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Markets Open Amid Trade War Fears; New Red Line for North Korea; Turmoil in White House; Powerful Nor'Easter Brings Warnings. Aired 9:30-10a ET
Aired March 2, 2018 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:30:00] RICHARD QUEST, CNN MONEY EDITOR AT LARGE: Opening bell. It's going to be ugly at the open, John Berman. Expect the market to be down around 200 to 300 points. That's the way the futures is showing. And so with the bell being rung, we are indeed off to the races. They are losing (INAUDIBLE) --
JOHN BERMAN, CNN ANCHOR: All right, you know things must be loud down at the market if you can't hear Richard Quest over the frenzy right there.
Romans, we're watching the markets open down, you know, 280 points right now. Explain to me what they are so upset about. The president wants tariffs on aluminum and steel and so --
CHRISTINE ROMANS, CNN CORRESPONDENT: And so they don't like trade wars. They don't. They don't even like trade skirmishes. They don't even like any kind of hint of a problem. We've spent two generations getting open and open and open in globalization. And this is -- this America first bothers them.
Here's what the president said this morning that really -- I mean the stock -- the futures went down another 100 points when the president tweeted this. When a country, USA, is losing many billions of dollars on trade with virtually every country it does business with. Trade wars are good.
Those four words freaked everyone out. And he said it easy to win (ph). That's what he and his team are focused on here. Example, we're down $100 billion with a certain country and they get cute, don't trade anymore, we win big, it's easy.
It's not so easy. And "The Wall Street Journal," frankly, came out strongly against this president in this proposal. Donald Trump made the biggest policy blunder of his presidency Thursday by announcing that next week he'll impose tariffs of 25 percent on imported steel and 10 percent on aluminum. That tax increase will punish American workers, invite retaliation that will harm U.S. exports, divide his political coalition at home, anger allies abroad and undermine his tax and regulatory reforms. Six or seven things that "The Wall Street Journal" says are very, very bad for American consumers and for Americans investors. So that's -- that's where we are today, John.
BERMAN: All right, we're down about 200 points right now. A little bit up from the low, which was about 285 at one point.
Richard Quest, who's been in the middle of the frenzy down there at the market, who are the winners and losers here? If these taxes and tariffs go through, Richard, who pays more for what?
QUEST: Just about everybody pays more for any form of raw materials because the reality is, anyone who's importing steel will pay more. That will be passed on through the chain of supply and eventually retailers. And that's why you saw Boeing down yesterday. You saw Caterpillar. You saw any manufacturer that uses steel or aluminum was down very heavily.
Now, you could argue that U.S. steel manufacturers will benefit. OK, but let's be blunt here. Just about every time tariffs have been used in the past, a narrow section gains and the wide swathe loses. That is why the president's words this morning that the trade war is good, while it might be a sophisticated argument in the grander scheme of things, it is irresponsible in the sense that other nations will take this as a clarion call against retaliation.
So, look, John, finally, over the last 24 hours, I've spoken to many trade experts, ambassador, trade ambassadors from Republican and Democrats. They all say the same thing. This is a no-win and it's a very dangerous game to be playing.
BERMAN: You know, Romans, it is interesting, though, that you do have some Democrats, particularly from steel, you know --
ROMANS: Sure. Of course.
BERMAN: And we've got states like Ohio saying they're for this. Sherrod Brown, senator from Ohio, Tim Ryan, congressman from Ohio, other Democratic members say they're OK. So this does scramble the party lines.
ROMANS: They are trying to protect blue collar jobs. And they have always tried to do that. And not very successfully.
There have been some anti-dumping laws and there have been some counter-veiling duties that President Obama put on steel, that also President George Bush put on steel, to not really great effect some would tell you.
ROMANS: So this isn't the first time there have been some of these attempts.
But the real concern here is exactly what Richard said, the retaliation. What if another country, like China, the biggest importer of U.S. soybeans, decides to do the same thing to soy beans? That would be a real problem --
ROMANS: For farmers in Iowa and Illinois and for -- and for the ag community at large.
BERMAN: Go ahead, Richard.
QUEST: And, look, John, the other thing is, it's going to be targeted. If you look at the last set of trade tariffs on tires, it was very targeted, very specific. What the president did yesterday was basically did an all-encompassing, we're going to impose --
QUEST: Across the board tariffs on steel. Now, that includes your very close allies, like Germany, Brazil, South Korea. And in doing --
QUEST: And Canada. Thank you, remind me, Canada. And in doing so, completely will miss out China, which as Christine Romans says, might well retaliate in something completely unrelated.
BERMAN: And, of course, China could benefit from all of this because manufacturing, if you really go through to the end here, manufacturing could leave the United States. And where might it go, Christine Romans? It could go to China.
ROMANS: Absolutely. And, Canada, let's not forget Canada, because that is the biggest source of our imported steel, and aluminum comes from Canada. We're in the middle of a very tense renegotiation of NAFTA --
QUEST: Yes. Yes.
[09:35:09] ROMANS: So this is tricky -- this is tricky here.
BERMAN: And also the market doesn't like uncertainty. I think the market would like more clarity about exactly what and when the president will announce whatever it is he's going to announce. We simply don't know right now.
Richard Quest watching things for us down on Wall Street. We'll come back to you if things get hairy again, a future --
ROMANS: Stocks negative for the year, John.
BERMAN: Down for the year now?
ROMANS: Down for the year.
BERMAN: Stocks official down for the year, so says Christine Romans.
Thanks for that.
All right, the president draws a red line for North Korea. What the White House says could cause a military response from the U.S.
And thank goodness it's Friday. Probably what the West Wing is saying after this week. We'll review.
BERMAN: All right, we have some breaking news to tell you about right now.
There are reports of a shooting at Central Michigan University. This is in Mount Pleasant, Michigan, about an hour and a half northeast of Grand Rapids.
[09:40:02] This is what we know. There are reports of shots fired at Campbell Hall on campus, which is a dormitory. That from a tweet from the university itself.
Now, the city of Mount Pleasant says there has been a report of a shooting at the campus of Central Michigan University. The police are assisting the campus police with the situation. The shooter has not yet been apprehended. Please remain aware of your surroundings and call 911 to report suspicious activity.
Again, reports of a shooting this morning at Central Michigan University. We will bring you an update as soon as we get it.
Also new this morning, according to multiple sources, the White House is considering military action if North Korea develops a fully operational nuclear missile capable of hitting the United States.
With me now, CNN Pentagon correspondent Barbara Starr.
Barbara, is this a new red line for the administration?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, it depends how much they want to enforce it. But it -- what it certainly is, is clearly the top priority, if there's going to be a new incoming national security adviser, this may be the first issue that new person has to deal with.
What the U.S. is saying basically is, the official policy, maximum pressure, maximum diplomacy on North Korea. But, behind the scene, the U.S. intelligence community watching very closely because they don't believe that North Korea, in any way, has given up its weapons program, still trying to perfect putting a nuclear warhead on a missile that could technically reach the United States.
And that is the red line. If they can put it all together, that gives any president of the United States really very little choice but to have to confront it and decide what to do about it. If that is the case, if North Korea could attack the U.S., would you let them sit there and have that capability, would you continue with diplomacy or would you engage in military action, which everyone from Defense Secretary Jim Mattis to General Dunford, the chairman of the Joint Chiefs, said could unleash catastrophe.
BERMAN: All right, Barbara Starr for us at the Pentagon. Thanks so much.
Again, the breaking news, we're getting reports of a shooting at Central Michigan University. We're going to get some new details. We'll be right back after a quick break.
[09:46:38] BERMAN: All right, it has been one crazy week at the White House, from departures, to rumored departures, to positions on guns, to changes to positions on guns, to the launching perhaps of a trade war or not. And that is just the start of it.
Joining me now to help digest this, CNN politics editor at large Chris Cillizza.
Chris, I want to play a little role playing here because you know we both like that. I'm going to be the straw man, and I want you to respond to these types of claims here.
CHRIS CILLIZZA, CNN POLITICS REPORTER: OK.
CILLIZZA: I'm ready.
BERMAN: All right. The president is playing a game of three dimensional chess right now. This chaos is all part of his method of getting big things done.
CILLIZZA: Is what you would have said the day after the president of the United States won the 2016 election and I think could have made a credible case there, that we all missed the boat, that Donald Trump was playing a different, more advanced game than everyone else, including Hillary Clinton, and that's why he won. The problem is, it's, you know, 2018, not the end of 2016. And I would argue almost every piece of evidence we have, from basically his election onward, certainly, since he's been sworn in as president of the United States, would suggest that it's not a grand strategy. I'm not sure it's a strategy at all. I think he says things and then he reacts to the reaction. That seems to me that it's much more likely to be zero dimensional chess than three-dimensional.
BERMAN: Sometimes chaos is, in fact, just chaos.
BERMAN: Now, as for the rumored staff departures, Gary Cohn reportedly threatening to leave. H.R. McMaster reportedly threatening to leave. The straw man argument here is, they're both there. They're both working at the White House today. People, you know, talk about their jobs all the time. There is no turmoil inside the West Wing.
CILLIZZA: Well, I mean, H.R. McMaster and Gary Cohn can stay for the rest of the four or eight years of the Trump presidency and there would still be chaos and turmoil within the West Wing. You know, you have Hope Hicks, one of Donald Trump's most close --
trusted loyal advisers leaving suddenly, resigning. You have Jared Kushner, Donald Trump's son-in-law, having his security clearance downgraded. Questions about foreign powers potentially targeting him, according to "The Washington Post." And that's just this week.
You have John Kelly, Jared Kushner versus Ivanka Trump. You know, this is a palace intrigue administration. There isn't much else. It's mostly -- I was thinking it's like a wrestling scorecard. It's sort of -- you know, it's this match. Then, oh, if you're not interested in that match, well, we've got this match, too. I mean it's just all versus. It's this one versus this one. These two in a tag team match against these two. It changes -- the players change who's on which side, where Donald Trump is changes. But the fundamental nature of it being, we're just going to pair two people off and see what sparks fly and what the result is, that's sort of -- that's the story. It's not a distraction. It's not a glitch. It's the fundamental reality of how Donald Trump operates his White House.
BERMAN: And the last straw man would be, you know, this is of no consequence, though. This intrigue is of no consequence. And I say that, Chris, as we have the famous split screen right now. The Dow is off 312 points this morning.
[09:50:01] BERMAN: I don't think it's because of you.
CILLIZZA: Well, you never know.
BERMAN: I think it has -- I think it has more to do with this tariff announcement that the president made yesterday.
BERMAN: These things have consequences.
CILLIZZA: They do. And I think one of his great weaknesses is not understanding that. I heard from a lot of people this week who said, look, I know you guys know who Hope Hicks is, but the average person doesn't care who Hope Hicks is or, you know, staff changes. Think Gary Cohn, it doesn't matter.
It matters in that it leads to either sort of this broader idea that the White House is just in total chaos and turmoil and/or, or both, Donald Trump is less bound by any sort of ability to rev the engine back. That the less people around him who he trusts, who he sort of values for advice, who he occasionally listens to, the more sort of internal staff turmoil, the more he just says and does stuff, like the tariffs, like the Alec Baldwin tweet this morning, and all of that doesn't do either his presidency or the country much good.
BERMAN: That's Alex Baldwin to you.
Chris Cillizza, thanks so much for being with us. I do appreciate it.
CILLIZZA: Well done. Thank you.
BERMAN: All right, not quite a bomb cyclone, but really, really close. Two thousand flights canceled or delayed. We are tracking this dangerous nor'easter, next.
[09:55:49] BERMAN: This morning, a powerful nor'easter is nearing bomb cyclone status. Coastal communities near Boston bracing for hurricane- like impact winds as the storm strengthens. Forecasters warning things could turn deadly fast. There is a storm surge concern as well. More than 2,000 flights have been canceled.
Meteorologist Jennifer Gray is standing.
First, I want to go to Ryan Young, who is in Scituate, Massachusetts.
They are concerned on the south shore, Ryan, told to evacuate.
RYAN YOUNG, CNN NATIONAL CORRESPONDENT: Yes, people have already started that evacuation. We know some of the roads here have already begun to close as well because the water is starting to rise. In fact, we've seen the water starting to come over from this dock area just this morning. And they're expecting that storm surge from three to five feet.
But this is some powerful winds that have been kicking up all day. We know firefighters will also be involved in terms of getting people out who may want to get out of their homes. What they're saying, get this, maybe three high tides that will hit this area. The first one coming around 11:00.
So we've seen the water rise over and over again. But we were here before a few years ago, we saw the water rise within a half hour, just really quickly. In the last 20 minutes or so, the water here had dramatically changed in the parking lot area. But what we do know is they already opened the high school to make sure that if people want to evacuate their homes, they can.
We've talked to some people who waited until the last minute to get their sandbags and put it in the back of their homes. Some people who said they were trying to wait this out. But it's the three high tides that are going to make people so cautious and the heavy winds that are just pounding us that are really no joke at this point. It will be interesting to see how conditions change over the next few hours.
BERMAN: Yes, your feet just got wet there, Ryan.
Ryan Young for us in Scituate. Thanks so much.
Let's get more on the timing and the impacts. Jennifer Gray at the Weather Center.
Jennifer. JENNIFER GRAY, AMS METEOROLOGIST: John, there's so many different angles to this storm. We have the wind component. We have the rain component. We have the storm surge component. And Ryan was right, we're going to be dealing with this for three high tide cycles near where he is. And so the water is going to be rushing in, the coastal flood conditions are going to be -- we're going to see major flooding across portions of the shore near Boston, the Cape, even down towards Rhode Island.
So the snow impacting portions of New York. We've had a quick changeover in the last hour or two. Still all rain for Boston. We're going to see mainly rain for much of the major cities across the coast. We are going to have that heavy wet snow across upstate New York. And we could see up to a foot of snow. We're going to see downed trees and power lines because of it as well.
Winds gusting up to 70 miles per hour along some of these areas, including Boston, the Cape, Rhode Island, even portions of eastern Long Island. That coastal flood threat is going to be huge because the winds are coming out of the northeast. It's pushing all of the water towards the shore. And so especially during those high tide cycles, that's where we're going to see even more flooding. And so people need to be very, very careful, especially if you live right along the coast.
So here is the forecast radar. And you can see, by the time we get into the midnight hour, the storm is pulling away. But even once the rain and the snow pulls away, we will definitely still have that wind threat as we go through the next 24 to 36 hours or so.
So here are the forecasted winds. You can see, 55-mile-per-hour winds in Scituate, 40 to 45 in Boston by the time we get into tonight. So it is going to be a rough go, John, for the next day or so.
BERMAN: All right, Jennifer Gray for us in the Weather Center.
Jennifer, thanks so much.
A new round of possible mudslides expected in southern California today. Tens of thousands of residents in Santa Barbara County already evacuated. Rain expected to bring potentially deadly flash floods. The National Weather Service is predicting an extreme impact today. Back in January, at least, 21 people in Montecito were killed, hundreds of homes damaged after heavy rains soaked areas burned by December wildfires.
All right, the next hour of NEWSROOM starts right now.
ANNOUNCER: This is CNN breaking news.
[09:59:59] BERMAN: All right, we do have breaking news now out of Michigan. Reports of a possible shooting at Central Michigan University. Some 20,000 students go there. We are told the shooter is still at large, considered armed and dangerous. The university is in Mount Pleasant