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EARLY START

Critical NATO Summit Starts Right Now; Tariffs on Another $200 Billion in Chinese Goods; Vive La France. Aired 4-4:30a ET

Aired July 11, 2018 - 04:00   ET

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


[04:00:01] CHRISTINE ROMANS, CNN ANCHOR: I agree.

ALEX MARQUARDT, CNN ANCHOR: But they are a mainstay. Part of the DNA.

Here we go. EARLY START starts right now.

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ANNOUNCER: This is CNN breaking news.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: But Germany is totally controlled by Russia because they were getting --

(END VIDEO CLIP)

MARQUARDT: President Trump with a shocker before the NATO summit gets under way. He says that NATO countries are taking advantage of the U.S. by cutting side deals with Russia.

ROMANS: Markets pointing lower after the president escalates his trade war with China. Tariffs on another $200 billion of Chinese goods are on the way, everything from fruit to handbags, rain jackets and baseball gloves.

MARQUARDT: And half of the World Cup final is set. France will play for the title. Will they face England or Croatia? We will find out today.

ROMANS: You were rooting for Belgium.

MARQUARDT: I was rooting for Belgium. They're the Cinderella. You know, they deserve a chance. But it's not to be. France is now in the finals against Croatia or England.

Good morning and welcome back to EARLY START. I'm Alex Marquardt.

ROMANS: I'm Christine Romans. It is Wednesday, July 11th. It is 4:00 a.m. in the East, 10:00 in Brussels where that NATO summit gets under way today.

And the president coming out swinging before the summit begins at a pre-summit breakfast. The president dressing down the NATO secretary- general, demanding increased defense spending by NATO allies. His wrath trained especially on Germany. He called Germany a captive of Russia.

(BEGIN VIDEO CLIP)

TRUMP: But Germany is totally controlled by Russia because they were getting from 60 to 70 percent of their energy from Russia and a new pipeline. And you tell me if that's appropriate because I think it's not. And I think it's a very bad thing for NATO and I don't think it should have happened.

(END VIDEO CLIP)

MARQUARDT: The president's pregame jabs coming as no surprise to European leaders. They fear that President Trump will follow through on threats to cut back on military protection for U.S. allies.

Earlier, the European Council president, Donald Tusk, had a stark warning for Mr. Trump.

(BEGIN VIDEO CLIP)

DONALD TUSK, PRESIDENT, EUROPEAN COUNCIL: America, appreciate your allies. After all, you don't have that many.

(END VIDEO CLIP)

ROMANS: The NATO summit comes just a few days ahead of President Trump's sit-down with Vladimir Putin.

I want to bring in international diplomatic editor Nic Robertson. He is live at NATO headquarters.

And what a way to start this confab, I mean, to have the president who has said that Putin is just fine, insulting Germany and really drawing his wrath on Germany.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: You know, don't they say, isn't the saying start out as you mean to continue? President Trump's had this drum roll of lambasting (ph) NATO leaders over the past couple of weeks, telling them to pay up their 2 percent on GDP on defense spending as their commitment to NATO, and tells them to do -- he's followed that up with tweets on the plane saying he's even considering getting back dues from NATO allies who haven't been paying enough over the recent years.

And then this attack on the German chancellor, Angela Merkel, somebody who's had no particular love lost for over the past year and a half since he's been in office. But this is very tough talk.

You had Jan Stoltenberg there, the NATO secretary-general, put on the spot. The cameras were on. President Trump was on a roll. Stoltenberg pushing back in a diplomatic way, sticking to the language we've seen him use before, that we are stronger when we are united.

Clearly, this is a message for Trump about the messaging that the whole NATO summit he hopes should achieve to send a message to President Putin, because in everyone's eyes here, President Putin would like to see NATO divided, in chaos, in turmoil. So, Stoltenberg really is trying to sort of play that down.

But what a way to begin, as you say, and if he does intend to continue this way, he's going to be meeting Angela Merkel face-to-face. He'll be meeting Justin Trudeau from Canada. He'll be meeting Theresa May. He'll be meeting Emmanuel Macron of France, all of the leaders that he so fell out with publicly at the G7 recently in Quebec.

So, you know, I think there's a real level of concern here that President Trump is going to come in punching hard. But at the same time, European leaders will recognize here with Secretary of State Pompeo that is here, with Secretary of Defense James Mattis, these are leaders -- these are figures within the administration who can perhaps broaden out the United States' message to its allies here that perhaps there can be unity, that perhaps they can find a way to address President Trump's concerns and do NATO's business, which is protect all these 29 member nations against common threats, like Russia.

ROMANS: All right. Nic Robertson, thanks for that.

You know, the president said -- called the situation sad. He said, we're protecting everybody. It's not fair.

[04:05:00] It's inappropriate. We can't put up with that.

I mean, you heard the Trump language on full display at that breakfast. Usually that's just a spray event, where you know, you get smiles and we're getting ready to work.

MARQUARDT: Take a couple pictures, it lasts a minute, and move on.

ROMANS: And that's not what this was. This was a moment for the president to really dress down the secretary-general of NATO.

MARQUARDT: But we knew Trump was going to come in like this. We knew he was going to go after the NATO allies and ask them to step up and pay more, but this wasn't -- this was specifically about Germany.

And the one word, the one name that he didn't say was Angela Merkel, who we know is arguably the biggest thorn, European thorn, in Trump's side, and so, he just came out absolutely swinging.

It's got to be a really unsettling start for the other NATO allies this morning as the talks get under way.

ROMANS: Let's talk about it more. Joining us from Brussels this morning, "Washington Post" staff writer John Hudson. Good morning.

MARQUARDT: Hello, John.

ROMANS: So, you presumably watched that --

JOHN HUDSON, STAFF WRITER, WASHINGTON POST: Good to be here.

ROMANS: -- spray. And the president very strong talking about the sad, inappropriate situation that Germany is a captive of Russia.

Walk me through your response to that moment.

HUDSON: I mean, it was an immediate sign that Trump was coming into this summit with his gloves off. He's not going to play the same message that a number of European officials wanted him to, which was, let's embrace unity, let's have a united front, let's show a Western resolve that puts the president in a strong place ahead of his meeting with President Putin.

Trump says, you know, I'm not going to tolerate this anymore, the fact that the U.S. is spending so much more on its own defense than other NATO countries. And it was a noticeably very sort of awkward and sort of contentious exchange with Stoltenberg. He was clearly trying to paper over differences, saying, well, of course, we can overcome this.

Trump was saying, no, this needs to end, the United States can't be the only one that's spending this much on its own -- on defense and collective security needs to be more of a shared experience among the NATO alliance members.

ROMANS: Sure. Let's look at the president talk being that very point, where he basically is casting himself as the champion of the American taxpayer. Listen.

(BEGIN VIDEO CLIP)

TRUMP: Over the last year, about $40 billion more has been given by other countries to help NATO, but that's not nearly enough. The United States is paying far too much, and other countries are not paying enough, especially some.

So, we're going to have a meeting on that, and the secretary-general has worked very hard on that. He understands the problem, and hopefully, we can get it resolved. This has been going on for decades, for decades. And it's disproportionate and not fair to the taxpayers of the United States. And we're going to make it fair.

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ROMANS: So, of course, there's a lot of nuance there, but it's been over the past several years, three years or so, that those defense spending numbers have gone up by about $46 billion, so it had already begun before he got here. But clearly, he is using the bully pulpit to chastise these countries to spend more on defense.

HUDSON: Absolutely, and there are a number of European countries that wanted to be able to say, yes, like, we have been spending more on defense. You know, in 2014, there were only three NATO member countries that were hitting that 2 percent requirement. And now at the end of 2018, there is going to be many more, around eight.

And so, they wanted to come into this summit celebrating the unity, the increased defense spending, and maybe even giving president Trump credit for it, and they were hoping that the president could take a victory. That's not the message that he's come in with. The message he's come

in with -- I have big problems with this alliance and I want things to change and they haven't changed enough.

MARQUARDT: John, it seems like the U.S. is now trying to do a funny dance, or at least president Trump will have to, because on the one hand, he's saying that Germany is captive to Russia, that Russia basically is saying -- is a captor, is an enemy. But at the same time, in the U.S./Russia relations, Putin is not a foe, he's a competitor, so how --

ROMANS: And he's just fine. Putin's just fine.

MARQUARDT: And he's just fine. Certainly compared to NATO allies, the Putin meeting is much easier.

So, how does the Trump administration walk this line, you know, in the course of five days?

HUDSON: Oh, it's a fascinating message, because you can just realize that in Helsinki, when president Trump meets with President Putin, President Putin doesn't like this message that Trump is sending right now about Nord Stream 2, this gas pipeline that runs between Russia and Germany that Trump wants to have not completed. That's not a message that Putin likes.

So, this isn't just a message Trump is carrying that is super soft on Russia. It's actually pretty complicated, and it is sort of unusual in terms of it doesn't play the exact tone he usually takes, which is, why can't we just get along with Russia?

[04:10:09] ROMANS: U.S. has American companies, multinationals have investments in Russia --

MARQUARDT: For years.

ROMANS: Russia has a lot of natural resources.

Is the president suggesting that America and its allies should not be doing business in Russia?

HUDSON: That's exactly what the Trump administration's explicit policy has been from the White House all the way to the State Department. They have been traveling around Europe saying that they oppose the Nord Stream 2 pipeline. They don't think a number of European countries should be dependent on Russian energy. And so, that's been their message.

But Trump is using the bully pulpit in a totally new way. We have heard that Trump behind the scenes has talked in very explicit, somewhat graphic terms, about how sort of Russia, you know, really has Germany by the balls when it comes to this -- forgive my language.

But this is the first time we're seeing it very publicly, very aggressively in the NATO Summit, which is, you know, obviously a divisive topic, and that's why you saw Stoltenberg really trying to paper over the differences that are being exposed right now.

ROMANS: We love the colorful diplomatic language this time of the morning. It's fine. I appreciate it.

I wholeheartedly agree. Anybody who's up now in the U.S. at 4:11, got a good chuckle. That's great.

Thank you so much. Nice to see you, John Hudson from the "Washington Post" there.

MARQUARDT: Fascinating, dramatic few hours ahead.

ROMANS: Yes.

MARQUARDT: All right. Well, President Trump's next stop on Thursday will be in the U.K., where there is a social media campaign under way to insult President Trump musically before he arrives in London.

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MARQUARDT: It's a Facebook effort to make that song, the Green Day hit, "American Idiot," which was released 14 years ago, back in 2004, the number one song on the British charts by the time Trump arrives in the U.K., and it is making some progress, climbing yesterday to number 18.

But there is a competing song in Britain with Britain now in the World Cup semifinals. The Green Day song "American Idiot" has to contend with a British soccer anthem that is also climbing the charts. A bit of a duel there.

So, it will take a strong push to get Green Day's "American Idiot" to number one by the end of Trump's visit on Sunday.

ROMANS: All right. To business now, the U.S. unveiling new tariffs on China, ramping up the trade war with Beijing. Additional tariffs on $200 billion more in Chinese goods.

China calls this unacceptable, vowing to respond with, quote, necessary countermeasures, didn't provide details, though. It's all shaking global stocks again. Asia falling overnight, Dow futures down more than 200 points.

This new round of tariffs also makes good on a threat by President Trump. Last week, the U.S. slapped tariffs on $34 billion in Chinese goods. That was punishment for China stealing U.S. trade secrets. China responded with tariffs in equal measure, but the president threatened to hit another $200 billion, if they retaliated.

These tariffs will hit thousands of products, including consumer goods, handbags, refrigerators, furniture, apparel, mattresses. So far until now, the U.S. had avoided targeting things that Americans would buy and would feel right away the higher prices, but the current scale of the tariffs make that nearly impossible.

This announcement comes as Trump meets with NATO allies, many of whom he accuses of unfair trade practices. He tweeted yesterday the U.S. has a $151 billion trade deficit with Europe but they want us to happily defend them through NATO and nicely pay for it. U.S. already hit the E.U. with tariffs on foreign steel. The E.U. retaliated. Now, the U.S. is threatening new tariffs on European cars.

I would say the market is remarkably solid, considering all of this, in part because the U.S. economy is so strong right now. And that's one of the arguments you hear from people in the administration, the economy is so strong, this is exactly the time for the president to stand up to China.

MARQUARDT: But the market has been more jittery in the wake of trade war talks.

ROMANS: Yes, absolutely.

MARQUARDT: But it's held strong the last few days, hasn't it?

ROMANS: It has, and that's mostly tech. You look, there are three or four stocks that account for a big chunk of the rise in the S&P 500 over the past year. So, there's tech stocks that have been largely immune to all of this.

MARQUARDT: So-called FANGs, right?

ROMANS: Yes. Facebook, Amazon, Netflix, Google.

MARQUARDT: There we go.

All right. Well, the deadline has come and gone for the government to reunite families with young children taken at the border. Now, the health secretary says that caring for those immigrant kids is what he calls an act of charity.

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[04:18:33] ROMANS: The Trump administration last night officially missed the deadline to reunify 102 children separated from their parents at the U.S. border. As of Wednesday evening, just 38 families had been reunited, just 38.

The judge in the case anticipated the number would reach 63 by the end of the day. It's unclear if even that bar was reached. The government said some parents couldn't be found, had been deported, had criminal histories, or other issues.

MARQUARDT: That deadline to reunify more than the 2,000 children still in government custody is July 26th, just over two weeks away. We asked Health and Human Services Secretary Alex Azar why his agency won't allow media cameras into facilities that are housing those kids. Here's what he had to say.

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ALEX AZAR, SECRETARY, HEALTH AND HUMAN SERVICES: It is one of the great acts of American generosity and charity, what we are doing for these unaccompanied kids who are smuggled into our country or come across illegally.

(END VIDEO CLIP)

ROMANS: The president said yesterday the solution to undocumented children being separated from their parents is for them not to come in the first place illegally. Now, some families were split up, even though they did come through legal channels. Seeking asylum is not a crime. Seeking asylum is a legal method of entry.

One of those fathers, Ever Reyes Mejia, was reunited with his 3-year- old son in Michigan. The two had not been together since April.

Also yesterday, Walter Jimenez Melendez reunited with his 4-year-old boy, Jeremy. They had been separated for 48 days.

[04:20:04] MARQUARDT: Heartwarming, but heartbreaking at the same time.

All right. Well, the Trump administration again slashing Obamacare funding for the coming year. The Centers for Medicare and Medicaid Services will provide only $10 million for the so-called navigator program for open enrollment in November. That's down from $36 million last year and $63 million in 2016. Navigator programs help consumers, small businesses, and employees find coverage on the Obamacare marketplace.

The Trump administration claims that navigators are not effective. Consumer groups disagree. They're concerned that Obamacare shoppers could become easily confused.

All right, turning now to the World Cup. For the first time in 20 years, France is going back to the world cup final. Samuel Umtiti's header gave the French the 1-0 lead they never surrendered. France last won the World Cup in 1988. They will face the winner of today's match between England and Croatia.

ROMANS: A good day for Emmanuel Macron. You could see him there.

MARQUARDT: I'm pulling for England, how about you?

ROMANS: I don't know.

MARQUARDT: Any strong feelings?

ROMANS: I guess I am. But I was pulling for France. I was glad to see France win. I know you were going for Belgium.

MARQUARDT: Only because they haven't had it before. And France won. Admittedly, it was 20 years ago.

ROMANS: I do think American productivity is going out the window in a way I haven't seen before with World Cup. It gets more and more popular every four years in the United States.

MARQUARDT: And that's here. Imagine the rest of the world.

ROMANS: Oh, yes. I mean, they ran out of beer in England, right? Basically in London.

All right. The recovery is just beginning for those 12 boys and their soccer coach freed from a flooded cave. Their condition and what challenges they now face. We're live in Thailand.

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[04:26:07] MARQUARDT: All 12 boys and their soccer coach are out of that Thai cave after 18 days trapped underground by floodwater. Now concern centers on their physical and emotional well-being after this ordeal.

CNN's Ivan Watson has the latest live from Chiang Rai, Thailand.

Ivan, obviously, a miraculous story. It seems to have gone as well as anyone could have hoped or imagined, so what's next for these boys and their coach?

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, they're still in the hospital. They'll probably be there for up to a week, you know. They came out in a succession of days, Sunday and Monday and Tuesday, four boys apiece, and then the adult coach on Tuesday evening.

And the doctors gave a briefing to journalists and said these kids are doing pretty well. They suffered from malnutrition. The medical authorities are taking a lot of precautions, for instance, making the kids wear sunglasses to protect their vision after being deprived of natural light for more than two weeks, slowly reintroducing them to solid food, putting them on antibiotics. Some of them had swollen lungs and had infections and coughs and things like that, but for the most part, they're doing pretty well.

The divers who spent more than a week with the kids in the cave helping sustain them, keep them alive, they're also doing well. I've been messaging with one of the international divers who spent dozens of hours on missions ferrying supplies and helping with the rescue operation. He messaged to me that he was getting some medical treatment today, the day after the last rescue, to kind of heal up his hands and feet, which were pretty beaten up.

We've heard that the tunnels had really sharp rocks. And meanwhile, the prime minister of Thailand is just thanking everybody for the contribution to what the chief of the rescue mission has described as mission possible -- Alex.

MARQUARDT: What an amazing story. Such a happy ending. Ivan Watson in Chiang Rai in Thailand -- thanks very much.

ROMANS: All right. Twenty-eight minutes after the hour. Step it up immediately. President Trump with a shocking dressing down of the NATO secretary-general. He says Germany is being controlled by the Russians.

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