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EARLY START

Trump Unloads on NATO Secretary General; Tariffs on Another $200 Billion in Chinese Goods; Vive La France; Focus Shifts to Rescued Coach & Players' Health. Aired 4:30-5a ET

Aired July 11, 2018 - 04:30   ET

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


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[04:31:47] ANNOUNCER: This is CNN breaking news.

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DONALD TRUMP, PRESIDENT OF THE UNITED STATES: But Germany is totally controlled by Russia.

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CHRISTINE ROMANS, CNN ANCHOR: All right. The president with a shocker before the NATO summit even gets under way. He says NATO countries are taking advantage of the U.S. by cutting side deals with Russia.

ALEX MARQUARDT, CNN ANCHOR: And costs for dozens of drugs will not go up as expected. Pfizer is now rolling back price hikes, for now. The catalyst, call from president Trump.

ROMANS: And half of the World Cup final is set. France will play for the world title. Will they face England? Will it be Croatia? We'll find out today.

Won't be your dear Belgium. Sorry.

MARQUARDT: Will not be the red devils.

ROMANS: Welcome back to EARLY START. I'm Christine Romans.

MARQUARDT: And I'm Alex Marquardt. It is 32 minutes past the hour.

And President Trump coming out swinging this morning, a very dramatic start before the NATO summit actually gets under way. At a pre-summit breakfast, the president dressed down the NATO secretary-general, demanding increased defense spending by NATO allies. His wrath trained specifically on Germany, calling it 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.

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ROMANS: The president's pregame jabs coming as no surprise to European leaders. They fear president Trump will follow through on threats to cut back on military protection for U.S. allies. Earlier, the European council president had this stark warning for Mr. Trump.

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

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MARQUARDT: All right. A very blunt and clear message from Donald tusk there. The NATO summit coming ahead of president Trump's sit- down with Vladimir Putin in Helsinki, Finland.

Let's now bring in international diplomatic editor for CNN, Nic Robertson, live at NATO headquarters.

Nic, any reaction so far from NATO members to Trump's comments this morning?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Interesting because we've had reaction from the German deputy defense minister, who says, look, this fuel-energy pipeline that president Trump is talking about is something that dates back to 2002-2003. It's a business deal that was put in place a long time before Russia annexed Crimea, went over the border into Ukraine, both international illegal actions that Germany has responded to.

Angela Merkel since then has really fallen out with Vladimir Putin. She speaks Russian. She trusted him to a degree. She doesn't trust him now. But as the deputy defense minister says, it's kind of difficult to pull out of that kind of business deal quickly.

But this is what President Trump is referring to, saying quite clearly, Germany's spending money on making business deals with Russia, making Russia richer at the same time that we, the United States, have to bail out Germany from its defense from Russia. And Germany, if you will, is one of the lowest spenders of the major NATO allies in terms of its GDP commitment to defense, 1.24 percent right now going up to 1.31 percent this year, later this year. That falls way short of the 2 percent that's expected of NATO partners.

[04:35:03] So, President Trump pushing that point. Jan Stoltenberg, secretary-general of NATO, not really expecting to have this put in his face over breakfast on camera right at the beginning of this summit. Everyone here was expecting it to be rocky, but perhaps not this rocky.

Stoltenberg saying, look, the key thing here is that we have unity. We have differences, but we can work them out as we have in the past. And the reason he's saying that is because he believes, like many of the other NATO leaders here, that Russia, President Putin is watching this space here right now for the next couple of days. Any divisions, he likes to see those divisions.

And, of course, the NATO leaders here worried because president Trump is going on to meet President Putin next, and they don't know what he's going to say to him.

MARQUARDT: All right, President Trump wasting no time taking that message to NATO allies. Nic Robertson in Brussels, thanks very much.

ROMANS: So, Germany and European allies will not take the president's remarks lightly.

Senior international correspondent Nick Paton Walsh is standing by live in London with more on that.

Good morning, Nick.

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: It is startling, just the mood music already set there in Brussels. I mean, this is the central country to the NATO alliance, the United States.

For example, if a country wants to leave NATO, it has to tell the United States of its intentions to do so. And to hear Donald Trump so specifically begin a key summit like this with so many eyes watching, particularly those in Moscow with a scolding of one of the major, or the major economy, frankly, outside of the U.S., in that NATO alliance, is remarkable.

Now, he's referring to the Nord Stream pipeline that runs through the Baltic Sea straight through Germany. That was hatched in the beginning of the 2000s, where frankly, the early part of the Putin administration was considered less threatening and there were issues they had with gas transit through Ukraine to the south of Germany. The Nord Stream pipeline was to cut all of the European mainland pipelines out and they may have gone on to other European nations.

Times have changed enormously. The German chancellor who hatched that deal, now in fact -- Gerhard Schroeder who hatched that deal, now works for a successor part of the pipeline, the Nord Stream 2 that's supposed to come in some time in the months ahead. As Nick was saying, of course, German Chancellor Angela Merkel is wise to that and they're looking at liquid gas, some even perhaps from the United States to take up growth needs in the German gas market.

But more importantly, Donald Trump, is supposed really in his sort of historical role as U.S. commander-in-chief to come along and be the leader of the NATO alliance, not the man to point out its holes. And right now we have all the neighbors along Russia's borders here with Eastern Europe deeply in need of extra military enforcement. In fact, Norway asking for more U.S. troops to come in and assist on their borders, many exercises along other parts of the Russian border, too, to bolster readiness.

And instead now, this key summit, the White House had laying out key demands, frankly, of people he's supposed to be reassuring.

ROMANS: Nick Paton Walsh laying it out for us clearly -- thank you, sir.

MARQUARDT: All right, well, the summit off to a rocky start. And for more live from Brussels, we have "Washington Post" staff writer John Hudson back with us this morning.

ROMANS: Hi, John.

MARQUARDT: John, good to have you with us.

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

MARQUARDT: To what extent -- this language we heard from Trump, when he was basically chastising Stoltenberg as a representative of the rest of the NATO alliance there, we knew he was going to do this. What we didn't know he would do it so quickly, so fast, out of the gate. To what extent do you think this is posturing for his domestic audience? What are the potential consequences of this type of language, of this message that he's bringing to Brussels?

HUDSON: Well, I think it is sort of Trump unleashed in the sense of I was here last year for the NATO summit, and he -- while he did express his longstanding complaints about defense spending in Europe, it was not as outright, it was not as gloves off as we're seeing right now.

I mean, in terms of potential consequences, you know, it really depends. I mean, we haven't seen him yet express particularly warm language about Russia, and that was one of the things that really threatened to sort of split up the NATO consensus on what to do. As you know, the Europeans are not in the same place when it comes to dialogue and rapprochement with Russia. You know, you have the Brits, you have the Poles, you have the Baltic States that would like a more aggressive stance towards Russia.

You -- and then, of course, you also have the other sort of older Europe that wants to have, you know, a more sort of rapprochement, the Greeks, the Hungarians, even the Germans to some extent. So, right now, what we're seeing is certainly a confrontational stance, most specifically against Germany, but we'll see if there's more to come.

And I think we should expect to sort of take out the popcorn. This is going to be a very interesting NATO summit this year.

ROMANS: This is the Polish delegation arriving there at NATO headquarters in Brussels.

[04:40:00] You know, the president saying Germany is controlled by Russia and really speaking sharply about Germany.

Yet, he has not had such harsh words for Russia itself. Russia invaded Ukraine. It annexed Crimea. It shot down a commercial airliner. There's four poisonings on U.K. soil. I could go on and on.

Everything that divides the west is a victory for Vladimir Putin. He thinks that weakness and division among America and its allies is something that strengthens Russia.

Does the president understand or reflect that?

HUDSON: It doesn't seem like the president holds that view, and he has repeatedly questioned what you basically just laid out, which are sort of consensus NATO talking points on Russia and what it did and its threat to the West. President Trump has never been someone who has heralded all of those things.

And just as recently as the G7 meeting, he questioned the idea of whether or not, you know, Crimea should be seen as part of Ukraine. Maybe it should be seen as part of Russia. And so, these are really sort of core Trump attitudes and beliefs that he has said privately to officials that have leaked out over longer than a year, but now we're seeing those publicly, and they really challenge sort of the heart of NATO orthodoxy.

And so, that's why we're seeing fireworks here today.

MARQUARDT: John, even though Trump has been reluctant to call Putin a foe, his aides around him, his senior officials, have admitted that this does work in Putin's favor. Let's quickly listen to NATO, the U.S. ambassador to NATO, Kay Bailey Hutchison.

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KAY BAILEY HUTCHISON, U.S. AMBASSADOR TO NATO: I think the discord is music to Putin's ears, but I do think that coming from this summit, which is allied, is strong, and is going to increase our deterrent capabilities, that is going to put President Trump in a very strong position with President Putin. And I think he will be tough with President Putin.

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MARQUARDT: So, Hutchison there believes that President Trump will be tough with Putin.

John, what does that look like? Because in the past, he's shown no inclination to be tough on Putin.

HUDSON: Yes, we're going to see -- we'll see if he challenges Putin on the U.S. intelligence assessment that Russia meddled in the 2016 election. That's been something that he's been -- Trump has been very reluctant to declare that he believes in. You know, we'll also see what they plan to do on Syria.

You know, a lot of officials I've talked to have expressed concern that Putin is going to try to exploit areas that he can see that Trump holds in his own sort of views. For instance, whether or not the United States should just get out of Syria immediately. That's something the Russians would like to see, and Trump has said he would like to see that. And, of course, his own advisers, his pentagon chief, his secretary of state are very much opposed to that.

Now, will Putin when he gets alone with Trump try to exploit those fissures? That's certainly something that a lot of people are watching right now and speculating might happen.

ROMANS: All right. Get ready. It's going to be an interesting next few days. John Hudson for us in Brussels, thank you so much.

MARQUARDT: Thank you.

ROMANS: Pfizer putting its recent price hikes on hold because of pressure from President Trump. On July 1st, Pfizer raised prices for about 40 drugs. On Monday, the president tweeted Pfizer should be ashamed they have raised drug prices for no reason. Now, Pfizer says it will roll back those price hikes after an extensive discussion with the president, writing that it shares the president's concern to provide affordable access to medicine and that it will give the administration more time to work on its plan to reduce drug prices.

That was a big campaign promise for President Trump. He unveiled a plan to reduce drug prices in May with some concrete steps, like making it easier for cheaper generic drugs to hit the market and targeting a shadowy world of drug rebates.

MARQUARDT: All right. Well, switching gears, this father got to hold his son again, something that not every parent was so lucky to do on what they called deadline day. Now, the health secretary says that the care that the immigrant kids got is an act of charity.

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[04:48:31] MARQUARDT: The Trump administration last night officially missing the deadline to reunify 102 children who were separated from their parents at the U.S./Mexico border. As of Tuesday evening, just 38 families had been reunited. The judge in the case anticipating that the number would reach 63 by the end of the day, but it's unclear even if that bar was reached. The government has said that some parents could not be found, had been deported, had criminal histories, or other issues.

ROMANS: The deadline to reunify more than 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 housing those kids. Here's what he said.

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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.

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MARQUARDT: Great act of generosity. Now, emotions are running high for the families that did get reunited yesterday. Ever Reyes Mejia, you can see him on the screen, reunited with his 3-year-old son in Michigan. Look at that.

Look at that smile. The two hadn't been together since April. Also, yesterday, Walter Jimenez Melendez also reunited there with his 4- year-old boy, Jeremy, after almost 50 days.

ROMANS: All right. 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 navigator program for open enrolment in November, down sharply from $36 million last year and $63 million in 2016.

[04:50:05] You know, the navigator program, that's what helps small businesses and employees explore and find coverage on the health care marketplace. The administration claims navigators are not effective. Consumer groups are concerned Obamacare shoppers could become easily confused.

MARQUARDT: Now, for the third time in 20 years, France is going to the World Cup final. Defender Samuel Umtiti's header in the 51st minute giving the French a 1-0 lead over the Belgian Red Devils that they never surrendered. France last won the World Cup in 1988. That's actually 1998. They will face the winner of today's match between England and Croatia. That's at 2:00 p.m. Eastern Time.

ROMANS: Emmanuel Macron going wild on the sidelines! Actually, he didn't, he just kind of shook hands.

MARQUARDT: Shaking hands with the king of Belgium there.

ROMANS: Interesting.

All right. Southwest doing away with a classic airline snack, peanuts. We'll tell you why on CNNMoney, why Dave likes -- I just called you Dave. I'm losing my mind.

MARQUARDT: Too early.

ROMANS: Too early in the morning.

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[04:55:47] MARQUARDT: All 12 boys and their soccer coach are out of that cave in Thailand after 18 days trapped under ground by raging floodwaters. Now concern centers on the physical and emotional toll of their ordeal.

CNN's Ivan Watson has been there on the ground. He has the latest this morning from Chiang Rai, Thailand.

Ivan, what's next for these boys? It looks like they're going to recover physically, but the question remains of how well they'll recover psychologically.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes. Certainly, physically, the doctors are saying they're in a pretty good state and they're going to be kind of nursed back to full health after suffering from malnutrition, deprivation of natural light, and just weakened immune systems in general, and they're in quarantine for that.

The question of their psychological emotional state, well, we've been told that there is going to be therapy, that the Thai psychiatrist association has been consulted on this. They're going to want to, frankly, protect the boys from journalists like you and me so they don't get overwhelmed by the throngs of reporters who have descended on northern Thailand amidst this drama that has attracted the attention of so many people here in Thailand and around the world.

The rescuers themselves, the four men who were under ground with the boys for more than a week, they're recovering. And some of the people conducting the dangerous rescue, which did claim the life of one petty officer first class, Saman Kunan, from the Thai Navy SEALs, a former SEAL, they're recovering.

I've been in contact with one international diver who said he's receiving medical treatment today because after hours in the rescue operations, many missions, his hands and his feet were pretty beaten up. There is an Australian doctor named Dr. Richard Harris, who's been described as playing an integral role, a critical role in the almost miraculous rescue, and he, sadly, lost his father this week amid the incredible rescues that were taking place.

So, this required just an incredible physical and emotional burden for everybody that was involved. And now people are kind of taking a deep breath and trying to collect themselves physically and emotionally after this incredible ordeal -- Alex and Christine.

MARQUARDT: Yes, this rescue mission obviously led by the Thai Navy SEALs, but it was an international effort and really an incredible one at that.

Ivan, thank you so much.

ROMANS: Even the farmers around there, you know, they're pumping out all that water from the cave system into the newly planted rice fields. Those farmers lost their crops. They will be made whole by the government, we're told, but it just shows you how the whole region, really, coming together to save those boys.

MARQUARDT: Certainly, the country, and led by the king. And it is a country that is really centered on the monarchy, the military, on Buddhism, and it is rallying around these boys. And so, yes, hopefully, those farmers and everyone else will be taken care of. Extraordinary effort.

ROMANS: Just about the top of the hour, 58 minutes after the hour. Let's get a check on CNNMoney.

The U.S. unveiling new tariffs on China, ramping up a trade war with Beijing, preparing additional tariffs on $200 billion more of Chinese goods. China vows to respond, and all that is shaking global stocks. Asia and Europe falling overnight. Dow futures down more than 200 points right now.

U.S. stocks closed higher yesterday. The S&P 500 actually had its best day since February, and that's because investors are really optimistic about earnings. How much money companies are making and they're making a lot of money.

That earnings season kicks off this week. Profits at S&P companies should be 20 percent higher than last year. Just remarkable.

Americans are quitting their jobs, voluntarily quitting their jobs at the highest rate in years. In May, the so-called U.S. quit rate hit 17-year high, a sign more people are confident they can find a new job and at a higher pay. Wage growth has been sluggish for such a tight, super tight labor market. Wages haven't grown above 3 percent since 2009. Maybe that quit rate is telling us wages will start to rise.

Southwest doing away with a classic airline snack -- peanuts -- to help passengers with severe peanut allergies. Southwest calls the decision difficult, writing that peanuts will be a part of Southwest's history and DNA but wants to ensure the best onboard experience for everyone. Southwest will stop serving peanuts on August 1st. It will offer other snacks, like pretzels, cookies, and chips.

MARQUARDT: I was on an airline the other day and they asked anybody who came on board not to eat peanuts, because apparently, people who are next to people, they can also be affected they have severe allergies.