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Tariff Trouble; Russia Investigation; U.S.-North Korea Summit; More Evacuations as Wildfires Spread in Western U.S. Aired 2-2:30a ET

Aired June 3, 2018 - 02:00   ET




CYRIL VANIER, CNN ANCHOR (voice-over): Hello, everybody. Thank you for joining us here at the CNN NEWSROOM. I'm Cyril Vanier in Atlanta.


VANIER: The meeting of G7 finance ministers in Canada ended on Saturday in a way rarely seen before, six of them ganging up on the U.S. for sticking key allies with punishing new tariffs on steel and aluminum.

This kind of friction rare among friendly nations. Senior officials from Canada, France, Germany, Italy, Japan and the U.K. all gave U.S. Treasury Secretary Steven Mnuchin an earful behind closed doors. Their collective frustration with Washington was palpable.


UNIDENTIFIED MALE: What did we ask Treasury Secretary to do?

We said that we were collectively hoping that he would bring the message back, the message of regret and disappointment at the American actions, and concern that they are not constructive. And my sense is that he's going to take that message back to Washington.


VANIER: So how did respond to it?

Well, he seemed to brush off their complaints.


STEVEN MNUCHIN, U.S. TREASURY SECRETARY: I don't think in any way the U.S. is abandoning its leadership in the global economy; quite the contrary. What the group was very focused on was obviously the steel and aluminum tariffs, which, again, we're doing to protect in particular our steel and aluminum industries.

So this is -- there was general concern that this could be create and become larger trade issues. We're in conversations with the E.U. about trade issues. And I think, as you know, on China, we've been very focused on the trade relationships with China.


VANIER: The U.S. president was defiant as usual, tweeting, "When you're almost $800 billion a year down in trade, you can't lose a trade war."

All of this while U.S. trade negotiators are in Beijing right now for crucial trade talks after the administration threatened to levy 25 percent tariffs on $50 billion worth of Chinese imports.

and it is not just international allies taking issue with President Trump's unilateral tariffs. Members of his own party are raising serious questions. Republican senator Bob Corker said he is working with like-minded Republicans to push back after Mr. Trump overstepped his authority in imposing the tariffs.

Earlier I spoke with political analyst Peter Matthews about where this goes next.


PETER MATTHEWS, CYPRESS COLLEGE: I think it's going to escalate if we don't calm things down and Trump reverses himself. Otherwise, it could escalate and become another Smoot-Hawley tariff, back in 1930, when exports to the United States were cut by at least 60 percent because of the tariffs, because a trade war broke out.

So I would think it would behoove Mr. Trump to backtrack, especially with our allies, our biggest trading partners, the E.U., Mexico and Canada, where he stuck these big tariffs on their products coming in.

And that's going to really, really hurt the exports to the United States, it's going to hurt jobs. The price of goods and services are going to go up right here and they are, have already started going up.

And that's a big problem. Mr. Trump has to look at this very carefully and look at why he's doing this and know it's going to start a trade war and continue the trade war that's already actually begun.

VANIER: Well, the U.S. has imposed its tariffs. Now the Canadian counter tariffs don't come into effect for another months; the European tariffs also don't come into effect for at least a few weeks.

How big could this get?

Because we're talking about a trade war, those words are always a little scary. But the former boss of the World Trade Organization, Pascal Lamy, says, look, let's not exaggerate the economic impact this could have.

What do you think?

MATTHEWS: I think it begins rather small and it escalates gradually. If we look in past history, back in 1930, again, it began with the tariffs that escalated further and further and retaliation occurred by many, many of our trading partner.

And the whole world was engulfed in a trade war, which escalated the price of goods and services, caused more unemployment and deepened the depression. So this could happen once again here. And I think it's very dangerous territory.

And Trump should understand the main problem here with American exports and import trade deficit is not so much the tariffs that will help but higher wages across the board.

He should have insisted in the NAFTA trade agreement earlier, when it was brought in by President Clinton, that wages should increase in Mexico, raise gradually, step by step, so Mexican workers could have more money in their pockets when American companies go down there.

That way they can demand American exports and buy them as well. The fair trade model is truly based on labor and environmental safeguard being increased, not on these tariffs, which is really a very backward way of looking at things.

VANIER: Could this end up backfiring politically for Donald Trump?

Because the U.S. allies are targeting Republican states with their potential tariffs.

MATTHEWS: Yes, they are. And many Republican states are rural states, where there are many farmers with export products and their products are going to be hit hard by, for example, China, which buys a lot of American soybeans and that's Midwestern farmers that voted for Trump.

So it can certainly backfire on him. And there's a good chance that that's already going to start happening.

And don't forget the gas prices have gone up because Trump got out of the Iran nuclear deal and that made a shortage in the oil around the world. And so you have now gas prices having gone up by at least 50 cents a gallon in many states in the United States, many of the Midwestern states as well.

So already Trump's actions, when it comes to the international political economy, are backfiring on him. And I think it's going to hurt the chances of the Republicans in Congress being re-elected this fall, very good chance that would happen.


VANIER: Peter Matthews speaking to me earlier.

Now to the Russia investigation. We have some insight into how President Trump's legal team plans to keep him from being forced to testify.

"The New York Times" obtained a confidential letter written by the president's lawyers and sent to special counsel Robert Mueller. The lawyers argue that it is legally impossible for Mr. Trump to obstruct justice because, well, he's the president.


CNN's Shimon Prokupecz breaks it down.


SHIMON PROKUPECZ, CNN CRIME AND JUSTICE PRODUCER: The 20-page letter argues why the president doesn't have to be in interviewed by the special counsel. The president's legal team in their letter was also responding to some of the questions that the special counsel, the FBI and Mueller and his team is seeking to ask Trump.

In the letter they say because Trump is the chief law enforcement officer, that --


PROKUPECZ: -- quote, "that the president's actions could neither constitutionally nor legally constitute obstruction because that would amount to him obstructing himself and that he could, if he wished, he could terminate the inquiry or even exercise his power to pardon if he so desired."

And then some of the other issues that the special counsel has been looking at is Michael Flynn and whether or not the president tried to interfere in that investigation when he fired the former FBI director, James Comey.

And here in an interesting argument from the president's lawyers, they claim that the FBI never told the White House that Flynn was under investigation and, therefore, how could Trump obstruct justice when he didn't know that Flynn was officially under investigation?

They also said the White House had every impression based on what Flynn told them, that he was going to be cleared after the FBI interviewed him.

And they write this in the letter, "There could not possibly have been intent to obstruct an investigation that had been neither confirmed nor denied to White House counsel and that they had every reason, based on General Flynn's statement and his continued security clearance, to assume that that investigation was not ongoing," they say.

Now the letter addresses some important aspects of the special counsel investigation and that has to do with the crafting of a statement by the president regarding the Donald Trump Jr. meeting at Trump Tower.

You'll remember that was with a Russian lawyer. And for the first time, really, the lawyers here, the president's lawyers here write in this letter, basically admitting an admission from those lawyers that he, the president, helped craft a statement. And the response here from the lawyers to the special counsel, who's

looking into that meeting and also the crafting of these statements when it was revealed that this meeting took place, they say essentially that this is private matter.

And the letter goes onto say that the special counsel has received all of the notes, communications and testimony indicating that the president dictated a short but accurate response to "The New York Times" article on behalf of his son, Donald Trump Jr.

Now the significance of this meeting, as you'll recall, was that Don Jr. thought he was meeting with someone who was going to provide dirt on Hillary Clinton. But it really turned out to be that it was a Russian lawyer who wanted to talk about adoptions.

And finally what's really important here is that, since at least January, the president's lawyers have been making these arguments to the special counsel and now some of them publicly why the president should not be subjected to an interview.

And it seems at least, as far as everything we know, that that's not working because basically we are now in June and there's still this ongoing battle with the special counsel about the interview -- Shimon Prokupecz, CNN, Washington.


VANIER: Just nine days to go now until the historic summit between U.S. President Trump and North Korean leader Kim Jong-un in Singapore. U.S. Defense Secretary James Mattis is already there. This was for a previously scheduled event.

He is giving every indication, especially when it comes to sanctions, that simply having a summit on the books is not enough.


GEN. JAMES MATTIS, U.S. SECRETARY OF DEFENSE: Especially now we must remain vigilant. And we will continue to implement all U.N. Security Council resolutions on North Korea. North Korea will receive relief only when it demonstrates verifiable and irreversible steps to denuclearization.


VANIER: That question of denuclearization is only one of the policy and logistical details still to be worked out. "The Washington Post" reports another.

Who will pay the North Korean delegation's hotel bill once in Singapore?

The North Koreans have reportedly asked someone else to pick up the tab. Let's bring in our Alexandra Field in Seoul.

Alex, who is going to foot Kim Jong-un's hotel bill? ALEXANDRA FIELD, CNN CORRESPONDENT: Well, Cyril, these aren't even questions you would typically be talking about nine days before a summit but you are dealing with North Korea. You are dealing with what is a very hastily planned summit at this point and, yes, there's the question of who is paying for what.

"The Washington Post" reporting that Kim Jong-un wants to stay in a five-star hotel, the Fullerton Hotel in Singapore. The presidential suite there runs about $6,000 and that North Korea is demanding someone else pays for it. That's according to "The Post," which cites two sources familiar with the talks.

A State Department spokesperson has said that the U.S. isn't going to foot the hotel bill and they're not willing to ask other countries to do it. But "The Post" goes on to report that the U.S. is expected to request a waiver of sanctions from the U.N. associated with the travel costs for the North Korean delegation.

There have been some outside offers to pick up the hotel bill. The International Campaign to Abolish Nuclear Weapons has made an offer to use the prize money it earned, about $1 million dollars from a Nobel Peace Prize a year ago, to pay for these --


FIELD: -- travel costs to serve the cause of peace on the peninsula. So that's one offer.

But certainly there are other logistical concerns that still need to be worked out, like, for instance, how does Kim Jong-un even get to Singapore?

There have been questions about whether North Korea's aging fleet of Soviet-era aircraft could make the trip or if he would have to use a plane from another country, potentially embarrassing in terms of the optics of all of this.

And, Cyril, there are basic questions, like where is the summit going to happen?

Still no confirmation yet on the exact location in Singapore -- Cyril.

Not to mention the substance of the summit and what a deal could actually look like. Alex Field, thank you very much. We will speak again next hour.

A CNN team in Northern Gaza is reporting two large explosions as an uneasy calm there appears to be coming to an end. Israel claims Gaza militants fired a total of six projectiles towards Israeli territory on Saturday and Sunday.

The militants' attacks appear to have broken the ceasefire agreed to by Hamas and Islamic Jihad but never confirmed by Israel. Israel says it has struck 15 Hamas targets in response.

Also in Gaza, thousands are outraged after a Palestinian nurse was killed on Friday. The Palestinian news agency says that Israeli snipers shot the young woman while she was giving first aid to injured protesters. The Israel Defense Forces have said it was following rules of engagement during the protests.

In just over two months, Israeli forces have killed more than 100 Palestinians, about half of them died in a single day.

Staying in the region, Jordan, one of the most stable countries in the Middle East, is now facing its largest protests in years.

Anger is growing against austerity measures recommended by the IMF, the International Monetary Fund. Demonstrators are demanding the government scrap proposed reforms, which would hike taxes on some workers and some companies.

Protesters want the prime minister to resign but he says it is up to parliament to decide the fate of the measures.

Massive wildfires are spreading across parts of the western United States. Flames have consumed thousands of hectares in California, Colorado and New Mexico and forced thousands to leave their homes. One resident near the New Mexico blaze says his neighborhood has prepared for a fire like this.


UNIDENTIFIED MALE: We were very fortunate in Ute Park. There were about 30 structures within the limits of the fire as it went through the park and none of them were damaged. We kind of attribute that to the fact that we're all a fire-watch community.

And by that I mean, over the last three or four years, we've established 50-yard fire boundaries around each home. So if do we get a fire like we do have now, it can't get much closer than 50 yards around the boundaries of the houses.


VANIER: Well, at last check, the major fires in California and Colorado and in New Mexico were still uncontained.

Thank you for watching CNN NEWSROOM. I'm Cyril Vanier. "MARKETPLACE AFRICA" is up next and we'll have the headlines after that.