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EPA Administrator Facing Yet Another Scandal; Trump Administration Imposes More Sanctions on Russia; Trade War Fears. Aired 3-3:30p ET

Aired April 6, 2018 - 15:00   ET



DANA BASH, CNN HOST: And, of course, what we have been hearing from the White House, threats from President Trump for $100 billion in tariffs against China.

Today, Treasury Secretary Steve Mnuchin said, while not intended to, the tariffs could, in fact, ignite a trade war.


STEVEN MNUCHIN, U.S. TREASURY SECRETARY: But, right now, we have initiated a plan. The tariffs will take some period of time to go into effect.

There will be public comments. So, while we're in the period before the tariffs go on, we will continue to have discussions. But there is the potential of a trade war. And let me just be clear. It's not a trade war. The president wants reciprocal trade.


BASH: So he said we could have a trade war, but it's not a trade war in the same breath.

We are going to dissect this and also go to -- excuse me -- first, let's listen to what the White House said today about the president's threats against essential economic growth.


SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: This is something that China has created, and President Trump is trying to fix it. And we are moving forward in that process of trying to -- we're going to continue putting pressure on China to stop any illegal and unfair trade practices that they have continued in for decades.

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

HUCKABEE 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. And that's what he's trying to do.

(END VIDEO CLIP) BASH: And now let's get to Richard Quest, CNN's money editor at large.

Richard, you have written on that you already think we are in a trade war. Explain.

RICHARD QUEST, CNN CORRESPONDENT: Well, if you want to be tight and sort of in one's definition of trade war, that it only happens when the tariffs come in, arguably they have because the $3 billion are already there. The steel tariffs are ready to go into effect unless negotiations prove successful.

So, to some extent, yes, you can arguably say that until you pull the trigger, you're not in a war. But, Dana, once you have got the weapons on the battlefield and you have got them unleashed and you have -- you're moving inextricably towards doing this, it is semantics whether in a war or not.

We are ratcheting up. Think about it this way, Dana. The U.S. had an action, China retaliated. China retaliated, the U.S. came back. China came back again overnight. And if that's not a trade war, tell me what is.

BASH: I don't know. I completely agree with you, with the punching and all.

So, Richard, let's talk about what Steve Mnuchin said. You have watched China, you have watched the stock market for years. You understand its quirks, its ebbs and flows. How much do you think Mnuchin's comments played into what we're seeing as we speak, with the Dow down, what, 714 points? How much should we contribute or attribute that to Sarah Sanders or is it a combination?

QUEST: It's the lot, Dana. It's the lot.

It is a president that tweeted last night $100 billion prospective tariffs when his national economic adviser didn't know anything about it. It's a national economic adviser, Larry Kudlow, who comes out this morning, trying to be the fireman, putting out the fire.

Meanwhile, the arsonist is lighting more fires by tweeting even more, suggesting that the WTO is useless and can't do it. And then Larry Kudlow has to come back again and try to put out a fire. Meanwhile, meanwhile, Steve Mnuchin turns up in a television studio to say, well, there could be the possibility of a trade war, which, frankly, is obvious, because the moment you have started this process, there's always the potential for it to happen.

I understand what they are saying. They are saying it's not their wish, it's not their desire. These tariffs are designed to rectify a longstanding problem, but if they have to use them, they will. But the market is looking for certainty, and what they are getting is confusion.

BASH: The market is looking for certainty, getting confusion. That's obvious. But let's talk about the overall message from the White House, which is, we might just have to deal with this, with this rocky road on Wall Street to get what the president is saying he wants, which is a level playing field with China.

Do you think that there's sort of a method to that madness?

QUEST: Right. And for those viewers who are watching who think I'm just being rabidly anti-administration, I will give you the other argument.

Absolutely. And, yes, I listened to the president's statement on radio this morning. He says there will be short-term pain. This is an issue that no other president has managed to succeed with doing. That's not entirely true, as Larry Summers points out, but I will give him the argument.

The reality, is this the right way to go about it? Do you go in, in such a truculent fashion, and deal with it this way, particularly when you're dealing with China, who is not going to play nice, as maybe the European Union would or Organization of American States would?


China is going to meet you toe for toe, head for head. Look, I applaud the president's goal here. This has been a longstanding sore and canker on the global economy that China does not play by the same rules as everybody else. You have to wonder, though, whether the bull in a china shop approach is down the right way.

The markets, down 751, seem to be suggesting it's not.

BASH: They sure do. Richard, thank you so much for that.

I want to get more to breaking news on this very topic.

President Trump's chief economic adviser, Larry Kudlow, just spoke to reporters off-camera.

Jeremy Diamond was there. And he joins me now.

Jeremy, what did he say?


Larry Kudlow is continuing this approach from the administration, which is to say that while the president is tweeting about his actions against China, saying the U.S. needs to get tough, talking about these tariffs, Larry Kudlow is continuing to suggest that this is really a negotiating ploy.

He's making clear that this is not a bluff, that President Trump will impose these tariffs if he needs to, but he is putting meat on the bone or pre-meat on the bones, perhaps, as far as whether this is truly a negotiating ploy.

He told us, a group of reporters at the White House, just a few moments ago that the White House may provide a list to China of suggestions that it wants China to change. Things that they want China to actually change in their behavior as it relates to market access in China for U.S. companies, some of these intellectual property concerns that the administration has.

But, again, Larry Kudlow making clear there are no tariffs at this point in place. It will take several months for those to actually go in place. And he is hopeful in that two-, three-months period that the United States and China will be able to come to some sort of more diplomatic agreement as it relates to changes in Chinese behaviors.

And I think that Larry Kudlow kind of summed up his belief when he said the problem here is China, not Trump.

BASH: And, Jeremy, what a delicate dance we're seeing from Larry Kudlow. Just the fact that he came out to talk to you and to other members of the White House press corps. He's watching what we're watching, the Dow down 784 points -- excuse me -- 48 points -- and he's trying to help that.

He's trying to stop this precipitous drop as part of or in response to the saber-rattling we heard from the president himself. And yet so he's trying to say, hold on. There's not really a trade war, but in the same breath saying, this is a real threat. It's not easy.

DIAMOND: That's right. It is a very delicate dance that he's playing here. It's hard to distinguish sometimes between what is specifically strategy on this perspective vs. what is actually simply a little bit of incoherent messaging between the president and his top economic adviser.

Larry Kudlow, let's be clear, is a free trader, he's not a big fan of tariffs, but he is backing the president's approach here, saying that threatening these tariffs, by, in fact, signing off on them, as he did the 50 billion, and now threatening $100 billion in tariffs, that the president will actually get China to the table and hopefully get China to change its behavior.

And, again, he made clear not a bluff. If there is no agreement between the two countries in the next two, three months, those tariffs will go into effect -- Dana.

BASH: Jeremy Diamond, thank you so much for giving us that breaking news of Larry Kudlow coming out again to try to calm the markets by talking to the White House press corps.

Let's get more on this with CNN political commentator Doug Heye and Molly Ball. She is national political correspondent for "TIME" magazine.

Doug, you're a communicator. You're a communications specialist. You're in the White House right now. You're seeing this drop. You're hearing the president, if your -- he would be your boss. Is it smart to send Larry Kudlow out to do what he's doing and will it make a difference?

DOUG HEYE, CNN POLITICAL COMMENTATOR: Yes, they're looking at the same market reactions we are. They need to do something to stem this tide. This is the fastest, quickest thing they can do short of having the president go out there.

The challenge is, as we saw with the president's remarks in West Virginia is, you may have planned remarks that get thrown up in the air. That's not the kind of chaos they want. Meanwhile, there are the other Republicans on Capitol Hill or in their districts this week, states and districts, who are looking at this very differently, because it's their states and communities that are being impacted.

BASH: What do you think?

MOLLY BALL, "TIME": And you have -- the Chinese can see what we see. They can see that you have an administration in this internal tug of war.

They can see that you have advisers like Larry Kudlow trying to turn around and whisper to the markets, it's not true, it's not real, which if that's the case, then the Chinese aren't going to back down. But then they hear all this bluster and they see the president seeming to contravene many inside his own White House.


And, of course, as everybody knows by now, you never know what Donald Trump is going to do. You never know what he's going to decide in a tweet and then follow through on vs. just threatening.

And so that leads to the situation where the Chinese are behaving very strategically, right? They are responding to these threats in a very targeted way. The reciprocal threats that they have made are aimed at specific American industries, specific American regions, trying to hit Trump where it hurts and to make him pay political consequences, because of course the Chinese leaders don't have to stand for reelection.

HEYE: And I would say also specific congressional districts and members of Congress and senators.

BASH: Thank you bringing that up, Doug.

As you're finishing your sentence, I want to put up a map we showed last hour with David Chalian. The middle of the country there, all of those states are Sony-bean-producing states.

Doug Heye, you were a top aide to the House majority leader, Republican. Again, put your hat on or maybe even tell me what you're hearing from the Republicans who are in vulnerable districts in those states, and there are about a dozen of them, looking at November, listening to what the president is saying and probably getting an earful from farmers who are worried about voting for a Republican for this reason.

HEYE: Sure. And it's not just soybeans. You could talk about pork, not only in Iowa. I'm from North Carolina. Pork and soybeans are big industries there. If they go after sweet potatoes, North Carolina's eastern part of the state has got a real problem.

BASH: How much does this threat of tariffs from China against these products hurt politically?

HEYE: Politically, it hurts very much. The question is, when does it hurt and how does it hurt? If you're a Republican, you have a primary and you have a general election, which means essentially you're damned if you do and you're worse if you don't.

Do you stand up to Trump and say this is awful and this is not what we want or do you wait? What are the potential ramifications for that? And this is the internal struggle Republicans have on everything where they disagree with Trump. How vocal can they be? Can they be critical of the policy without criticizing the president?

That's what they face every day.

BALL: And I think this is an issue has divided Republicans from Trump more overtly than a lot of other issues.

When it comes to his conduct, they have often been content to wring their hands in private, but sort of mouth loyalty to him in public, because of this issue with the Republican base being loyal to him.

But this, this is hitting him on an ideological level. Right? And you had Paul Ryan issuing, when this was first announced, a remarkably forthright, unusually forthright statement saying I disagree with this. McConnell said the same thing. Ben Sasse, senator from Nebraska, big soybean state, also has been a Trump critic in the past, but issued a statement saying, this is stupid. This is the stupidest way you could possibly go about it.

They are not mincing words. And the question I have is, the constituents who love Trump, are they really going to blame Trump for this or are they just going to blame China?

BASH: Or are they going to use their vote in November where they want to protest somebody and maybe just blame their House members, the Republicans there, which maybe wouldn't be fair, but that's the only option they have?

HEYE: And it should be said Donald Trump campaigned to do exactly this.

BASH: That's true.

HEYE: This is no surprise to anyone.

BASH: And this is one of those issues he has been consistent about when he...

HEYE: Twenty years. Yes.

BASH: When he was leaning toward being a Democrat, an independent and a Republican. He has always been hard on China as a private citizen. Thank you, both, Molly Ball, Doug Heye. Appreciate it.

HEYE: Thank you.

BASH: And up next, we dig deeper on the new U.S. sanctions against Russia's elite, their ties to the Trump campaign and how this all ties into the Mueller investigation.

Plus, yet another scandal involving EPA Chief Scott Pruitt. What CNN is learning about how he retaliated against agency employees who challenged him.

Plus, we are keeping an eye on the markets, as we have been discussing, as we approach the closing bell.

Back in a moment.



BASH: The Trump administration is winning some praise from some of the president's harshest critics after it sanctioned two dozen members of Vladimir Putin's inner circle today.

Senator John McCain said the action is -- quote -- "a clear message to Putin and to Russia."

But moments ago, the White House had to go on the defense when asked why President Trump has not personally condemned the specific meddling actions by Russia during the 2016 election.


HUCKABEE SANDERS: It's ridiculous that you guys say that. 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.

QUESTION: On these sanctions imposed today, he has not spoken out, and there's been no statement issued under his name, and 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 not spoken out against those. He just said he's been tough on Russia.

HUCKABEE SANDERS: We speak on behalf of the president day in, day out. Again, the president has signed off and directed these actions. I think that that speaks volumes.


BASH: CNN's Kara Scannell joins me now.

And, Kara, give us the details on what exactly these sanctions are and specifically who they're targeting.

KARA SCANNELL, CNN CORRESPONDENT: So, the sanctions are targeting some of the heads of some of the biggest industries, the most important industries to the Russian economy, aluminum, metals, energy, oil and gas.

And so three of them that are on the list are particularly interesting, as they intersect with people that Robert Mueller, the special counsel, has been looking at as part of this investigation. One of them, Oleg Deripaska, he's the head of an aluminum company, one of the biggest ones in the world.

And he's of interest because he had invested in a business that Trump's former campaign manager, Paul Manafort, the deputy chairman of the campaign, Rick Gates, had put together about 10 years ago.


That venture fell apart. Deripaska is suing them. But he's also of interest because, during the campaign, about two weeks before Trump won the Republican nomination, Manafort, through an intermediary, reached out to Deripaska, asking if he wanted a private briefing.

So, that's also very interesting. We know Manafort has been indicted. And we know that Rick Gates who, in addition to work on the campaign, was the vice chair of Trump's inauguration.

He has pleaded guilty. He is cooperating with the investigation. That's going to be an avenue through which Mueller can look at this. One of the things we know Mueller is looking at and we've reported that he stopped two oligarchs as they entered the U.S. recently, is the money trail.

Did Russian money enter the U.S. election either directly or indirectly? Another one of these individuals on the sanction list today is Viktor Vekselberg. He is the head of the one of the largest energy companies in Russia. And he is of interest because he attended two events.

He was at the Trump inauguration, along with an American business partner of his. And he also attended that dinner that Michael Flynn went to in December 2015 when he sat next to Vladimir Putin.

Those are also -- Michael Flynn, of course, pled guilty. And the third individual is Alexander Torshin. He's a Russian banker. He is very active with the NRA. And we know that the FBI is reportedly investigating whether he funneled money illegally through the NRA into the Trump campaign.

All three people on the -- three of the people on the list have that one thing in common, that they have these overlapping ties with individuals who are of interest by the special counsel's investigation.

BASH: So interesting. Thank you so much for that reporting, Kara. I appreciate it. And joining me now, CNN senior diplomatic correspondent Michelle

Kosinski and CNN legal analyst Carrie Cordero, who served as counsel to the assistant attorney general for national security.

First, Michelle, why now? Why this latest round of sanctions now? After so many months, over a year of the president's toughest critics saying, do this, is he finally do it?

MICHELLE KOSINSKI, CNN SENIOR DIPLOMATIC CORRESPONDENT: Right, because plenty of people were asking, why not do this immediately when the deadline came around?

BASH: Right.

KOSINSKI: The administration always saw that not as a deadline to sanction, but as kind of a starting point.

BASH: A deadline when the Congress passed the legislation that he signed.


BASH: It was October, right?

KOSINSKI: It was in August when that legislation was passed and it was very reluctantly signed by the president, you remember. He put a statement attached to it, because they felt like that was encroaching on the White House's authority basically and Congress was saying we want you to punish Russia.

Now the administration finally is. And they're doing it incrementally. This is understandable to some extent, because it does take time. This was incredibly complicated sanctioning, because you remember some of it had to do with other countries doing business with Russia.

But this round is finally getting to the heart of what many members of Congress on both sides of the aisle have been urging the administration to do for a very long time. That's why they passed this legislation over the summer, to say let's punish Russia and let's make sure we hit them where it hurts in their big piles of money.

And they're finally doing this. On one hand, you say great. If you want to see Russia brought to task for meddling in U.S. democracy, this has more teeth than what they have done before. This is more significant. On the other hand, though, you're going to see critics -- and we are hearing from some critics -- saying, OK, this is a start, but what took you so long?

Any oligarch worth his salt is going to move things around and insulate themselves as much as possible from having these sanctions hit them. They have had months to know that this was coming. And, also, you still see this administration loathe, in most cases, most times, to say the words meddling in the U.S. election.

BASH: The president himself, obviously. KOSINSKI: And others. Even this morning when these sanctions were

announced on a briefing with senior members of the administration, they still said this is partly about Russia's continued interference in Western democracies.

They finally put out a paper statement later that said interference in the 2016 election, but it's like pulling teeth a lot of the time.

BASH: To bring it out of their mouth.

KOSINSKI: And critics say, let's see a broader, more integrated approach to turning the screws on Russia, although the Obama administration did these same kinds of things. You can see it from both sides, obviously.

BASH: Yes, no question.

And, Carrie, Kara was talking about the oligarch who is now being punished in the sanctions who is a very, very powerful man in Russia, very close to Vladimir Putin, head of the aluminum companies and industry.

And he also has ties to Paul Manafort. What does that tell you about how these sanctions could be tied to or related to the Mueller investigation of Russia meddling and potential connection between the Trump campaign and Russia?


CARRIE CORDERO, CNN LEGAL ANALYST: This is an interesting point, because it shows -- these sanctions, I think, to a large degree, show that there are institutions in government that are working right now.

We hear a lot lately about criticisms of our own institutions buckling a little bit under a president who wants to exert a lot of executive authority and just sort of plow forward with his policy agenda.

But really what this shows is that the intelligence community apparatus and the national security components and law enforcement are working together in sharing information. Now, there's limits to what type of information that arises through the special counsel's investigation, what that comes from that can be shared toward the intelligence or with the Treasury Department.

But, on the other side, from the intelligence community working with FBI intelligence or other components of the community and the Treasury Department, we see that they really are pulling together what probably is information that they have been working on for many years.

And Congress really deserves a shout-out in this particular circumstance for pressing this legislation last summer and driving this force towards getting these additional sanctions.

BASH: No question.

As you both mentioned, it was Congress that forced the president's hand, forced the administration's hand with a huge bipartisan vote for sanctions. But it was -- did take a while for the administration to actually implement it. And they missed a deadline.

Thank you both for your insights. Appreciate it.

And up next, the picture President Trump paints is hordes of immigrants, many of them criminals, poised to storm the border. But the caravan CNN found is a very different scenario.

We will take you live to meet the families, many women and children, waiting for their next move.