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EARLY START

Trump and Putin, Face-to-Face; CNN: Russia Ramps Up Spying in U.S.; South Korean Leader Renews Offer to Talk with North. Aired 4:30-5a ET

Aired July 7, 2017 - 04:30   ET

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


MIGUEL MARQUEZ, CNN ANCHOR: President Trump hours away from going eye to eye with Vladimir Putin. Will the Russian president blink, or will the veteran politician outmatch the new American president at the G20?

We have it all covered from Hamburg, Washington, Moscow, and Seoul. Welcome back to EARLY START. I'm Miguel Marquez.

CHRISTINE ROMANS, CNN ANCHOR: I'm Christine Romans.

Look at all that talent lined up for this morning. Twenty-eight minutes past the hour on this Friday morning.

It is one of the most eagerly anticipated meeting of world leaders in decades frankly. This morning, President Trump sits down with Russian President Vladimir Putin as the G20 Summit, as it gets underway in Germany. This is a full-fledged bilateral meeting. It comes just a day after President Trump said Russia should stop its, quote, destabilizing activities. But then minutes later, the president refused to conclude that Russia alone meddled in the U.S. election.

MARQUEZ: Now, new CNN reporting this morning says Russia has even stepped up its efforts at spying in the U.S. More on that in a moment.

For latest, we want to turn to White House correspondent Sara Murray. She is live for us in Hamburg.

Sara, President Trump meets Putin face to face today, in just a few hours. What can we expect out of this meeting?

SARA MURRAY, CNN WHITE HOUSE CORRESPONDENT: Well, look, everything from their public statements to their body language is going to be closely scrutinized in this meeting. We're expecting it to be relatively brief but intimate. Obviously, President Trump, Putin will be there, as well as their top diplomat, Secretary of State Rex Tillerson, and Russian Foreign Minister Sergey Lavrov.

[04:30:05] Now, in the run-up to the meeting, these two world leaders have had some sharp words for one another. Putin has slammed the U.S. sanctions against Russia and taken aim at President Trump's trade policies, whereas Trump speaking in Poland yesterday was chiding Russia for their role in conflicts in Ukraine as well as in Syria. But the one thing that Trump did is he questioned Russia's role in interfering in the 2016 election. Now, U.S. intelligence has concluded that Russia meddled. Trump is

under pressure from lawmakers to bring this up in the meeting with Putin. It's unclear whether he's going to do that.

And today, Trump is offering up harsher words for some of his Democratic opponents than he is for Russia. He took to Twitter to say everyone here is talking about why John Podesta, a Clinton campaign staffer, refused to give the DNC server to the FBI and the CIA. Disgraceful.

So, that is where the president's head is at today. Of course, all of this is playing out in Germany against the backdrop, a pretty intense protest to the G20. There were about 12,000 protesters out here yesterday, 111 police officers were injured, and a number of arrests. We're expecting, of course, those protests to continue today.

Back to you, guys.

MARQUEZ: Sara Murray for us in Hamburg, thank you very much.

ROMANS: As President Trump prepares to face off with Vladimir Putin, CNN has learned that Russian spies are very active here in the United States, especially since the election. U.S. intelligence officials say the Kremlin is feeling emboldened because the current and past administrations have failed to retaliate.

We get more this morning from CNN's Pamela Brown in Washington.

(BEGIN VIDEOTAPE)

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Well, Miguel and Christine, good morning to you. We have learned that Russian spies are ramping up their intelligence gathering efforts in the United States, according to current and former U.S. intelligence officials who say they've noticed an increase since the election. So, the Russians' efforts have not been slowed by the intense focus of the intelligence community's assessment that Russia meddled in the U.S. election. And since the election, U.S. authorities have detected an uptick in suspected Russian intelligence officers entering the United States under the guise of other business.

Officials say they've been replenishing their ranks ever since the U.S. expelled 35 Russian diplomats suspected of spying last December. And in some cases, Russian spies have tried to gain employment at places with sensitive information as part of their intelligence- gathering efforts.

Now, the FBI, which is responsible for counterintelligence efforts in the U.S., would not comment for the story. The Russian embassy in Washington didn't respond to a request for comment. But, of course, all of this begs the question, why isn't the U.S. stopping it?

Well, there's a couple of reasons. Partisan political disagreements over the Russian activity, and President Donald Trump's reluctance to accept intelligence conclusions about Russia's meddling in the election has slowed efforts to counter the threat this former and current intelligence officials say. And we were also told that FBI counterintelligence is seeking to keep an eye on some of this activity. In some cases, the FBI uses surveillance to track the suspected Russian intelligence officers as part of a counterintelligence effort -- Christine and Miguel.

(END VIDEOTAPE)

ROMANS: OK, great new reporting from Pamela there.

Responding to requests for comment, a Kremlin spokesman says, quote, don't listen to fakes.

MARQUEZ: Now, there will be plenty on the agenda when Presidents Trump and Putin meet at the G20. So much that Russians say the limited time available might be hard to delve into issues like Russia's aggression in Ukraine and Crimea. Still leaves Syria, ISIS, NATO sanctions, and more out there.

Senior international correspondent Ivan Watson joins us now live from Moscow.

Ivan, looking at this from both sides, what could constitute a successful meeting for the Russians and for the U.S.? Clearly, a great amount of pressure on both these men.

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

I mean, the Russians would love to have U.S. sanctions lifted that have been imposed ever since Russia invaded and occupied and annexed Crimea out of the Ukraine in 2014. Just in the last couple of weeks, the Trump administration slapped additional sanctions on dozens of Russian entities much to Moscow's chagrin. We don't know whether or not that is a possibility in this upcoming meeting.

The one area that perhaps both sides could find some common ground on is the conflict in Syria. Earlier this week, Secretary of State Rex Tillerson wrote that there had been some success there between the two militaries, Russia and the U.S., which are operating in such close proximity there. There had been some success at establishing deconfliction zones. And he floated the idea of establishing no-fly- zones there.

Russia's top diplomat said last night that is a step in the right direction. But also on the eve of this meeting, the Kremlin said, regrettably, we don't know what Washington wants to get out of the meeting.

[04:35:05] They've indicated that relations between the two countries are at zero right now. The Kremlin had said simply sitting face to face would probably be good for geopolitical stability, basically trying to avoid a worst-case scenario of these two militaries that are bumping up against each other not only in Syria but in the airspace over NATO's eastern borders, simply getting the leaders to talk could prevent a worst case scenario, some terrible example of miscommunication -- Miguel and Christine. MARQUEZ: Sounds like a soft restart of the entire relationship.

Ivan Watson for us, thank you.

ROMANS: All right. Let's turn to Hamburg, the site of this G20 meeting. I want to bring in international diplomatic editor Nic Robertson.

Good morning, Nic. The world will be closely watching this Trump/Putin meeting. Given how interconnected this G20 is, what are the chances their encounter could make a difference, could have far- reaching effects?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Well, if you had to look for one area where both are keen to cooperate, Syria might be the one. And on the issue of fighting ISIS, you know, there's more of a meeting of minds on that than on anything else. Certainly, the Kremlin seems to have indicated it doesn't expect to bend President Trump's mind on Ukraine.

Of course, you know, Nikki Haley, ambassador to the U.N., has been very, very clear that the threshold there is for Russia to get his troops out of Crimea before sanctions can be lifted. But on the issue of Syria, Russia said that it is willing to work with the United States fighting ISIS, and that is a very big issue to President Trump. So, there could be cooperation there.

But, of course, the Pentagon's been skeptical of Russia, on claims of tackling ISIS because it says most of the airstrikes in Syria are supporting regime of President Bashar al Assad. So, you know, that's -- any meeting of the minds there between President Trump, President Putin, on that is obviously going to get close scrutiny by defense chiefs, et cetera. So, we -- I think that could potentially be the area of cooperation.

On North Korea, you know, still seeing to be poles apart. You know, President Putin's position is sanctions don't work, and, of course, that's the line that President Trump wants to take to increase sanctions on North Korea, to get it to curb this nuclear and missile ambition.

So, you know, let's -- let's look toward Syria. Perhaps -- both countries, both presidents pulls apart on -- it appears at least on, climate change, as well.

ROMANS: So much to be made of the body language. Let's really be honest. I mean, there's so much substance to go through, Nic, but so much to be made of the body language, because we know that Vladimir Putin is a very skilled manipulator of the other person who he's meeting with.

He's been known to berate world leaders in private. He brought a dog to a meeting with Angela Merkel because she doesn't like dogs. You know, that matters. Those tactics matters, too.

ROBERTSON: We've also heard, you know, President Bush saying that his dog -- Putin criticized his dog Bonnie or implied -- implied the dog, a smaller dog, wasn't as impressive as great, large dog he paraded in front of President Bush when they met one time. Yes, he's going to use that, I mean, and also, I mean, let's think about President Putin here, his narrative for Russians is one of a strongman, riding bare- chested on a horse, bare-chested hunting. He bears the image of a strongman.

So, you can guarantee that that's the way he's going to want to be perceived in his first encounter on camera with President Trump. President Trump, of course, is not going to want the Russian leader to get away with looking like the dominant force in that. You know, he's the negotiator, the tough negotiator, you know, who starts with the maximalist position, starts from a strong position.

So, we can expect the body language I think at the beginning at least, while the cameras are there, to be one -- let's not call it a faceoff. But two tough men standing face to face.

ROMANS: It will be very interesting. And make a very good point, Nic. They both have very, very refined and defined personal brands, these two men.

All right. Nic Robertson, thank you so much for that in Hamburg for us this morning.

MARQUEZ: An assault on a flight attendant forces a Delta flight to turn around shortly after takeoff. How other passengers jumped into action.

(COMMERCIAL BREAK)

[04:43:42] ROMANS: All right. First Friday of the month. The June jobs report is out today. In less than four hours, we'll see if America's job market remains strong and just how far the president's promise of 25 million jobs in the next decade is to reality.

Economists predict 172,000 jobs added in June. Now, that's a strong number. But to get to the 25 million promise from the president, you'd need to average 208,000 a month to meet that goal, still, the unemployment rate should remain a low 4.3 percent, the lowest since 2001.

You know, experts tell us they think these numbers, the unemployment rate in particular, is near what is called full employment. Meaning there aren't many more available workers waiting for a job. That means job gains will probably start to slow.

They already are. Job growth from February to May was the slowest in three years. That's because the U.S. has been adding jobs for 80 consecutive months. And that streak can't last forever.

Still, there's plenty to be happy about -- American wages, we're looking for them to rise in this report. American manufacturing is now humming again. The U.S. added 55,000 manufacturing jobs, that's the largest gain since 2014. Strong global growth and a weak U.S. dollar are making U.S. exports more competitive. MARQUEZ: A scare for passengers on a Delta Airlines flight headed

from Seattle to Beijing, Flight 129 turned back shortly after takeoff last night when a passenger assaulted a flight attendant in first class. The plane returned to SeaTac Airport under Defense Department escort. Delta says the suspect was restrained by other passengers on board and taken into custody upon landing.

The flight attendant and passenger were injured and taken to the hospital. Both are expected to be fine. Flight 129 is back in the air this hour, expected to land in Beijing this afternoon.

ROMANS: Last night, a federal judge denied the state of Hawaii's attempt to limit the scope of President Trump's travel ban. In its request for clarification, Hawaiian officials argued the government overreached by excluding grandparents and other relatives after the Supreme Court decision allowing the ban to take effect. But a district court judge in Honolulu rejected the challenge, ruling any request for clarification should be made to the Supreme Court. A full hearing for the case is set for the fall.

MARQUEZ: Now, the White House battling conflict of interest concerns now has to find a new ethics watchdog. That's because Walter Shaub, the director of the Office of Government Ethics, is stepping down to tackle campaign finance reform at a nonprofit. He made a name for himself as a Trump administration critic, repeatedly raising questions over the president's decision not to sell his business interests.

The ethics office works with executive branch employees to avoid conflicts of interest, but it does not have enforcement power. The White House says it appreciates Shaub's service and that the president will name a successor in short order.

Severe weather brewing for parts of the Midwest and Northeast. We want to bring in meteorologist Derek Van Dam.

(BEGIN VIDEOTAPE)

DEREK VAN DAM, AMS METEOROLOGIST: Good Friday morning, Christine and Miguel.

We're talking now about the newly formed tropical depression across the central Atlantic. This is tropical depression four. A lot of things working against the strengthening of this tropical depression, that being the upper level wind shear and also Saharan dust coming off of north central Africa. You see that on our dust monitor that's streaming right into the location where our particular tropical depression is located.

This is the satellite loop. You see how poorly organized this particular system is. Only winds at about 30 miles per hour. The National Hurricane Center doesn't believe the storm will impact land. That's good news.

Scattered showers, though, across the Southeast. We have severe storms throughout the Ohio River Valley. We're focusing attention today from Cleveland to Pittsburgh, Indianapolis as well as Louisville for large hail, damaging winds, maybe an isolated tornado.

By the way, a very wet day across the eastern seaboard, from New York to Boston. Have your raincoats and umbrellas handy.

Let's talk temperatures. Cloud cover and rain in the forecast, only 79 for the Big Apple today. Back to you.

ROMANS: Seventy-nine is fine -- 79 is fine.

MARQUEZ: I love it.

ROMANS: Tesla's stock is plunging. It's down more than 20 percent since the end of June, losing an important title. We'll tell you what's going on with Tesla, next.

(COMMERCIAL BREAK)

[04:52:09] MARQUEZ: The new president of South Korea is still willing to meet with the North's Kim Jong-un, despite raising tension and other condemnation of the North's first intercontinental ballistic missile test. President Moon Jae-in says he's ready to talk any time and at any place if the conditions are right.

Yesterday, Moon met China's president about North Korea hours after meeting with President Trump and Japanese Prime Minister Shinzo Abe.

We want to bring in CNN's David McKenzie. He's live in Seoul for us.

David, any takeaways from the meetings ahead of the G20?

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Well, Miguel, what we do know is that everyone's trying to figure out how to just get out of this mess with North Korea rapidly progressing its ICBM program. And you've had handwringing and tough talk from President Trump in Europe.

But in Pyongyang, a different viewpoint. This massive celebration, thousands of people, fireworks, and senior leaders of both the party and the military all celebrating latest scientific revolution of their latest ICBM. And more rhetoric against the United States, saying they will reduce America to ashes in any conflict. Certainly, the propaganda, the bombastic talk from North Korea isn't changing one bit which suggests, and I said it plainly, that they plan to do anything in terms of stopping progression to a nuclear power.

And that is a reality check for President Moon, for President Trump, and all the leaders at the G20 summit trying to figure out the headache of North Korea -- Miguel.

MARQUEZ: Yes, certainly interesting to see the dynamics there. I'm sure that will be a topic of great conversation at the G20. David, thank you very much.

ROMANS: All right. Amelia Earhart's disappearance 80 years ago remains one of the great mysteries of our time. She vanished while trying to become the first female pilot to fly around the world. Now, a History Channel special suggests this photograph found in the National Archives may be a vital clue -- missing since Earhart and her navigator disappeared.

CNN's Jeanne Moos with more.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Whether you low-key it --

UNIDENTIFIED MALE: There is a new clue.

MOOS: -- or hype it.

UNIDENTIFIED MALE: It will blow the lid off the whole Amelia Earhart story.

MOOS: This 80-year-old mystery never gets old. Amelia-mania is back as the History Channel presents new evidence for an old theory.

UNIDENTIFIED MALE: She may have been held prisoner by the Japanese.

MOOS: Backed up by a photo that purports to show Amelia Earhart alive sitting on a Pacific island jetty in 1937. And this may or may not be her navigator, Fred Noonan, according to a facial recognition expert.

UNIDENTIFIED MALE: The hairline is the most distinctive characteristic.

[04:55:00] UNIDENTIFIED MALE: Are you kidding me? That's Fred Noonan.

MOOS: And is that ill-defined blob really the plane being towed by a Japanese ship?

The theory is Earhart crash-landed, was picked up by Japanese and imprisoned until her death.

Even Cher was even intrigued. OK, no more politics. How about finding Amelia Earhart?

And singer Josh Groban confessed, this is giving me chills.

But the naysayers say nay, could be anyone, no face to see, black and white and grainy. I want to, but I don't see it.

(on camera): As if the latest photo weren't questionable enough, Internet posters couldn't resist embellishing it.

(voice-over): Photoshopping in a flying saucer, JFK's assassin and Bigfoot, even Chris Christie in a beach chair has landed on a jetty.

Did she crash into the ocean or was she a castaway? Short wave radio operators say they picked up distress calls.

UNIDENTIFIED FEMALE: I recognize that voice. MOOS: One place we know you can find Earhart's plane is on iTunes.

You can download this romantic comedy starring Clark Gable and Joan Crawford, and guest starring Amelia's actual plane. The 1936 movie came out the year before this Lockheed Electra disappeared.

"Love on the Run" it's called. Seems we never run out of love for the mystery of where Earhart's plane ended up.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

ROMANS: When I was a little girl, my grandpa used to talk about -- remember the news coverage of her being missing and how it was such a big news event that she was embarking on this round-the-world trip. When she vanished, it was just -- it was the mystery of the time.

MARQUEZ: Wow.

ROMANS: And still is apparently.

MARQUEZ: It's a great story.

ROMANS: Millions of people still interested.

MARQUEZ: That's the story I go to when I hear a new development.

ROMANS: Amelia Earhart rocks, bottom line.

MARQUEZ: That's true.

ROMANS: All right. Let's get a check on CNN "Money Stream" this morning.

Global markets down after Wall Street closed lower. The Dow shed more than 150 points. All 11 sectors in the S&P 500 fell yesterday, the Nasdaq dropping along with tech stocks.

Meanwhile, bond yields are rising. Yields, of course, increase as prices have fallen. For weeks investors have been selling government bonds as central banks reduce monetary stimulus. The stock rally could stall if borrowing costs rise. Economic growth is mediocre.

We're going to get a good gauge of the economy today. Folks, the June jobs report comes out at 8:30 a.m. Eastern Time.

Tesla is no longer the most valuable U.S. car company. The stock is down 20 percent from its all-time high in June. That's officially bear market territory. In fact, Tesla lost $3 billion in value just yesterday. The company's worth about $2 billion less than GM.

The stock fell after disappointing safety test results and delivery data. Don't feel do bad. Tesla's stock is still up 45 percent this year.

Eighteen Democratic attorneys general are suing the Education Secretary Betsy DeVos, because she delayed an Obama-era rule meant to protect student borrowers. The rule was created to help students take an advantage -- taken advantage of by for-profit colleges. DeVos announced in June that she would delay its implementation. The suit claims DeVos is siding with for-profit school executives over students.

Americans hold $1.34 trillion in student loan debt. And that debt is growing. A 2016 graduate had an average $37,000 in debt. Ten years ago, the average was about $20,000. Of those who have debt, that's how much they have on graduation.

MARQUEZ: Fortunately, I finally got rid of mine.

ROMANS: Did you?

MARQUEZ: A lot of debt out there, like my house basically --

(CROSSTALK)

MARQUEZ: Guess what?-

ROMANS: What?

MARQUEZ: EARLY START continues right now.

(MUSIC)

MARQUEZ: Less than five hours from now, the sit-down the world has been waiting for. President Trump and President Putin ready to meet for the first time in spotlight of the G20. World leaders arriving at this hour and protesters are out, as well. We have it all covered this morning in Hamburg, Washington, Moscow, and Seoul.

Good morning and welcome to EARLY START. I'm Miguel Marquez.

ROMANS: I'm Christine Romans. It is Friday, July 7th, folks. It is 5:00 a.m. in the East. It is 11:00 a.m. at the G20 in Hamburg.

We welcome all of our viewers in the U.S. and around the world.

It is one of the most eagerly anticipated meetings of world leaders in decades. This morning, President Trump sits down with Russian President Vladimir Putin as the G20 Summit gets underway in Germany. Their bilateral meeting comes a day after President Trump said Russia should stop its, quote, destabilizing activities. But then minutes later, refused to conclude that Russia alone melded in the U.S. election.

MARQUEZ: A new CNN reporting this morning says Russia has even stepped up its spying efforts on the U.S. More on that in a moment.

For the latest, we turn to White House correspondent Sara Murray. She's live for us in Hamburg.

Sara, President Trump meets Putin face to face in just a few hours. What can we actually expect out of this meeting? MURRAY: Well, you can expect everything from their statements to

their body language to be very closely scrutinized.