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Report: Sanctions Against Putin's Former Son in Law; Markets on Edge as Trump Threatens More Tariffs on China, $100 Billion. Aired 2-2:30p ET

Aired April 6, 2018 - 14:00   ET


[14:00:00] DANA BASH, CNN HOST: Hi, everybody. I'm Dana Bash in for Brooke Baldwin. And any moment now we are waiting for a White House briefing it's going to begin should be momentarily as the President unleashes a new level of aggression against two of the world's powerhouses, Russia and China. But while billions of dollars in tariffs are still just threats against China, the administration is unequivocally going after Vladimir Putin and some of his closest and wealthiest allies, including the Russian President's reported former son-in-law, the one who is not in that picture, and an oligarch who has close ties with President Trump's former campaign chairman, Paul Manafort.

While we wait for the briefing, let's talk about what all this means with our own Kara Scannell. First of all, let's break it down. Who are these sanctions against?

KARA SCANNELL, CNN REPORTER: It's a number of people who are the oligarchs. You can't be an oligarch in Russia unless you have the preapproval of Vladimir Putin. They're in charge of the most important, biggest industries like aluminum, energy. Some of these oligarchs on this sanctions list also overlap with some of the actors in the Mueller investigation. One of those is Oleg Deripaska he is the head of one of the largest aluminum companies in the world. He invested with Paul Manafort and Rick Gates in a failed Ukrainian cable deal about 10 years ago.

And two weeks before Trump received the Republican nomination, Manafort had reached out through an intermediary to Deripaska t ask him if he wanted any private briefings, that's according to "The Washington Post." We don't know if Deripaska has ever gotten that briefing. Rick Gates has now pleaded guilty and he's cooperating with this investigation. And this is all about money. Is universal factor but all of these oligarchs that they have a lot of money. A lot of them come to the U.S. and a lot of them have American friends and counterparts. One thing Mueller is looking at is how money flowed from Russia, potentially into the campaign. There's where a lot of these individuals come into play.

BASH: you mentioned this sort of nexus here of these sanctions in the Mueller investigation. What do you think this tells us about how deep the Trump administration thinks that the Mueller investigation is going into the ties that the campaign might have had?

SCANNELL: Well, our reporting is that, you know, we know that there are a lot of questions being asked about relationships and money flows. And we know that Mueller's investigators have stopped several oligarchs. At least two at the airport, in wanting to ask them questions about campaign financing. So, you know, two other ones that we know that are on this list that interact and overlap with people this Viktor Vekselberg, he runs one of the largest energy companies and he attended this controversial dinner in Moscow that Michael Flynn was at where Flynn sat next to Vladimir Putin.

We know that Flynn is cooperating as part of the Mueller investigation. Another one is Alexandr Torshin he is trying to build the parallel to the NRA in Russia, he is an annual attendee of the convention. He made an overture to the Trump campaign to try to set up a meeting. There's a lot of overlap and nexus and connections there, which is not surprising. We have seen Mueller potentially be interested in this. It's interesting to see them end up on the sanctions list now.

BASH: It sure is, especially after -- in all fairness, especially after the Trump administration has been criticized by both parties for not doing enough to punish those who they believe potentially had connections to the Trump campaign and also potentially involved in meddling in U.S. elections. Thank you so much for that, Kara. A short time ago CNN's Richard Quest spoke to one of those Russians hit by sanctions, Russian bank CEO Andre Kostin said it's all a misunderstanding by the U.S. government.


ANDREY KOSTIN, CEO, RUSSIAN VTB BANK: I did nothing wrong to American interest. I was always trying to promote good business relationships with American investors. I'm punished because the American administration considered that Russian government conducted wrong policy. It's very unfortunate. It shows a very high level of misunderstanding of the problem the American administration of the intention of the Russian government, of the Russian leadership.

[14:05:00] This is very unfortunate. I think we should stop somewhere because we are going from bad to worse and if not for us, but for the sake of our children, who definitely deserve the better world than this world, we should stop somewhere. I don't have any feeling of revenge. I don't even recommend my government to retaliate because we already had tit-for-tat expulsion of diplomats. Now the sanction against Russian businessmen including the private ones. I think we should stop somewhere and start to rebuild our relationship.


BASH: One of the seven Russian billionaires Kara and I were just talking about hit with these sanctions has ties to Vladimir Putin and Paul Manafort. CNN's Matthew Chance tracked down Oleg Deripaska, an aluminum magnate whom Manafort may have owed millions of dollars.


MATHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Did he offer those private briefings to you as a way to try to repay that debt, Mr. Deripaska? Can you just answer me that, please? It's a big issue in the United States, sir. Did he offer you those private briefings to try to repay some of that debt to you? Is that why he offered them?



BASH: Nice try, Matthew. Get lost. Pretty clear there. No issue with that translation. What do we know about this tycoon?

CHANCE: First of all, I know that it makes me wince every time I see that played again and again. Such a difficult character to get ahold of. He's media shy. He doesn't like being interviewed. And for good reason. This is a man who is deeply controversial. He's very close to Vladimir Putin. He was standing right behind Vladimir Putin when I accosted him at that event, the Apex Summit in Vietnam.

It's interesting to see what U.S. Treasury has to say about him. Some astonishing words they're using to describe Oleg Deripaska, they say he has been accused of threatening the lives of business rivals, illegally wire tapping a government official, taking part in extortion and racketeering. He is alleged to have ordered the murder of a businessman and has links to organized crime.

So, this is not a figure who is particularly savory and not somebody who should be necessarily messed with. Which is why, of course, he was so reluctant to answer the questions, legitimate questions I was putting to him last year.

BASH: Absolutely. Now the question, given all of the connections he has to Vladimir Putin, is what do you think he is going to react to these sanctions? How do you think Vladimir Putin is going to react to these sanctions?

CHANCE: It's difficult to say, isn't it? Undoubtedly this list of sanctions that the U.S. treasury department has put out is targeted at those individuals who are very, very close, indeed, to Vladimir Putin. Oleg Deripaska is perhaps his favorite oligarch but there are others on the list that are close to Putin.

Particularly, Kirill Shamalov, viewers may not have heard of him, but he is the son of one of Putin's closest friends and also said to be Putin's son-in-law, though there are other reports that he recently got divorced from Putin's daughter. But never the less, a family member virtually. There's no question that this list of individuals targeted at those very close to Putin himself and in the inner circle.

Other people on this list close to him as well. In terms of what Putin will do, it's very unpredictable. We heard that call from Andrey Kostin for nothing to be done for this to end. In the past, Putin has downsized the diplomatic mission here, expelled American diplomats. He can undertake all sorts of possible sort of revenge measures as well. Insults going to be a very interesting and very dangerous period we're currently in, I think. BASH: Absolutely. Very unpredictable. Of course, he also cracked

down on American adoptions in Russia. Will watch for that. Matthew, I know you'll be on top of it. Thank you so much for that report. We have a lot to discuss here, including how these sanctions tie into the Mueller investigation, as we've been discussing. And the timing of this announcement. Why now? Will this slow Russian meddling in U.S. elections this year?

My panelists are standing by as we await the White House briefing any moment now. President Trump defends his embattled EPA Chief, Scott Pruitt, calling him, quote, a good man. Why some say that phrase could be the kiss of death for Pruitt. And why Chief of Staff John Kelly doesn't feel the same way.

Breaking news. Facebook is announcing significant changes to its platform just before Mark Zuckerberg faces lawmakers here in Washington on Capitol Hill. All this as the Dow, look at that, down 590 points plus. We'll be back in a moment.


[14:15:00] BASH: Welcome back. Look at the screen there. The Dow is down 572 points. It's definitely fluctuating but hovering around the 600 mark as a loss. We're back with our panel. I want to start with you, Greg, from "The Wall Street Journal." explain that to me, to our viewers, why that matters and what's happening right now. Do you think it's related to this China trade issue?

GREG IP, CHIEF ECONOMICS COMMENTATOR, "THE WALL STREET JOURNAL": A couple of things are going on. Clearly that's one of them. We had

a somewhat disappointing job report this morning and overall level of policy uncertainty that is kind of new to the market in the last month. It's not just this. It's the attacks on Amazon. It's a variety of things.

Today there were a couple of things new developments that I think were especially kind of unsettling for investors. One is that the administration, it's first $50 billion import tariff threat was well telegraphed and the result of a very long and careful. But the additional dialing it up to say it's now $100 billion seems to be something that came together in less than 24 hours, was not telegraphed and was not the result of a long process it had kind of an ad hoc feel to it. I think the other disturbing issue is that the Chinese has responded much more aggressively to this thing. There are no talks going on.

BASH: Sorry to interrupt you. The White House briefing just began. I want to go to that. Let's listen in.

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: -- at Mt. Vernon, historic home of our nation's first president, George Washington. This setting will serve as a beautiful reminder of France's unique status of America's first ally going all the way back to the revolution.

Finally, this is General McMaster's last day serving as national security advisor here in the White House. General McMaster is a terrific person. On a personal note it's been a privilege to serve alongside him and travel around the world, advancing the President's American first foreign policy. His decades long career and service to our nation is an inspiration to us all and we know he will do well wherever he lands next.

The President wishes him well. He will miss working with him, but they will continue to be great friends and no doubt will continue to see each other in the years ahead. With that, I'll take your questions.

UNIDENTIFIED MALE: What effect did the announcement on Russia have by the President somewhat with Vladimir Putin? Should we consider that off?

SANDERS: Not at all. As the President has said, he wants to have a good relationship with Russia but that's going to depend on some of the actions by the Russians. However, at the same time, the President is going to continue to be tough until we see that change take place. And we're going to continue working forward in what we can to have that meeting and have a meeting with Vladimir Putin at some point.

UNIDENTIFIED MALE: Would this not suggest ratcheting up of tensions in the relationship and wouldn't a summit have to necessarily resolve some of that tension before it could even take place?

SANDERS: I think that's part of the purpose of the two individuals and the two leaders being able to sit down and have those conversations and develop that relationship and hopefully put some pressure for Russia to change their behavior.

UNIDENTIFIED MALE: These oligarchs, aren't you sending a signal that you assume he would want to have to respond negatively to and not want to come and talk about that?

SANDERS: We hope he would respond positively. We would like them to change their behavior and we would like to see some significant changes. I'm not going to get into all those details right now. Again, what we would like to see is the totality of the Russian behavior change. We want to continue to have conversations working forward to building a better relationship. John?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Two questions on China. First of all, what was it that prompted the President last night to come out with a statement that he's threatening another -- threatening tariffs on another $100 billion on Chinese goods? Since none of these tariffs are taken affect, what was the purpose of upping the ante, if you would?

SANDERS: The United States is responding to Chinese actions that have gone on for decades. The Chinese have engaged in unfair and illegal trade practices for many years and this is simply a response to that. We would like to see them change and make significant changes to the trade back and forth that we have with them. That's the purpose.

KING: What was it that prompted the escalation? He already announced $60 billion worth of goods targeted for tariffs and upped that to $100 billion last night.

SANDERS: The President is going to do something and be tough when no one was willing to do this. China created this problem. The President is trying to put pressure on them to fix it and take back the terrible actions they've had over the last decades.

KING: Second question. A few minutes ago, on CNBC, Steve Mnuchin, Treasury Secretary, said it's not intended -- this could ignite a trade war.

[14:20:00] How concerned is the President that this could tip the balance to a trade war. The stock market took a look at that statement and didn't like it at all.

SANDERS: This is something that China has created, and President Trump is trying to fix it. We are moving forward in that process of trying to -- we'll continue putting pressure on China to stop in the illegal and unfair trade practices that they've continued in for decades.

KING: Is he willing to fight a trade war on this?

SANDERS: We don't want it to come to that. The President wants us to move to a process of fairness, to free and fair and open trade. That's what he's trying to do.

UNIDENTIFIED MALE: Does the President think that trade wars are easy to win? Is that still his view?

SANDERS: I think the President feels like if he is in charge of those negotiations, absolutely. He is the best negotiator at the table. We certainly have full confidence in his ability to help move things forward. If you look simply at the Corus deal in which the President was able to get a much better deal for the United States. We've made great progress on NAFTA and we're hoping to have great progress on the trade negotiations with China.

UNIDENTIFIED MALE: If I could ask you to clarify something he said in his remarks in West Virginia. He said yesterday it came out where this journey coming up, women are raped at levels nobody has ever seen before. What was he talking about?

SANDERS: It was not --

UNIDENTIFIED MALE: It came out yesterday.

SANDERS: There was a story. I believe the LA Times, I don't have it in here in front of me, that documented some of that. This is a well documented fact, that a lot of the people, I believe, up to 80 percent in recent years of women that are making that journey have been raped in that process. The President saying that's simply unacceptable and something that should be looked at.

UNIDENTIFIED MALE: You are saying 80 percent of the women coming across the border are raped? SANDERS; No. He's saying the drug smugglers, the traffickers,

coyotes. This has happened in recent years and has been up to 80 percent.

UNIDENTIFIED MALE: Sarah, the Dow is down about 500 points the last time I looked. Does that give the President any pause as he pursues these actions?

SANDERS: We know there could be some fluctuation. At the same time the President has said enough is enough. China has to change this illegal and unfair practice they've been in. And the President -- frankly we shouldn't be in this situation. Previous administrations should have stepped up and tried to stop these actions long before today. Thankfully, we have a President that's willing to stand up, be tough and take some courageous and bold action like President Trump has done. John?

UNIDENTIFIED MALE: What is the next step? Would you want to see happen now? Do you want the Chinese to come forward and ask for talks, renegotiate? What do you want to see happen?

SANDERS: We certainly want to be able to negotiate. We want them to stop participating in unfair and illegal trade practices, intellectual property theft being a huge threat to United States companies and businesses.

UNIDENTIFIED MALE: Thanks a lot. Just a follow up on Steve's question regarding the stock market, the Dow is down nearly 4,000 points since January 26th. Does the President, does the administration believe that any of that decline is attributable to any of the President's actions concerning the tariffs the President has announced on steel and aluminum? Perhaps tariffs the President intends to impose upon China? Anything related to what the administration has done since that time period.

SANDERS: We are focused on the long-term economic principles. Let's be clear. The tariffs we're talking about have not been implemented and are months away. The President has cleared the way for a strong economic environment through tax cuts, deregulation. We're going to continue to push forward our long-term economic principles. At the same time, we're not going to allow a country like China to continue to have these unfair and illegal trade practices.

UNIDENTIFIED MALE: I understand that. Just getting back to my question, any actions that the President has taken since January 26th, since that period in which the Dow has declined almost 4,000 points, anything that he has done or said that you think is attributable to that stock market decline?

SANDERS: The actions of the President have certainly strengthened our economy, creating almost 3 million new jobs, gotten regulation out of the way, provided tax cuts for American individuals and companies. We're focused on the long term economic principles and feel very confident where we are. UNIDENTIFIED MALE: On the sanctions, why hasn't the President spoken

out personally about the sanctions and the behavior enumerated by the administration today by Russia--

SANDERS: The President has. It's ridiculous that you guys say that.

[14:25:00] Just earlier this week the President stood on a stage in an open press room and talked about how he had been tough on Russia. And he has continued to do that through action. We've continued to do that through a number of administration officials. To say he hasn't addressed that directly, he did that while standing on stage with the leaders of the Baltic countries, in front of almost every single one of you earlier this week. It's not a fair or accurate statement.

UNIDENTIFIED MALE: On these sanctions imposed today he has not spoken out. No statement has been issued under his name. He has not spoken out specifically about the issues enumerated by the administration. He hasn't condemned the alleged subversion of Western democracies, the activity in Syria, a number of things. Cyber crimes, all the things that your administration has outlined. He himself has spoken out against those. He has just said that he has been tough on Russia.

SANDERS: We speak on behalf of the President day in, day out. The President has signed off and directed these actions. I think that speaks volumes, actually, in how the President feels. And exactly underscores what he said earlier this week when he said no one has been tougher on Russia.

UNIDENTIFIED FEMALE: A question about the President's stance on Scott Pruitt keeping his post at the EPA. Has he been advised by anyone close to him, if Pruitt steps down, what is the President stand?

SANDERS: No one other than the President has the authority to hire and fire members of his cabinet. It's a decision that he'll make. We don't have any personnel announcements. The President feels that the administrator has done a good job at EPA, he's restored back to its original purpose of protecting the environment. It has gotten unnecessary regulations out of the way and we're continuing to review any of the concerns that we have, and I'll keep you posted if there's anything further on that front. Sorry, guys, I can't hear if you're all talking at one time. Guys, be respectful. I'll call on you one at a time.

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

SANDERS: I'm not going to walk through hypotheticals until we have time to go through a full review. That's what we're doing right now but again the President thinks that he's done a good job of carrying out the goals of the EPA.

UNIDENTIFIED MALE: Two quick ones. The first is the Treasury Secretary on CNBC earlier was asked about the ongoing feud with Amazon and responded by saying the President is focused on the post office. And quote, in discussions with the post office and looking at that. Party line around here has been kind of that there's no additional actions being contemplated by the administration against Amazon. I'm wondering if that's changed and specifically if the White House per the President or any part of the administration has been in contact with the Postal Service about Amazon's contract.

SANDERS: I'm not aware of anything specific taking place on Amazon. We are looking at ways to help the post office modernize and help move them forward. They've lost tens of billions of dollars over the last ten years. We would like to see that stop and we're looking at the best ways to do that. Anything specific dealing with Amazon I'm not aware of anything on the table.

UNIDENTIFIED MALE: The discussion we've been having, I think we're all trying to get a little clarity on, whether U.S. and China are actively in negotiations now or if it's the routine contact we would expect through U.S. and China and you're hopeful that direct negotiations --

SANDERS: Currently, routine contact but this is a negotiation period. That's why it doesn't happen immediately. And there's a process and we're going through that process.

UNIDENTIFIED MALE: Two questions. One, following up on that, in terms of negotiations earlier today Chinese officials said negotiations wouldn't be possible in this current environment of threats of tariffs. What's your response to that?

SANDERS: If they want to stop unfair and illegal trade practices, that would be great. Until then we're going to continue to move forward in this process.

UNIDENTIFIED MALE: A second question. With the talk of tariffs, a number of farmers particularly in the American Midwest who have suggested that the volatility of the markets has made it very hard for them to plan for the upcoming season and they're already thinking there will be a negative economic impact on them. What is the administration's response to those farmers, many of whom supported the President two years ago?

SANDERS: We are working with the Department of Agriculture. The President has directed Secretary Purdue to do what we can to protect our farmers and they'll look at different ways possible. I would refer you to them for some of the specifics and specific actions they're looking at taking.

UNIDENTIFIED FEMALE: I was wondering if you could kind of speak to this.

[14:30:00] There seems to be a perception that at times the President makes announcements and then the White House has to come up with policy to match what the President said, like the talk with the military at the border. There weren't a lot of details with that at first and the issue with Syria, saying he wanted to pull all the troops back. Can you talk anything about like that perception and what's going on there? SANDERS: I think that's a perception of completely people that don't

understand, I guess, how civics works. The only person elected to make those decisions and actually outline what policy should look like is the President. When he makes an announcement, he is the only one who has the authority to do so. Use carrying out the duties that he was elected to do. It's up to his staff to implement those policies that he announces or that he makes. So, he is doing exactly what the American people asked him to do. And that's to come here and change Washington. He's doing that every single day.

UNIDENTIFIED MALE: Sarah, on the border --

SANDERS: Sorry, I was pointing up here. Anita. Then I will go to April for the last question

UNIDENTIFIED FEMALE: I want to get an update on the national guard sending mass troops to the border. A couple of days ago the DHS Secretary was saying it could happen as early as that night. We still haven't seen them gone over. I was wondering if you could update us. I know California is the one who hasn't said what they plan to do. They're still reviewing. Would you all still go ahead with the plan if it is just the three other states and not them? And can you tell us what the holdup is with California?