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EARLY START

Trump's day of political gymnastics; President Trump says relations with Russia at an all-time low; Secretary Tillerson bemoans low of trust with Russia; US officials say Syrian military consulted chemical experts for the sarin gas attack; President Donald Trump's reversal on NATO; Trump heaps praise on President Xi of China; Will China help US deal with North Korea?; Inside the fight against ISIS with Lt. Gen. Stephen Townsend. Aired 4:30-5a ET

Aired April 13, 2017 - 04:30   ET

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


DAVE BRIGGS, CNN HOST, EARLY START: President Trump sounding a much different tone on several key issues. Three major shifts in the span of just a few hours. What has changed and what it means for his presidency right now.

CHRISTINE ROMANS, CNN HOST, EARLY START: U-turn. U-turn. 180.

BRIGGS: Dramatic.

ROMANS: Flip-flops. Call it what you want. Some of the things that got him elected, he's totally changed his position on them.

BRIGGS: I was off for three days. I feel like we elected an entirely different president over that term. Welcome back to EARLY START. I'm Dave Briggs.

ROMANS: And I'm Christine Romans. Let's talk about these reversals. A stunning display of political acrobatics from President Trump. In a matter of hours, he performed at least three backflips, a leaping away from the stances that formed the bedrock of his campaign.

He took the most skeptical position yet on Russia even as he left the door open for reconciliation with Vladimir Putin. This, just hours after Secretary of State Rex Tillerson met with the Russian president.

BRIGGS: Mr. Trump also performed a complete reversal on NATO, proclaiming its new relevance as he stood alongside NATO's secretary general.

ROMANS: Wait, say that again, I thought it was obsolete.

BRIGGS: It was obsolete. Now, not so much. And a sudden twist on China as well, with the president suddenly full of praise for President Xi, hoping for his help in dealing with North Korea.

Let's bring in senior White House correspondent Jim Acosta with some answers.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Christine and Dave, a sharp change in tone from the president on the subject of Russia during a news conference here at the White House with the NATO Secretary General.

President Trump described relations between the US and Russia as at an all-time low. He also said that the Russians may have known about that chemical weapons attack in Syria last week that prompted the president to order strikes against the Syrians.

But the president was not so quick to criticize the Russian President Vladimir Putin, who has arguably been the biggest backer of Syrian leader Bashar al-Assad. Here is what he had to say during that news conference.

(BEGIN VIDEO CLIP)

DONALD J. TRUMP, PRESIDENT OF THE UNITED STATES: It would be wonderful, as we were discussing just a little while ago, if NATO and our country could get along with Russia. Right now, we're not getting along with Russia at all, but we're going to see what happens. Putin is the leader of Russia. Russia is a strong country. We're a very, very strong country. We're going to see how that all works out.

(END VIDEO CLIP)

[04:35:03] ACOSTA: And that is not the only shift in tone for the president. There were also some pretty big reversals for the president at that news conference. He described NATO as not being obsolete. That's a huge departure from what he used to talk about during the campaign when he referred to the NATO alliance as being obsolete.

Also, on the subject of China, the president told The Wall Street Journal he no longer considers China to be currency manipulators. I asked White House Press Secretary Sean Spicer about that. He said circumstances change.

Christine and Dave?

ROMANS: Jim Acosta, circumstances change.

The president, though, saying he is fulfilling his promises. He tweeted this. One by one, we are keeping our promises on the border, on energy, on jobs, on regulations. Bi changes are happening.

BRIGGS: Really wants to take back control of this narrative. Jobs returning, illegal immigration is plummeting, law, order and justice are being restored, we are truly making America great again. That's to try to answer those skeptics that are saying he has totally reversed himself on everything that got him elected. Trying to take back the narrative.

ROMANS: All right. President Trump's abrupt turn on Russia, echoing Secretary of State Rex Tillerson's frosty tone following meetings in Moscow with President Putin and his Foreign Minister Sergey Lavrov.

Speaking to reporters after his meeting with Lavrov offered this grim assessment.

(BEGIN VIDEO CLIP)

REX TILLERSON, US SECRETARY OF STATE: I expressed the view that the current state of US-Russia relations is at a low point. There is a low level of trust between our two countries. The world's two foremost nuclear powers cannot have this kind of relationship.

(END VIDEO CLIP)

ROMANS: For more on the fallout from Tillerson's visit, I want to bring in CNN's Paula Newton. She's in Moscow. She's been covering this visit for us. Remarkable when you hear this leader talk about just how low we are in terms of the relationship here with Russia.

PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT: If everyone agreed on one thing, Christine, it was that the relations were at a low point. OK, where do we go from here. Everyone was stating the obvious.

There was no conciliatory tone here, no papering anything over. Nothing, zero. Sergey Lavrov walked into that room, they shook hands, he sat down and basically gave it to Rex Tillerson. Those airstrikes were illegal, you have no evidence on the chemical attacks. And, look, we don't even know who to talk to at your State Department. You don't have positions filled. Your policy is a mystery.

Rex Tillerson hitting back and saying, look, it's pretty much decided that you interfered in our election, A. B, what are you doing on Syria? How far away will you back from Assad? And on it went to that entire tone.

What was perhaps more substantive, though, Christine, was the fact that Vladimir Putin did give Rex Tillerson an audience. They met for two hours. We have no evidence that even happened. They ditched the press pool. We're waiting for at least a still to come out. You can bet that they got down to the important issues of Syria.

But I'll put in one thing. You and Dave have been talking about all these flip-flops. That is actually coming to a country like this and trying to do negotiations, likely a good thing.

Look, Russia was already caught off guard by the fact that Donald Trump ordered those airstrikes. Keeping them a little bit guessing in terms of what American policy will be, that may actually move negotiations forward and give the United States ever so slightly some leverage.

Where you didn't see any leverage yesterday, Christine, was at the United Nations in New York. Nikki Haley putting on the table, wanted Russia on the record to denounce Syria for a chemical attack, as was expected, Russia vetoing that resolution. And on it goes with the arguments at the UN. Heated words there (inaudible) yesterday.

ROMANS: I know. Put on a sweater for the frosty relations right now with Russia. Thank you so much for that, Paula. Keep us posted.

BRIGGS: New, overnight, CNN learning that US military and intelligence officials intercepted communications between Syria's military and chemical experts discussing preparations for last week's sarin gas attack in Idlib.

A US official says those intercepts have helped confirm Syria's role in the deadly bombing. We are told the US did not have prior knowledge of the attack. And so far, there are no intelligence intercepts showing Russian military or intelligence officials communicating about that chemical attack.

ROMANS: Maybe the starkest example of presidential shape shifting concerns NATO. During the campaign, then-candidate Trump called the military alliance obsolete more than once. But at a news conference, Wednesday, alongside NATO's Secretary General, president said he changed his view after the alliance began to focus on fighting terrorism, a change he is taking the credit for.

(BEGIN VIDEO CLIP)

TRUMP: Secretary general and I had a productive discussion about what more NATO can do in the fight against terrorism. I complained about that a long time ago and they made a change. And now, they do fight terrorism. I said it was obsolete. It's no longer obsolete.

(END VIDEO CLIP)

BRIGGS: Now, to be clear, the president's allegation that NATO just recently began fighting terror is not accurate. The alliance has played a central role in Afghanistan for more than a decade. Its involvement in that war came after the US invoked NATO's Article V calling for collective defense following the 9/11 attacks.

ROMANS: Right. And another 180 for this president. After skewering China for months and promising to be tough - very tough on China, Mr. Trump suddenly has kind words for President Xi Jinping, even suggesting a better trade deal could emerge if Beijing helps on the North Korean threat.

BRIGGS: The president also backing away from a campaign promise to label China as a currency manipulator. More on that in a moment. But first, let's bring in CNN's Matt Rivers live from Beijing.

Good morning to you, Matt. Are we witnessing a warming of relations between the US and China?

MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: Well, at this point, there certainly seems to an agreement - to be some agreement around one specific thing that China is doing when it comes to dealing with North Korea, and that has to do with coal.

China is one of - is perhaps the biggest coal importer from North Korea. It's a very big source of income for the North Korean regime. But back in February, February 18, China said that it was going to stop importing North Korean coal because it was nearing a limit that the UN sanctions had put on the amount of coal countries could buy from North Korea.

And so, it was during that press conference yesterday that President Trump gave with the Secretary General of NATO that President Trump actually said that China halting those coal imports was a big step in terms of doing what the Trump administration wants, which is to use their economic leverage over Pyongyang to get the Kim Jong-un regime to stop developing those weapons.

That said, China, in some data that was released this morning here, actually increased its total trade volume with North Korea by 40 percent in the first three months of this year. So, on the one hand, yes, they are stopping the imports of coal. But on the other hand, they are finding lots of other ways to spend money in North Korea.

Very interesting to hear what the Trump administration has to say about that.

BRIGGS: So, maybe Xi giving Donald Trump a little symbolic win to take back to the United States. Matt, thank you.

ROMANS: All right. Time for an early start on your money. The president making two significant economic policy reversals Wednesday. First, the president tells The Wall Street Journal, his administration will not label China a currency manipulator in an upcoming report.

That's something he promised repeatedly to do on the campaign trail, labeling China currency manipulator would trigger an investigation and allow the United States to seek possible penalties. But now, the president is acknowledging that China is no longer manipulating its currency.

BRIGGS: In fact, China has actually been propping up the yuan lately, in an effort to try get wealthy Chinese investors to keep their money at home.

As for Trump's second policy twist, Fed chief Janet Yellen apparently no longer persona non grata. The president told the Journal he likes and respects the head of the Federal Reserve. Only a few months ago, Trump said Yellen should be ashamed of herself for keeping interest rates low, suggesting she was doing that to help President Obama.

Now, President Trump says he likes low interest rates and didn't rule out asking Yellen to stay when her term expires next year.

Can you keep up with that? Difficult to do so, Christine Romans, the financial twists and turns of this administration.

ROMANS: And they got a lot of attention yesterday. You wonder what it means for the working class voters who voted for him, who think that China stole the American jobs and that China is winning on the global trade battlefield and now they don't think that this president is being so tough on China.

BRIGGS: And what it means for Steve Bannon's role in this White House.

China calling for a peaceful resolution to growing tensions on the Korean peninsula just as a US aircraft carrier strike group makes its way to the region. Let's go live to Pyongyang and bring in CNN's Will Ripley. Will, good morning. We understand the Japanese Prime Minister just issued a dire warning about North Korea's potential to use chemical weapons.

Will Ripley, CNN International Correspondent: That's right, Dave. Shinzo Abe, the Prime Minister of Japan, said that North Korea, they believe, has the capability of placing sarin gas inside warheads and launching them on their ballistic missiles, which are capable of hitting targets all over the region, including highly populated areas like Seoul, South Korea and Tokyo, Japan. There also tens of thousands of US troops in the region.

North Korea would say that this is more propaganda designed to make their regime look bad even as there are new indications from the think tank 38 North that their nuclear test site is primed and ready for a test at any time, something that US and South Korean intelligence analysts have believed is to be the case for several weeks now.

There are new images from North Korean state media of Kim Jong-un, the North Korean leader, overseeing a special forces training operation, his commandos jumping out of planes. He was apparently at the watchtower looking over all of it. These images were released today. We don't know when the actual operation took place.

But we did get a glimpse on the ground here of Kim Jong-un for the first time on this trip. We got a phone call just after 4 AM and were told to dress up, take - leave all of our cell phones behind. And we went, after five hours, multiple security checks, to an area in Pyongyang with tens of thousands of North Koreans where Kim Jong-un arrived in a black Mercedes limousine and stood silently during a ceremony.

[04:45:19] It was a ribbon-cutting ceremony for a series of apartment buildings, high-rise apartment buildings that he put up here. It seems as if he's trying to grow Pyongyang's skyline just as quickly as he's trying to grow this country's nuclear program.

Dave?

BRIGGS: Fascinating glimpse at the world leader. Thank you, Will.

ROMANS: Another glimpse. Rare and exclusive access CNN has to the American general leading the war against ISIS in Iraq and Syria. What's the timeline, what are the big hurdles, we go live to Iraq with Nick Paton Walsh next.

(COMMERCIAL BREAK)

[04:50:00] BRIGGS: President Trump is threatening not to reimburse health insurance companies for covering the poorest Americans. In an interview with The Wall Street Journal, Mr. Trump says, he is undecided about funding cost-sharing initiatives that reduce co-pays and deductibles for lower income patients.

It's the president way of trying to pressure Democrats to come to the negotiating table on healthcare reform. Without those payments, many insurers are likely to pull out of the Obamacare marketplace. This might collapse all of Obamacare as we know it.

ROMANS: All right. Steve Bannon's future at the White House in his own hands. Several sources say the president's chief strategist is trying to keep his head down as he mends fences with first son-in-law Jared Kushner, so Bannon can maintain his foothold in the White House.

Our source says the president is unhappy with the suggestion he is implementing Bannon's agenda and not the other way around. Our source also tells CNN, President Trump's tepid endorsement for Bannon this week was a warning that the president has grown tired of Bannon's open conflict with Kushner and infighting among his staff.

BRIGGS: Questions are growing after the body of a New York State appeals court judge washed up in the Hudson River. 65-year-old Sheila Abdus-Salaam was discovered Wednesday, a day after she was reported missing.

Police say there were no obvious signs of trauma. The medical examiner will determine the cause of death. Salaam was the first black woman and first Muslim to sit on the state's highest court.

New York Governor Andrew Cuomo, who appointed Abdus-Salaam in 2013, calling her "a trailblazing jurist."

ROMANS: That is a troubling and sad story.

51 minutes past the hour. Why Tesla's Elon Musk is telling some investors to buy shares in a different car company. If you don't like how I do it, go out there and buy shares of Ford instead.

BRIGGS: I like it.

(COMMERCIAL BREAK)

[04:56:01] BRIGGS: CNN getting an exclusive look into the fight against ISIS, flying above the battlefield with Lt. Gen. Stephen Townsend, who is leading the war in Iraq and Syria. Our Nick Paton Walsh asks how long the fight for Raqqa will last and how concerned the military is about chemical weapons.

He joins us live from Iraq with that exclusive reporting. Good morning to you, Nick. A fascinating look inside our effort there.

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Gen. Stephen Townsend commands US and coalition forces in Iraq and Syria fighting ISIS. And his calculus has, obviously, been changing over the past weeks, seeing US strikes against regime targets, knowing they have Russian support.

He's mildly concerned, as we call it a small risk, that maybe sarin might get used against US assets. He says, frankly, the regime would be - I'm paraphrasing here, but foolhardy to pick a fight with the US. But more broadly, the focus now is on the de facto capital of ISIS' self-declared caliphate of Raqqa. That is around which from the north, west and east, coalition-backed Syrian rebel forces are pressing. They're going to possibly move soon, round to the southern bottom,

encircling the town entirely. And, of course, the question is how fast can this be carried out. Well, they hope it will be underway on the city center by summer at the latest and finish by this year.

I asked the question, though, do you have enough US boots on the ground to pull this very difficult task off. Here's what he said.

(BEGIN VIDEO CLIP)

LT. GEN. STEPHEN TOWNSEND, COMMANDER, COMBINED JOINT TASK FORCE, OPERATION INHERENT RESOLVE: Right now, I think we have the resources we need there to isolate, to do what - the task we're doing right now, which is complete the isolation of Raqqa.

After the isolation of Raqqa will come the assault. And we're still evaluating what resources we need. If I need more resources, I'll go to my leadership, my chain of command and tell them what we need to get the job done.

(END VIDEO CLIP)

WALSH: Another interesting point we discussed was where is Abu Bakr al-Baghdadi, the leader self-declared of ISIS. Well, despite the fact he's keeping a low profile and his group, frankly, are in tatters, losing in Mosul near where I'm standing and under pressure like never before in Syria, particularly Raqqa, he is still thought by Lt. Gen. Townsend to be in "operational control" of the group.

Still the world's most wanted man, but now ISIS really possibly seeing their closing chapter this year. Back to you.

BRIGGS: Some great reporting. Thank you, Nick.

ROMANS: All right. Let's get a check on CNN MoneyStream this Thursday morning. A sharp drop in the dollar, triggered by comments from President Trump. Stock futures right now pointing lower. World markets also trading mostly lower here.

In an interview with The Wall Street Journal, the president said the dollar is getting too strong. That caused an immediate drop of seven- tenths of a percent, a big move when it comes to the dollar.

Three of the biggest US banks deliver their quarterly report cards to Wall Street this morning - JP Morgan Chase, Wells Fargo and Citigroup. Bank stocks, as you know, surged after the election. Investors were betting President Trump would roll back financial regulations and help them make more money.

But the rally in financials has slumped as doubts now set in about the future of the president's agenda. Both JP Morgan and Citigroup are expected to post higher profits from a year ago, but Wells Fargo could see a dip as it deals with the fallout from its fake accounts scandal.

Tesla CEO Elon Musk is pushing back on disgruntled investors who want the electric car maker to shake up its board. He tweeted, "This investor group should buy Ford stock. Their governance is amazing."

Tesla just passed Ford in market cap. Five groups of investors sent Tesla a letter this week urging it to add more independent board members not so closely tied to Elon Musk. They argue diversifying will provide a critical check.

Tesla says it's actively searching for independent board members and expects to announce new additions soon. You don't like it? Go somewhere else.

BRIGGS: Beat it. Gutsy. EARLY START continues right now.

Series of significant policy shift coming at a rapid pace from President Trump. Big changes on key issues including Russia, NATO and China. His new outlook and what it all means -