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EARLY START

China: The U.S. Has Started 'The Biggest Trade War' In History; Scott Pruitt Resigns Amid Ethics Scandals; Former Thai Navy Diver Dies During Cave Rescue Effort; Secretary of State Pompeo In North Korea For Denuclearization Talks. Aired 5:30-6a ET

Aired July 6, 2018 - 05:30   ET

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


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[05:30:52] DAVE BRIGGS, CNN ANCHOR: The biggest trade war in economic history. China with a stern rebuke and promises to strike back after another round of tariffs imposed by the U.S.

CHRISTINE ROMANS, CNN ANCHOR: The administration facing urgent deadlines to reunite thousands of families split up at the border, but still no clarity on just how many kids are being held.

BRIGGS: Tragedy in Thailand. A rescuer has died working in the cave where a soccer team and their coach remain trapped. We have a live report from Thailand straight ahead.

Welcome back to EARLY START, everybody. I'm Dave Briggs.

ROMANS: And I'm Christine Romans. It is 31 minutes past the hour this Friday, jobs day.

But today we're talking about a trade war -- a trade war between the U.S. and China. It is real, it is here. The U.S. firing the first real shot in a trade battle that's been brewing now for months.

At midnight -- the stroke of midnight -- the U.S. hit China with tariffs on $34 billion in goods. China immediately responded, hitting the U.S. with revenge tariffs of equal value, accusing the U.S. of launching the largest trade war in economic history, and being a trade bully.

China threatening high-value American exports -- cars, crude oil, and cash crops like soybeans. The farm goods are strategic hitting states that voted for President Trump.

The U.S. tariffs target Xi Jinping's 'Made in China 2025' -- the high- tech industries China has vowed to dominate -- aerospace, robotics, manufacturing, autos.

American companies will pay those tariffs when they import the goods. They can either be absorbed the costs or pass it along to consumers. But so far, the U.S. has avoided slapping tariffs on things that Americans feel directly in their wallets -- consumer goods. Everything from shoes and cellphones. But the U.S. won't be able to avoid slapping tariffs on those goods if the president vows to follow through on this threat to target $500 billion in Chinese goods. That's what he told reporters yesterday. Five hundred billion is roughly the total amount the U.S. imported from China last year.

Wall Street has been concerned about a trade war but investors knew this move was coming. Global stocks and U.S. futures barely moving on the news.

BRIGGS: All right, let's bring in "CNN POLITICS" senior writer and analyst, Harry Enten. Good morning to you.

HARRY ENTEN, SENIOR WRITER AND ANALYST, "CNN POLITICS": Good morning.

ROMANS: Hello.

BRIGGS: Let's crunch some numbers. Still much to be learned about the economic impact of this trade war. But when you look at the numbers what types of counties will feel it if, in fact, these tariffs go into effect and people pay more?

ENTEN: Yes, they tend to be Trump-leaning counties in the Midwest. And the Midwest, of course, was where Donald Trump outperformed Mitt Romney the most and where he won the presidential election, so this is a very dangerous topic for him, potentially.

ROMANS: Interesting because you look at Iowa, you look at Wisconsin, you look at some of these counties that completely flipped, right --

ENTEN: Right.

ROMANS: -- for Donald Trump and became really important counties for Trump. If you look at the numbers, according to the Brookings Institution, I think some 82 percent of the counties affected by tariffs will be Trump counties.

So how much leverage do those voters give Trump if they see soybean prices fall and farm values fall?

ENTEN: Well, I mean, obviously, his voters -- the core of his base is going to give him a lot of leverage. But the question is the voters in the middle of the spectrum -- the voters that switched over from Barack Obama in 2012 to Donald Trump in 2016.

But it's not just about voters changing their minds, it's also about turnout. If let's say, they're unhappy with the trade war and they go you know what, at the end of the day I like Donald Trump more than the Democrat, but I just don't really feel it so I'm not going to turn out. Turnout is very important in the midterm elections.

ROMANS: And, White House trade officials have been publicly and privately saying that they think the economy is just so good in so many different areas that trade war, it can be absorbed. Even if there's negative economic consequences it can be absorbed because people -- there are more job openings than there are people -- BRIGGS: Sure.

ROMANS: -- with jobs at the moment.

BRIGGS: And he's got a lot to tout. He can talk --

ROMANS: Right.

BRIGGS: -- about the record low unemployment, record low Hispanic unemployment rate, record low African-American unemployment rate. And his favorability on the economy is very strong.

He's on safe turf here, isn't he?

ENTEN: The economy is his best issue, by far, of the major issues. And, in fact, the difference between his overall approval rating -- his approval rating on the economy is one of the largest for any presidents dating back since the late 70s. So if he's fighting on the economy that's where he wants to fight.

The question is whether or not a trade war might drag him down a little bit --

ROMANS: Yes.

ENTEN: -- on -- in those numbers.

ROMANS: And whether it becomes a real big conflagration or we just are limited to this $50 billion back-and-forth from these two.

[05:35:02] Let's talk about women. The president, last night, managing to insult Sen. Elizabeth Warren and make a weird rejection of the #MeToo movement all in one move -- listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Let's say I'm debating Pocahontas, right? I promise you I'll do this. I will take -- you now those little kits they sell on television for $2? Learn your heritage.

We will take that little kit and say -- but we have to do it gently because when the #MeToo generation -- so we have to be very careful. And we will very gently take that kit and we will slowly toss it, hoping it doesn't hit her and injure her arm.

(END VIDEO CLIP)

ROMANS: Now, Dave keeps making a very good point that the #MeToo movement is not about --

BRIGGS: I shouldn't laugh. That is not funny.

ROMANS: -- tossing something softly at a woman.

BRIGGS: No. The #MeToo movement has nothing to do with being gentle to women. It has to do with not sexually harassing them.

ROMANS: Yes, at work.

BRIGGS: We digress.

ROMANS: Anyway, so tell me about the #MeToo movement and maybe this gender gap for what men and women -- coming up here for the president.

Is he weak on -- is he weak on the women issue?

ENTEN: Well, we know that if you look at this graphic on the screen right now we see that the gender gap -- the way that women said they're going to vote in this election versus men -- if it holds through the midterm election we're going to have the largest gender gap on record since at least 1958 and it could be even longer than that. That's just as far back as the data goes.

BRIGGS: And he made these #MeToo comments the same day he hired a new messaging man. That man was on Air Force One on the flight to Montana -- who was let go from a television network -- Bill Shine -- for years being quiet about ongoing sexual harassment. Now, he was never accused of harassing anyone but being quiet about what Roger Ailes was doing there at Fox News.

So this could be turf where he's not on as safe a ground.

ENTEN: Definitely not.

Women, right now in the polls, say they're going to vote for Democratic candidates by 20 percentage points. Men are saying they're going to vote for Republicans by six. But if that's where the gender gap is and women are voting for Democrats in such large numbers, it could be very dangerous ground for the president.

And more than that, it looks like they're going to turn out. If you look, so far, at the special elections -- the gubernatorial elections in Virginia and New Jersey and the primaries so far, women are turning out in very large numbers and if that continues to be the case it would be very bad for the president.

ROMANS: All right.

BRIGGS: So if you're in charge of coms get back to the economy.

ENTEN: Get back to the economy. Economy, economy, economy.

ROMANS: All right.

BRIGGS: All right. Harry Enten, thank you.

ROMANS: Thanks, Harry.

ENTEN: Thank you.

BRIGGS: President Trump also attacking not just one, but two ailing Republicans at that Montana rally last night. The president mocking Sen. John McCain for his thumbs-down vote on

health care last summer despite calls from several Republicans to stop attacking McCain.

Then, Mr. Trump went after former President George H.W. Bush for a campaign slogan he coined some 30 years ago.

(BEGIN VIDEO CLIP)

TRUMP: You know, all the rhetoric you see here -- the thousand points of lights. What the hell was that, by the way?

A thousand points of light. What did that mean? Does anyone know?

I know one thing. Make America great again, we understand. Putting America first, we understand.

A thousand points of light? I never quite got that one. What the hell is that? Has anyone ever figured that one out?

It was put out by a Republican, wasn't it?

(END VIDEO CLIP)

BRIGGS: It was.

Former George W. Bush press secretary Ari Fleischer firing back on Twitter, writing, quote, "This is so uncalled for going after a 94- year-old former president's promotion of volunteerism. I don't mind POTUS being a fighter. I do mind him being rude."

ROMANS: Months of scandal and accusations of misconduct proving too much for the EPA administrator Scott Pruitt. He resigned Thursday but that may not end his troubles.

President Trump announced Pruitt's departure on Twitter, later telling reporters the allegations against his EPA chief didn't bother him. But he said Pruitt believed the accusations had become a distraction.

Now, "The Washington Post" reports Trump forced Pruitt out without speaking to him, ordering his chief of staff to let Pruitt know it was time to go.

In his resignation letter, Pruitt does not directly mention the scandals nor the 14 -- 14 official investigations into his conduct.

Instead, he writes, "It is extremely difficult for me to cease serving you in this role. However, the unrelenting attacks on me personally and my family are unprecedented and have taken a sizable toll on all of us."

Despite his resignation, the House Oversight Committee and the EPA inspector general continue their investigations of Pruitt.

His deputy, Andrew Wheeler, takes over as acting administration on Monday. He is a former coal lobbyist. He is expected to continue deregulation and climate policies critics regard as harmful to the environment but are favorable to the folks he represents.

BRIGGS: Yes, indeed. They love what he's done.

Today marks the first of several key deadlines the administration faces as it struggles to reunite thousands of families split up at the border. July sixth, the court-ordered deadline for officials to put parents in phone contact with their children.

Officials still will not say exactly how many kids taken from their parents remain in federal custody.

ROMANS: For weeks now, we've been told about 2,000 children were separated. But on Thursday, Health and Human Services Sec. Alex Azar said this.

[05:40:09] (BEGIN VIDEO CLIP)

ALEX AZAR, SECRETARY, DEPARTMENT OF HEALTH AND HUMAN SERVICES: It is under 3,000. I want to give you an outer bound -- under 3,000 and that is the maximum set. It will not be 3,000, it will not be close to 3,000. It will be under 3,000.

(END VIDEO CLIP)

ROMANS: To be fair, under 3,000 represents all separated children in government hands, not just those taken under the new zero tolerance policy. Some came earlier, some crossed illegally by themselves.

BRIGGS: CNN was on hand exclusively for one moving reunification yesterday -- a Guatemalan woman who had not seen her 8-year-old daughter for two months.

(BEGIN VIDEO CLIP)

ANGELICA GONZALEZ-GARCIA, REUNITED WITH DAUGHTER AFTER TWO MONTHS: Forgive me for leaving you all alone. Forgive me, daughter. Forgive me.

(END VIDEO CLIP)

Angelica Gonzalez-Garcia said she and her daughter fled domestic violence in Guatemala but were separated by immigration officers in Arizona. Gonzalez-Garcia had to go to Boston, with the help of friends, to get her daughter back.

ROMANS: All right.

Breaking overnight, a former Thai Navy diver working to rescue those 12 boys and their soccer coach trapped in a flooded cave -- he has died. Officials say he ran out of oxygen attempting to return to a command center inside the cave. Now, for the first time, rescuers say there is a limited amount of time to get everyone out.

I want to bring in CNN's David McKenzie. He is there on the scene for us live in Thailand.

Such a tragedy for that ex-Navy diver. He was delivering air tanks along the path to the boys in the cave when his own air ran out.

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Well, that's right, Christine. Good morning.

You know, that former Thai Navy SEAL gave his life to the search operation and he gave it trying to get oxygen to the boys in that cavern. And that is one of the reasons for a dramatic reassessment, just today, of the time line of this possible rescue effort -- this difficult rescue effort.

Thai Navy SEALs saying that now they might have to go in sooner rather than later. That the window might be closing both because those oxygen levels in the cave where the boys and their coach have been hunkered down for more than two weeks may be reaching critical levels that could cause very severe health effects.

And, the rains have been coming on and off today. If they start in earnest, then Christine, the waters could flood in again and inundate those boys.

And that noise you might be able to hear behind me, that's an air compressor filling in the tanks with a special -- specially-equipped divers who are going in and out of this cave several hours to get to the boys from the command center.

That helicopter overhead is probably trying to find sinkholes or air vents into the ground.

This is a huge operation with expertise from around the world. Still, it's not clear when they will mount that rescue mission but it could be sooner rather than later and they say that window could close very soon, indeed -- Christine.

ROMANS: All right, we certainly wish everyone well there and those rescuers are working so hard. Thank you so much for that, David.

You know, Elon Musk just tweeted SpaceX and Boring Company would be sending engineers to Thailand to offer assistance with the rescue.

BRIGGS: Fantastic. All right.

What's North Korea's plan to denuclearize? The secretary of state touching down in North Korea overnight, looking for answers to that and much more. We're live in Seoul, straight ahead.

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[05:48:20] BRIGGS: At this hour, Secretary of State Mike Pompeo is beginning his third visit to North Korea for talks with Kim Jong Un. And, President Trump is defending his administration's approach with the Kim regime.

(BEGIN VIDEO CLIP)

TRUMP: Since the rhetoric stopped -- you know, we had very tough rhetoric. Would you say that was a little tough, right? So remember, they said he's too tough. He's going to cause a war.

It's too tough.

Now they say he's too nice, he's too nice. He's too nice.

(END VIDEO CLIP)

BRIGGS: Pompeo says he spoke to the president while they were both in the air last night. The secretary of state tweeting the president "believes that Chairman Kim sees a different, brighter future for the people of North Korea. We both hope that's true."

Andrew Stevens live in Seoul for us. Andrew, good morning.

Does this start with a general accounting of exactly what nuclear weapons North Korea possesses? What else can Pompeo hope to take home? It's a concrete step.

ANDREW STEVENS, CNN INTERNATIONAL CORRESPONDENT: Well certainly, Mike Pompeo would like to take home that step for a start, Dave -- a full list of the nuclear program, the nuclear weapons, and the nuclear infrastructure -- and ballistic missiles includes, obviously -- from North Korea.

At this stage, we don't know what Mike Pompeo is going to get. He has thrown a bit of cold water on hopes that he may get a time line from Kim Jong Un or from the North Koreans on exactly what the next steps towards this complete denuclearization of the Korean Peninsula would look like and when it would happen.

That was the agreement at the summit in Singapore on June 12th and that's all we have at the moment -- this commitment to denuclearization with no specifics whatsoever.

[05:50:05] What Mike Pompeo could get, as a start at least from North Korea, is the commitment or the actual happening of returning remains of U.S. troops that fought in the Korean War back to the United States.

But so far, Mike Pompeo has really said that he is in North Korea to follow-up on that commitment from the summit and to find out whether Kim Jong Un is serious in his intent to give up, and what Kim's next steps are going to be. At this stage Dave, we can't say exactly what they're going to be.

BRIGGS: All right, 6:50 p.m. there in Seoul. Andrew Stevens live for us. Thank you.

The June jobs report is out today. How low can unemployment go?

It's currently at 3.8 percent, the lowest since 2000. If it dips to 3.7 percent that would be the lowest in nearly 50 years but economists predict it will hold steady in June.

They also think the U.S. added 195,000 jobs and wages grew 2.8 percent. That's sluggish for such a tight labor market. The Labor Department says job openings currently outnumber unemployed workers, but wages have not grown about three percent since 2009.

Ahead, a Dallas mom saw a man stealing her car with her two kids in the back seat. What she did to stop him will shock you.

(COMMERCIAL BREAK)

[05:55:53] BRIGGS: A Texas woman stops an alleged car thief by shooting him with her own kids in the back seat. Police say Michelle Booker went into a Dallas convenience store Wednesday and emerged to find a man driving away with her two toddlers in the back seat. That's when police say Booker managed to jump into the car.

(BEGIN VIDEO CLIP)

MICHELLE BOOKER-HICKS, MOTHER WHO SHOT ALLEGED CARJACKER: I asked the gentleman to pull over, to stop -- you know, to get out of the car. He would not -- he would not get out of the car.

And he turned around and looked at me with eyes buzzed. I then reached in the middle of the armrest to get to my glove compartment and that's when I fired at him.

I'm not a killer or anything like that, but I do believe in defending what's mine.

(END VIDEO CLIP)

BRIGGS: Wow.

Ricky Wright was shot once in the head and crashed the car into a telephone pole. Wright is in the hospital in serious but stable condition. He is facing charges.

No charges have been filed against the mom.

New meaning to the phrase "wedding crasher." A couple in Wisconsin barely escapes disaster when a tree branch falls as they record their wedding video.

(BEGIN VIDEO CLIP)

(Tree branch falling)

CHEYENNE KOPESCHKA, BRIDE: Oh, my God.

(END VIDEO CLIP)

BRIGGS: Cheyenne and Lucas Kopeschka were not hurt, just a few scrapes, and they kept shooting the video with the downed branch on the picnic table next to them. The bride says the couple's love is going to be stronger than that tree.

The first hurricane of the season has formed way out in the Atlantic. Beryl is expected to weaken to a tropical storm before reaching land Sunday or Monday. Here in the U.S., the northeast finally getting a break from that

oppressive heat. Whose turn is it now? Derek Van Dam with the answer.

(BEGIN VIDEOTAPE)

DEREK VAN DAM, AMS METEOROLOGIST: Good morning, Dave and Christine. I think I have a weather forecast you're going to enjoy.

Much cooler air settling in for the weekend for the Big Apple all the up the New England coastline, in fact. This is all thanks to a cold front that will trigger off a few showers and rumbles of thunder.

In fact, there is a potential for some localized flash flooding as well. That's where we've highlighted it in that shading of green stretching from Boston to New York, Philadelphia, and D.C.

This is a line of storms moving through the morning and afternoon hours. The evening, however, I think we should start to see a general clearing trend from the west to the east just in time for dinner.

Temperatures today, 82 degrees. Look at this, 79 by Saturday. More of the same for Boston. Temperatures cooling off significantly and you'll feel a drop in the humidity levels.

Unfortunately, the same can't be said across the southwest. Record heat setting up across the region. The National Weather Service issuing extreme heat warnings for L.A., Las Vegas, and Phoenix. Triple-digit heat for this region.

Back to you.

(END VIDEOTAPE)

BRIGGS: Wicked. Thank you, Derek.

A giant baby full of hot air and wearing nothing but a diaper set to greet President Trump when he arrives in London a week from today. The city's mayor Sadiq Khan, a noted Trump critic, has given the go- ahead for the Trump baby blimp to be flown near the Parliament building.

The 19-foot-high balloon built with the trademark swoop of hair and tiny hands will take flight for two hours and the hashtag #TrumpBaby was born.

Thanks for joining us. I'm Dave Briggs.

Christine Romans has the trade war news right now with Alisyn Camerota and John Berman on "NEW DAY."

Have a great weekend, everybody.

ANNOUNCER: This is CNN breaking news.

ALISYN CAMEROTA, CNN ANCHOR: We want to welcome our viewers in the United States and around the world. This is NEW DAY. It is Friday, July sixth, 6:00 here in New York.

And we do begin with breaking news because overnight, President Trump launched a trade war with China, imposing tariffs on $34 billion worth of Chinese goods. China hitting back with retaliatory tariffs and accusing the U.S. of starting the biggest trade war in history.

So what are the consequences of this? We will explore that.

Meanwhile, the president's scandal-plagued EPA chief Scott Pruitt is out of a job. President Trump insists that Pruitt made the decision to leave but there are reports that the president pushed him out by forcing him to resign.

Now, a former coal lobbyist takes over.

JOHN BERMAN, CNN ANCHOR: A stunning admission from the U.S. government. The secretary of Health and Human Services announced the government has reunited zero families in the last week. We're talking about the children separated from their parents at the border and held in custody around the country.

And that might not even be the most glaring admission here.