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President Trump Does Not Blame China for Trade Deficit; After Election Losses GOP Scrambles for Tax Reform Win; Flynn And Son Under Scrutiny By Special Counsel Mueller; Markets Set To Open Lower On Retail Trouble. Aired 9-9:30a ET

Aired November 9, 2017 - 09:00   ET


[09:00:00] CAMEROTA: -- have answers yet.

CUOMO: Well, you don't have answers when you don't look. I mean, the real tragedy of Las Vegas is the legacy of it. You then wound up having another one a month later in Texas and still no real talk about why they happen and how to stop them.

CAMEROTA: All right. It's time now for "CNN NEWSROOM" with Poppy Harlow and John Berman.

Take it away, guys.

JOHN BERMAN, CNN ANCHOR: All right. Guys, thanks so much. A lovely tribute, but one we wish we did not have to keep on making. Thanks, guys.

A lot of news. Let's get to it.

POPPY HARLOW, CNN ANCHOR: Top of the hour. Good morning, everyone. I am Poppy Harlow.

BERMAN: And I am John Berman. Thanks for the welcome cannons and good job taking advantage of us.

Overnight in what seemed like a diplomatic case of victim blaming, not to mention apparently radical about-face on his opinion of China and its trade practices, President Trump stood next to the Chinese leader and praised him for taking advantage of the United States.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I don't blame China. After all, who can blame a country for being able to take advantage of another country for the benefit of its citizens? I give China great credit.


HARLOW: Who can? He did as a candidate. President Trump markedly different in language and tone from Candidate Trump who accused China of being a currency manipulator, a thief and worse.


TRUMP: We can't continue to allow China to rape our country, and that's what they are doing. It's the greatest theft in the history of the world.


HARLOW: Why did it change? Well, it is a question that reporters probably would have asked a president had they been allowed to ask any questions.

Our Kaitlan Collins is in Beijing.

Disappointing to say the least that they -- both presidents did not allow any questions from reporters. The first time that has happened in decades. Why the shift in tone?

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Yes, that's right, Poppy. Another sign that the newly empowered Chinese President Xi Jinping was running the show here during the president's two-day visit with those joint statements where they did not take any questions from reporters. And when I asked the press secretary, Sarah Sanders, about it, she said it was at the -- the Chinese's insistence that they were not going to take questions.

But as the president wraps up his two-day trip here, we saw a lot of praise, a lot of flattery from him towards President Xi. And we saw a big change in rhetoric as far as the trade imbalance goes. During the campaign, the president said that China was, quote, "raping the United States" and that he was going to label them a currency manipulator as soon as he got into office.

And he really softened his stance on that today saying not only did he not blame China but he praised them for doing so and instead blamed past U.S. administrations for allowing them to do so. But yes, them not taking questions at that press conference was certainly something that raised a lot of eyebrows among reporters here because it could have a chance for the United States to really come here and show China what it's like to be in a democracy where you take tough questions from reporters.

BERMAN: No questions from reporters.

All right, Kaitlan, what are we learning about President Trump's prospective meeting with Vladimir Putin as this trip continues?

COLLINS: Yes, that's right. There's been this rumored meeting as the president leaves Beijing in a matter of hours for his next stop on his Asia trip where he will go to Vietnam. There has been talk of a pull aside between him and Russian president, Vladimir Putin. And what Secretary of State Rex Tillerson was briefing reporters here at the hotel that I am at right now today, he said that a meeting had not been nailed down because they were trying to determine if there was enough substance for these two leaders to warrant a pull-aside.

He said those talks would be about the Syria, Ukraine, and said that Russian meddling in the election would certainly still be on the list. He did not give a firm date to reporters, but we know that Russian news agencies are saying that the meeting could come on Friday in Vietnam, but certainly it would be quite a meeting between the two of them as that Russian investigation into Russian meddling in the 2016 election hangs over Washington, John and Poppy.

HARLOW: Kaitlan Collins in Beijing. Thank you very much. We look forward to you asking the president those critical questions when you and other reporters are allowed to.

Back in Washington, the Republican shellacking in Tuesday's elections either complicates the fight to pass a tax overhaul or makes it all the more urgent for the party in power probably.

BERMAN: The House Ways and Means Committee finishing up its work on the House plan right now. The Senate due to unveil its plan shortly and it could be different from the House plan in major ways.

CNN's Suzanne Malveaux on Capitol Hill with all the twists and turns and a new White House complication -- Suzanne.

SUZANNE MALVEAUX, CNN NATIONAL CORRESPONDENT: Well, good morning, John and Poppy. There's a number of things that are happening, first of all on the House side. As you mentioned, House Ways and Means Committee wrapping up the mark up process on their own tax reform bill. The problem here is yesterday the Congressional Budget Office revealing that they believe it contributes to the federal deficit of -- in the tune of $1.7 trillion.

[09:05:02] They have to get that figure down to $1.5 trillion and allowing it those special rules that would require a simple majority to pass in the Senate side. So they've got to figure out a way to get that number down. But that's going to go to the full House floor next week.

On the Senate side here, there are going to be a number of changes. The Senate Finance Committee has been working behind the scenes, behind closed doors. They're going to be briefing fellow Republicans. That will be unveiled later this morning.

There are some significant changes between the Senate and the House versions. First and foremost, it's going to be five to seven tax brackets instead of the four tax brackets on the House side so less of a simplification process.

Also the taxes on the state as well as local tax deductions, they will go ahead and repeal those as well as property tax deductions. That will also allow for more revenue. And then finally on the House side they immediately wanted to go ahead and reduce the corporate tax rate from 35 percent to 40 percent.

Well, the Senate side, they are going to face that in through the course of a year or so, a delay, so again looking for more sources of revenue. What is the White House doing? What is the president doing with all of this? Well, they are insisting that there is a significant cut to the middle class and when it comes to tax cuts they are not seeing that or at least the Tax Policy Center yesterday said they are not seeing that.

And so they are simply saying this is a marker and we heard from the director of OMB yesterday making that very clear.


MICK MULVANEY, WHITE HOUSE BUDGET DIRECTOR: In Washington, D.C. you can go out and hire anybody you want to, to get them to say whatever number you want it to say. Right?


MULVANEY: If our numbers here at the White House actually show the same thing, if they show that taxes are going up on the middle class, on the House plan. On the Senate plan, or some combination of the two, we won't sign it.


MALVEAUX: And John and Poppy, since Tuesday's shellacking, if you will, there are a number of congress lawmakers who are saying, look, we have to get this done. There is even a greater sense of urgency to pass this, but it is far from certain whether or not you're going to have the House and the Senate be able to come up with something that they can agree on -- John, Poppy.

HARLOW: Suzanne Malveaux on the Hill, thank you very much.

Joining us to discuss CNN political analyst Jonathan Martin, Amber Philips, political reporter for the "Washington Post" political blog "Fix," and CNN global affairs analyst, David Rohde.

All right. We'll get to the complicated business of tax and how much it matters to all Americans in a moment. But first, the president's trip, David, help us to understand what's raping our country to --

BERMAN: Thanks for that.

HARLOW: Thanks for that. And he just tweeted. He just tweeted, "Looking forward to a better and stronger relationship with China."

DAVID ROHDE, CNN GLOBAL AFFAIRS ANALYST: To me this was one of the sort of meekest public presentations by an American president in China I've seen in years. I mean, he lauded him, he praised him for taking advantage of the United States, and maybe that's unfair to President Trump, but again he ran as this incredibly tough person. He accused China of being a currency manipulator which many experts said was false. You know, that was a false claim and what do we get in Beijing and sorry to use another campaign term but a nothing burger from the president on trade war.

BERMAN: In terms of standing, you could make a case it was a smart move to play President Xi like this, but it's just a different move than it feels like we were promised by Candidate Trump.

ROHDE: Yes, it's another exaggerated and in some ways false claim and promise he made during the campaign. And yet again everything he's promised regarding China he's unable to live on.

HARLOW: And his base loved this. I mean, there was one point, Jonathan Martin, during the campaign where he was talking about a 45 percent tax on China. 45 percent. I think it was early in January, right, before inauguration when he said that. But I think John's point is a good one, flattery. I mean, that's just been sort of the name of the game in these few days in Beijing. It's been -- it's been flattery. And --


HARLOW: Every morning. Every morning I do it before we get on set. But Tillerson said -- Rex Tillerson, Jonathan, said of the president that he thinks that President Xi is, quote, "You're a strong man. You can, I'm sure, solve this for me," talking about North Korea. Once again, flattery. Smart strategy?

MARTIN: Yes. That's the name of the game for this president. And it's not just limited to his time in politics. If you look at his career in business and media, he's always somebody that's tried to appeal to the audience in front of him and tried to tell them in the moment what he thinks it is that they want to hear or at least shade it slightly. That's his MO. I can't say I'm surprised. And I think that most of your viewers out there watching this probably aren't going to be that surprised that he would go over to China and do this.

And the question to me politically is, do his voters back here, who, in fact, would love the idea of massive tariffs against China, does that bother them? Probably not. Does it reinforce a wider swath of voters, their concerns about this president? Probably.

BERMAN: All right. Let's move on to some of the politics of the day.

Amber, we just heard from Mick Mulvaney, the White House budget director, say that the White House would not sign a tax bill that raises taxes on the middle class.

[09:10:06] Look, the issue here is that, yes, overall, average Americans will see their taxes decrease but taxes are going to go up on some people. That's what the analysis shows. And this is primarily a corporate tax cut. But the White House and congressional Republicans keep on trying to sell this as something perhaps where the emphasis isn't really on.

AMBER PHILLIPS, POLITICAL REPORTER, WASHINGTON POST: Yes. Well, there's a reason for that, John. Republicans need a legislative win, right? A tax cut plan that they could sell to their base next year is one of the most perfect legislative wins you could have, but it can't just be, look, we changed the tax code. They have to be able to sell this as we gave more money into your pockets, middle class.

That's kind of anathema, though, with a lot of conservatives governing philosophy is which is don't cut taxes at the bottom and take from the rich, it's tax cuts -- cut taxes at the top and let that trickle down and that is really the center of this House bill that's being debated. We'll see what the Senate puts out today. But you're absolutely right, the independent analysis say this is

largely a tax cut for corporations and wealthy, and then it's kind of a mish mash of tax cuts for people down lower on the pay scale and then eliminating some of their popular deductions they use to save money.

HARLOW: Jonathan, you have a great piece in "The Times" today. We are now 36 hours or so after this blue wave and you talk about the suburbs, the suburbs, the suburbs.


HARLOW: So one of the most interesting points, I think, in the piece is the lesson learned for -- you know, for Republicans in 2005, what happened in New Jersey and Virginia in 2005.


HARLOW: And what it told about 2006. Are we going to see that repeat itself here for 2018?

MARTIN: Well, you've got a lot of similarities. And the fact is, you had the two governorships in 2005, you know, go to the Democrats in large part because President Bush's popularity was really waning. And you had centrist voters who wanted to send a message to the White House. And by the way, you had a lot of excitement in the Democratic ranks, fundraising was up, and they were recruiting candidates for 2006, voters were indicating and polling that they preferred Democrats to control the Congress.

All of the same things, the same things happening today were happening then. The question is what does the environment look like this time next year? Politics as you guys know move so quickly. And right now if you're looking towards 2018, Democrats do seem to be in a strong place. We don't know what's going to change. This tax bill we're talking about, the kind of unknown unknowns, to borrow the old Rumsfeld term, about what could take place in the next year.

But there's no question that this is the best place Democrats have been going into a midterm election since that '05-'06 cycle.


BERMAN: It's certainly the best place they've been in during the Trump administration because it's the first time they've won anything.

HARLOW: That's right.

BERMAN: You know, since last November.

MARTIN: That's right.

BERMAN: David, one of the things hanging over this administration obviously is the Russia investigation. And one of the things hanging over the president as he saw in this overseas trip is will he meet with Vladimir Putin tomorrow? And the word from the White House is they're talking about it.

HARLOW: Maybe. Maybe.

BERMAN: Maybe. Maybe they will if they find enough stuff to talk about. What are the considerations here? What's the over under?

ROHDE: Look, I think the president will meet with Putin. He will probably ignore the advice of his aides who say don't --

HARLOW: Don't.

ROHDE: -- raise Russia again but he'll do it because he wants to defy people. And there's a broader problem with delivery here. President Xi did not say anything about doing any additional steps to pressure North Korea. There's no success here on that policy. And then on the tax policy, it's the same problem.

Flattery is not working for this president. It's not delivering legislative wins or wins internationally.

HARLOW: Let me ask you this, though, about the Putin meeting if it happens. Isn't it what you want an American president to do to disregard optics or something if it looks bad for you personally and have a meeting that could help you on something as critical as North Korea, and if he does that, isn't that good?

ROHDE: But the big player here is China.


ROHDE: The "Economist" magazine just --


HARLOW: Meaning you don't think Russia can move the needle significantly?

ROHDE: Yes, this Trump campaign focus on Russia, this whole embrace of Vladimir Putin never made any sense. China is the most -- much more powerful country in the world. The "Economist" just called President Xi the most powerful man in the world.


ROHDE: And the way President Trump acted showed the Chinese people that President Xi seems to be the most powerful leader in the world.

BERMAN: You know, Amber, David was talking about accomplishments and that's one of the things that Republicans obviously want with the tax plan as well, and it gets to how this president is being measured because you look at legislative victories or defeats, he doesn't have that many. Just doesn't have that many wins notched up, but a lot of his supporters would tell you he's delivering them exactly what they want, which is that he's mixing things up, that he's making things interesting, that he's not an average politician. Even with the defeats we saw Tuesday, you know, is he being graded on a different scale?


PHILLIPS: Yes, I think he is. He's obviously the first president to hold this office that hasn't held public office before, of course, he's graded on a different scale. He also campaigned exactly like you said, John, on a very different than other politicians are able to campaign on as much as they might want to.

Which is I am just going to go to Washington and get all these guys ingrained in the swap out of their thinking and get them to start, you know, turning outside Washington and thinking about you guys. That being said, it's a very soft measurement, right? So, sooner or later Trump will need something tangible to show his base as a victory. We're almost a year in and he doesn't have that.

JONATHAN MARTIN, CNN POLITICAL ANALYST: I would suggest that his real challenge is that he may be given a kind of gentleman's C by some of his voters. But the broader electorate is treating this president like they have other presidents. He is historically unpopular.

I mean, if you look at the new "Washington Post" poll that came out to coincide with his election, he's far more unpopular than any president at this point in his presidency in the history of modern polling in the American presidency. So, there may be a curve given to him by some, but fact is, guys, most Americans don't like this president.

BERMAN: Gentleman C, not part of the very nice grade as the president said he enjoyed in college. Thank you all very much. We're going to cut it off right there.

Former National Security Adviser Michael Flynn worried about his son in the Russia probe. Is the special counsel pressuring the father to flip?

In moments, the neighbor accused of attacking Senator Rand Paul and breaking six of his ribs heads to court. This is the strangest case around. We are going there live.

HARLOW: And more than 150 members of a motorcycle gang charged in you remember this deadly shooting outside that Waco, Texas restaurant? Soon the jury begins deliberating in the very first case.



BERMAN: All right. CNN has learned that campaign adviser to then- Candidate Trump and the president's first national security adviser, Michael Flynn, is worried about the prospect that his son could be caught up in the Special Counsel Robert Mueller's investigation.

HARLOW: Flynn Sr. has been under federal investigation even before Robert Mueller became the special counsel. Flynn Jr. has played a key role in the family's consulting business. Our Michelle Kosinski has the details. What can you tell us? MICHELLE KOSINSKI, CNN SENIOR DIPLOMATIC CORRESPONDENT: More complexity in this. CNN is told by multiple sources familiar with this that Flynn himself has expressed concern about the potential legal exposure of his son, Michael Flynn Jr., who like his father is under scrutiny by Special Counsel Robert Mueller.

So, Flynn's concern could factor into his decisions about how to respond to Mueller's ongoing investigation into Russian meddling in the 2016 campaign and the business dealings of key Trump campaign advisers.

HARLOW: What legal questions do you think the special counsel is focusing on regarding Michael Flynn?

KOSINSKI: This is coming from two witnesses who themselves were interviewed by Special Counsel investigators and they told CNN's Jim Sciutto the questions regarding Flynn focused on his and his son's business dealings, including their firms reporting of income from work overseas.

So, we've hearing a lot lately about FARA, the Foreign Agents Registration Act. That requires people who are acting as agents for foreign entities to publicly disclose their relationships with those entities and financial compensation that they get for that kind of work.

So, Flynn Jr. who serves as his father's chief of staff and top aide was actively involved in his father's consulting and lobbying work at their firm, Flynn Intel Group, and that included joining his father on some overseas trips including Moscow in December 2015, that was the time when Flynn dined with the Russian president, Vladimir Putin, at a black-tie gala for the Russia Today television network.

Flynn Sr. is also under legal scrutiny remember by Mueller's team for his undisclosed lobbying during the campaign on behalf of the Turkish government. Flynn's alleged participation and discussions about this idea of forcibly removing the Turkish cleric who has been living in exile in Pennsylvania, according to sources. So, in the past a spokesman for Flynn denied such discussions ever happened.

HARLOW: So, then what is next? I mean, what happens next in this investigation?

KOSINSKI: Well, Flynn's business dealings have been the subject of federal investigation since November, that was prior to Mueller's appointment in March. It's not clear that either of the Flynns will face charges once the investigation is over.

Flynn's attorney did not respond to multiple requests for comment. Flynn Jr.'s lawyer declined comment, although, Flynn Jr. tweeted this past Sunday, quote, "The disappointment on your faces when I don't go to jail will be worth all your harassments."

BERMAN: Smart legal strategy, we will get to that in a moment. Michelle Kosinski, thanks so much. With us now, CNN legal analyst, Michael Zeldin. Michael, thanks so much for being with us. So, what is the special counsel doing here if this reporting rings through, using Michael Flynn Jr. as leverage. Why would that be an effective tool?

MICHAEL ZELDIN, CNN LEGAL ANALYST: Well, so back up one second and then I will go forward with that. It seems to me that Flynn probably should look to the Manafort indictment as a template for what Mueller is looking at with respect to him and his business and his son.

They all seemed to have similar patterns of receipt of moneys overseas, foreign bank accounts unreported, taxes unreported, failure to register as a foreign agent, and in Michael Flynn's case perhaps misstatements on his SF-86, that's the financial disclosure form that Manafort did not have because Manafort didn't join the government.

So that's the backdrop of it. Flynn Jr. is part of that conglomerate of Flynn Intel Group and so they are going to look at both of these guys as potential criminal actors in that investigation.

[09:25:10] The problem, of course, for General Flynn is that it's his son and so every parent wants to protect their children and therefore, they have pressure on them to decide what to do in order to protect their son, and that might mean cooperating.

Normally, we see this in the context of spouses, the husband protecting the wife and doing the jail time or the guilty plea to protect her. Here it's a father and son, but it's very typical of prosecutors to try to leverage who they really want, which is General Flynn, by working through his son.

HARLOW: What do you make of the son's tweet, of Michael Flynn Jr.'s tweet, you know, just within the last week, saying the disappointment on your faces when I don't go to jail with be worth all your harassment. Your his lawyer, you are looking at this and you're thinking what?

ZELDIN: I'm thinking really and how did you not tell me that you were thinking about doing that? This notion that he is going to try to poke the eye of the Mueller team by taunting them is just so ill considered. You just can't figure out what could possibly be behind the thinking of such a tweet.

There it stands. I don't think it will really make a difference to Mueller. Mueller will not look at his tweet and say we are definitely indicting him now. That doesn't matter. As a PR matter it doesn't show contrition or recognition of a mistake.

BERMAN: You think General Flynn, if he's not cooperating, he will be soon. Why?

ZELDIN: Because his son is exposed. I just don't think that he can sort of withstand the pressure in the family of being silent if he has something to say and having the consequence of that be potentially his son gets indicted and if convicted goes to jail.

It's not human nature to me. You think about it in our own lives, just day-to-day lives, you want to do what you can to protect your kids. If Flynn has a story to tell and Mueller can't get that information other than through Flynn, there is a lot of pressure on Flynn to cooperate.

BERMAN: It was Michael Flynn's lawyer, by the way, who said he has a story to tell.

HARLOW: Those words exactly.

ZELDIN: That's right. But so far Flynn has not been very cooperative in the public domain, at least.

HARLOW: We have to leave it there. Michael Zeldin, we appreciate your expertise. Thank you.

So, a big question for incumbent Republicans after a blue wave, a wave they didn't like on Tuesday, embrace President Trump or distance yourself? We are going to ask one New Jersey congressman what he plans to do.

BERMAN: And we are just moments away from the opening bell. Alison Kosik joins us for the preview.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Good morning. Another sign that the retail apocalypse continuous. We got that new sign from Macy's reporting its latest earnings and they are not looking good. Revenue down. Sales down. You are looking at the stock there, a year to date.

Shares of Macy's are down more than 50 percent just this year, and this is coming as we are seeing a resurgence of Walmart. We are seeing Amazon continue to dominate the world when it comes to the retail space.

As far as stocks go, we are seeing that negative sentiment about retail weighing on stocks over all. Expect the Dow to start the day deeply in the red, down at least 100 points.

HARLOW: Alison, thank you. We appreciate it. A quick break and we will be right back.