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Trade War Talk And Russia Sanctions; Trump Begins Prep For Possible Mueller Interview; Facebook Moves to Provide Transparency; Deadly Clashes Rock Israel-Gaza Border. Aired 0-1a ET

Aired April 7, 2018 - 00:00   ET




CYRIL VANIER, CNN ANCHOR (voice-over): The U.S. and China not backing down. Both countries say they're ready to fight a trade war if they have to and that triggered what you're seeing on your screen, a massive selloff on Wall Street.

And Washington imposes new sanctions on Russia. Among the targets there, Vladimir Putin's inner circle.

Plus Facebook now trying to prevent election meddling on its platform. The site will clearly label political ads going forward.

Great to have you with us. I'm Cyril Vanier in Atlanta.


VANIER: The U.S. president is banging the drums of a trade war, threatening China with even more tariffs in the latest round of tit- for-tat retaliations. Plus the Trump administration slapping sanctions on several Russian oligarchs with ties to the Russian president.

Let's start with trade. U.S. Markets were nervous again on Friday and they closed down on fears of a trade war between the U.S. and China and perhaps with your money as collateral damage.

The Dow index in New York ended the day down 572 points and at one point it was actually down 767 points, wiping out gains for the entire week and putting it back in correction territory.

This volatility started Thursday night when President Trump threatened to hit China with another $100 billion in tariffs. That is on top of the $50 billion he threatened last week.

The president's new economic adviser, Larry Kudlow, tried to tamp down the fears, saying that there was no trade war and that all the talk on tariffs were just negotiating proposals. That eased the freefall somewhat, but only until Treasury Secretary Steve Mnuchin said on TV, quote, "there is potential of a trade war."

And that was after President Trump said in a radio interview that the drop in the Dow, well, that's OK.


TRUMP: The easiest thing for me to do would be just to close my eyes and forget it. If I did that, I'm not doing my job. So I'm not saying there won't be a little pain but the market has gone up 40 percent, 42 percent, so we might lose a little bit of it. But we're going to have a much stronger country when we're finished.


VANIER: Now Richard Quest takes a closer look at what's driving the markets.


RICHARD QUEST, CNNMONEY EDITOR AT LARGE: The chart shows the sorry situation of the day, not one of the Dow stocks was positive during the Friday session and those that suffered most, Caterpillar, Boeing, 3M, Nike, all -- and General Electric -- all stocks that have exposure to China and possibility of detriment if the trade war gets under way.

Look at the way they actually progressed and you'll see just how vicious it was, a sharp fall just after 10:30, another just after 1:30. And you can time those falls to either a presidential tweet or some statement by an administration official, whether it be Larry Kudlow, the director of the National Economic Council, or Steve Mnuchin, the Treasury Secretary, who actually said there was the possibility of a trade war.

The reality is, you and I have said this many times, markets like certainty. They like to know what's likely to happen next. The reality here is, they've got anything but. Confused messages from an administration with an end goal that would be tariffs with the second largest trading partner to the United States.

Put it all together, it does not bode well and that is why you're seeing the market 572 points -- Richard Quest, CNN, New York.


VANIER: Vladimir Putin's inner circle now feeling the sting of new U.S. sanctions. Among those targeted Friday by the U.S. Treasury is a man who married the Russian president's daughter.

And he's not alone. A total of seven powerful Russian oligarchs with close ties to Mr. Putin are on that sanctions list. Also named, 12 companies that those oligarchs either own or control. And just to drive the point home, the sanctions also target 17 senior Russian officials.

This is all meant to punish Moscow for what the U.S. considers hostile actions around the world and that include interfering in the 2016 U.S. presidential election. We get more on this from CNN's Manu Raju.

(BEGIN VIDEOTAPE) MANU RAJU, CNN SENIOR POLITICAL CORRESPONDENT: The new sanctions that Trump administration announced today will hit several prominent Russians who have ties to President Trump's associates and could be of interest to special counsel Robert Mueller.

Included on the list, billionaire Oleg Deripaska, who owns one of the world's largest aluminum producers. Deripaska has longstanding business ties to former Trump campaign chairman Paul Manafort, who --


RAJU: -- according to "The Washington Post," reached out to the Russian oligarch, offering private briefings on the campaign during his tie as Trump's campaign chairman.

Also, Viktor Vekselberg, owner of a major Russian conglomerate, who had a prominent role in the Bank of Cyprus at the same time that Commerce Secretary Wilbur Ross had a large investment in the bank.

Two of the oligarchs' American associates donated handsomely to the president's inauguration, which Vekselberg also attended.

And the administration also targeted Alexander Torshin, a top official at the Central Bank of Russia. Torshin has longstanding ties to the National Rifle Association, which spent millions to help Trump win the presidency.

In 2016, Torshin had a brief interaction with the president's eldest son, Donald Trump Jr. and also played a role in an effort to arrange a meeting between Trump and Putin that same year.

The tough new moves may have been announced by Trump's administration, but the president himself has been mostly quiet in condemning Russia's behavior. The White House today said actions speak louder than words.

SARAH HUCKABEE SANDERS, DEPUTY WHITE HOUSE PRESS SECRETARY: 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, actually, on how the president feels and exactly underscores what he said earlier this week when he said no one has been tougher on Russia.

RAJU: Mueller's investigation also is putting pressure on prominent Russians.

After indicting 13 over allegations they sought to interfere in the 2016 campaign, his investigators in recent weeks have questioned Russian oligarchs traveling to the United States, including one who landed in the New York area and had his electronic devices searched.

New court filings also show that Mueller's team is seizing on information gathered during a raid last year of Manafort's Virginia home and from a storage locker.

Investigators used a warrant from March 9th to get information on five AT&T phone numbers to aid ongoing investigations that are not the subject of either of the current prosecutions involving Manafort, who was indicted on federal charges last year but has denied any wrongdoing.

Now after issuing a subpoena to the Trump Organization, Mueller's team also appears to be targeting Trump business partners. Investigators showed up unannounced at the home of a Trump business associate, who witnessed multiple transactions connected to Trump's efforts to expand his brand abroad. That's according to a McClatchy report.

That same report also says investigators seem to be especially interested in transactions involving Trump's personal attorney, Michael Cohen, in business deals the Trump Organization pursued deals in Georgia, Kazakhstan and Russia.

Cohen has denied any wrongdoing. His attorney could not be reached for comment but ultimately the question is whether that will breach the red line the president drew last year when he said that Mueller should not be investigating the president's finances -- Manu Raju, CNN, Washington.


VANIER: What's the reaction in Russia to these latest sanctions?

Well, it can best be summed up in one word: defiance. The foreign ministry promised, quote, "harsh response." It also issued this statement, "Washington continues to frighten with the rejection of American visas and threaten Russian businesses with freezing property and financial assets, forgetting that the seizure of private property and other people's money is called robbery.

"We would like to advise Washington to get rid of illusions that we can be spoken to with the language of sanctions."

One of the men targeted is Andrey Kostin, the chairman of Russia's VTB Bank. Here's what he told CNN's Richard Quest.


ANDREY KOSTIN, CHAIRMAN, VTB BANK: I don't view the sanctions, the personal ones, because I did nothing wrong to America, to American interests. I was always trying to promote good business relationship with American banks, with American investors.

So I am punished because the American administration considers that the Russian government is conducting the wrong policy, and it's very unfortunate.

It shows the very high level of misunderstanding of Parliament and American administration of the intention of the Russian government, of the Russian leadership.


VANIER: You might recall this recent bout of tension between Western countries and Russia started after a former Russian spy was poisoned in England. Well, doctors treating Sergei Skripal say that he is no longer in critical condition and that he is improving rapidly. His daughter, Yulia, also pictured here, is now in stable condition.

Both of them were attacked with a nerve agent last month in Salisbury, England. Moscow denies that it anything to do with this poison attack.

In exclusive reporting, CNN has learned that Donald Trump's lawyers are preparing him for what could be the most important interview of his presidency. This is according to a White House officials and a familiar with the situation.

The lawyers are repeatedly going over potential topics that special counsel Robert Mueller may ask Mr. Trump about. All of this is connected to Mueller's investigation into Russian election meddling.

And keep in mind, President Trump hasn't --


VANIER: -- officially or formally agree to be interviewed yet. Let's take a look at all of these developments. Let's talk to Michael Genovese. He's a political analyst and author of "How Trump Governs."

Michael, if the president does not have to answer the special counsel's questions, then why would he do it?

MICHAEL GENOVESE, CNN POLITICAL ANALYST: Well, I think one way or another, the president is going to testify, whether it's voluntarily, out of a deal that his lawyers make with the prosecutor or whether he's forced to because of a subpoena.

So I think that's clear. The problem for President Trump is that he is notoriously undisciplined. He blurts things out. The whole incident, we're sending troops to the border, something just blurted out and became policy.

I think in the case of Trump, he needs to be disciplined, focused, he needs to stay on script and so therefore practice, practice, practice. If he lets Trump just be Trump, he's liable to do what Bill Clinton did, which is get into the perjury trap, where you say something that is not true, that is materially not true to a particular case.

And that's what they get you on. And so I think the president's lawyers and friends of the president are clearly worried about that potential for President Trump to basically put his foot in his mouth legally.

VANIER: All right. I want to pivot now to the administration's actions vis-a-vis China and Russia. Let's start with China. The U.S. getting tough on Beijing. And listen first to trade secretary Steven Mnuchin.


STEVEN MNUCHIN, U.S. TREASURY SECRETARY: The tariffs will take some period of time to go in to effect. There will be public comments. So while we're in the period before the tariffs go on, we'll continue to have discussions. But there is the potential of a trade war.

And let me just be clear, it is not a trade war. The president wants reciprocal trade.


VANIER: So you heard the key words there. "There is the potential for a trade war."

My question is this, does the administration actually have a choice?

Is there any alternative course of action given the administration's goal, which is to change China's trade practices?

GENOVESE: Well, you're right, Cyril, and this should come as no surprise. The president signaled this during the campaign repeatedly, singling out China as the enemy. And in many respects, he's correct. China violates I.P. rules; trade Sanctions. They are a major violator of the trade regime.

And so in one sense he's correct.

The question is, how do you deal with this?

Do you go public as Trump did and challenge the Chinese publicly, threaten them publicly and force them to reciprocate, ratcheting things up tit-for-tat, which could accidentally lead to what everyone says they want to avoid, a trade war?

Or do you deal with it more privately?

The Chinese will have to save face and so if you insult the publicly, they will respond. If you deal with them privately, you're more likely to get them to respond favorably.


VANIER: But, Michael, let me stop you right there because this argument has been explored before. And the administration has an answer to this. And the administration's answer is, well, past administrations have tried negotiating with the Chinese. The -- Obama has tried negotiating with the Chinese.

They identified the same problems with Chinese trade practices that we do and their negotiation just didn't work. So we have to take a stronger, you know, more strong-armed tactic.

GENOVESE: And they are. Indeed, they are. And the question is, how far to the edge do you want to go?

How far can you go before there's an accident and someone slips?

I think you're absolutely right that they've tried to negotiate before. China has not been very willing to get involved. But I think in this case, the Chinese think they can play Trump. They think that if they keep moving forward, ratcheting things up, they will give him a small victory. He'll claim victory, throw himself a parade and then the Chinese will just behind the scenes continue to clean our clock.

So I think that's the real danger that the Chinese believe they can play Trump.

VANIER: OK. So tell me about the Russians now. New sanctions against the Russians; specifically, against seven Russian oligarchs, a number of Russian government officials, a number of Russian companies.

Do you think that's enough?

Again, the goal here for the U.S. administration is to change Russia's behavior on a wide range of issues, both international, what they call hostile actions around the world, and U.S. election meddling.

Is this enough to get that done?

GENOVESE: Let me say hurray at last. The president really responded with some firmness and with some direction. And so he's to be congratulated. We've talked about how he's afraid to take the Russians on. He's taking them on and he's taking the one where it hurts, with the oligarchy.

Russia is a kleptocracy. That kleptocracy has made Putin one of the richest men in the world. He feeds the oligarchs. They feed him. It's a mutual benefit society --


VANIER: But the oligarchs have been sanctioned before to little effect.

GENOVESE: Well, again, any sanction that you have, you have to keep taking it up, sip, one at a time, one at a time until you get --


GENOVESE: -- closer, until you squeeze a little bit harder. And once you squeeze the oligarchy, once you take their money, there's a section in London that's referred to as Londongrad. That's how much money they're taking out and exploiting it and exploiting the riches of Russia at the expense of the Russian people.

And so I think the strategy of increased pressure on Russia and increased sanctions might work. As it is today, it won't work. But if you keep ratcheting it up, if we can get our allies to join us and I think England has been a tremendous leader in this, there's a chance to really squeeze the Russian oligarchy and that's what'll hurt Putin the most.

VANIER: Yes. And actually, that's something that U.S. and U.K. are looking at, changing laws so that some of the front companies that are used to buy property for Russian oligarchs actually have to declare who they belong to. So that's one thing that they're looking at -- (CROSSTALK)

GENOVESE: Watch them squeeze when that happens.

VANIER: Michael Genovese, thank you so much for joining us on the show. Always a pleasure to talk to you. Thanks.

GENOVESE: Thank you. Good to see you.

VANIER: Now Facebook is scrambling to make some big changes before Mark Zuckerberg heads to Capitol Hill. What it means for your Facebook page -- ahead.

And more violence along that Israel-Gaza border. How Israel tried to stop Palestinians trying to cross the border. Stay with us.




VANIER: Brazil's former president Luiz Inacio Lula da Silva is officially now a fugitive. The 72-year old was supposed to turn himself in on Friday to begin a 12-year prison sentence. But instead, he's now holed up headquarters of Brazil's metal workers' union, surrounded by supporters.

Lula was convicted of corruption related to the state-run oil company but he denies any wrongdoing in the scandal.

Facebook is making changes. The goal is to try to stop the Russian trolls. Mark Zuckerberg says it's not going to stop everyone from trying to game the system but it will make it harder. Zuckerberg announced the new rules just days before he's scheduled to testify before Congress. CNN's Laurie Segall goes through the changes and what it means for your Facebook page.


LAURIE SEGALL, CNNMONEY TECHNOLOGY CORRESPONDENT: Hey, there. Well, Facebook announcing a number of changes to come about election meddling. It's a push for transparency around advertising and the social media company will now actually begin labeling all political and issue ads.

And there also is a part of this going to show who paid for those ads and require anyone who wants to run a political or issue ad to verify their identity and location so they'll have to be approved in order to do this.

Now this is an expansion from Facebook's prior moves. These measures would have applied to political ads. So as mentioning candidates. But this expansion also covers issue ads, which if you think about issue ads, they cover hot button issues that don't even mention candidates -- so think gun control or education. As part of this, the company also announced a searchable database

where users can actually see how much the ads cost and also what kinds of people advertisers are targeting.


SEGALL: So this is all about more transparency.

And one more move which is actually pretty interesting, the company is going to start verifying the people behind pages if they have a big following. So think about pages like the topics or organizations that you like on Facebook.

And then think about 2016, Russian trolls actually used pages to pose as Americans on different sides of the different political spectrum to create division in America. Facebook found out about this after the fact.

This news is coming as Sheryl Sandburg made the media rounds. She was asked a lot of tough questions. One question she was asked about will the company find more issues when it came to user data. Listen to what she said.


SHERYL SANDBURG, FACEBOOK: Well, we weren't focused enough was protecting because that same data that you enable to use social experiences can also be misused.

UNIDENTIFIED FEMALE: Do you think there could be other breaches like the one we saw in Cambridge Analytica, where tens of millions of people's status was accessed improperly?

SANDBURG: We're doing an investigation. We're going to do audits and, yes, we think it's possible. That's why we're doing the audit.


SEGALL: And all of this is coming before a monumental week for Facebook. The CEO, Mark Zuckerberg, will be testifying before Congress on Tuesday and Wednesday. He'll have lawmakers posing very challenging questions to Mark about the company's use of data in light of the Cambridge Analytica scandal and everything that's come out.

And also the weaponization of the platform for political purposes -- back to you.


VANIER: Deadly protests broke out again on Friday along the Israel- Gaza border. Since last week, thousands of Palestinians have been taking part in what they're calling the March of Return. They're trying to reach Israeli territory in a bid to reclaim what they say is Palestinian land. And that's led to confrontations with Israeli forces.

Palestinian health officials say at least seven people were killed on Friday and more than a thousand injured.

CNN's Ian Lee has been at the scene, tracking the protests and the violence along the Israel-Gaza border. He filed this report.


LEE (voice-over): Burning tires draw a black curtain across the border of Gaza and Israel. A Friday of fire mixed with tear gas and water, ingredients for another volatile day. Thousands of Palestinians again rallying near the fence; meters away, Israeli forces, each side bracing following Gaza's deadliest week in years.

LEE: This thick, black smoke is designed to obscure the sight of Israeli snipers. But the military fears that it could also be used as cover for Palestinians moving closer to the border.

LEE (voice-over): This video provided by the IDF allegedly shows a Palestinian cutting the border fence, a red line for Israel, who warns anyone threatening the country's sovereignty is risking their life.

UNIDENTIFIED MALE: Our mission today is to deny the Hamas that ability and to make sure that nothing harms our security infrastructure and nothing comes across.

LEE (voice-over): Tear gas and water cannons try to repel Palestinians making a run at the fence. When that doesn't work, live rounds and the death toll rises.

"I'm hoping that I will be a martyr," Nihal Walid (ph) says. "My son is carrying the Israeli flag. He will burn it in front of them and I want him to be a martyr, too, God willing."

She is not the only one that says so. Many of these Palestinians tell us they have nothing to lose and will do anything to return to lands they lost to Israel 70 years ago. Their determination can be measured by their casualties. And the dead and injured overwhelming the already struggling Gaza hospitals.

UNIDENTIFIED MALE: (INAUDIBLE) some kinds of medicines and supplies. So we are trying but it is not so easy.

LEE (voice-over): It is likely to get more difficult with the violence expected every Friday until mid May. And many worry a single incident could burn out of control leading to yet another war -- Ian Lee, CNN, on the Israel-Gaza border.


VANIER: Temporary relief in India from the sweltering heat wave sweeping the region. We'll be taking a look at the forecast when we come back.





VANIER: Thank you for watching from the CNN NEWSROOM. I'll be back with the headlines in just a moment.