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EARLY START

President Trump Backs Scott Pruitt Despite Piling Ethics Questions; China Pushes Back Against Trump Latest Tariff Threats of $100 Billion; U.S. Prepares to Sanction Russian Oligarchs; Caravan of Migrants Arrives in Puebla, Mexico; Aired 4:30-5a ET

Aired April 6, 2018 - 04:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[04:31:15] RENE MARSH, CNN ANCHOR: President Trump with big praise for scandal plagued EPA chief Scott Pruitt. Will that prove to be a political kiss of death?

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: You know, this was going to be my remarks. It would have taken about two minutes but the hell with.

(END VIDEO CLIP)

DAVE BRIGGS, CNN ANCHOR: President Trump tossing the script, ignoring key facts on voter fraud, immigration and more.

MARSH: The president ups the ante in his trade standoff with China. How will Beijing respond this time to his new tariff talk?

Welcome back to EARLY START. I'm Rene Marsh.

BRIGGS: I'm Dave Briggs. He tossed the script. So symbolic of what the president is doing on all issues right now, right?

MARSH: I won't do that, though. Yes -- no, it certainly is. He is taking the nontraditional route.

BRIGGS: He's unchained right now.

President Trump is standing firmly by Scott Pruitt this morning even as controversies mount around the embattled EPA administrator. Returning from an event in West Virginia yesterday, the president was asked if he still has confidence in Pruitt.

(BEGIN VIDEO CLIP)

TRUMP: I think that Scott has done a fantastic job. I think he is a fantastic person. I just left -- I just left coal and energy country. They love Scott Pruitt. They feel very strongly about Scott Pruitt. And they love Scott Pruitt.

(END VIDEO CLIP)

BRIGGS: The president's backing is so strong sources tell CNN he floated replacing Attorney General Jeff Sessions with Scott Pruitt as recently as this week. Sessions a target of the president ever since he recused himself in the Russia investigation. The president has endorsed Pruitt despite negative headlines and new allegations he sidelined top aides who pushed back on his spending.

More now from CNN's Sara Ganim in Washington.

SARA GANIM, CNN CORRESPONDENT: Good morning, Rene and Dave. The bad headlines continuing for EPA administrator Scott Pruitt, this time reports that he sidelined or demoted multiple senior officials after they pushed back or raised concerns about his pricey travel, his office furniture spending, and his overall management of the agency.

Two sources with direct knowledge of the matter told CNN that both career and political appointees who disagreed with Pruitt were iced out. A story that was first reported by "The New York Times." In one case, an official was reassigned when he refused to drive Pruitt through town with lights and sirens to help him avoid heavy Washington traffic. Others were simply raising concerns about his spending, his frequent trips home to Oklahoma, and his international trips that cost thousands of dollars to the taxpayers that included a lot of leisure time.

This of course all adds to a list of ethics issues that are piling up on Pruitt in the last few days, including a sweetheart deal that he received a $50 per night apartment in the city, leading some top White House officials to grow frustrated with him. But the most important White House official, President Trump, has so far indicated that he is still backing Pruitt at least for now -- Rene and Dave.

BRIGGS: All right, Sara. Thanks.

Meanwhile, President Trump threatening $100 billion in new tariffs on Chinese exports. That stoking fears of a trade war and rattling markets once again. The president put this statement out late yesterday saying, quote, "In light of China's unfair retaliation, I've instructed the United States trade representative to consider whether $100 billion of additional tariffs would be appropriate."

Earlier this week, the Trump administration announced $50 billion worth of tariffs on Chinese exports. China immediately retaliated threatening tariffs on 106 American products. That's what the president is calling unfair. And he telegraphed his latest move at an event yesterday calling China out for its unfair trade practices.

(BEGIN VIDEO CLIP)

[04:30:06] TRUMP: We're at a point where we had to do this. Our economy is strong, our jobs are great. We're going to come out with numbers on Friday that hopefully are going to be fantastic numbers. Companies are doing really well. And you have to go after the people that aren't treating you right.

(END VIDEO CLIP)

BRIGGS: The potential for more tariffs sent stock futures sinking. But they are off the loads and Asian markets mostly shrugged off the move.

The National Retail Federation is slamming President Trump's threat and Nebraska Senator Ben Sasse calls the tariffs, quote, "nuts."

MARSH: So how is China responding to the latest tariff threats from Washington?

CNN's Ivan Watson is live for us this morning in Beijing with the very latest.

And Ivan, it sounds like China is not backing down.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: No, it's not. A government statement described the latest threats coming from President Trump of more tariffs a provocation. That statement went on to say, quote, "We do not want to fight a trade war but we're not afraid of it. If the U.S. disregards the opposition of China, the Chinese side will follow through to the end and will not hesitate to fight back at any cost."

It sure does sound like the rhetoric is heating up between Washington and Beijing. If you take President Trump at his word, if he follows through on this threats, that would be tariffs on about $150 billion worth of Chinese goods, roughly 40 percent of what China exported to the U.S. in 2016.

The U.S. is China's largest export market. That could put a dent in the Chinese economy but the Chinese have up until now fired back in kind and they've singled out sectors of the economy that could hurt Trump's base. Notably soybeans which were a $14 billion export business to China in 2016. It's raised alarms amongst some agricultural associations, some retail associations, and as Dave mentioned, the Nebraska Republican senator Ben Sasse who said that President Trump's policy right now, quote, "threatened to light American agriculture on fire."

For now, you've got two governments making threats. We'll see if they can deescalate and talk their way out of what is appearing to be a looming trade war -- Rene.

MARSH: And the president's own Republicans getting concerned. Thank you so much for that this morning, Ivan.

Well, during a tax reform roundtable in West Virginia on Thursday, the president tossed out his prepared remarks. Literally. Take a look.

(BEGIN VIDEO CLIP)

TRUMP: You know, this was going to be my remarks. It would have taken about two minutes but what the hell.

(LAUGHTER AND APPLAUSE)

TRUMP: That would have been a little boring. Little boring. No, I'm reading off the first paragraph. I said, this is boring. Come on. We have -- (LAUGHTER)

TRUMP: We have to say -- tell it like it is.

(END VIDEO CLIP)

MARSH: Well, after going off script as he talked about tax reform, the president then adlibbed on a host of other topics including border security, anchor babies and voter fraud.

BRIGGS: And in an effort to bolster his argument for tougher immigration laws, the president claimed women coming from Central America are raped at unprecedented levels.

(BEGIN VIDEO CLIP)

TRUMP: I remember my opening remarks at Trump Tower. When I opened, everybody said, oh, he was so tough and I used the word rape. And yesterday it came out where this journey coming up, women are raped at levels that nobody has ever seen before. They don't want to mention that. So we have to change our laws.

(END VIDEO CLIP)

BRIGGS: Unclear where the president got that information from. He later announced plans to send 2,000 to 4,000 National Guard troops to help secure the U.S.-Mexico border. The administration has not said how much it will cost but the president insists troops will remain on the border until his proposed wall is built.

MARSH: The president on Thursday also repeated a debunked voter fraud claim.

(BEGIN VIDEO CLIP)

TRUMP: In many places like California, the same person votes many times. You probably heard about that. They always like to say oh, that's a conspiracy theory. Not a conspiracy theory, folks. Millions and millions of people.

(END VIDEO CLIP)

MARSH: Well, the president once again asserted millions of people voted illegally in 2016. Despite having failed for more than a year to produce evidence to support his claim, you'll remember the president set up a commission to investigate the issue last year. The panel was ultimately shut down in early January after heavy criticism from Democrats for not publishing evidence of mass voter fraud. The president argued Democratic states refused to turn over data to the commission.

BRIGGS: President Trump finally broke his silence about his alleged affair with adult film actress Stormy Daniels.

[04:40:03] Aboard Air Force One Thursday, the president said he knew nothing about the $130,000 hush payment to his lawyer made to Daniels. Listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED REPORTER: Did you know about the $130,000 payment to Stormy Daniels?

TRUMP: No.

UNIDENTIFIED REPORTER: Then why --

TRUMP: What else?

UNIDENTIFIED REPORTER: Why did Michael Cohen make it if there was no -- if they're allegations?

TRUMP: You'll have to ask Michael Cohen. Michael is my attorney. You'll have to ask Michael.

UNIDENTIFIED REPORTER: Do you know where he got the money to make that payment?

TRUMP: No, I don't know.

(END VIDEO CLIP)

BRIGGS: Cohen paid Daniels out of his own pocket he says to sign a nondisclosure agreement. Daniels and her lawyer claim the agreement is invalid. Last night, Daniels' lawyer Michael Avenatti said to Anderson Cooper the president's new comment greatly improves their legal standing allowing Daniels and her attorney to depose the president.

(BEGIN VIDEO CLIP)

MICHAEL AVENATTI, STORMY DANIELS' LAWYER: It's like Christmas and Hanukkah all rolled into one. You can't have an agreement if one party claims they knew nothing about one of the principal terms of the agreement. So the president has just shot himself in the foot. Thrown his attorney basically, Michael Cohen, under the bus in the process.

(END VIDEO CLIP)

BRIGGS: Avenatti says he looks forward to, quote, "testing the truthfulness of the president's claims."

MARSH: Well, the final witness testifying before the House Russia investigation repeatedly cursed at Democrats on the committee. Four sources tell CNN President Trump's former campaign manager Corey Lewandowski at one point said, I'm not going to answer your f-ing questions. Yes. Well, except he used the real swear word. After CNN first reported this story, Lewandowski reached out to say Democrats were the first to use what he called appalling language.

The harsh exchange is a measure of just how far this committee descended into partisan back biting before breaking up last month. BRIGGS: Children, behave.

MARSH: That was on Capitol Hill.

BRIGGS: Both sides. Right? I mean, this is where we are. This is the perfect story for 2018.

Ahead it's the border or bust for hundreds of Central American migrants headed right now for the U.S. CNN is on the ground with the caravan next.

MARSH: And a narrow escape for some construction workers. The story behind this stunning video is straight ahead.

(COMMERCIAL BREAK)

[04:46:33] BRIGGS: 4:46 Eastern Time. The White House about to make its next move in the ongoing diplomatic skirmish with Russia. Sources say the Trump administration could announce sanctions as soon as today against several people with close ties to Vladimir Putin in connection with their alleged interference in the 2016 presidential election.

CNN's Matthew Chance live for us in Moscow with the latest.

Matthew, good morning to you. That's what everyone has been calling for is you got to go after the money. Is that where we're headed?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: It certainly looks like that's the direction that these sanctions are pointing to. These are widely expected. They've been planned, these sanctions. They're aimed at individuals who are close to Vladimir Putin, the Russian president. It's also emerged that the Mueller investigation has been questioning a number of Russian businessman or Russian oligarchs in connection with the allegations that they illegally funded the Trump election campaign, the Trump inauguration. So that may be one of the factors that leads the U.S. administration to include people on the list.

But the main reason, I think, is people who are close to Vladimir Putin. This is a way of punishing Russia for its alleged meddling in that 2016 presidential election. Of course there have been people sanctioned previously. This would add to that number.

And it all comes, Dave, as the relationship between Russia and the West and Russia and the United States in particular is undergoing particular strains. Just yesterday, 60 American diplomats were put on buses and flown out of Russia in the latest tit-for-tat expulsions between the two countries, this time over the nerve agent poisoning of Yulia and Sergei Skripal on the streets of Salisbury. And these latest sanctions, when they come down, are not likely to make that relationship any better at all -- Dave.

BRIGGS: No. Indeed that is the case, Matthew Chance, big story coming today. Thank you.

MARSH: Well, the first busload of Central American migrants traveling northward toward the U.S. border is now in Puebla, Mexico.

CNN's Leyla Santiago spoke with migrant families in the annual caravan. Their next stop, Mexico City.

LEYLA SANTIAGO, CNN CORRESPONDENT: Dave and Rene, the organizers of this caravan have admitted that they are overwhelmed. And so we are actually getting conflicting reports on what exactly is happening with this caravan. Some organizers saying that things are on hold, they're going to delay their next move. And others saying the march is on. We will continue to make our way north.

So what are we seeing? We are in Puebla, where one bus arrived transporting people from Oaxaca further south to Puebla where we are right now. These were women, children, families that started with this caravan. Some now having permission from the Mexican government to be here without fear of deportation, having that special permit that allows them to be here. But many of them still saying they plan to go to the United States. Others saying they are afraid of the rhetoric coming out of the White House and they will stay in Mexico over going to the United States.

Now the president of the United States, President Trump, has said that the numbers are dwindling. That this is a caravan that is breaking up. And while this group is seeing the numbers diminish and they are breaking up into smaller groups, that is actually something that is quite normal. Remember, this is a caravan that has been organized for years. They have been doing this for more than five years. And every year, they start with a big number. This year about 1200. And then the groups get smaller and smaller as they make their way to the north.

[04:50:11] And organizers say that a group of about 200, they believe, will make it to the U.S.-Mexico border to seek asylum. I asked some of the people here today what will happen if they encounter National Guard troops given that President Trump says that is the new plan to provide more security on the border. And many of the people here said if they have to wait, they'll wait. If they have to find another way, they'll find another way, but they will make it to the United States of America -- Dave, Rene.

MARSH: Thanks, Leyla.

And Virgin Galactic successfully launched its rocket-powered Spaceship 2 on a supersonic flight. It's the company's first rocket-powered flight since a crash in 2014 destroyed an earlier model and killed all of its pilot. The Spaceship 2 took off shortly after 8:00 a.m. from the Mojave air and space port in California. It flew to an altitude of roughly 46,500 feet before separating from its mother ship and firing off its own rocket. The test puts Richard Branson's aerospace company another step closer to its goal of space tourism.

BRIGGS: That is awesome video.

Some more stunning video to show you now. A towering crane being used to build the new police headquarters in St. Petersburg, Florida, collapses sending workers literally running for their lives. Security video capturing a massive crane about 10-stories high, falling over Thursday morning, just barely missing some of those workers on the ground. Thankfully no one was injured. Officials say the falling crane created no hazardous conditions and minimal damage at the construction site, if you can believe that. That's extraordinary.

MARSH: Yes. Amazing video there.

So coming up, Facebook's apology tour. It's not over yet. As the company's data privacy scandal grows, so do the mea culpas. We'll get a check on all that in "CNN Money" next.

BRIGGS: Plus the MMA fighter, Conor McGregor charged by New York police after this epic rampage caught on camera. That's next.

(COMMERCIAL BREAK)

[04:56:56] BRIGGS: An investigation is under way at Ohio State University following sex abuse allegations against the former wrestling coach and physician. Dr. Richard Strauss who died in 2005 allegedly linked to incidents from the mid 1970s all the way to the late 1990s. A former wrestler, Michael DiSabato, said he brought the allegations to the athletics department several times dating back to 1994. But he says nothing was ever done. The university now says law enforcement has been notified. And the university has appointed an outside independent investigator.

MARSH: UFC star Conor McGregor charged overnight with three counts of assault and one count of criminal mischief after allegedly attacking a bus with rival fighters on board. That's the video there, you can see him. This is all happening at the Barclays Center in Brooklyn. McGregor and his entourage reportedly crashed a press event then attacked a mini bus using trash cans and metal barricades.

UFC president Dana White says one fighter suffered head and facial cuts from broken glass. McGregor was apparently upset with the decision to strip him of his lightweight title belt. McGregor is expected in court later this morning.

BRIGGS: Let's get a check on "CNN Money" this morning. Fears of a trade war rattling investors yet again. That's after President Trump threatened China with $100 billion worth of new tariffs. Stock market futures are pointing down, although they're off the lows. Asian markets mostly shrugging off the move. European markets slightly lower. Some investors betting the threats are just a negotiating ploy that won't actually result in a full-blown trade war.

The March jobs report could add even more volatility. It's due in about 3 1/2 hours. Economists predict 185,000 jobs were created. A slowdown from February, but still would mark the 90th straight month of job creation. A historic run of 7 1/2 years. The jobless rate could also dip to 4 percent. A fresh 17-year low.

Wall Street is watching how fast wages grew. 2.7 percent is the prediction. Anything stronger could raise fears of inflation and higher interest rates.

Facebook's apology tour making more stops. In a PBS interview, chief operating officer Sheryl Sandberg admitted big mistakes.

(BEGIN VIDEO CLIP)

SHERYL SANDBERG, COO, FACEBOOK: We were very focused for the last 10 years on building social experiences. And those are important. Those are why your friends know it's your birthday, why you can share playlists. But we were not focused enough on the possible misuses of data.

(END VIDEO CLIP)

BRIGGS: This week, Facebook revealed its data scandal is even bigger than originally thought. Trump campaign consultants may have accessed the info of 87 million users without their consent. CEO Mark Zuckerberg testifies next week on Capitol Hill. All eyes on those two days, Tuesday and Wednesday. That should be intriguing stuff.

MARSH: Absolutely.

BRIGGS: Hopefully they keep the swear words out of this one, though, right?

MARSH: And you know what, it --

BRIGGS: No Lewandowski.

MARSH: It affects so many people too. So --

BRIGGS: Yes.

MARSH: Well, EARLY START continues right now.

President Trump with big praise for scandal plagued EPA chief Scott Pruitt. Will that prove to be a political kiss of death?