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Cohn to Explain Trump Tariffs Amid Republican Pushback; Nashville Mayor Resigns After Pleading Guilty to Felony Theft; Bank Flagged Trump Attorney's Payment to Porn Star; Deal Reached to End West Virginia Teacher Strike. Aired 11:30-12p ET

Aired March 6, 2018 - 11:30   ET



[11:31:48] BRIANNA KEILAR, CNN ANCHOR: The Republican pushback on the presidents' tariff proposal is on full display this morning. House Speaker Paul Ryan says he thinks the president has the right idea but needs to hone it a little more.


REP. PAUL RYAN, (R-WI), SPEAKER OF THE HOUSE: There is clearly abuse occurring. Clearly, there is overcapacity dumping in trend shipping of steel and aluminum by some countries, particularly China. But I think the smarter way to go is to make it more surgical and more targeted. So I think 232 is a little too broad. And I think it is more prone to retaliation. And so we're encouraging the administration to focus on what is clearly a legitimate problem and to be more surgical in its approach so we can go after the true abusers without creating any kind of unintended consequences or collateral damage.


KEILAR: Now CNN is learning the chief economist, Gary Cohn, is trying to organize a meeting with the president and people from the auto and bottling industries to help explain how the tariffs would affect the economy. Word from a senior administration official that some countries would be exempt from the tariffs.

Joining me now is Republican Congressman Warren Davidson, from Ohio. He's called the president's tariff proposal a big mess.

Sir, thank you for being with us.

REP. WARREN DAVIDSON, (R), OHIO: Thank you for having me on.

KEILAR: So you actually have some rare firsthand knowledge of the effects of the steel and aluminum tariffs. You have a background in manufacturing. You managed one of your family's companies, which dealt with metal stamping. So people think about, as you explained in the break, spoons, if you think about brackets on, as you said, Ikea furniture, lots of stamped metal products out there. That was your wheelhouse before getting involved in Congress. With that in mind, how do you see, how do you worry about all of this impacting manufacturing workers in Ohio and other industrial states?

DAVIDSON: As the speaker said, the president is right to focus on the abuses. The problem with uniform tariffs, it targets our friends and allies. The best trading partners we would want to have, you're assuming no one meets the criteria. That has in affect is to unite the world really against the United States when we really could be building a coalition of friends and allies and good trading partners to focus on the bad actors who are stealing our intellectual property and subsidizing competitors. Not just to prop up their domestic market but to steal market share from American companies. This is happening to, in our district, A.K. Steel. And so while we think about the steel company, there is five to six times, you know, massively more jobs in the area that are focused on manufacturing as a sector where the end user uses the product. A targeted approach could be helpful in getting after the bad actors. But right now, the announcements have caused disruptions to supply chains. Even if we change course already, the announcements have moved markets.

KEILAR: You're saying there is this -- this lead time when it comes to doing this kind of work. Already the tariffs are -- the market is responding to it.

What is your concern without a more targeted approach about how this is going to trickle down to constituents that you represent, how are they going to field this on a day to day basis?

[11:35:05] DAVIDSON: In the steel-consuming industries, say the auto industry, can makers, food or beverage, and any number of other component parts makers, the lead times get shifted because the domestic supply, supplies about 75 percent of U.S. consumption, and there is not enough capacity to meet all the demand. The tariff's -- even if it is a bad policy, if it is implemented badly and takes effect immediately, the deliveries are going to be shifted. So that could mean work stoppages at some of the factories because they don't have steel to even begin with. And the companies are already spending tens of millions of dollars. I met with a company on Monday who said it is going to cost him more than $10 million just to meet the gaps in the supply chain. And that has canceled their plans to hire six new employees. So they're still planning to hit the operating plan for the company, but $10 million worth of negative variance will have to be covered somehow and they'll kill some of their marketing programs.

KEILAR: Yes, jobs, as you said.


KEILAR: You've been very outspoken about this. You directly tweeted responses to the president, one of them you said, "Couldn't disagree more."

Here's what a White House official just told CNN, quote: "We had members over to the White House for months now to discuss this, so I think that the president is very aware of where member sentiment is. We've had them over to the White House many times to discuss trade policy, and they have articulated their upon on tariffs as well as their desire to see NAFTA renegotiated." That's the White House, Congressman, saying they have heard you, but

they're going ahead anyway. What is your reaction to that?

DAVIDSON: This is something the president clearly has authority to do. I will say that we have had private conversations behind closed doors and certainly Gary Cohn has had those conversations as well. What you see is the time from behind closed doors conversations has come to a pass for now. And not that they're not still happening and we're going very public with our views. Because I think it is vitally important to sustain the momentum that we have had in our economy, with the regulatory reforms that the House passed, with the tax reform that is out there, we don't want to steal that momentum. All of our hope is the president is using this as a negotiating tactic to get a better deal out of NAFTA. And that would be a long-term win.

KEILAR: The House speaker wants something more narrow. We heard that from a number of Republicans. What do you want to see instead of what has been put out there by the president?

DAVIDSON: I've been pushing for targeted actions on things like electrical conductive steel. China has been stealing intellectual property and dumping to kill market share. There is only one U.S. producer left and we had several. And this is important, especially as we start talking about infrastructure projects. So this is killing the intellectual property of the United States. Nearly a trillion dollars a year stolen in intellectual property. China is not the only country doing that. But this is a big effect. I think that we could build a coalition of good trading partners and allies to the United States to help take action on this. And my hope is that the president has been working on that, and this is a tactic that will help bring them to the table on his course of action. But what I am concerned that if we do implement the uniform tariffs, it will unite people that would otherwise be friends and allies in opposition to the United States and hurt our jobs.

KEILAR: Congressman Warren Davidson, thank you so much for being with us.

DAVIDSON: Thank you.

KEILAR: Up next, a new report says the president's personal lawyer complained he wasn't paid back after making a six-figure payment to a porn star who allegedly had an affair with Donald Trump. We'll have details ahead.


[11:42:56] KEILAR: Just in to CNN, the mayor of Nashville announcing her resignation under a cloud of scandal. Democrat Megan Barry has been under criminal investigation since admitting she had an extramarital affair with her bodyguard. CNN has learned her resignation comes after she admitted to felony theft.

She addressed none of that in her brief farewell speech.

(BEGIN VIDEO CLIP) MEGAN BARRY, (D), FORMER NASHVILLE MAYOR: Nashville, with its boundless energy, its infectious optimism, it is never encountered an obstacle it couldn't overcome attitude, will in the years ahead continue its steady march toward the very top of the list of great American cities. It is a continued climb that I will watch, but I will watch as a private citizen.


KEILAR: CNN's Nick Valencia has been following this. He's joining us now with more details.

Nick, tell us what led up to this moment in Nashville?

NICK VALENCIA, CNN CORRESPONDENT: Frist, we should mention, Brianna, that in recent memory you would be hard pressed to find a female politician who resigns as a result of a sex scandal, but that appear to be what happened earlier this morning in Nashville. Mayor Megan Barry, now former mayor, Megan Barry, of Nashville, stepping aside. Never making direct reference to her extramarital affair, never using the words "I've resigned," only saying she would be observing the post as a private citizen and ensuring smooth transition to the vice mayor.

This announcement comes weeks after turmoil for Megan Barry. She admitted earlier this year to an extramarital affair with her head of security. All of that may have been kept private between the two if not for the investigation of a local TV station who started following money. They realized their head of security incurred tens of thousands of extra money in overtime costs. They started digging into it, to which they realized this mayor, now former mayor, was having an affair with her head of security.

It was earlier this morning that we learned that also Megan Barry admitted to $10,000 felony theft of property. She said she would be paying that back, about $11,000 of that. Multiple investigations led to find the facts that her head of security had a naked photo of her on his phone, all of that may have led to her downfall. Now Megan Barry stepping aside as Nashville's mayor -- Brianna?

[11:45:16] KEILAR: Nick Valencia for us. Thank you so much.

VALENCIA: You bet.

KEILAR: The Stormy Daniels payoff scandal just keeps going. And with an interesting new twist. The "Wall Street Journal" reporting that President Trump's personal attorney, Michael Cohen, groused to friends that he wasn't reimbursed for a $130,000 payment to Stormy Daniels, an adult film actress, to buy her silence before the presidential election. Well, "The Journal" has reported that Daniels had an affair with Donald Trump back in 2006, though Cohen said the affair didn't happen. "The Journal" also reports that the bank flagged Cohen's transaction as suspicious and reported it to the Treasury Department.

I want to talk more about this now with CNN contributor, Larry Noble. He is former general counsel at the FTC. He's now general counsel at the Campaign Legal Center. OK, I wonder, there are some new details here, I wonder how it changes

the legal exposure for Michael Cohen, maybe also for President Trump. In this story, you have Michael Cohen saying he missed multiple deadlines to pay Stormy Daniels because he couldn't reach Trump in the final days of the campaign. Also that Trump did not -- also that -- sorry, pardon me -- so it was that he missed the deadlines and previously he had said that Trump didn't know about the payment, right? And he said that he was not reimbursed either by the Trump Organization or the campaign, though it seemed like maybe there was some wiggle room there. Does this change anything legally?

LARRY NOBLE, CNN CONTRIBUTOR: It does. Previously, what he said, about six weeks ago, he said the Trump Organization did not pay for it. He said that the campaign did not pay for it. He said he facilitated the payment for it. Which was a great lawyer statement and you have to look at what he left out. So the question we all had at that time was, did Trump pay for it, did Trump know about it. What we have is evidence that he complained that at first Trump wasn't paying the money. He had three times he had to request the money, wasn't getting it, he paid it out of his own pocket.

KEILAR: If you're mad someone didn't reimburse you, presumably, they know about it.

NOBLE: They know about it.

KEILAR: Right?

NOBLE: Then after the election, he complained he had not gotten reimbursed for it. Why this is important, is that if Trump made a payment, I think it really strengthens the case that this was a campaign expenditure. Trump can make that payment, but it should have been reported by his campaign committee. Also, when the lawyer, Michael --


KEILAR: Violate the purpose of nondisclosure money.

NOBLE: Right. If you run for office, you have this problem. And then, Cohen himself, when he advanced the money, he was making alone in the campaign that wasn't excessive contribution, and when the campaign did not repay him, that excessive contribution remained. And if they haven't repaid him to this day, then he has an illegal contribution. So this fills in the gap.

KEILAR: He has a liability.

NOBLE: He has a liability. This fills in a gap that existed before.

KEILAR: OK. So, all right, OK. So what makes the $130,000 illegal is that it would be technically a campaign contribution.

Are you surprised Michael Cohen wasn't aware that something of that size, unusual, that payment, would be flagged? NOBLE: I am. So what happened here is that the bank saw it and they

flagged it, and they apparently did a suspicious activity report to the government, which their required to do if they see something that looks like it might be money laundering, might be some sort of illegal activity. And they flagged it to the government. And you would think that a lawyer would know that if you make a large transaction, financial transaction, it is unusual that the bank hasn't seen before, that they may very well file a suspicious activity report.

KEILAR: So First Republic Bank, the bank that filed a suspicious activity report, or a bank that did, this -- there was a lag time of about a year on this flagging of suspicious activity. What does that tell you, really quickly, many?

NOBLE: It is not clear. One of the banks waited a year. They may have gotten some information. Somebody may have come to them, they may have gotten questions from Mueller. Something they have highlighted for them and they've gone back and looked and said, this doesn't look right.

KEILAR: Interesting.

All right, thank you so much. We really appreciate it, Larry Noble.

NOBLE: My pleasure.

[11:49:24] KEILAR: Still ahead, teachers celebrating in West Virginia. The governor says a deal has been reached to end a nine-day strike. We're going to have details next.





KEILAR: We have breaking news out of West Virginia where a statewide teachers strike has shut down public schools for the last nine days. This morning, a reason to celebrate.




KEILAR: Now, state officials say they have struck a tentative deal that could reopen schools in just a day or two.

CNN's Polo Sandoval has been following what has really turned into a bit of a saga that's now resolved in Charleston, West Virginia -- Polo?

[11:54:31] POLO SANDOVAL, CNN CORRESPONDENT: Yes, that very familiar John Denver song, Brianna, echoing through the halls of the state capitol here in the last hour or so. There is a very celebratory mood happening among teachers as they wait for this piece of legislation to make it out of both chambers and finally make it to Jim Justice's desk. We have to remember what took place a year ago. There was a promise of a 5 percent raise for teachers and a 4 percent raise for state employees. Then this legislative limbo kicked in. Finally, this announcement made, especially on Twitter, by Governor Jim Justice, announcing the deal has been made, this compromise, and common ground has been reached between both members of the Senate and the House at the state level. Now they simply need to get this legislation on the desk.

Here's why this is important. A 5 percent raise for teachers that are underpaid in the state. It's obviously a big deal. But more than anything, this is also symbolic. Teachers want this raise because they see it as promise from legislators that they will tackle the next issue, which is their insurance, paying for some of those premiums -- Brianna?

KEILAR: Yesterday, that was the question, is it 4 percent or is it 5 percent? In the end, it stuck to 5 percent.

Polo Sandoval, covering this for us for days. We do appreciate it.

Coming up, perhaps a major breakthrough on Korean peninsula. Kim Jong-Un stopping nuclear tests for now and opening the door for diplomacy with the U.S. We'll have details ahead.