this morning, at that summit of 27 leaders -- thank you, sir.

MARQUEZ: Australia's ambassador to the U.S. meeting with top officials at the White House, trying to smooth things over after a heated phone call between their respective bosses. Ambassador Joe Hockey sitting down with chief of staff Reince Priebus and top strategist Steve Bannon for what the administration is calling a productive meeting. Senator John McCain inserting himself into the dispute, he also spoke to the express America's unwavering support.

Though President Trump is still questioning a deal the Obama administration made with Australia to bring in over 1,000 refugees, the president says he has a lot of respect for Australia, but feels he still has a right to ask why we are doing this.

Secretary of Defense James Mattis with a stern warning to North Korea on his trip to the Far East. Pyongyang responds harshly overnight. We'll have that reaction coming right up.

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[04:46:11] ROMANS: Welcome back this Friday morning.

Defense Secretary James Mattis arriving in Japan overnight. His mission: to calm nerves there. Japan has been a key important ally on matters involving China and North Korea. Pyongyang issued a stern warning to the U.S. and South Korea overnight after Secretary Mattis had strong words of his own following his visit to Seoul.

I want to go live to Tokyo and bring in CNN's Muhammad Lila who is following this important visit by the defense secretary.

Good morning.

MUHAMMAD LILA, CNN INTERNATIONAL CORRESPONDENT: Well, good morning, Christine.

You can see it is evening time here in Tokyo. And, of course, right now, Mattis is scheduled to be meeting with Japan's Prime Minister Shinzo Abe. Many are calling this visit to Korea and here now in Tokyo a visit of reassurance. And that reassurance came through loud and clear with some very strong words that the new defense secretary made while he was in Korea, specifically directed at North Korea.

This is what he had to say.

(BEGIN VIDEO CLIP)

JAMES MATTIS, U.S. SECRETARY OF DEFENSE: Any attack on the United States or on our allies will be defeated and any use of nuclear weapons would be met with the response that would be effective and overwhelming.

(END VIDEO CLIP)

LILA: Yes, and you can't really get more reassuring than a statement as strong as that.

Now, as it relates to Mattis' visit here in Japan, of course, this is his first visit overseas since being appointed as secretary of defense, it's no coincidence that he choose these two countries, these two key allies of the United States.

Here in Japan alone, there are more than 50,000 service members are here. It's home to the Navy's Seventh Fleet. And, of course, you've got China and the assertiveness in the region right next door. And, of course, North Korea and the region as well.

Now, there were comments made during the campaign by Donald Trump about how Japan should get its own nuclear weapons or perhaps it should foot the bill, some of the economic bill for maintaining a U.S. presence in this region. So, there was concern from Japanese officials about how this strategic relationship, his alliance between Japan and the United States, would move forward during the administration of Donald Trump.

Now, we don't have the official readout of the conversation that was had between Japan's Prime Minister Abe and Jim Mattis. We're expecting a readout in the next little while. But you can be sure the future of that strategic alliance that has been in place for 70 years now is one of the first topics going to be discussed -- Christine.

ROMANS: Absolutely. All right. When you get that readout, come back to us and tell us what it said, all right? Thanks, Muhammad Lila.

MARQUEZ: Now, the prayer breakfast is usually a somber and prayerful event. This time, not so much. President Trump getting political, vowing to destroy the Johnson Amendment. The law that limits the ability of the tax-exempt groups to oppose a candidate. He says voices of faith should be allowed to speak freely.

The president also gloating over the ratings of "The Apprentice" fading without him. He did it in front of the show's producer Mark Burnett.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The ratings went right down the tubes. It's been a total disaster and Mark will never ever bet against Trump again. And I want to just pray for Arnold if we can for those ratings, OK?

(END VIDEO CLIP)

MARQUEZ: Sounds like a roast. It did not take long for Arnold Schwarzenegger to fire back. Listen to his proposition for the president.

(BEGIN VIDEO CLIP)

ARNOLD SCHWARZENEGGER, HOST, CELEBRITY APPRENTINCE: Donald, I have a great idea. Why don't we switch jobs? You take over TV because you are such an expert at ratings and I take over your job, and then, people can finally sleep comfortable again. huh?

(END VIDEO CLIP)

MARQUEZ: Now, one more bizarre moment. Mr. Trump making it clear he was impressed with the keynote speaker, Senate Chaplain Barry Black.

(BEGIN VIDEO CLIP)

TRUMP: Is that an appointed position? I don't know if you are Democrat or if you're a Republican. But I'm appointing you for another year.

(END VIDEO CLIP)

ROMANS: Gobsmacked.

[04:50:00] It was really something to watch. Usually they are somber and holy. And it was not.

MARQUEZ: It's about prayer.

ROMANS: Yes.

MARQUEZ: It is early in the morning.

ROMANS: Dear god.

All right. Fifty minutes past the hour.

The first jobs report of Donald Trump's presidency will be released at 8:30 a.m. Eastern Time. The economists surveyed by CNN Money forecasting 175,000 net new jobs in January. The jobless rate expected to hold steady at 4.7 percent. We also like to watch wages as you know.

I'm expecting that to pick up to 2.9 percent. That's the highest wage growth since 2009. Those numbers are one big story. The administration's reaction is another.

During the campaign, President Trump called this report phony, a joke, a hoax. Last week, Press Secretary Sean Spicer refused to say what the jobless rate is. During his confirmation, Treasury pick Steve Mnuchin says the jobless

rate is not real. And the Labor Department said the jobless rate is a bad economic indicator. Their main issue I think is this, it does not include people who want a job, but just stopped looking, people who are sort of out of the labor market or people who are working part- time are discouraged.

That's not reflected in the 4.7 percent number, although there are many, many other parts of the report that show some of those gauges of how people feel of the economy. Look, I want to be clear here.

The unemployment rate done not measure feelings. It is a fact. It has been compiled this way for decades, with small tweaks along the way. It is the percentage of the working age population that is out of work and looking for a job, period.

And this is kind of a baseline cater. When you hear top government officials saying, oh, this is B.S. That's concerning to a lot of people. This is how we gauge what's going on in the world.

MARQUEZ: But also important because you can't suddenly change the formula because you're comparing apples to apples.

ROMANS: Absolutely.

MARQUEZ: All right. Another bizarre day on Capitol Hill as the Republicans try to jam through the president's cabinet nominees. That's coming right up.

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[04:56:13] ROMANS: All right. We have breaking news out of Paris. The French interior ministry says there is an ongoing, quote, "serious security incident" at the Carrousel du Louvre, that's a shopping center near the iconic Louvre Museum.

CNN affiliate BFM reports a soldier on duty opened fire on a man who had just attempted to attack him with a knife. Now, that man we're told is seriously injured. These details are just coming in. We're going to have more information as soon as it becomes available.

MARQUEZ: President Trump's cabinet is starting to take shape, not without some pushback from Democrats. Trump's pick to head EPA, Scott Pruitt, is the latest nominee to get the nod from the Senate committee.

CNN's Manu Raju has more on the political gamesmanship on Capitol Hill.

(BEGIN VIDEOTAPE)

MANU RAJU, CNN SENIOR CONGRESSIONAL REPORTER: Good morning, Christine and Miguel.

Some drama in the Senate yesterday as Republicans changed the rules of the key committee to advance a nomination of Scott Pruitt to head the EPA to the floor without any Democrats present at the meeting. Republicans said Democrats boycotted that meeting for a second straight day and to circumvent the committee rules that require Democrats to be present at committee. They decided to change the rules and say that it's been this one particular instance, it was OK to vote on strict party lines without any Democrats present to advance his nomination to the floor.

Now, this happening after earlier this week, when two other nominees had followed a similar route to their eventual confirmation. Tom Price for Health and Human Services and Steve Mnuchin to lead the Treasury Department. And next week, expect those to be a final vote on the floor of the Senate.

Now, later on Friday, we are expecting the Senate to try to break a filibuster of Betsy DeVos to lead the Education Department. But that will be of the narrowest of margin on a 51-50 vote. That's because Senator Jeff Sessions has not yet been confirmed as attorney general. They kept him in the Senate a little while longer to vote to help Betsy DeVos and also, Vice President Mike Pence coming to Senate to break a tie and pass and confirm this nomination by the narrowest margins. So, Donald Trump is getting nominees in place, but maybe it's not in the time he wanted -- Christine and Miguel.

(END VIDEOTAPE)

ROMANS: All right. Manu Raju with all the drama on Capitol Hill, thank you for that, Manu.

Let's get a check on CNN Money Stream this morning. Investors feeling good ahead of the January jobs report that's due now in about three and a half hours. Miguel cannot wait.

MARQUEZ: I'm beside myself.

ROMANS: Dow futures are ticking higher. Stock markets in Europe are higher. Shares in Asia finishing mixed. Oil is up.

The U.S. dollar is struggling here. It's the worst start to the year for the dollar in three decades. At least part of that decline is due to tough talk from President Trump. His administration clearly realizes that a strong dollar makes U.S. exports more expensive and in turn manufacturing jobs harder to create. But the dollar surged as investors bet the tax cuts and infrastructure would boost the economy.

All right. Call it a tale of two retailers. Shares of Macy's jumping 5 percent after reports the CEO is shopping for a sale. Shares of Ralph Lauren tanking 12 percent after its CEO announced plans to leave the company. He'd only been on the job for two years and apparently disagreed with the founder about the direction or Ralph Lauren.

Both retailers had a brutal holiday season and cutting stores and laying off workers. It's part of a broader trend of brick and mortar struggling to keep up with discounters like Walmart and Target and especially sites like Amazon. Amazon had earnings yesterday, too.

MARQUEZ: The internet is killing retail, isn't it? ROMANS: It sort of is. In some cases.

MARQUEZ: It's tough out there.

EARLY START continues now.

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ROMANS: After all the harsh criticism, would you believe President's foreign policy is starting to align in some areas with President Obama's. Major developments around the world. We are live with the newest development.

Good morning, everybody. Welcome to EARLY START. I'm Christine Romans.

MARQUEZ: And I'm Miguel Marquez. Happy Friday.