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Report: Markets React to Tariff Response from China; Top Economic Advisor Suggests Tariff Talk Is A Negotiating Tactic; Trump Lawyers Told Trump Not Target of Mueller. Aired 2-2:30p ET
Aired April 4, 2018 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[14:00:00] (COMMERCIAL BREAK)
BROOKE BALDWIN, CNN HOST: All right, here we go. You're watching CNN. I'm Brooke Baldwin. Thanks for being with us. Very soon will have that White House press briefing. We'll take it live, first time in a week. Lot to discuss, including the president not being a target in the Russian probe. Also, a big decision on U.S. troops in Syria. And, of course, here is of this possible trade war with China.
Beijing wasting no time counterpunching against the president's latest tariff on its products, China announcing a 25 percent tax on 106 American exports including the crucial soy bean. More on why that really matters in just a minute. This is the official list of the nearly 1300 Chinese goods the U.S. is proposing to be taxed. We are talking blood products, engine, aviation parts and so much more.
The newest sent market deep, deep in the red, tumbling 500 points by mid morning but when you look now not quite where we were, the market bouncing back a bit. Slight recovery, right around the same time these comments came in from the president's new chief economic adviser, Larry Kudlow.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Is it possible that the stiff new tariffs against China are, in fact in negotiating tactic --
LARRY KUDLOW, NEW CHIEF ECONOMIC ADVISER: It's part of the process. I would take the president seriously on this tariff issue. There are carrots and sticks in life, but he is ultimately a free trader. He said that to me, he said that publicly, he wants to solve this with the least amount of pain.
UNIDENTIFIED FEMALE: Can you have growth if there's a trade war?
KUDLOW: Hopefully we won't get to that.
(END VIDEO CLIP)
BALDWIN: let's take you straight to the New York stock Exchange. And CNN's Money Christina Alesci, do you think the Kudlow comments have something to do with the Dow bouncing back a little bit?
CHRISTINA ALESCI, CNN MONEY CORRESPONDENT: The timing is right there, as you laid out in the introduction, Brooke. What the administration did was it witnessed such a steep and dramatic reaction to China counterpunch that he unleashed a bevy of officials to basically wink at the market. And tell traders and investors, hey, we are not going to do anything stupid.
You heard Larry Kudlow who by the way is a favorite here on Wall Street, saying that this is a process. He even used some warm and fuzzy language that you didn't play about keep your eye on the pot of gold at the end of the rainbow. Wilbur Ross, Commerce Secretary out there saying at the end of every shooting war, there is a negotiation.
So, it was a wink to the market that this may be a negotiating ploy. This is a really messy one, Brooke. There were companies that took big hits today. We're talking about Boeing, GM, Ford. GM took this extraordinary move and issued a statement, emphasizing the interdependency between the U.S. and China. It's a really messy way to get to the negotiating table if that's what this is.
BALDWIN: We have the rainbow and they pot of gold coming up. So, thank you, Christina. To a deeper dive and a bigger conversation with me now, CNN political commentator Catherine Rampell it was also an opinion writer for "The Washington Post."
So, Larry Kudlow says people shouldn't overreact to this news and said the negotiation is all tools and Christina mentioned Commerce Secretary Wilbur Ross. Let me just pay that sound as well.
(BEGIN VIDEO CLIP)
WILBUR ROSS, COMMERCE SECRETARY: Well, think about that. Even shooting wars end with negotiations. Somebody signs a treaty with someone else, it has whatever terms it has. So, it wouldn't be surprising out all the thing that out, while this is some sort of negotiation.
(END VIDEO CLIP)
[14:05:00] Here is the but, which is the president's tweet this morning, when you are already 500 billion down, you can't lose. What does he mean by that? It seems to contradict what Ross and Kudlow have been saying. Is that the president is saying bring it on China?
CATHERINE RAMPELL, CNN POLITICAL COMMENTATOR: They have conflicting messages here. Trump wants to show that if he's not bluffing then China does need to capitulate and give the United States everything it wants, or in effect everything that Trump wants. But if, in fact, he's serious and he does plan on implementing all these tariffs that have been announced, but there is no date that has been put to them. For most of them, in any case, then freaks out markets because markets know if, in fact, these tariffs go into effect in the United States and go into effect in China. That is very bad for a lot of Americans.
BALDWIN: I think you're making a point without realizing you're making it, which is different goes into affect, the thing is as people are watching and trying to catch up with happening between China and the United States. This hasn't been done, right? Kudlow made the point this morning that it still has to go through processes and machinations over the next couple of months.
RAMPELL: And that would be the best possible outcome if, in fact, none of these tariffs happen. Tariffs are bad for consumers. They're bad for companies. There is lots of fallout and unintended consequences which Kudlow very well knows. Less than a month ago he co-authored an op-ed that said if you look at the history of tariffs, you see they are always losers essentially. So, this White House at least has some people in it who that these tariffs would be very, very bad. It is not clear that Trump himself realizes that, maybe he thinks they are negotiating ploy, maybe not. The consequence of all of this is, if, in fact, these tariffs go, everybody loses. Contemporary to what Trump says, nobody wins a trade war.
BALDWIN: What about this whole pot of gold point? So, let me just reiterate. Kudlow on Fox Business says there will be a pot of gold at the end of the rainbow. In that pot you'll see better economic growth, more trading and better wages. He calls it a growth play. What might he be seeing that all of those who have been criticizing them maybe don't see?
RAMPELL: Look, it's a little bit unclear, Brooke. I think what they're trying to say is Trump is going to get us better trade deals. That's what he's after in the end. What he means by better trade deals is very unclear. The kinds of things that China has been doing that's bad for U.S. companies -- and they have been misbehaving -- have mostly to do with intellectual property, it is the fact that they are stealing IP or in any event requiring U.S. companies that want to do business there, turn over some of their intellectual property, that sort of thing.
The way you resolve those kinds of issues are not through macho trade war efforts. It's through the WTO. It's through getting together with our allies, something like the Transpacific Partnership, which we pulled out of last year. We have lots of tools available to negotiate better trade deals but it's not clear that Trump really realizes what the problems are or how to solve them.
BALDWIN: I think it's key in this conversation to say who has hit the hardest. This is the heartland. This is who produces these soy beans. You can see that the majority of the color on your screen is red.
RAMPELL: Yes. That is no accident. China is trying to go after industries located in areas that are politically sensitive for this administration.
BALDWIN: They're thinking that way?
RAMPELL: I think so. There's no way they couldn't realize that. Iowa in particular. You mentioned soy beans, but more than half of Iowa's top 20 exports are hit by these newly announced Chinese tariffs. That's soy beans, corn, ethanol, pork. All of these things are critical to the Iowa economy. And remember the U.S. ambassador to China right now is the former Iowa governor.
And the reason why he was chosen is because he was involved in a lot of these trade negotiations, or at least the informal diplomacy between Iowa's companies and the Chinese government or Chinese companies importing Iowa goods.
[14:10:00] So it is no accident that they are targeting goods that are in the Trump heartland, in these particularly sensitive states where we have an ambassador from where, of course, the presidential primary occurs. There are a lot of reasons why these are really sensitive areas. And there is no way that China is too stupid to notice that. It's not a coincidence.
BALDWIN: Catherine Rampell. Thank you very much. A pork farmer is coming up from Illinois. We'll talk to him about how this could hit him the hardest here. Thank you so much.
RAMPELL: Thank you.
BALDWIN: Now to this. Coming up. Is the glass half full or half empty for the president in the Russia probe? Robert Mueller says he is not a target. But reportedly she is a subject. What's the difference? Will the president ultimately sit down for interview with the Mueller team? We will get into that. Also, the president's big concession on Syria, he will keep troops there for now, but has made it known to his national security team he wants an exit plan. ASAP.
And we are standing by that White House press briefing on a day when the president is promising strong action on securing the border with Mexico. What does he mean by that exactly? We will take that briefing live. You're watching CNN, I'm Brooke Baldwin.
[14:15:00] (COMMERCIAL BREAK)
BALDWIN: We are back. You're watching CNN. I'm Brooke Baldwin. Congress has announced Facebook founder Mark Zuckerberg will testify next week. He will go before the House Commerce Committee next Wednesday. Facebook as you well know has been under fire as of late after a data firm with ties to President Trump's 2016 campaign reportedly accessed information of 50 million Facebook users without their knowledge.
And to another development here at CNN. Special Counsel Robert Mueller recently told President Trump's legal team that the President of the United States is not a criminal target in the investigation at this time, but Mueller is still pushing to interview the president. No decision has been made as to whether Trump will testify but his legal team needs to respond and respond soon. With me now, our senior justice correspondent, Evan Perez and CNN contributor Ambassador Norm Eisen, former White House ethics czar and former ambassador to the Czech Republic. Gentlemen, good have both of you. And Evan, first to you, on your reporting. Tell me more about his conversations between team Trump and team Mueller.
EVAN PEREZ, CNN SENIOR JUSTICE CORRESPONDENT: Right, Brooke. In these conversations occurred in the past few weeks, last month in particular there was a discussion between the president's lawyers and the special counsel. Special counsel made it clear, at this at this point he is not a criminal target in this investigation. But they also told him that he is more than a simple witness.
Obviously, he participated in some of the events that they're investigating, including possible obstruction. So, he is something in between. So, the interference there, at least according to the president's legal team at least the way they interpret it the conversation, is that he more of a subject.
Look, I've got to tell you, some people might react to hearing that the president's not a target I think that is celebration. This still means that the president is at the center of a criminal investigation and there is very much a big risk in providing testimony to the special counsel as a result of that,
BALDWIN: OK. Mr. Ambassador, I'll leave it to you to explain all of that sort of thinking. More than a witness, not a target. Explain the difference. Subject, target, witness. Who is he in the eyes of Bob Mueller?
AMBASSADOR NORM EISEN, CNN CONTRIBUTOR, FORMER WHITE HOUSE ETHICS CZAR AND FORMER AMBASSADOR: Brooke, thanks for having me back. There are three levels. I know this from decades of practice, representing people, including in cases involving Bob Mueller. What you hope for is a defense lawyer. I'm sure what those Trump lawyers were hoping for is you are not really interested, Mr. Special counsel, in my client, are you? They didn't get that.
They didn't get a mere declaration that Trump is a witness, that they're not focused on him. Now the worst news of all is your client is a target. That means they're a punitive defendant in the case. They're likely to be charged in the case. And that has a variety of consequences in terms of when a grand jury is sitting. The client has to be notified, given an opportunity to present.
Then there's the in between category. I'll tell you, I've done this for a quarter of a century. And this struck terror into my heart, too, Brooke. Your client is a subject. That means they're within the scope of the investigation. That is ominous because, this happened to me, a client can go from a subject to a target in a heartbeat. One witness, one piece of paper, even their own mouth can cause it.
BALDWIN: OK. Here is what I am wondering, and Evan back over to you because this is also part of your reporting. This whole issue of subject, target, more than a witness, this all came up when the two sides were discussing the possible sit down with the president. I'm wondering in all of your dealings with officials over the years, might this be a strategy on behalf of the Mueller team? OK, you're not a target. Meaning coaxing the president in to sitting for this interview.
[14:20:00] PEREZ: I think prosecutors are known to do this. I think a lot of people would say this is dishonest but given a certain set of facts, I think you can go, as the ambassador just said, very quickly, very easily from subject to target in an investigation. That's why it poses such great risk for the president. You see how he talks. Imagine that behind closed doors where he gets irritated at the questions being asked of him and just blurts things out. You could see that ending up being a huge problem for the president and that's why his lawyers have been so cautious in giving him that caution flag about doing this.
BALDWIN: Mr. Ambassador, you were nodding. We don't know yet. Apparently, the president is deciding whether he would sit. He is apparently pleased that he is not seen as a target. But your point simply being he may walk into the door in this interview not being a target and that could quickly change.
EISEN: That's right, Brooke. Three risks. Number one is he moves himself from subject to target. He thinks he's going to downgrade himself from subject to witness, but it could go the other way. And prosecutors, you know, they don't give you a promise of where you're going to end up.
Number two, the risk of making a false statement, as Evan was saying. It's colossal with this president. 2,000 lies, according to "The Washington Post" in his first year alone. Constantly lies. Seems he can't talk or tweet without lying. That's Why John Dowd walked out of there.
Third risk, there's reporting that Mueller will write a report on the president and it may be that Mueller is going to kick this over to the House of Representatives and Trump may dig his own grave there with what is said. No wonder his lawyer, John Dowd, quit. I would not allow the president, if he were my client, to testify under these circumstances but then I wouldn't take the president for a client.
BALDWIN: Evan, back over to you. On "The Washington Post" reporting, Mueller is filing a report about the president's actions while in office. What more do you know about these reports?
PEREZ: The first part of that would be some kind of report that looks at the obstruction picture. The question is, where would that report end up? Mueller still reports to Rod Rosenstein, who is acting attorney general for the purposes of this investigation. The report would end up in his hands and then he would have to decide whether or not there's something to go forward on and whether to turn this over to Congress.
I think as the ambassador pointed out, a lot of -- the Justice Department regulations right now say that a sitting president cannot be indicted for a crime. Therefore, the way this would be resolved is for Congress to decide whether or not this is an impeachable offense. And this is where Mueller comes in. Mueller would prepare, essentially, the reasoning, whether he believes there's any crimes that happened here, even if they're not indictable. There is reason for Congress to take them up. That's where this eventually ends up, Brooke.
BALDWIN: Will land.
PEREZ: This is the end of the investigation, where Congress and politicians decide whether the president needs to leave office as a result of this. BALDWIN: It's important to remind people even though we keep talking
about the special counsel. It is ultimately up to Congress. Evan Perez, thank you, Ambassador Eisen good to see you again. Thank you both so much.
Coming up next here. New questions about the man who proudly calls himself a dirty political trickster. What CNN's K file just uncovered about Trump associate Roger Stone and links to Wikileaks. Also, as President Trump Eisen exit from Syria, Ambassador to the United Nations Nikki Haley speaking out about what she thinks the United States needs to do. A topic Sarah Sanders is likely to be pressed on today. The White House briefing begins in mere minutes. Stay with me.
[14:25:00] (COMMERCIAL BREAK)
BALDWIN: Jitters on Wall Street amid new fears of a looming tariff war. Pres. Trump's tariff gamble escalating quickly, China counterpunching today with 25 percent tariffs on imports of U.S. soy beans, cars, airplanes. Got an eye on the stock market on the left side of your screen. Right side, live pictures from the press briefing room at the White House where we should see Sarah Sanders momentarily. Lot for her to discuss.
We bring in senior White House correspondent Jeff Zeleny, standing by in that briefing room along with a couple of others here. Jeff Zeleny, first to you. We saw Larry Kudlow, top economic adviser do some of the rounds today, trying to maybe quell fears that this is the opening salvo of some sort of trade war, despite the president's tweet, which does seem contradictory to the message from Larry Kudlow, which is don't overreact. What is the word that you are hearing from the White House?
[14:30:00] JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: That was Larry Kudlow's debut, if you will, on the government side of this. He was out doing interviews this morning on the north driveway at the White House, talking openly about how this is a process and it's not the end of the negotiations but indeed the beginning. It is a notable that we've seen a consistent pattern here.
The president will send something out on social media online and there's no administration official to sort of explain it or back it up. That is what Larry Kudlow was trying to do. Certainly, trying to ease the concern of the markets here. The fact that this is happening in a mid term election has many Republicans concerned and worried.
The fact of the matter is if you look at maps of the country from the farming sector to the manufacturing sector, there are many congressional seats up. The Republicans are worried about holding anyway. From a political context, it certainly is worrisome. From simply a governing and economic process also the White House has not really explained the long game here. I would not be surprised if Larry Kudlow comes into this briefing room, stands behind me here at some point.
BALDWIN: Really? ZELENY: And explains this. We'll see if it happens today. I don't
know. Of course, he's very good, very popular on Wall Street, of course. We'll see if that happens. That certainly is something that the president is bringing advisers on who are good communicators. That certainly is a possibility here. So many things to talk to the White House press secretary. Today, of course, this is just one of them. Syria, the border, so many other questions that the White House has yet to answer, Brooke.