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"Coffee Boy" Joseph Schmitz May Be Interviewed By Mueller's Team; Trump Begins Informal Prep For Possible Mueller Interview; Trump Administration Sanctions Putin's Inner Circle; Stock Market Plummets After Trump Threatens China With $100 Billion In Tariffs. Aired 10-11p ET

Aired April 6, 2018 - 22:00   ET



[22:00:00] DON LEMON, CNN HOST: This is CNN TONIGHT. I'm Don Lemon.

We're following multiple breaking news stories tonight. First, a CNN exclusive on the Mueller investigation. In the clearest sign that the President Trump is considering sitting down with the special counsel even though that is the last thing some of his advisers want him to do.

Sources are telling CNN that Trump has begun to prepare for a possible interview with Robert Mueller.

CNN's Pamela Brown has more on that, that's just ahead. And in another CNN exclusive, we have learned that one of the Trump campaign's earliest foreign policy advisers who was no coffee boy at the time, in fact he literally had a seat at table. Look at the screen right now. He was part of the effort to expose damaging information on Hillary Clinton during the campaign.

Joseph Schmitz pushed the FBI and House intelligence to review materials from the dark web he thought were Clintons missing e-mails from her private service. Sources describe Schmitz as relentless but they say they believe the material was take.

CNN's Jim Sciutto will be here with much more on that in just moment.

All of this coming with another member of the Trump cabinet potentially on the chopping block. The president today praising EPA Chief Scott Pruitt even though he is under fire for renting a cut rate condo from a pair of energy lobbyists. But the president said Pruitt, is quote, "a good man." Which might be the kiss of death in this administration.

Ask some of the president's other good men like Rex Tillerson, H.R. McMaster, Steve Bannon, Michael Flynn pretty much anybody who's on the outs after being praised by the president.

That as the Trump administration hits Vladimir Putin where he lives with undeniably tough sanctions against a group of oligarchs all of them with ties to the Russian president. So how will Putin respond? We'll figure that out. Plus, the Dow tumbles 572 points on fear of a bruising trade war with

China. And the president says this.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I'm not saying there won't be a little pain. But we're going to have a much stronger country when we're finished.


LEMON: A lot to discuss. I want to start with CNN senior White House Correspondent, Pamela Brown and CNN Contributor, John Dean who was Nixon's White House counsel, also CNN Legal Analyst, Laura Coates, a former federal prosecutor, and CNN Legal Analyst, Michael Zeldin who is Robert Mueller's special assistant at the Justice Department. A lot to get to. Good evening to all panel.

Pamela, I'm going to start with you. You have exclusive new reporting that President Trump's lawyers have begun to prepare for a possible interview with Robert Mueller. What kind of preparations are underway?

PAMELA BROWN, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, that's right, Don. My colleague Gloria Borger and I have learned that the initial preparations are underway between the president and his legal team for a possible interview with Robert Mueller and his team.

Now I'm told that the sessions so far have been short, again they've been informal. But clearly this is entering a new phase and it is a sign, Don, that the deliberations are intensifying with the president's legal team to make a decision soon on whether it will allow the president to do an interview with Robert Mueller.

So this is certainly a significant development in that light. And it also shows that there is still open to doing an interview, allowing the president to do an interview with Robert Mueller.

Now sources caution that the four -- more formal proceedings, a sit- down, practice sessions have not begun but what they have been doing with the president, Don, is going over potential topics with him that Robert Mueller's team has shared with the legal team about what it wants to discuss in a potential interview.

We should note that the president's lawyers, Jay Sekulow, as well as White House lawyer Ty Cobb declined to comment for the story. Don?

LEMON: So, John, you have expert knowledge in this particular field. How do you prepare a president -- how do you prep a president for an interview like this? Is he particularly challenging, is he challenging client giving his freewheeling style?

JOHN DEAN, CNN CONTRIBUTOR: I think he would be extraordinary challenging. This is not a president you can give a briefing book to and let him go off. He is not like Richard Nixon or he's not like a Bill Clinton or he's not a Hillary Clinton who prepared for 11 hours before the Benghazi committee. So he is somebody they are going to have to almost creep up on to get

him informed and to be cautious on what he's doing. So I think it is a real rough assignment.

LEMON: And Laura, as we know this president doesn't often listen -- doesn't always but doesn't often listen to advise of his attorneys or of his advisers. That's why John Dowd resigned from the president's legal team. How do you think the president's personality is going to factor into all of this?

LAURA COATES, CNN LEGAL ANALYST: I think it is a obstacle for him and his counsel preparing him but it's going to come into play as to what the parameters of the interview are going to be. You know, it might seem counterintuitive but both sides have an interest in having a negotiated sit down.

If you are the President Trump's counsel and you are President Trump yourself, you would like to have the opportunity to have a voluntary sessions as opposed to one that is subpoenaed by a grand jury because then your counsel can be there if he does choose to listen to them at some point in time or want to reference them in any way or seek counsel in some way during the interview and during the discussion.

[22:05:06] If it's a grand jury, he's in alone in the room and could go rogue at any moment. And if you are Mueller and his team you also have an interest because there is not a whole lot of precedent in the same way you would think to have a subpoena and a sitting president.

So maybe for him the idea of having -- being able to circumvent and having to go to the Supreme Court and having to get an appellate process to go through to figure out if he can actually do that and what cause which would delay his investigations.

So both sides have an interest in Trump listening to good reason but obviously an uphill battle about wanting him to be alone in a room with a grand jury.

LEMON: That is a lot of what-ifs and options, Laura. My goodness.


LEMON: But I just want you guys, just look at yesterday. This is aboard, speaking of someone you don't know what they're going to say and not following the advice of his advisers or attorneys all the time. This is aboard air force one yesterday, the president for the first time speaking on the record about Stormy Daniels. I mean, it must have been -- they must have been pulling their hair out over this, Laura.

COATES: They probably were. I mean, if you were the attorney for Trump and you're saying up until now we have been able to remain silent. Please continue to do so.

And then with one, you know, response, one word know about whether or not he knew about the $130,000 payment, he put Michael Cohen squarely under a bus that he was already incapable of being under because of ethical violations.

But it also now opens a slight crack in a door for Michael Avenatti, who is counsel who always been articulating a reason to the court in California that he's got to test these theories about what the president knew and whether it was a campaign finance violation or donation of some sort.

And so as much as the attorneys for Trump were probably pulling out their hair, I'm sure the counsel for Stormy Daniels was probably jumping up in the air. Both are probably premature until the judge rules but either way I'm surprised he spoke on the issue at all.

LEMON: Yes. It is -- I mean, I feel like I'm watching dynasty from the '80s with all of this.

COATES: Or Falcon Crest.

LEMON: Or Falcon Crest--


COATES: That's where we are.

LEMON: Yes. Or Dallas or anyone in those. So, Knots Landing. Listen, Michael, there's a reason I save you for last because I sort of -- I want you to tie all of this up. You worked for Robert Mueller that's why I saved the last question for you. Talk to me about the tactics he and his team could use here.

MICHAEL ZELDIN, CNN LEGAL ANALYST: In terms of whether they guest an interview or in terms of the court -- in the course of an interview?

LEMON: Either way. Go on.

ZELDIN: So I think that Mueller and his team wants an interview of the president because there is no way they can write their final report at least on the obstruction matter and perhaps on the coordination and conspiracy matter without hearing from him.

I don't think there is evidence that exists outside of the oral testimony of the president that would allow them to skip the interview. So I think they're going full forth -- force at getting this interview. And whether they have to do it by grand jury subpoena or by voluntary cooperation will just be determine on what the president says.

During the course of the interview, it will follow as all interviews follow which is they will ask for a testimony, they'll get what the answer is, and they'll present the witness with documents in respect to what they have said orally either to confirm or to contradict what the testimony is, and they'll move forward topic by topic that they are authorized to ask the president about with respect to the parameters of the interview.

So I think it's going to be a very methodical step by step and relatively long interview with the president. That said, one thing I wanted to mention, Don, if I had time is that, in respect to the story that they are prepping the president, I see there is two possible -- two possibilities.

One is they've made the decision more or less they are not going to be able to defeat a grand jury subpoena that Clinton versus Jones and combination with Nixon versus the United States do not allow them to resist. And so they're preparing for the inevitable.

Or they still think there is wiggle room within those cases and they are going to try to present the evidence, the evidence to the president about how he could be in danger were he to sit down with this interview and use these prep sessions as a means to dissuade him from moving forward with the interview and taking it to court.

LEMON: Yes. Or also to see maybe possibly how he performs during these interviews and then judge well maybe he might be OK with the special counsel--


ZELDIN: Maybe. Although if you watch the presser or whatever it was in West Virginia where he threw his notes up in the air, I don't think that's a good sign of how things might work out in that respect.

LEMON: Well said. That is a good observation. Hey, Pam, you know, the president has said multiple times that he wants to sit down with Robert Mueller. Watch this.


UNIDENTIFIED MALE: Would you be willing to speak under oath to give your version of--


TRUMP: One hundred percent.

UNIDENTIFIED FEMALE: Mr. President, if Robert Mueller asked you to come and speak with his committee personally, are you committed still to doing that.

TRUMP: Just so you understand -- just so you understand, there's been no collusion. There has been no crime.

UNIDENTIFIED MALE: Would you be open to--


[22:10:00] TRUMP: We'll see what happens. I mean, certainly I'll see what happens. But when they have no collusion and nobody has found any collusion at any level it seems unlikely that you would even have an interview.

UNIDENTIFIED MALE: Are you going to talk to Mueller?

TRUMP: I'm looking forward to it, actually. (END VIDEO CLIP)

LEMON: So listen, he said publicly he wants to do it multiple times in an interview with Mueller. Do you think he's saying the same thing behind closed doors?

BROWN: I'm told by sources that he's not. That he shows a lot more enthusiasm in public view about sitting down with Robert Mueller under oath saying that he would love to do it. But behind closed doors, I'm told that he vacillates, that he will waiver depending on the day. Not that he is saying he doesn't want to do it definitely, but he's definitely not showing the same amount of enthusiasm particularly as he sees this probe play out.

His lawyers see this probe with 19 people at least being charged with criminal offenses including for lying, I think the president understands the gravity of the situation and as we know he has not formally agreed to a sit down interview.

But what it seems to me from talking to sources, Don, is that the lawyers wanted to go ahead and take the steps to just begin preparing him, taking those initial steps and even though that final decision hasn't been made yet.

LEMON: That is probably a very smart strategy. I have to admit. John, listen, when under oath, if the president is under oath, when he's under oath, he usually lacks details. But the Washington Post looked at two depositions that he sat previously through and here's what they said. "In 2012, Trump University deposition -- in a 2012 Trump University deposition he couldn't recall details 24 times, in a 2015 deposition 35 times." That won't fly with the special prosecutor, will it?

DEAN: They will press him. Indeed in his most recent deposition on the contract action since he's been elected, he was totally unprepared. Made very boisterous overstatements and went off the rail on truth on several occasions.

So I think they'll have to caution him about that. That these are very dangerous. And also, Son, very likely it will be videotaped. I don't think they'll ask the president under any circumstances to go to the courthouse to go to the grand jury room. There are all kinds of security problems. You can't separate the president from his football, for example, you can't separate him from a telephone if he needed.

So they'll make a combination and it will be much like Bill Clinton's video where there is a good record of it so people can observe -- the grand jurors could observe his demeanor because that's often very telling as well.

LEMON: But if says 25 or 35 times, you know, I don't recall to all of their questions. Well, how is that going to go with the -- with Robert Mueller.

DEAN: That doesn't play well.


DEAN: Does not play well and they'll keep pressing him.

LEMON: Quickly.


ZELDIN: Especially -- especially--

COATES: You know, Don--

LEMON: Go ahead, Michael.


ZELDIN: Especially if Mueller has indications that that is not a truthful statement.


ZELDIN: Remember, you can be charged with a false statement by saying I don't remember when there is evidence that you actually do remember and that you're sort of lying--


ZELDIN: -- if you will, by not remembering.

LEMON: Laura, go ahead.

COATES: The number 25 and the number you also quoted about the number of times he lies is important but the bigger number here is five because he still has a fifth amendment right against self- incrimination if he in fact does sit down for an interview.

And although in most cases and most normal circumstances you would think that a president of the United States exercising or asserting the Fifth Amendment would be political suicide. He has done a fine job of trying to undermine the integrity and credibility of the investigation. I think in large ways to secure a reason to say, I'm not having anything to hide. I just don't want to sit down for a witch hunt and that is why he'd insert the Fifth Amendment privilege.

He has that in his back pocket and may carry it out and if they try to press him and say we're going to hold you in contempt, well, no one has ever held a president in contempt during or able to so. That's another battle that Mueller would have to face.

LEMON: All right. Thank you, all. I appreciate it.

COATES: Thank you.

LEMON: When we come back, he was no "coffee boy." Joseph Schmitz was one of the Trump campaign's earliest foreign policy advisers. And sources say he was mixed up in efforts to find dirt on Hillary Clinton during the campaign. Another CNN exclusive next. [22:15:00] (COMMERCIAL BREAK)

LEMON: We have another CNN exclusive. Another Trump campaign adviser mixed up in efforts to find dirt on Hillary Clinton during the campaign pushing what he thought were Clinton's missing e-mails.

Here with that story is CNN National Security Correspondent, Jim Sciutto, also CNN Politics Editor-at-Large, Chris Cilliza and CNN Security Analyst, Samantha Vinograd.

Good evening to all of you.

Jim, what more can you tell us about what this campaign adviser was trying to do with what he thought was Hillary Clinton's missing e- mails.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, let's start with who he was. Joseph Schmitz, as you said, Don, not a coffee boy. He was a foreign policy adviser, he was in that famous photo with Donald Trump and Jeff Sessions and the rest of foreign policy team there right next to George Papadopoulos and he himself had a serious background.

He was a DOD official in the Bush administration. And he would later be considered for secretary of the navy by Trump when he was elected president.

So he obtained what he believes are the deleted Hillary Clinton e- mails from the dark web and multiple sources told us that he was relentless in trying to get these cleared in effect and verified. He brought them to the FBI, he brought them to the intelligence community and he brought them to the State Department. Went there and said, we need to declassify these.

Apparently, with the intention of disseminating them. When he didn't get satisfaction there he was interviewed briefly but they didn't want to touch it because they knew that it came from a place -- the dark web where it could be questionable. But the source and also the veracity of these e-mails.

He then went to the House intelligence committee and tried it there. Again, did not get a receptive audience.

But fitting into the larger picture because we've heard of multiple Trump aides who were told or offered potential dirt on Hillary Clinton and not just dirt typical campaign opposition research, but even the possibility of e-mails that were stolen from Hillary Clinton and here is Joseph Schmitz, one that we have not heard before in effect taking part in this effort.

LEMON: And that's, Jim, you had the picture as you were speaking, it's him at the table if we can put up with then candidate Trump and with Jeff Sessions and I think this is during the campaign, right. This is before the presidency, yes.

SCIUTTO: That's right. LEMON: And so there he is sitting there at the table. Again, as we

said, no coffee boy. And these -- am I correct, Jim, these were deemed to be fake, right? They weren't real, these e-mails?

[22:20:00] SCIUTTO: Well, what happened -- as he went to the intelligence community the FBI and the State Department, as I said, they didn't want to touch this material coming from the dark web and who knows. What was it stolen, was it provided by a foreign entity. They didn't want to touch it.

But we did speak my colleague Jenna McLaughlin and I, a national security reporter, we did speak to someone who viewed the e-mails at the time and his reaction was that they were not authentic, partly based on where they were coming from on the dark web--

LEMON: Got it.

SCIUTTO: -- but also based on what he saw in those e-mails. But like I said, there was real hesitancy to handle these or treat them seriously because there was the possibility that they were stolen or they came from someplace where you should not have gotten them in the first place.

LEMON: Got it. So, Sam, so he went to the FBI, as Jim said, he went to the State Department, he went to the intelligence community and inspector general, did he do the right thing by taking these materials to them, is that the right thing to do?

SAMANTHA VINOGRAD, CNN NATIONAL SECURITY ANALYST: Well, this might be, this sounds like it might be a little bit different from the other stories that we've heard. He did seemingly go to authorities and say I have legally obtained information and let's do something with it. So it does sound maybe a little bit different than the other guys in the campaign.

But I'm listening to all of this and my deep thought tonight, Don, is shady people do shady things with other shady people. You have this guy who has a client who is on the dark web, I don't even really know what the dark web is. I don't know what you use it for, if that's ever anything good. This information just lands in his lap.

Don Junior just gets contacted by WikiLeaks and Papadopoulos just contacted about this information. That seems like too cute of a coincidence. And I'm asking myself, what was the interview process for the campaign here? Was the basic question do you know how to get a legal information or know somebody who does rather than any actual policy experience.

LEMON: Yes, all of the best people.


LEMON: Yes. Who was that? Was that Chris?

CHRIS CILLIZZA, CNN POLITICS REPORTER: That was me. I was just going -- one quick thing to Sam's point first, Don, which is, I think what you have to remember is that foreign policy national security team was thrown together very slap dash because Donald Trump was being questioned over and over again on who he had that had any experience as he became -- looked more and more like the nominee or could be the nominee and he sort of thrust all these people together. But I don't know--


LEMON: He was at the first five campaign foreign policy adviser.

CILLIZZA: Yes. And these are people -- these are people -- these are people who I really don't think were vetted.


CILLIZZA: I think it's hard to go back and remember. But Donald Trump went from zero percent chance of being the nominee suddenly to, hey, wait a minute, this guy might be the nominee, I think they shoved a bunch of people like this in there--


SCIUTTO: But on that point, Don, to be clear, yes, you could say that about George Papadopoulos, and folks didn't know where he came from. But Joseph Schmitz he was the inspector general of the Defense Department--


CILLIZZA: That shouldn't have--

LEMON: George Bush -- W. Bush.

SCIUTTO: -- in the Bush administration, right. And he -- so he was not -- he was literally not a coffee boy. He had a pedigree and advised the Trump campaign for a number of months and then when Trump was elected long after that slap dash period in his campaign and he was considered for secretary of the navy. So -- so he is not--


LEMON: What do you saying--

SCIUTTO: -- in that same category.

LEMON: Jim, he should have known better?

CILLIZZA: That's right.

LEMON: He should have known better.

SCIUTTO: Absolutely.


CILLIZZA: Don, one thing I think is important is step back and look at the context of this. The truth is Hillary Clinton during the campaign prior to -- made decisions she went through -- she didn't personally inspect them but went through and sort of split the e-mails in the server to things that had potential relevance into her professional life and things that she deemed entirely personal.

The personal e-mails were the ones that were deleted they became a holy grail for the Trump campaign on the eve of the Democratic convention. You had Donald Trump--


SCIUTTO: That's right.

CILLIZZA: -- literally appealing to the Russians, please get your hands on this. I think that's one of the reasons why you see so much interest, so many attempts by people like Joseph Schmitz, as well as Papadopoulos, as well as that meeting with Don Junior at Trump tower, they believe that there was something here that would fundamentally disqualify her.

And to be clear they thought they needed that sort of out of nowhere shot to take her out--


LEMON: To when? Yes.

CILLIZZA: -- because simply they didn't think they had a chance short of that.

LEMON: Well Sam, they seem -- I mean, they certainly seemed obsessed with getting Hillary Clinton's e-mails and to both, you know, Chris and Jim's point, he was one of the first five campaign foreign policy advisers named by the Trump campaign. Others included, it was Carter Page, George Papadopoulos and who pled guilty to Mueller -- to lying to Mueller. So what does this say about the cast of characters that Trump had been working, had been working for him.

VINOGRAD: This is not who I think any of us would want advising us on anything other than doing something illegal. And I think that Schmitz is just the latest in this group of shady characters that's been surrounding Donald Trump.

And there is a point that we haven't discussed which is, the Russians all knew that these campaign characters were trying to get access to illegal information and that's exactly why the Russians reached out to them to try to launder information through them to get Donald Trump elected. It seems like a coincidence.

LEMON: And they knew. And then, yes, do you want -- I have dirt on Hillary Clinton, do you want it? Absolutely. I forget what the -- Don Junior's exact phrase was.

[22:25:02] Jim, what does this have to do with Mueller? Is he interested in Joseph Schmitz? SCIUTTO: We don't know if Joseph Schmitz has been interviewed by

Mueller. In fact, we asked him this morning, we went to his home this morning because we'd reached out multiple times via e-mail, phone, prior in the week he did not comment.

Now, one could theorize that Mueller would be interested in him. We know that other witnesses who have been interviewed by Mueller had been asked about Schmitz in other context because Schmitz was an adviser to the president and he was present in that meeting in March 2016.

But we do know that Mueller has been interested in what you were describing there, Don, which is, effort to get hands on information damaging to Hillary Clinton, which a lot of campaigns do. But even if that information had a questionable providence, whether it was coming from Russia as we saw in the Trump tower meeting with the Russians from the dark web in this case whether it was illegally obtained, right? I mean, that's the question.

So we know that Mueller has been interested in that kind of thing, do we know that he's interviewed Joseph Schmitz specifically about this effort, we don't know.

LEMON: All right. Thank you. I appreciate it.

When we come back, much more on what a conversation between Robert Mueller and the president could look like. Plus, the president and his chief of staff disagreeing about whether yet another cabinet member should be fired and you know what always seems to happen on Friday. It's not over yet.


LEMON: Our CNN exclusive reporting tonight, President Trump taking the first steps to prepare for a possible interview with Special Counsel, Robert Mueller. And I'll talk about that now with CNN Senior Political Commentator, David Axelrod, a former senior adviser to President Obama. David, good evening to you from lovely and I'm sure cold Chicago.


LEMON: So President Trump is starting to prep for an interview with the Special Counsel through a source -- through a source said the preparation efforts are quote, in its infancy. Is that a big deal, David?

AXELROD: Well, it will be if he does it. Look, I think the question that needs to be answered is, is he following his own advisers or is he going to follow the advice of his lawyers. And so much of what we've seen lately in every realm has been that this President now is flying by his own lights, he's not taking a lot of advice.

He is obviously has lead lawyer quit. He -- and so there are many, many legal people who will tell you, including people who are on the show, that they wouldn't testify if he has the option. And yet he seems to be moving forward.

In any case, he should be preparing if there is any chance that he will testify, because this is not something that he can sort of bow guard his way through as he is done in so many other instances.

LEMON: You mentioned that his lead lawyer quit. What about his lack of lawyers. I mean, going up against a team that is as well prepared as Robert Mueller.

AXELROD: Yes. It is like the green bay packers versus the little sisters of the poor. You know, it is not a -- this is not a fair fight. And I would think that the President -- I mean, he is not well served. But he -- as I said, something has happened.

He has crossed some sort of Rubicon, he is tired of being told what he can do and what he can't do. He has a sense of omniscience about him and he thinks that he got here at this stage in his life to be President of the United States by following his own instincts and he's going to follow his own instincts now. And we'll see how that works out for him.

LEMON: What do you think about that, as someone who has, you know, advised Presidents?

AXELROD: Well, I mean, forget about advising Presidents and I'm not a lawyer, but I think any lawyer would tell you that, that is a very, very bad idea in this situation.

LEMON: Well, I just mean you saying, doing what he wants to do and not listening to his adviser in a whole. Are you saying, he seems like, you know, has a sense of omniscious about him.

AXELROD: Yes, I mean, I mean -- oh, I see -- well look, I mean, I think that we've seen this on the tariffs and we saw it on North Korea and now we see it on personnel matters, he is -- he is shunning the advice of his advisers and he's doing his own thing.

And I think ultimately the wheels are going to fall off as a result. Because I've sat in that -- you know, I sat in the office next to the President, I've seen the kinds of things that come across that desk. You can't fake your way through that. You can't tweet your way through that. There are substantive decisions that have to be made and you want to make them on the basis of the best --

LEMON: And you want to rely on people. Right? You need to rely on your advisers.

AXELROD: You have to. I don't care who you are, I don't care who you are, every president needs the advice of people -- because the subject matter is so complex and so vast that you can't possibly know everything you need to know and the problem is that Donald Trump doesn't know what he doesn't know.

LEMON: Yes. Well there you go. Let's talk about some of the folks around him. His bee leagued the EPA chief Scott Pruitt. The President met with him today and we know the chief of staff, John Kelly, wants to fire Pruitt. Trump is not there yet. Here is what we heard from the White House today. Watch this.


UNIDENTIFIED FEMALE: Everything has been reported of Mr. Pruitt ends up being true in the President's estimation. Security detail, the $50 a day --

SARAH HUCKABEE SANDERS, DEPUTY WHITE HOUSE PRESS SECRETARY: I'm not going to walk through hypotheticals until we have time to go through a full review. That is what we're doing right now. But again the President thinks he is done a good job on the purpose of carrying out the goals of the EPA.


LEMON: Leaving herself a little wiggle room there?

AXELROD: Oh, absolutely. Look, one thing we know, I mean, that this President can give you a full endorsement on one day and fire you --

LEMON: On the same day.

AXELROD: On the next -- yes so, I don't know that means anything. I'm sure that he is happy with Scott Pruitt. Scott Pruitt has been a radical deregulator in the environmental area as he just -- this week rolled back the fuel emissions standards for cars which was a dramatic step backward in terms of climate change and in terms of pollution.

[22:35:00] And I think, this is consistent with what Trump promised as a candidate. But the question is, and this is why John Kelly apparently recommended that he be dispatched, that Pruitt be dispatched, the question is how many bricks can the load take. Every single day there is a new scandal associated with this guy. And at some point it is just going to be too heavy of a load to bear.

LEMON: And we will also details that -- we are going to details that he overstayed his welcome at the room, that he was renting a member of the landlord was -- had to change the locks.

AXELROD: Had to change the locks.

LEMON: He had to change the locks. The one that was $50 a night. I mean, that is pretty pathetic, don't you think. And as you said how many -- how many bricks is going to load take. Come on.

AXELROD: Yes. Don, there was an old song -- a Country Western song called "How can I miss you when you won't go away." I think he overstayed his welcome for sure.

LEMON: Yes. Look, Trey Gowdy is looking into that cheap condo, he is the head of the oversight -- House Oversight Chairman. What do you think? You think anything will come around?

AXELROD: Well, first of all, I think it is amazing how courageous people get when they announce their retirement from Congress. But, look, there is plenty there. I think that Congressman Gowdy and anyone else in a position of authority in the Congress, who has oversight responsibility would be remiss in their duties if they didn't look at this. This is a glaring, glaring ethical breach. And so, I'm glad he is looking at it. He should be looking at it.

LEMON: David Axelrod, thanks. David, has the weekend off. It is Van Jones' turn so, he'll be back next week and he tell us who you have. Thank you sir.

AXELROD: All right, Don, thank you.

LEMON: And when we come back. The Trump administration slapping sanctions on some of Russia's wealthiest and most powerful -- going straight with Vladimir Putin's inner circle.


LEMON: President punching back for Russian interference in the 2016 election slapping sanctions on some close associates of Vladimir Putin, a pretty big change from Tuesday, when the president said he thought he could have a very good relationship with Putin. Let's discuss now CNN Political Analyst, April Ryan and White House correspondent for the American urban radio network, joins us, also Matthew Rojansky, the Director of the Wilson Center's Kennan Institute.

Good evening to both of you. I like the bow tie, Mathew.


LEMON: Very fancy.

Thank you.

LEMON: April. You know, you got to catch up. He has a bow tie on.


So April, listen, Trump administration sanctioning --


LEMON: -- oligarchs with ties to Putin. 12 Russian companies, 17 senior government officials, I mean, that is a big move from Trump, especially considering that he was hesitant to penalize Russia for their election interference, what changed?

RYAN: Well, it is a big move, but you have to remember the devil is in the details, yet again when it comes to this administration. What has changed, Don, is the fact that this President is under scrutiny when it comes to Russia and Russia's meddling in the 2016 Presidential elections? But at the same time as this is happening, there has been a flip.

This President, according to Sara Sanders approved this. He signed off on it and he is not expected to come out to make a pronouncement or statement or write something about it. But what happened was it was issued through the treasury secretary.

Now the President typically is supposed to give the directive to the cabinet and all the rest are supposed to figure out how to do this, to include the treasury secretary. But this is the onus was on Treasury Secretary, the President did not necessarily come out and say, look this is it and I'm behind this. Sara said that and he is not doing that himself.


RYAN: So there is another piece that kind of makes you wonder, is this just like saying, OK, my administration did this, but I'm still standing where I am.

LEMON: That he is separated from it.

RYAN: So there is big flip here, this is --


RYAN: -- separate from it.

LEMON: Got it. So Matthew, listen, these new sanctions will block -- let's talk what are they going to do. They are going to block access to Russia, controlled assets currently under U.S. jurisdiction and prohibit Americans from doing business with them. How serious of a move is this, Matthew?

MATTHEW ROJANSKY, DIRECTOR, WOODROW WILSON CENTER'S KENNAN INSTITUTE: Well, I think it is very significant, Don. But the details matters here a lot. So number one, these are sanctions that were described in the official Treasury Department statement as being in response to a pattern of malign global activity by Russia. So, it is not just the election hacking, it's not just the attempted murderer of Skripal in the U.K., it is not Ukraine, it is not -- everything rolled together. And then it is actually a list of individuals that is quite diverse.

So you have categories of people, one or two, three or four picked from each category which tells me, so, you know, you have the security services, you have literally the head of Putin's Praetorian Guard, you know, you have the head of Gazprom, you have Putin's former son-in- law, you have major Russian oligarchs who made their money in the 90's and are really not that close to Putin, but are powerful and wealthy in Russia and so I get a sense, this is a symbolic list. It is a shot across the vow by the administration saying domestically, hey, Congress, we heard you and you passed legislation that require sanctions, we are going to follow this up, trust us, there are more names to come along these lines, but it is also a message to the Russians themselves, saying, hey, we get it, you know, these oligarchs are interchangeable, going after these two or three now, we can go after more tomorrow. It is an attempt to try to push the Russians in a new direction of actually rolling back their activity. I'm doubtful that is going to be dramatically different than what we've seen before. But it is an effort.

LEMON: What do you -- what do you think -- how do you think Russia is going to respond? What do you think we'll see from them? Because they're vowing a harsh response, Matthew?

ROJANSKY: Yes, there will be a response. The sad reality of course, is that, you know, those who are in the firing line of the Russian response tend to be those who are keeping the doors of dialogue open, whether you are talking about civil society, you know, University exchanges, church groups that are going over to Russia, you know, NGO's are going to get punished.

Companies that are doing good business and employing Russians and Americans, you know, because these are the people that Russians have access to at this point. Russians don't have the kind of control and influence in the global financial and trading system that the United States has.

[22:45:05] LEMON: Yes.

ROJANSKY: They cannot impose reciprocal sanctions on the United States that look like our sanctions on them. They simply don't have the ability to do it. So ordinary people are going to suffer from this. And the fact is Putin will actually -- his domestic political line will be strengthened. He will say, look, we're under assault and it is time for fortress Russia. I'm you're defender and that has been his message all along.

LEMON: Before leaving the White House today, April, the outgoing national security adviser, H.R. McMaster was critical this week of the U.S. lack of response to the Russian election meddling, saying the U.S. had failed to respond appropriately. Do you think that he had anything to do with this decision?

RYAN: Well, I will say this, John Bolton has been coming in for last couple of days and you never know, you know, how much of McMaster or Bolton was all in this. But either way, it is about the election and also Assad, Crimean's and so many other things. But again the focus for the United States primarily is the 2016 Presidential election and what happened and this is a response.

And if it was H.R. McMaster, you know, so be it. He had a big crowd today for all of the work that he is done. So -- I mean, he had a huge crowd today supporting him. So if it was him, good for him. He leaves not getting the fourth star but he leaves -- you know, --

LEMON: With a lot of fans.

RYAN: -- with integrity.

LEMON: Yes. Absolutely.

RYAN: Yes. A lot of fans.

LEMON: That is always important. April, thank you. Matthew, thank you. Have a great weekend.

RYAN: Yes.

ROJANSKY: Thank you. LEMON: When we come back, markets plunging today as China threatens a

major response to President Trump's tariffs. How is the art of the deal going now?


LEMON: So you probably shouldn't look at your 401 K tonight. Don't do it. The DOW tumbled 572 points today on fears of a trade war with China. That is after the President said late last night that he was considering tariffs on $100 billion more in the Chinese exports, which could triple what the United States is already planning.

So, I want to bring in now CNN Senior Economic Analyst, Stephen Moore, who is senior economic adviser on the Trump campaign, and Rick Wilson, a Republican strategist. So, I'm not -- I'm not going to even look, Rick and Stephen at my 401 K. I mean, today was scary. I just sat there in the afternoon watching that numbers going, oh my gosh. Oh my gosh. Oh my gosh. So, Rick, if the President's new national economic council Director was asked about President Trump threat of an additional $100 billion in tariffs on China this is what he said this morning. Watch this.


UNIDENTIFIED MALE: When did the President first tell you that he was announcing additional potential $100 billion in tariffs?

LARRY KUDLOW, DIRECTOR, U.S. NATIONAL ECONOMIC COUNCIL: Last evening. President Trump says enough is enough. Now, we're not running a trade war. If you read this thing you'll see. This is just a proposed idea which will be vetted by USDR and open for public comments. None of these happen. None of these have been executed. I read about how -- there is no there yet. But there will be.


LEMON: OK. So that is Larry Kudlow. So, a couple of things to dissect here, Rick. One why did the President apparently not consult with his top economic advisers on these new potential tariffs. And two, do you think that this threat from the President was an empty one?

RICK WILSON, REPUBLICAN STRATEGIST: Well, I think, the first question answers itself. This is the pattern of behavior the President engages in at all times. He is impulsive. He is -- he shoots from the lip. He talks, you know, whatever is in his brain leaps out of it and heads straight through his Twitter fingers. And as for the second part, you know, I think the fact is the damage is already done. We've already started down this path where you have seen the market shed off today. Yes, many, many billion dollars of equity, because they are terrified now that the Chinese have all the cards in the trade war against us and they are terrified that we are in a situation where Donald Trump has written a bunch of checks that he can't cash, with no surprise.

But politically speaking, they realize that they can bring a lot of pain into this, but when it comes to trade, the U.S. and China are frenemies. You know, we have a big problem with them and in our intellectual property, but we also have a relationship with the bi-RT bills and they sell us things that we want that improved the quality of lives of American consumer. And no American wants to go out and pay 9 bucks for a toilet brush at Walmart instead of 99 cents. And so, there's a benefit to trade, our trade deficit with China when you level services and two it's a net plus. That is why the President is off on one of his little tangents, one of his little tares.


WILSON: And, you know, whether the war was meant to start, he started it.

LEMON: OK, so Stephen, I want you to weigh in on that. Do you think, Stephen, what do you think, I mean is this a negotiating tactic without the intention of following, you know, all the way through as the President consulting with his team on this moves or is he just wing it here, what's going on?

STEPHEN MOORE, CNN SENIOR ECONOMIC ANALYST: Well, this wasn't impulsive. I disagree totally with what Rick Wilson, apparently you weren't listening to what Donald Trump was saying during the campaign. I mean, this was one of the major economic points, was that we were going to get very, very tough with China. He mentioned China in every speech. That China is stealing, they are cheating on the trade deals. They are consorting with our enemies in North Korea in every way China in my opinion, I think, Donald Trump shares this opinion has become an enemy of the United States. They're not an ally. And a lot of Americans are wondering Rick and Don, what took us so long? Why has it taken us 15 or 20 years to react in this way, when China has been stealing about $300 billion of intellectual property every year?

That, you know, I talk to CEO's every day Don, who say it's almost impossible for American companies to penetrate the Chinese markets. So it's not a level playing field. And look, Rick, is just completely wrong. The country that can't -- look, if we can't trade with China that will hurt American consumers. It might mean that rather than paying 99 cents for a tube of tooth paste and mine cost $1.29. Cell phone might cost an extra $15.

[22:55:00] But China, they don't have access to the American $10 trillion market, their economies plunges into a recession. So, I think Trump understands that we have the upper hand here. What I want and I think Trump wants is a negotiated settlement where China starts to behave itself.

LEMON: Let him respond.

MOORE: Stops cheating and stealing.

LEMON: Rick, what if he is doing something that needs to be done? Or maybe he -- I don't know maybe he is bluffing his way and maybe China will buy it. I don't know. But it could end up being a good thing.

WILSON: Look, the -- the fact that we have to address the trade imbalances with China, we have to address the intellectual property stuff with China. Absolutely, no one disagrees with that. Stephen is correct. That is an absolute issue. But what you don't do is enter negotiation with a country that buys our T-bills and can tank our market a hot minute, if they choose to and that we have a broad set of relationships with that benefit the U.S. in many, many ways that benefit China in many ways.

Like I said, we are frenemies in this thing. We are bound together. And you don't go into that negotiation impulsively, you don't go into that negotiations with the typical Donald Trump, like a monkey in a zoo a cage throwing poo out of the bars and hoping something, you know, makes people run the right direction. This is not a guy who does things in a -- Trump supporters often describe by the President, is this five dimensional quantum chess that he is playing. It's not, he doesn't have the intellectual where with all to do that. And the fact the matter is, very few economists think, wow a trade war with China will be really -- have a really good set of outcomes, because what is likely to happen, is we are going to see what happen today, iterate over and over again. We are going to see the market go into (inaudible) --

LEMON: I'm running out of time, Rick.

WILSON: -- We are going to see a lot of difficulty, but if the Chinese decide one time to set out a T-bill auction. Guess what happens, today will look like a love tap.

LEMON: All right. Stephen, I've got 10 seconds.

MOORE: That is ridiculous, I mean, they are the ones who own our T- bills and they would be hurting themselves if they sold all our T- bills, by the way, people are buying our T-bills at 3 percent interest rate, I don't think there is a shortage of people who want to buy them. By the way, we do borrow way too much money. But look, I think Trump understands we have the upper hand here. At some point China is going to have to make concessions. I mean, look.

LEMON: Got to run.

MOORE: It's simple Rick, we cannot have free trade deals with a country that steals $300 billion from us, and this doesn't work anymore.

LEMON: How ever it works out. We hope that works out. We can't take many more days like today though, I mean it's just like a --

MOORE: That is true too that is why we got to get it resolved. I agree with you.

LEMON: -- it's like a rollercoaster, my heart (INAUDIBLE). Thank you guys. Have a good night. We'll be right back.

MOORE: Thanks, Don.