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INSIDE POLITICS

New Tariffs on China; New Sanctions on Russian Elites; Trump Praises Pruitt. Aired 12-12:30p ET

Aired April 6, 2018 - 12:00   ET

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


[12:00:00] JASON CARROLL, CNN NATIONAL CORRESPONDENT: McGregor is facing several charges, including three counts of assault and one count of criminal mischief.

Back to you.

BRIANNA KEILAR, CNN ANCHOR: Jason Carroll, thank you.

And thank you so much for joining me.

INSIDE POLITICS with John King starts right now.

JOHN KING, CNN ANCHOR: Welcome to INSIDE POLITICS. I'm John King. Thank you for sharing your day with us.

The markets don't like it and farmers don't like it, but President Trump says a little pain is worth it if he can force China to be a more fair trading partner.

Plus, tough new sanctions sure to anger Vladimir Putin. The Treasury Department targets Russia oligarchs and it label's Putin's Kremlin as corrupt and destabilizing.

And Scott Pruitt is a marked man inside Washington, yet the EPA administration just might have friends in all the right places.

(BEGIN VIDEO CLIP)

REPORTER: I'm sorry, I couldn't hear your response earlier about -- about Scott Pruitt. Are you still --

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: About who?

REPORTER: About Pruitt. I was -- I couldn't hear it.

TRUMP: I think that Scott has done a fantastic job. I think he's a fantastic person. I believe -- you know, I just left -- I just left coal and energy country. They love Scott Pruitt. They feel very strongly about Scott Pruitt and they love Scott Pruitt.

(END VIDEO CLIP)

KING: We begin the hour in turmoil on Wall Street, where a new jobs report that was weaker than expected is almost an afterthought because the president is threatening China with a whopping $100 billion in additional tariffs. Here are the noon hours numbers. The Dow down, you see it there, around 330 points. Investors are rattled by talk of a trade war. Farmers are rattled, too.

But, listen here, the president telling a morning radio show getting tough with China is long overdue and that a roller coaster market is a price worth paying.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We've already lost a trade war. We don't have a trade war, we've lost a trade war. I'm not saying there won't be a little pain, but the market has gone up 40 percent, 42 percent. So we might lose a little bit of it. But we're going to have a much stronger country when we're finished.

(END VIDEO CLIP)

KING: The president on the radio this morning.

CNN's Jeff Zeleny live at the White House for us.

Jeff, the president surprised even members of his own team with this new $100 billion threat of a counterpunch. Do they share his view that the end will justify all the turmoil now?

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: John, a great question. And there's not a consistent answer to that. Several advisers here all say one thing consistently, the president is driving this train here. The top economic adviser, the incoming, new economic adviser, Larry Kudlow, was talking to reporters earlier this morning here at the White House, and he was essentially again trying to, you know, I would say, calm fears and cool tensions about this and saying, look, you know, this is simply the beginning of a negotiation here. The president is just throwing this out there.

But the reality here is, without any warning or without any further explanation, there is a lot of concern. And we've seen Republicans, you know, like Ben Sasse of Nebraska, you know, he is a very -- sharp against this. A lot of Republicans from farm states as well.

So there's no sense here what the end game is, but there is a lot of concerted and worry that the president is saying the short-term pain is worth it. Politically, Republicans are nervous about this. Of course the midterm elections not that far away here and what is the end game. But the president is driving this as so much more is on his agenda. It will be interesting to watch how that market ends today, John. The White House certainly is.

KING: Without a doubt it's the president, the president -- the president driving it.

Jeff Zeleny, live at the White House, appreciate that.

With me here in studio to share their reporting and their insights, Karoun Demirjian of "The Washington Post," Michael Shear of "The New York Times," Perry Bacon of FiveThirtyEight, and Mary Katharine Ham of "The Federalist."

It is remarkable, normally on the first Friday of the month, when you're talking about Wall Street, you're talking about reaction to the jobs report. It's almost an afterthought. It was a less than expected 103,000 new jobs. The unemployment rate stayed sold at 4.1 percent. You know, you look at 103,000, you might be worried, but you look at recent months and you think, OK, it's just a one month blip, some bad weather. So that's one reason.

But the other reason is because the president is driving this conversation, which is fascinating. And if you listened to the president on the radio this morning, being pretty candid, saying, yes, the markets are going to get mad, yes, some people are going to get mad at me, but Obama wouldn't do it, Bush wouldn't do it, Clinton wouldn't do it. I'm going to stand up to China and we're going to take a few hits.

KAROUN DEMIRJIAN, CONGRESSIONAL REPORTER, "THE WASHINGTON POST": I mean it's the classic no pain no gain sort of argument, right, except for the fact that you don't really know where it ends. And that's the thing. The president can't really predict that either. He's trying to make everybody feel OK about the fact that the market are a little bit in turmoil right now.

As -- and the reason the president can't say where it's going to end is because it's not just up to him. I mean China can take steps in retaliation, as we saw them say they're going to do today. And that doesn't necessarily end at certain industries or certain tariffs. And if you keep going tit for tat, open question.

MICHAEL SHEAR, WHITE HOUSE CORRESPONDENT, "THE NEW YORK TIMES": I also think it's remarkable, most White Houses are so much more disciplined about this kind of thing that if the -- if the president was going to take kind of a hard line trade approach, you would have kind of White House aides preparing reporters ahead of time. This is what we're going to do. This is how it's -- we think it's going to play out. And instead what you had this week was these sort of divergent messages with the aides like Kudlow trying to walk back the sort of fears of a trade war, trying to sort of, you know, give the sense that this wasn't just sort of helter-skelter. And then all of a sudden the president does another thing and ratchets this up again. And so you do have a sense of not being in control.

[12:05:30] KING: Not being in control is the sense. And it's very different. You're right, in a prior administration, if they were going to do this, you would bring in economic reporters. You would have people on the National Economic Council or at the Treasury Department, the Commerce Department, talking to key people on Wall Street, trying to give them a heads up, this is coming, to try to limit the bouncing in the markets.

But -- but this is the way this president operates. And does he have a --

SHEAR: (INAUDIBLE) different. KING: He certainly has a case to make when he could say that it's been years and no one has gotten tough with China. It's been years and China has been cheating or not being a fair player in the trading marketplace.

The question is, the method here. And, again, he -- he thinks this is the way to do it, disrupt, shock the system, then try to cut a deal.

MARY KATHARINE HAM, SENIOR WRITER, "THE FEDERALIST": Well, I think that's the argument he makes. And that's what -- we've seen him do that before where he -- there's a lot of bluster and then he sort of backs it off. The problem is, the market reacts to bluster. And the markets and the economy, as it stands, or as its stood -- and we'll see how this falls out -- was one of his best-selling points about his administration. So if it ain't broke, maybe don't try messing with it this much.

He does have an argument on China, and I'm not adverse to going against -- going after them on things like intellectual property, where they really are huge violators, but the trade war stuff is not going to end well. And, by the way, politically saying this is going to be painful for some people but it's going to be worth it is a very tough argument to make, even in the most disciplined sense.

PERRY BACON, SENIOR WRITER, FIVETHIRTYEIGHT: To the people who --

HAM: Right, who might get --

KING: Yes. In the short term, in the short term, for the people who might suffer pain and turmoil and just uncertainty, a lot of the soybeans, for example, commodities, are sold in future markets and the markets are doing things like this. That's part of it.

But the political reaction is interesting because he's not on the ballot this year. A lot of Republicans, especially in farm states, are nervous about this.

But look at the split right here. Jeff mentioned Ben Sasse, Republican of Nebraska, frequent Trump critic. Hopefully the president is just blowing off steam again. But if he's even half-serious, this is nuts. China is guilty of many things, but the president has no actual plan to win right now. He's threatening to light American agriculture on fire. Let's absolutely take on Chinese bad behavior but with a plan that punishes them instead of us. This is the dumbest possible way to do this.

Number one, it's just remarkable to hear anybody, including a Republican. I know he's a Trump critic. But to talk about a president like that, maybe he's just blowing off steam. That's remarkable. But that's Ben Sasse of Nebraska.

Mitt Romney, Utah Senate candidate, again, not always a fan of this president, a very different line. I think the president is leading with some policies that will wake up our friends in China and they'll recognize business as usual is going to have to change. China, over the years, has taken advantage of the attitude in America, which is, we haven't watched very closely and they've been cheating.

Now, is that because Romney is on the ballot and has a -- there's a --

BACON: Yes.

KING: Yes. OK, thank -- thank -- I mean it's not like the -- it's not like the Trump base in Utah is gangbusters.

BACON: I would say the party lines are split on the tariffs issue more broadly. But if you listen to what Bob Casey, Sherrod Brown, Joe Manchin, some Democrats are saying -- of course they're running (ph) right now, but they've generally been more favorable about the idea of tariffs and changing our trade policies, versus most Republicans on The Hill, I assume Larry Kudlow, members of Trump's -- I assume Trump's staff that organized on tariffs because they're trying to stop him from doing it. So that's part of what's going on here.

But the lines are shifted here. The Republicans on The Hill are nervous about this. But I think Trump is doing this. You know, as you noted, Clinton, Obama, Bush would not do this, and Trump is really -- he's talking about this his entire life, functionally, that, you know, trade is not working for the U.S. So I think he has a long-term plan on this particular issue. And I do think he's right, the short term is probably not going to be good. The markets are going to be rocked. I'll be curious to see what the long term look like. And I'm not sure he's wrong at this point on this issue.

KING: And that's the part the Republicans are nervous about, that he doesn't care about us.

SHEAR: Well, I'm voting (ph) for long term. Is the long term -- does the long term, you know, sort of come -- dose the benefits of this come before the midterm elections? I don't think so, because economics just doesn't work that quickly. And so if the pain is still there in a lot of places when a lot of these lawmakers are going to the polls, that's what they're worried about.

DEMIRJIAN: And it's not that isolated of like, you know, this is not just caring about us but the president, I mean, does have a stake in this. If that House flips, that could mean a lot for things for his presidency, especially considering all the, you know, Russia allegation. So, I mean, they're not completely disconnected, but it's certainly a very different mindset (INAUDIBLE) --

KING: But he seems to be going back to his instincts.

DEMIRJIAN: Yes.

KING: Which, on a lot of issues, we could say the president's not consistent, at least in his words on trade. He has been even well before he got into politics.

BACON: Well before this.

HAM: Well, I was just going to say, politically, not only is there going to be some immediate pain of some sort for different parties, but he explicitly says that he's the one who has brought it.

KING: Right.

HAM: And that -- that lays -- that's a very difficult argument to make to voters.

SHEAR: He (INAUDIBLE) himself.

KING: Well, again, though, we often say he doesn't want to take responsibility for things. At least give him -- so give him quote/unquote credit? I'm not sure that's the right word for that. All right, we'll keep an eye on the markets.

[12:09:58] Up next, though, a new round of U.S. sanctions on Russia, this time targeting some of President Putin's inner circle.

(COMMERCIAL BREAK)

KING: Welcome back.

The Trump administration announcing tough new financial sanctions on Russia today, targeting some of Russia's richest men and some of Vladimir Putin's closest advisers. The Treasury Department list includes Putin's internal affairs minister and a top Kremlin aide, executives at a Russian owned bank, energy companies, even Putin's son-in-law, and at least three people who are said to be of interest in the Russia special counsel investigation. Billionaires Oleg Deripaska, Viktor Vekselberg, as well as central banker Alexander Torshin.

CNN crime and justice reporter Shimon Prokupecz joins us first.

Shimon, tell us how this connects to Russia probe and how significant is this from the Treasury Department?

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: Certainly very significant, John. And in terms of the larger investigation into Russia.

Deripaska, his name has surfaced before because of Paul Manafort. And now Deripaska, based on some State Department information, is one of these wealthy oligarchs who consults with Putin regularly. This according to State Department cables. And it's been reported -- and this is the connection to Manafort -- one of the connections anyhow -- is that before Trump was nominated, Manafort had offered to brief Deripaska privately on how the campaign was going, and then Deripaska was also in business, ultimately failed with both Manafort and Gates. So clearly connections there to the two former high-level people inside the Trump campaign. And, as we know, Rick Gates is now cooperating in the investigation.

[12:15:34] Now, the other person you mentioned, Viktor Vekselberg, he's more of an interesting kind of outside character in all of this and that he's another billionaire with ties to Putin. He's the head of a Russian electric company. And clearly everything that goes on in Russia usually involves the government. And here he also has ties to Putin.

Now, what's interesting, another one of these things that's interesting, and where Vekselberg has come up with the counter- intelligence officials at the FBI, is where he apparently, according to "The Washington Post," attended the Trump inauguration event. He was also at an RT dinner that we've reported on that Michael Flynn attended and Vladimir Putin attended in 2015. So all of this, as we certainly know, have come under scrutiny by both folks at The Hill and the Mueller investigators.

KING: Interesting to watch how it plays out from an investigative standpoint, and the Kremlin reaction as well, at this time of tension.

Shimon, appreciate the reporting there.

Let's bring it inside the room.

It is striking. Fr those out there who understandably and legitimately for months have said, when is this administration going to take Russian meddling or Russian bad behavior on the world stage seriously? This is the second in a matter of weeks, tough set of sanctions. And if you read -- this is from the Treasury Department. It's not the president's words. But if you read the Treasury Department's release, the Kremlin is corrupt. Putin is a destabilizing force on the world stage.

So if you've been waiting -- maybe you're still waiting for the president to say these things -- but you have to give the administration some credit here for taking out the 2x4.

BACON: We have a -- yes, we have a weird policy right now where we have very strong language from the government but not from the president. You can imagine after 2016, Hillary Clinton would have given a speech announcing these sanctions and being very harsh about Putin. And I'm sure Trump will not use the language you just read.

At the same time, you can't say the administration is soft on Russia at this point as we were saying last year because the policy has moved a different direction.

KING: Right. To back up -- to back up that point, the president did not announce this himself.

BACON: No.

KING: The president has not said a word on Twitter. He's been talking about China. He's been talking about other things on Twitter.

BACON: Correct.

KING: And the vice president did tweet this, the Trump administration continue to hold bad Russian actors accountable for their lawless actions on the international stage. He goes on to say, today's action by POTUS shows strong leadership and sends a clear message.

Why won't the president of the United States say that or maybe just retweet his vice president?

BACON: Does he retweet?

SHEAR: I don't know.

DEMIRJIAN: I mean, look, everything -- everything Russia related that -- in the president's eyes, he can't separate that from himself. The questions of Russia's activities are questions for him about the legitimacy of his own seat at the desk in the Oval Office, right? So that's been very difficult for him to separate out. Also, he's just, you know, his general personality is to be really nice to these strong man (ph) leaders who flatter him. And so that is something that, you know, in a vacuum, were it not for the Russia investigation, would be fine. You're taking really, really tough actions on your administration when it comes to actually issuing sanctions that are hitting the oligarchs that are close to Putin in the hopes that that shifts the policy up because that's what, you know, people that are closest to that inner circle.

KING: Right.

DEMIRJIAN: At the same time, you know, speaking softly. So it -- but -- except for we're not in that vacuum at all. And, as you saw, this list of sanctions even hits on people that are, you know, in that nexus of the characters that are now under scrutiny because of the allegations.

KING: Right. And it lays out what Bob Mueller has said, and what anyone who's watched the world in the last 10 years knows, that Putin uses these oligarchs to travel the world essentially as his emissaries, to take their money out and to try to influence things by spending their money or investing their money elsewhere.

Again, to show you how the dynamic changed this year, the administration -- we haven't heard directly from the president, but the administration has been criticized for months for dragging its feet on getting tough with Russia. Among those criticized in the administration constantly has been Senator John McCain, who issues this statement. Today, sanctions sent a clear message to Putin and his cronies that there will be a high price to pay for Russia's aggression in the Ukraine and Syria, and its attempts to undermine western democracies, including our own. And it goes on. He says the United States must go on with a broader strategy. So he's saying, keep going. But, again, praise from John McCain of the Trump administration on Russia. That is a sentence you could not speak not that long ago.

DEMIRJIAN: Right.

SHEAR: That's true, but also let's not go overboard either, right? The administration is acting in part because of a lot of pressure to act. Congress had to pass a law mandating extra sanctions that he didn't want to sign and that, you know, he sort of did when it was --

BACON: (INAUDIBLE) --

SHEAR: When it was clear that it was going to pass anyway, a veto- proof majority.

The Russian attacks, the poisoning in London built world pressure for the president to act. That, you know -- and the United States acted after a lot of other, you know, parts of the world had reacted to that. So, yes, they're acting. Yes, they're doing -- taking some serious steps today is another one. But it's not -- but this is still dragged -- being dragged and kicked -- kicking and screaming to do it.

KING: Right.

[12:20:13] DEMIRJIAN: In a way, though, it's like an evolution. I mean I'm not trying to say that it's --

SHEAR: Right.

DEMIRJIAN: It was pretty obvious to everybody when Trump entered office that this was not a good relationship and Russia was a pretty bad actor, especially given what happened in the elections. But he's not the first president to actually have to take a little bit of time to realize that you have to get really, really rough on Russia. And just, you know, taking the -- out of the politics situation for a second, it's actually interesting timing for, you know, going after people in Russia because Putin just got re-elected. He's trying to figure out how he's going to be set up now for the great beyond. He's got six years in office. And messing with his inner circle could actually have a fairly destabilizing effect on what he -- how he plans and who he decides to keep as his allies. But it would have to be continued in this way for that to work. You'd have to actually have this not be a one-off, I guess, but actually a progression of changing tactics.

HAM: Yes, I think the definitely deserve credit for putting points on the side of the ledger. And I don't want to disincentives that by (INAUDIBLE) it too much.

But you're going to -- this dichotomy is going to remain.

KING: Right.

HAM: I think he's not going to change the way he talks because he does have a bit of a soft spot for strong men. And he likes people who like him. And Putin has praised him. So that dichotomy I think is going to continue to exist. And it's this weird situation where there is an alternative history. Or if you look to the conduct of the Obama administration, you might have the right words, but much less action. And here we have the flip. It would be great if we could put them together, but I don't see it happening anytime soon.

KING: Right. And just quickly to that point. The president had an opportunity this week, he was with the leaders of three Baltic nations, who more than anybody are worried about Vladimir Putin because they live in the neighborhood. They've watched what's happened in Ukraine. They've watched what happened in Georgia. So if you're in Lithuania, Latvia, Estonia, you want tough words from the president of the United States when it comes to Vladimir Putin. Not exactly what they got. (BEGIN VIDEO CLIP)

REPORTER: How do you see Vladimir Putin? Is he a friend or a foe?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We'll find out. I'll let you know. I mean there will be a time when I'll let you know. You're going to find out very quickly.

So I think I could have a very good relationship with Russia and with President Putin. And if I did, that would be a great thing. And there's also a great possibility that that won't happen. Who knows?

(END VIDEO CLIP)

BACON: He's been consistent. He was saying that the whole (ph) two years is he wants -- essentially that he wants to have a relationship with Putin, even though that seems unlikely to happen. So I think the question we all have is, of course, is just because Trump wants a relationship with Putin for policy reasons or because somehow Putin helped him win the election.

KING: Right, that is it. But if you take what -- take the president's words and match them up to the last two releases from the president's Treasury Department and it's a parallel universe kind of thing. So we'll keep an eye on that one as well.

Up next, President Trump gives his embattled EPA chief a renewed vote of confidence. That despite a growing list of ethics questions.

(COMMERCIAL BREAK)

[12:26:58] KING: Welcome back.

Scott Pruitt is winning praise from the boss and some playful attention from his critics. Check out these posters up on Capitol Hill this morning mocking the EPA administrator for his low-rent deal at a condo owned by an energy lobbyist. Now the condo deal is just one of a long list of ethics and judgement questions about Pruitt's EPA tenure. And we know the president doesn't like bad headlines. But he says he does like Pruitt.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Yes, I think he'll be fine. Yes, I want to look at it. I haven't seen the details. But I can tell you, at EPA, he has done a fantastic job.

REPORTER: Are you bothered by the reports about him, sir?

TRUMP: On Scott? Who's saying that? I have to look at it, and close. You know, I hear different versions of it. But I'll make that determination. But he's a good man. He's done a terrific job. And -- but I'll take a look at it very closely.

REPORTER: Are you thinking about switching him out for attorney general? TRUMP: No. No. No, Scott's doing a great job where he is.

(END VIDEO CLIP)

KING: Now, another factor, the president says what he hears outside of Washington is very different than the conversation here inside the beltway.

(BEGIN VIDEO CLIP)

REPORTER: I'm sorry, I couldn't hear your response earlier about -- about Scott Pruitt. Are you still --

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: About who?

REPORTER: About Pruitt. I was -- I couldn't hear it.

TRUMP: I think that Scott has done a fantastic job. I think he's a fantastic person. I believe -- you know, I just left -- I just left coal and energy country. They love Scott Pruitt. They feel very strongly about Scott Pruitt, and they love Scott Pruitt.

(END VIDEO CLIP)

KING: And so which is it? If -- should you be happy if you're Scott Pruitt? The president says when he travels he hears great things about you. He's a good man. He's doing a fantastic job. Or, do you look at some past people who have been called good men and told they've been doing a fantastic job who are now former --

BACON: That's usually the kiss of death.

KING: Former Trump administration officials? Which is it in this case? In the case of Pruitt, I would make the distinction that the -- they're more -- they're more frequent and that the president connects them to the job performance.

SHEAR: Yes.

KING: Doing a fantastic job.

SHEAR: And there is a real chorus of conservative activism behind Pruitt.

BACON: Right.

SHEAR: Arguing both kind of to reporters but also, I'm sure, to the administration quite directly that they don't want to see Pruitt go. So that suggests that, you know, perhaps if the president is listening to such things, that he'll end up staying on, at least longer than maybe one might think.

I will say, I talked to a senior administration official yesterday who made no bones about the fact that they are looking into this. Like, they are at least saying that there is a, you know, is a process beyond just sort of whatever's in the president's head. And whether that influences him or whether he just goes with his gut, we don't know. But like there is -- there is a process of looking at all of this drip, drip, drip that's going on.

KING: And one of the questions is, did Pruitt have anything to do with trying to get raises for two of his supporters within the agency. Two people he brought into the agency. Where he was told no by the White House, but they found another fund -- they were going to go around the White House.

Mr. Pruitt was asked by Ed Henry of Fox News. He's categorically denied it. He said he had nothing to do with it. When he found out about it, he stopped it. There are administration officials who say they don't believe that's the true story. That they believe he did have something to do with it.

[12:30:05] Now, again, so the issue is, who's the president going to believe. We do know, listen here, that he's aware of this Fox News interview and what his EPA administrator said.