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Proposed Tariffs on Chinese Goods Could Double; Ohio State Football Coach on Leave Amid Controversy; Trump to Hold 22nd Rally in Pennsylvania; Trump administration Fights to Freeze Emission Standards. Aired 10:30-11a ET

Aired August 2, 2018 - 10:30   ET


[10:30:00] CRISTINA ALESCI, CNN MONEY CORRESPONDENT: -- 25 percent. That would mean a whole lot of stuff.

Let's bring in our CNN Money politics and money reporter, Cristina Alesci. I could have said that more eloquently but this is really a big deal as it happen.

CRISTINA ALESCI, CNN MONEY CORRESPONDENT: It is a really big deal if it happens. And this is classic Trump. He is clearly frustrated by the lack of a deal between the U.S. and China and those negotiations on a trade deal. So he's ratcheting up the pressure in the hopes of getting China to the negotiating table. The problem is, this strategy of escalation hasn't worked. The first round of tariffs, China imposed tariffs on U.S. goods. And in another case study in Europe, yes, there was a pause on European cars -- tariffs on European cars. But again, no deal.

So the question remains, where is this deal for the American worker? All we have are the strongly worded statements from China so far. Overnight China saying it is fully prepared and will be forced to launch countermeasures to safeguard national dignity and people's interest. That on the heels of another statement that basically alleged the U.S. was blackmailing China, very strong words. In the meantime consumers and companies are caught in the middle of this fight. They're not sure whether to spend, or whether to save, what's going to happen on the cost of goods?

HARLOW: I mean, a tariff equals a tax. This would just mean more expensive good for the American people unless China were to fold. And it doesn't sound like they're going to.

ALESCI: Well, that's actually an interesting point. I don't want to make it sound like the strategy won't work. It just hasn't worked yet.


ALESCI: China's economy is taking a hit as a result of the --


HARLOW: It's a good point.


HARLOW: I want to ask you about something that is a little wonky but really important and doesn't always make the headlines. And that is the size of the deficit in this country. Because there's a warning from the "Wall Street Journal" this morning on the news that it the OMB put out a month ago that it looks like right now the United States -- Trump's own Office of Management and Budget is saying, we'll run a trillion-dollar plus deficit for the next four years.

So "The Wall Street Journal" writes, "This has prompted the U.S. Treasury to increase its borrowing substantially which could restrain a fast-growing economy as the cost of credit also rises." This is the "Journal" saying watch out.

ALESCI: Well, first off, we can always count -- the viewers can always count on you on bringing out these intricate topics but important ones, no doubt about that. Look, in the long term, deficits, as you know, can be detrimental because the U.S. can be in so much debt that it can't spend on anything else, including on Medicare and Medicaid. In the short term, most Republicans or many of them who have traditionally, to your point, been deficit hawks do not see the political upside in standing up to this president whose policy seems to be spend, spend, spend, and in the meantime they think it's a good time to push for these tax cuts, which they have been vying for.

You know at this point when the president seems to be not caring about the deficit. So they're kind of getting their way. And the political upside of standing up to the president is not there.

HARLOW: And Larry Kudlow promised with Jake over the weekend, look, this is going to be, you know, deficit neutral, we're going to make it up but they don't know, right?

ALESCI: That is a subject for much debate.

HARLOW: OK. Thank you, Cristina Alesci, I appreciate very much.

And still ahead for us, one of the biggest names in college football, Urban Meyer, now on leave. This as controversy grows around a former coach on his team. We will explain.


[10:37:54] HARLOW: Ohio State places football coach Urban Meyer on paid administrative leave as it investigates what he knew about domestic violence allegations against a former assistant coach.

Let's go to Coy Wire, he has this morning's "Bleacher Report." What's the latest?

COY WIRE, CNN SPORTS CORRESPONDENT: Good morning to you, Poppy.

Former Ohio State assistant Zach Smith was fired last week after being served a civil protection order on behalf of his ex-wife Courtney Smith, who told the sports outlet Stadium that Urban Meyer's wife Shelley knew about the alleged domestic violence incident in 2015. Listen.


UNIDENTIFIED FEMALE: With Shelley Meyer being aware of everything that was going on and saying that she was going to have to tell Urban, do you think that he knows about all of this?


UNIDENTIFIED REPORTER: Did he ever directly talk to you about what was going on in your marriage or between you and Zach?

SMITH: Not the abuse. He never spoke to me about the physical abuse. But he had, you know, made a couple comments to me and we have had a couple of conversations very brief. How are you doing, everything OK.


WIRE: The full interview is available on Meyer says he did know about an incident involving the Smiths, but that was 2009. He denies knowing anything about something happening more recently. He released a statement yesterday saying in part, quote, "Being on leave during this inquiry will facilitate its completion. This allows the team to conduct training camp with minimal distraction," unquote. Ohio State says, quote, "We are focused on supporting our players and on getting to the truth as expeditiously as possible," unquote.

Zach Smith's attorney tells CNN that once Smith gets his chance to tell his side of the story, it will be corroborated by police. Urban Meyer has a $38.1 million buy-out if he's fired without case. If Meyer is found to have known the alleged incident in 2015 he could be fired with cause. Offensive coordinator Ryan Day, Poppy, will act as a head coach while Meyer is on paid leave. Season opener for the Buckeye's September 1st versus Oregon State.

HARLOW: All right. It's important they get to the bottom of who knew what, when.

Coy, thank you.

[10:40:03 HARLOW: Still to come we are T minus 96 days from the midterms. The president set to make a second stop this week in a key swing state. He's looking to give the Trump a bump fir a big raise in Pennsylvania. We'll talk about it next.


HARLOW: President Trump will do something tonight he's done three dozen times before. He will hold a rally in Pennsylvania. A battleground state that voted blue in six presidential elections in a row before it went for Trump narrowly in 2016.

[10:45:05] Two former Keystone State lawmakers are with me to talk about this. Big picture Republican Charlie Dent served seven times in the House of Representatives. Rick Santorum also Republican, served two terms in the Senate ran for president twice. No better voices to have on this one, gentlemen. So thanks for being with me.

Let's look big picture, Congressman Dent, to you. Pennsylvania as a whole, you say your party, Republicans should look at Pennsylvania and be alarmed at the way that independents are trending. Why?

CHARLIE DENT, CNN POLITICAL COMMENTATOR: Well, I am concerned. I do believe this election is going to be more about swinging independent voters in the bases, w. Both bases are with their candidates. You know, the Republican base -- a lot of Democratic bases with Casey. In my view, the Democratic base is a bit angrier and more energized. Just because they are out of power. But at the end of the day I look at the swing voters, not just in Pennsylvania but across the country. And they tend not to be trending well for Republicans right now.

We've been through this wave elections before, in '06, '08, '10, '14 and here we are again. So this election is really more about us, the party in power, than it is about the party out of power. So I would be very concerned about those swinging independent voters.

HARLOW: Senator Santorum, the president goes to Wilkes-Barre, Pennsylvania. He's going to stump for Republican congressman there, Lou Barletta, who has struggled. I mean, at least the polling we've seen has them about 15 points apart, him behind Democrat Senator Bob Casey. But given Trump's recent success, ala the gubernatorial governor race in Florida and the swing towards DeSantis there, do you -- I mean, how do you like Barletta's odds having the president come here? Is this a fight the president should wage?

RICK SANTORUM, CNN SENIOR POLITICAL COMMENTATOR: Yes -- no, absolutely. I think Pennsylvania is very much in play in this election. And while Charlie is right in one respect, I mean, Casey is doing well among Democrats, you know, Lou could actually do better among Republicans, in large part because he's just not very well-known outside of the region of the state that he is from. So bringing the president to campaign for him and giving Lou some visibility will be a very good thing in solidifying the Republican base and closing those polls. I mean I've seen internal polls that have this race a lot closer. And frankly most of the polls have Casey below 50 percent, which is not a great place for a Democrat -- for any incumbent to be.

HARLOW: So -- I mean, but the thing with DeSantis in Florida in the gubernatorial race is that he just went all things Trump. I mean, he even has that new ad out that sort of making fun of himself, right, teaching his kid how to build a wall with blocks, et cetera. Has Lou Barletta gone -- is he all things Trump?

DENT: Well, certainly, Ron DeSantis has gone in that direction. And Lou -- very closely tied to President Trump, no question about it. But I would caution people on that type of a campaign strategy. In fact my friend Rick Santorum, his old seat, the one that just went to Conor Lamb, you know, Rick Saccone, the Republican nominee in that seat said, I'm Trump before Trump, I'm Trump's wing man and he lost the seat that the president won by 20 points. I think the issue here is in a general election, you have to

demonstrate that you are somewhat independent of the executive. I mean, even if the people in your district or your state like the president, they do expect you to not be a rubber stamp. So I think it's important that they not get too close because I think that can boomerang. Look what happened in southwestern Pennsylvania in Rick's old seat.

HARLOW: What do you think, Rick?

SANTORUM: Well, I mean, it's a fine line you have to walk. I mean, you have to energize the Republican base. And look, Lou Barletta, you know, endorsed the -- I think the second member of Congress to endorse President Trump. So I mean, he's been a Trump guy. And he did so on the issues because, you know, Lou has been very strong on the issue of immigration, very strong on the issue of trade and manufacturing. I mean he is a blue-collar conservative. And I think that plays very well. I mean, if you look at the issue sets that Lou is focused on, he is right on with the state of Pennsylvania.

So to me, it's a matter of aligning with Trump on the issues. But again, I agree with Charlie. You got -- you know, you're representing the state of Pennsylvania. You're not there to work for the administration.


SANTORUM: So he's got to -- he's got to, you know, show that he's an independent voice and he's going to fight for the people of the state.

HARLOW: But, Rick, could the tariffs complicate all of that?

SANTORUM: Did the what complicate all that?

HARLOW: Could the tariffs complicate all of that?

SANTORUM: I'm not catching that word for some reason.

HARLOW: Tariffs. Tariffs.

SANTORUM: Paris? I'm missing it. I'm sorry.

HARLOW: I hope this makes it on "The Daily Show".

SANTORUM: Trade. Trade.

HARLOW: Trade. Trade and tariffs.

SANTORUM: Oh, tariffs, I'm sorry. I -- I got to work on my earphone --

HARLOW: I wish we were talking about Paris. I wish.

SANTORUM: Yes, I couldn't hear -- I apologize. OK, so the issue -- no, not in Pennsylvania. Look, agriculture, while it's important is that the agricultural tariffs that are the counter tariffs that are hurting aren't that really big of an impact in Pennsylvania. And look, the state there is still very much a state that relies on manufacturing. And the fact that the president is out there fighting -- I could tell you from my experience, particularly in the west where actually Lou has a lot of ground to gain in western Pennsylvania, I think lining up with the president on trade is absolutely the perfect thing to do.

[10:50:06] HARLOW: All right. So, Charlie, to you, on the Koch brothers, as in K-O-C-H, not C-O-K-E, just so we're very clear here, on the Koch brothers, fascinating reporting in "The New York Times." The headline in the piece Charles Koch takes on Donald Trump, Trump takes on Charles Koch. Both of your campaigns, you've received donations from the Koch brothers. Here is what "The New York Times" writes. Because we know Charles Koch hates what the president has done on tariffs. Not Paris but on tariffs. And on his language. And here's what the "Times" write. "Mr. Koch and his organizations have struggled to find their place in a political party they barely recognize and whose political fortune is now wedded, for better or worse, to Mr. Trump."

What is the role of the Koch brothers and Koch money in the Republican Party today with President Trump.

DENT: Well, you should separate out the Koch pack, that's the industry pack and then they got their own political enterprise, that's separate. But look, it's pretty clear the Koch organization is concerned about core issues in these Senate races. They are concerned about trade. They're free traders. They want a more tolerant immigration policy. They are concerned about spending in the omnibus. And they're also concerned about re-authorization of the export-import thing.

I guess I was with them on two of the four issues. But the point is, they're deeply alarmed by the trade issue. And I think that's motivating them. That's why they are not participating or actively participating in some of these Senate races where, you know, Republicans have a chance at beating Democrats. Now the Kochs aren't going to endorse Democrats. But they're holding back and I think in some respects they may feel a bit taken for granted that they are expected just to support the Republican nominee regardless of where he stands on any given issue that is important to them.

HARLOW: Yes. They do still plan to spend $400 million in the midterms. But where the money is going and where it's not is hugely important.

Thank you, gentlemen, both. I wish you a nice weekend and a trip to Paris soon, Senator Santorum.


SANTORUM: Actually I'm going next week, to be honest with you.

HARLOW: Well, there you go.

SANTORUM: Yes. Maybe I had that on my mind. I'm sorry. HARLOW: It's clear, it would be on my mind as well. Thank you,



HARLOW: The administration just proposing a rule that would roll back federal limits on emission standards for cars and trucks. This is a big deal. This is going to be a big fight. A group of attorney generals is already gearing up to throw down in court.


[10:56:47] HARLOW: The Trump administration just announced a plan to revoke an Obama administration rule, mandating that automakers make cars more fuel efficient. The government is saying this is all about safety. One reason for the change is that -- and they also talk about making cars more affordable. This is all tied together.

Let's go to Nick Watt who joins me now with more details. Swift reaction from 20 attorneys general across the country. They're going to take this to court.

NICK WATT, CNN NATIONAL CORRESPONDENT: Absolutely, Poppy. Buckle up. This is going to be a rough ride. We've also heard from California's governor Jerry Brown who said this, these are his words, he says, "California will fight this stupidity in every conceivable way."

So here's what happens. Back in 2012, the Obama administration set fuel efficiency standards for automakers that could have ratcheted it up until 2025 when all automakers would have to across their fleet have an average fuel efficiency of about 50 miles per gallon. What the Trump administration is now proposing is freezing those standards at the 2020 level, which is about 43 miles per gallon.

Now I'm going to read you a bit of a statement from the acting EPA administrator Andrew Wheeler to explain their rationale behind this. He says, "Our proposal aims to strike the right regulatory balance based on the most recent information and create a 50-state solution that will enable Americans to afford newer, safer vehicles that pollute less. So they are still going to have these efficiency standards. But they claim that if automakers don't have to meet these very stringent standards, as they see them, then cars will be cheaper, more people will buy new cars. So therefore, more older, less safe cars will be off the road.

That is their argument. Now opponents say, well, actually, the cars are going to be less fuel efficient, then we the consumers are going to pay more at the pump for gas. So there's not really going to be a cost saving. Anyway, now, we have heard from the auto alliance and they say, well, we urge California and the federal government to find a common sense solution that sets continued increases in vehicle efficiency standards while also meeting the needs of American drivers.

But as you mentioned 20 states' attorneys general are already saying they're going to challenge this. California is clearly going to challenge this. This, I've been told by one environmental activist, this may drag through the courts long after the Trump administration has left the White House -- Poppy.

HARLOW: I actually read, Nick, that this takes it further, the Trump administration sort of rollback of these fuel efficiency standards, takes it even further than the automakers have been asking for .

WATT: Well, listen, the automakers have signed up to the Obama era standards.

HARLOW: Right.

WATT: And also those standards were reviewed in 2017. Just before the Obama administration left, they reviewed the standards to see if they were still workable, if they were still reachable. And their conclusion was, yes, they are. So everyone was on board. Then when the Trump administration came in, they decided to re-open that and try and review those standards. That's what they did. And that's the situation we're in now.


WATT: They are trying to freeze those standards -- Poppy.

HARLOW: OK. Nick, appreciate the reporting. Very important topic. We appreciate you being here from California for us.

And thank you all for being with me today. I'm Poppy Harlow -- there you go. I'm Poppy Harlow in New York. "AT THIS HOUR" with Kate Bolduan starts now.