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Republicans on Trump's Tariffs; Concerns over Trade War; Sessions Lawsuit Against California; Daniels Files Lawsuit. Aired 12- 12:30p ET

Aired March 07, 2018 - 12:00   ET

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

[12:00:14] JOHN KING, CNN ANCHOR: Welcome to INSIDE POLITICS. I'm John King. Thank you for sharing your day with us. Another busy day it is.

The White House says its new tariff plan will be ready by week's end. This as Republicans complain new West Wing personnel and policy chaos digs their midterm election ditch even deeper.

Plus, Stormy Daniels is really Stephanie Clifford. So is David Dennison really Donald Trump? The porn star files a lawsuit alleging an affair with the president and includes documents she says prove it.

And first, the attorney, now the FBI director. The president and his allies use terms like tattered and biased to describe the FBI. Today, this rebuttal from the top.

(BEGIN VIDEO CLIP)

CHRISTOPHER WRAY, FBI DIRECTOR: I counter example after example after example of relentlessly hardworking, selfless, honest, brave professional people over and over and over again. And I would love to sit up here for hours telling you stories of some of the people I've gotten to meet and work with, patriots.

(END VIDEO CLIP)

KING: We begin the hour with more White House chaos and its impact.

President Trump says he likes conflict. And his team today is promising the new trade tariffs causing the latest personnel and policy tsunamis will be finalized by week end. The markets don't like it. Maybe even more so, when the guy leaving the West Wing is the presidential aide Wall Street trusts the most. You see Wall Street right there, down 270 points at the noon hour. We'll keep an eye on that. It's been up and down all day. But 270 points at the noon hour. Not good.

And there's -- Republicans don't like it either. Understatement there. They see tariffs as bad policy and as disastrous politics. Here's a few notes from my inbox this morning, all from seasoned Republicans. Quote, Hill R's are flabbergasted, is how one assessed the move. And when R's lose -- that's Republicans -- lose the safe PAC, panic will become epidemic.

A second GOP veteran with access to the latest data said simply, PA-18 loss is coming.

PA-18 is a western Pennsylvania House seat up for a special election next Tuesday. Now, the president carried that district by 20 points in 2016. It is now Exhibit A in this latest test of how the president's chaotic style is in the view of his own party's leaders turning an already difficult midterm year into a potentially disastrous midterm year. And how, it's important to note, establishment Republicans have been wrong about the president before, many times. And those who support his nationalist instincts are happy with talk of tariffs. Also happy with the West Wing exit of former Goldman Sachs chief Gary Cohn.

But as we wait for the final tariff details and perhaps even more White House staff turnover, this from a 30-year veteran of Republican campaigns and administrations captures the mood of the day among Republicans. Quote, he is making losing the majority more likely by risking economic growth through higher prices and higher interest rates. He is creating the reality for his impeachment by the House.

Ouch.

With us to share their reporting and their insights, CNN's Nia-Malika Henderson, Carl Hulse of "The New York Times," CNN's Kaitlan Collins, and Eliana Johnson of Politico.

A good day to have four great reporters at the table.

That's my inbox this morning, and that's only a little bit of it. Is that hyperbole? Is that panic? It's certainly what they think today.

CARL HULSE, CHIEF WASHINGTON CORRESPONDENT, "THE NEW YORK TIMES": Well, I was on The Hill yesterday and, obviously, the panic is sort of written on the faces of the Republicans. They are really worried about this. They sort of thought that Trump had gotten past some of this more populist instincts and protectionist instincts and that they thought they could handle this. Well, they're not handling it and now they're worried.

Just as you said, this is really going to upset their midterm messages. Businesses are already saying that the effects of the tariff would be far greater than the benefit that they got under the tax bill. This is a calamity for them.

And it's funny you mentioned the Pennsylvania race last year -- or next week and that, you know, people thought, well, this maybe would play in that district. But if they lose that district, even with the tariffs, then there will be widespread panic, if there isn't already, on this.

KING: And, one, a lot of the smart Republicans say it's not even the specifics. That they do think tariffs are bad policy. They think it's bad politics in the sense that the tax cuts were beginning to settle in with people who were saying, hey, OK, the economy's doing pretty good. I like these tax cuts. But to them it's not so specific. It's just the constant churn that the president is always in a mess. He's always in turnover. He can't keep good people. ELIANA JOHNSON, NATIONAL POLITICAL REPORTER, POLITICO: I think the

concern coming from inside the White House and on The Hill is twofold. The first is that the president twice last week circumvented his own policy process inside the White House.

The first was on guns, where he held a sort of free-wheeling policy discussion with a bipartisan session of lawmakers and just shocked Republicans with the sort of pro-gun control things he said. You could see Mike Pence sort of flabbergasted in the background. And the second was on trade, where he simply tweeted his policy announcement, much to the shock and chagrin of Gary Cohn, who resigned yesterday.

[12:05:05] But the second is that this is happening not in the first couple weeks or months of his administration, where I think people more or less expected this behavior, but a year in. And I think you're seeing that starting to take its toll on White House aides and on Republicans on The Hill.

KING: I want to toss this into the conversation now. The White House this morning saying we thought it might go till next week. The White House this morning saying we should get the final details of the tariff plan this week, meaning by Friday. We're having this conversation Wednesday noontime in Washington.

Listen to the commerce secretary here today. He has been part of those, among those pushing the president to get tougher on trade. He doesn't give you the final details here, but he says things might change a bit.

(BEGIN VIDEO CLIP)

WILBUR ROSS, COMMERCE SECRETARY: I think that you're going to see, as you understand the details of what actually is going to happen, that we're not trying to blow up the world. There's no intention of that. We want to balance our needs to fix the trade deficit with the needs of the economy and the needs of the global economy itself.

(END VIDEO CLIP)

KING: We don't know the final details yet, Kaitlan, but what a lot of seasoned Republicans in town say, even people who like this president say, if you're not going to blow up the world in the end, then why did you blow up the town?

KAITLAN COLLINS, CNN WHITE HOUSE REPORTER: Exactly. And I was talking to some the other day who were saying they were taking their time working on the final details of this because they don't want to bungle the rollout of this. But they essentially did that when the president announced it at a very hastily arranged meeting at the White House. And you see the people who are winning technically in this situation, the Wilbur Rosses, the Peter Navarros, are even too worried to give too many parameters to this because they're not sure what the president's final decision on this is going to be. As we heard Wilbur Ross saying this morning, that there could be flexibility here and they're not totally sure. And even on the Sunday shows, he was saying he wasn't 100 percent sure that these would be rolled out in the way that the president said that they would.

But we're seeing here that the president is itching to get this out. He is desperate to sign this. He wants to do it as soon as possible. And now they're working on this timeline by the end of this week.

Earlier this week they were saying it could certainly happen next week. But now the president has made clear he wants this done before even Saturday. And so the White House is having to say, we might have this done by the end of the week.

But what's clear is the policy is not finalized yet. We have to make that clear. It's not even ready to be signed yet.

NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL REPORTER: And this is the Pennsylvania race, right, coming into play in some ways. That race coming up on the 13th, on Tuesday. You can imagine the president wants to go there and say, listen, I signed this executive order. I signed this move to punish the world that has been ripping America off for all these years. And I'm the one who promised this and I'm delivering. So, in that way, I think you've got Republicans worried that that race is already lost. But the president making policy that will impact markets all around the world, in some ways connected to this race on Tuesday.

KING: Yes, the Republicans have poured a lot of money into that district. And, again, those --

HENDERSON: $9 million.

KING: Those who are tracking the data say that it's trending the wrong way and that all the money they're spending, they can't move the numbers, even when they move it a little bit, they can't move it significantly.

HENDERSON: Yes.

KING: The thing that's interesting to me as -- I was saying this before we came on the air -- is that all the people who know more than we do, their mood, their demeanor, the way they talk publicly and privately has changed in the last ten days, whether it's those who see the election data and the campaign data, those who are inside the White House and know a lot more about the investigations, whether it's the attorney general standing up to the president, the FBI director standing up to the president, and the Republican congressional leadership standing up to the president.

This is much more gentle than you hear in private conversations. But here's the Republican speaker of the House, the Republican majority of the United States Senate saying, Mr. President, you are wrong, and you're hurting us.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R), MAJORITY LEADER: There is a lot of concern among Republican senators that this could sort of metastasize into a larger trade war. And there's a high level of concern about interfering with what

appears to be an economy that's taking off in every respect.

REP. PAUL RYAN (R), HOUSE SPEAKER: There is a problem that needs to be addressed here. We just want to make sure that it's done in a prudent way that's more surgical so we can limit unintended consequences.

(END VIDEO CLIP)

KING: The number two Senate Republican, John Cornyn, today saying maybe we should have hearings so that we can get people more smart about trade. That's a message to the president.

HENDERSON: Yes. Yes.

KING: It is -- it is -- it's striking. Even when you see what they say publicly.

JOHNSON: Certain people.

KING: Yes, certain people.

JOHNSON: Particular people. I could name names.

KING: Certain people.

But you see what they're saying publicly. Which, again, that's relatively diplomatic from Leader McConnell and Speaker Ryan. But they're out getting in the president's face, which they didn't do for a longest time. And then in the private conversations, it is striking to me that they -- this is becoming survival. They see the president risking their survival. And they've tried to sort of stay with him, ride the wave with him. But now it's like riding that rodeo bull. It's like, when do you let go?

HULSE: Well, I think for Senator McConnell, those were pretty tough words. He had -- he had been very quiet, trying to see, hoping maybe it was going to play out differently. But then he sees, you know, what's going on. He knows Gary Cohn's going to leave. And he is going to take a hard stand there. There's not much they can do.

HENDERSON: Right.

HULSE: That is their problem. On the guns issue, they knew they could kind of control that themselves with tariffs. The president's got a lot of responsibility.

I do think that the one thing we're hearing from the Democrats is, wow, this is finally the issue that they're going to blow up the relationship over, all the things that have gone down and it's over tariffs.

[12:10:04] COLLINS: But the president does not care about their criticism at all. And this is like --

HULSE: He might even enjoy it. KING: Right.

COLLINS: Those words -- those did seem like mild words from them, but those were very defiant statements and the president seems to be bucking them completely.

KING: That -- it's a critical point because my understanding is both congressional leaders and others around the president, including friends of the president, who support the president on policy, have been telling him to lift your head. That he looks at that, the Dow is down 290 points right now. Maybe that will convince him because he's -- every day says the markets are doing great. But he's looking down all the time. As one friend put it to me last night, he's worried about tomorrow morning's "Fox and Friends," not the November elections.

The Republican leaders are trying to tell him to lift his head because if you hurt us, you hurt you. Because if Nancy Pelosi is speaker of the House, guess what, you're going to be investigated, you're going to have oversight, you're not going to be able to pass anything. And some, as I said at the top of the show, think they could actually move to impeach him.

How do you get the president to lift his head?

JOHNSON: This president has never operated that way. He's never behaved like he was the leader of the Republican Party and like he had that sort of relationship with Speaker Ryan and Leader McConnell.

And, look, they're getting into a battle that White House aides have been waging for the past year in terms of explaining to him how exactly trade works economically. I had a White House aide tell me, look, I've explained to the president dozens of times that having a trade deficit with another country doesn't mean that that country's taking advantage of us.

HENDERSON: Right.

JOHNSON: And he simply doesn't seem to take to that argument or understand that argument. He's got his own views on this. And I think you've seen the president. It happened on the Iran deal. It happened on the transgender policy. And it happened on trade. When he wants to move on something and he doesn't feel like his advisers are facilitating that move, he simply circumvents them and does it himself.

HENDERSON: And he thinks he knows those rust belt workers better than anybody. And in some ways, at least 2016 shows that he could talk to them in a way that others couldn't. You know, sort of establishment Republicans couldn't. So he's talking again like the guy at the end of the bar who doesn't understand trade policy, doesn't understand that globalism is probably a good thing for the American economy. Though there have obviously been some rough patches in terms of closing, you know, manufacturing places and offshore sourcing.

But, yes, I mean that's -- I think he's confident that he can talk to that forgotten man that he always talks about.

KING: It's a great point, because the Republicans who are nervous about him now, even those who didn't like him in 2016 say, you've got to give the guy his due. He won 2016. His instincts then, as they say, were brilliant. What they think is, you know, he's (INAUDIBLE) campaigning --

HULSE: A different set of voters, though.

KING: Right.

HULSE: A different set of voters.

HENDERSON: Yes. No, that's right.

KING: A different set of voting. Governing challenge different than the campaign challenge. An excellent point there. Much more on this unprecedented White House turnover in a bit.

But, next, it's the Trump administration versus the state of California. The issue, immigration.

(COMMERCIAL BREAK)

[12:16:41] KING: Welcome back.

The Trump administration now suing the state of California over its immigration law, saying the state is deliberately keeping the federal government from deporting undocumented criminals. Attorney General Jeff Sessions traveled out to California, making this announcement in Sacramento to a group of local law enforcement officers a short time ago. As part of the Sessions' speech, he singled out the Oakland mayor for warning residents about coming immigration crackdowns.

(BEGIN VIDEO CLIP)

JEFF SESSIONS, ATTORNEY GENERAL: How dare you -- how dare you needlessly endanger the lives of our law enforcement officers to promote a radical, open borders agenda.

But I can't sit by idly while the lawful authority of federal officers are being blocked by legislative acts and politicians.

(END VIDEO CLIP)

KING: It's the latest and the most significant political fight between the Trump administration and the state of California. Fights the state's Democratic leader seemed more than eager to join in. Governor Jerry Brown, who's named in the lawsuit, channeled the president in this response to the suit, tweeting, at a time of unprecedented political turmoil, Jeff Sessions has come to California to further divide and polarize America. Jeff, these political stunts may be the norm in Washington, but they don't work here. Sad.

Nice play there on the president from Governor Brown. This is political, but it's also a significant legal question. And normally -- normally the courts have ruled that federal -- that immigration is actually one of the rights reserved to Washington. The administration feel it's on god standing here?

COLLINS: Well, they've actually struggled. You've seen the Justice Department struggle with this before when they tried to strip them of federal funding and they didn't win out in that. So it's an interesting play, but they're certainly, obviously, making the argument that the federal government prevails when it comes between them and the state over this.

And it also makes this dynamic between the president and Jeff Sessions all the more interesting because we actually know that their relationship is at an all-time low. The two are not disagreeing. Of course, the president is frustrated with him over recusing himself from the Russia investigation. But the argument is to be made that Jeff Sessions is one of the few people in his administration that is really carrying out what the president campaigned on. And that's what we're seeing him do with this now.

But the president has not been pleased with Jeff Sessions no matter what he's done in these last 12 months.

HENDERSON: Yes, and it highlights California as the hot bed of the resistance. You see Jerry Brown there, also the attorney general, Xavier Bacerra. They have been pretty vocal for -- with this president and counteracting this president from day one with the Muslim ban and all sorts of sort of lawsuits trying to counter him, joining other attorneys generals from other blue states. You also have figures there like Kamala Harris, who's been very vocal in terms of DACA.

So, yes, I mean, I think this goes to show where the kind of heart of the resistance is, where a lot of the Democrats are on this in trying to counter President Trump, particularly on immigration.

KING: In an odd way it's one of those issues where we'll see where the legal arguments go. If they're going to argue legally who gets to make the call in court. Is it the federal government call or the state government's call. Legally, we'll see where this goes. Politically, this is one of the issues where both parties like these fights. If you're the Democrats, for your base, you don't mind having this fight with President Trump. And if you're President Trump and his attorney general, in part they think this is part of the dance that brung them, if you will. That immigration has always been his go-to.

JOHNSON: And also, I think this is where Donald Trump and Jeff Sessions see themselves as differentiating themselves from the Republicans that came before them. They said really that neither party has acted on immigration, has moved to enforce the laws, and they really thought that they were going to distinguish themselves from leaders in both parties.

[12:20:07] Sessions, you know, has called them the elites and spoke very similarly to Trump and is really moving to, I think, crack down on immigration enforcement and say we're simply enforcing the country's laws by doing that.

What I find really ironic is that Sessions is one of the few members of this president's cabinet who really sees eye to eye with Trump ideologically. And yet, as Kaitlan said, simply cannot get back in the president's good graces. I think it's an example of some of the ways -- some of the president's self-defeating behavior.

KING: Self-defeating behavior is a good way to put it. And it's interesting. You know, this is -- they're going to fight this out in court now. Just two weeks ago at the White House, the president said, you know, if California doesn't start to see things my way, I could do this differently.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I mean, frankly, if I wanted to pull our people from California, you would have a crime nest like you've never seen in California. All I'd have to do is say, ICE and border patrol, let California alone. You'd be inundated. You would see crime like nobody's ever seen crime in this country. And yet we get no help from the state of California. They are doing a lousy management job.

In two month they'd be begging for us to come back. They would be begging. And, you know what, I'm thinking about doing it.

(END VIDEO CLIP)

KING: Just a threat or?

HULSE: I did notice that Jeff Sessions went to Sacramento and not Oakland to make that announcement. I think his reception --

HENDERSON: (INAUDIBLE), yes.

HULSE: His reception there probably wouldn't have been as good.

I mean California and the administration are basically at war over immigration. And it's in a few other places too, in Chicago and Philadelphia. Remember when they issued some subpoenas to mayors when they were in town the other day. Most of those mayors took that as a point of pride.

I also think the immigration thing -- your point on the politics of it is right. This was the week they were going to resolve the dreamers issue, right? That is at a total standstill in Congress. Nothing's going to happen. This is going to be something fought out in the midterm elections.

And I'm not sure that while this is good politics around the country for some Republicans, there's a lot of Republicans in California --

HENDERSON: Yes.

HULSE: Who are in trouble --

HENDERSON: Yes.

HULSE: And it's probably not that great for them to have this be (INAUDIBLE).

KING: Right. To Carl's point, this was the DACA deadline week. It has been essentially dissolved by the courts. The firm deadline doesn't exist because it's going through the courts.

The president's giving a speech to a Latino group this hour in Washington. He just said this, we're trying to have a DACA victory for everybody, by the way, and the Democrats are nowhere to be found. The president again, he's done this consistently in recent weeks, laying the blame on the Democrats. But is there anybody at the table who thinks that there's, absent a deadline, this town normally does nothing, so --

COLLINS: Exactly.

HENDERSON: Yes. There seems to be not -- and there probably won't be much movement on that. We'll see what the courts say on this. But, yes, I mean the president is trying this idea that it's really the Democrats' fault. He's the one who undid DACA and got us here in the first place.

And I think to your point about California, Democrats very much looking at California to see if they can flip those seats. I think it's like seven seats or so that Hillary Clinton did. These are Republican seats that Hillary Clinton won. So I think this immigration fight probably not going to play well for the Republicans there who are trying to hold on to seats or run in those seats.

KING: That's -- it's a great point. It's a great laboratory to watch. Democrats need 24 to take back the House. They think they can get five, six, maybe -- or even more than that in California. That would be a good basket to start. It will be fun to watch. A good campaign year. Take the show to California before we're done this year.

Up next, President Trump facing a new legal fire storm. Why a porn star who claims to have had an affair with the president says the agreement that demands that she keep quiet no longer holds up.

(COMMERCIAL BREAK)

[12:27:51] KING: Welcome back.

A lawsuit filed by porn actress Stormy Daniels alleges she had an intimate relationship with President Trump that stretched months and that his lawyer concocted a pseudonym for his boss to hide it all in a nondisclosure agreement. As we try to follow the money, you need to follow the names. Stormy Daniels is Stephanie Clifford by birth, but in this side letter, she agrees to adopt the pseudonym Peggy Peterson. Her agreement is with, on paper, a man named David Dennison and a shell business set up by Trump attorney Michael Cohen. But you see the blacked out part there. The actress says the side letter confirmed David Dennison is actually Donald Trump. And her suit says her agreement to keep silent about the affair can now not be enforced because David Dennison, aka Donald Trump, never signed it.

(BEGIN VIDEO CLIP)

MICHAEL AVENATTI, STORMY DANIELS' LAWYER: There were three parties to the agreement, My client, Mr. Trump, NEC. Two of the three signed. Mr. Trump did not sign. We believe that that was so that he could later claim deniability and, therefore, from a legal perspective, we believe she's free to talk.

(END VIDEO CLIP)

KING: This is the story that will not go away.

HENDERSON: No, and it's probably because porn star or adult film actress, however you want to refer to her, her name is Stormy Daniels, there's hush money involved, and there's Michael Cohen involved in a way that makes him seem not to be the most efficient lawyer in terms of striking these agreements.

It's something that I think is easy for average people to understand. I think particularly women will understand this. Even though Donald Trump is someone who most voters didn't think was necessarily faithful to his wife. He clearly wasn't faithful to a lot of his wives. But there was a kind of seediness to this that I think really breaks through to people. It also suggests that this is a president who has secrets around sex and goes to great lengths to hide them.

KING: And to that -- to that point, there's the tabloid part of this --

HENDERSON: Yes.

KING: Which a lot of people will be like, wow, I want to know more about it. There's also -- but there's also -- if what she alleges is true, and the president was supposed to sign this as Dennis Dennison, and was aware of this agreement, and $130,000 was paid out in the weeks before the election, you can make a case, and at least deserve a hearing, that that's a campaign finance violation.

HENDERSON: Right.

[12:30:05] COLLINS: Well, certainly. And Michael -- we also should look at what Michael Cohen, who is the president's private attorney, is saying.