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EARLY START

Trump: Armed Conflict With North Korea Possible; President Trump Says Seoul Should Pay For Missiles; Trump's Job Creation; General Flynn Warned About Foreign Payments. Aired 5:30-6a ET

Aired April 28, 2017 - 05:30   ET

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


CHRISTINE ROMANS, CNN HOST: And, new fallout from Michael Flynn's decision to accept payments from Russia and Turkey, but why is the White House shifting some of the blame to the Obama administration? Welcome back to EARLY START, I'm Christine Romans.

BRIGGS: I'm Dave Briggs. It is day 99 of the Trump administration.

ROMANS: And it's Friday.

BRIGGS: And it is Friday, and President Trump probably thankful about that one. Breaking overnight, an urgent warning from President Trump on North Korea's nuclear and missile development programs. The president suggesting a military face-off with Pyongyang is within the realm of possibility.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, there's a -- there's a -- there's a chance that we could end up having a major, major conflict with North Korea. Absolutely.

(END VIDEO CLIP)

BRIGGS: The president also telling Reuters the U.S. would prefer to achieve a non-nuclear North Korea through diplomacy, but he said that's very difficult.

ROMANS: In the interview,the president praised president -- Chinese President Xi Jinping for trying very hard to resolve the crisis. You might recall the president has previously criticized Xi and the Chinese for not doing enough. In fact, Secretary of State Rex Tillerson says that China threatened sanctions against North Korea if it attempted another nuclear test. Tillerson is set to chair a U.N. Security Council meeting on North Korea later this morning, with the House of Representatives set to vote on new sanctions against Pyongyang next week.

For the very latestI want to bring in CNN's Alexandra Field, live in Seoul. Good morning. You know, just 24 days ago this White House was saying that it had no comment on the fifth nuclear test, and now we're hearing the president say we could have a major conflict with North Korea. That's a big change in tone coming from this White House. ALEXANDRA FIELD, CNN CORRESPONDENT: Yes, it's very blunt, Christine, and it comes at a time when it seemed that the administration was really trying to steer the conversation away from the suggestion or possibility of military conflict and more toward economic sanctions and diplomatic measures. That had really been the message that had come following that unprecedented meeting in which senators were summoned to the White House to be briefed on North Korea.

But now you have, again, President Trump raising the possibility of a major, major conflict, while he does go on to say that he hopes that diplomacy is the way forward here. And he also does speak extensively about the Chinese president Xi Jinping, saying that he believes that President Xi does want to solve the problem but maybe he won't be able to. Now you've got some reaction from Chinese officials. The Ministry of Foreign Affairs here warning that this is a situation that could spiral out of control. China and Russia have called for more open dialogue.

The Secretary of State in the U.S., Rex Tillerson, is now also leaving the door open for the possibility of dialogue which, again, seems to be a bit of a change of course from the administration where top officials had previously said that the climate and conditions weren't right for any dialogue, but Sec. Tillerson now saying that maybe it's possible with the right kind of agenda.

He's also talking about North Korea, saying in an interview that he doesn't believe that Kim Jong Un is insane. Saying he may be a murderer, he may be ruthless, he may be irrational, but not insane. Secretary Tillerson will be calling on the enforcement -- the full enforcement of sanctions when he leads this U.N. Security Council meeting later today. All eyes, of course, will be on that.

And, there are a lot of people who are shaking their heads, you could say, here in South Korea, when it comes to more of the president's words from this most recent interview. He is now saying that he believes that South Korea should fork over $1 billion for a highly controversial U.S. missile defense system. It's a defense system that the U.S. insisted was critical for the security of the region and for U.S. national security interests. Now he's saying South Korea should pay for it. Officials here saying that's not the deal. The U.S. pays for the operation of their own system, they just provide a place to put it -- Christine, Dave.

ROMANS: (Audio gap) -- of the United States to have that THAAD missile system there, it had to convince the South Koreans to let us put it there. Am I right? And, it even has caused a lot of blowback from the Russians and the Chinese to South Korean companies who even, you know, gave -- sold the land to put the THAAD system on.

FIELD: Yes. China and Russia are staunchly opposed to THAAD. They believe the radar in that system could be used to spy on them. South Korea has said that China has retaliated, hitting them in the pocket when it comes to canceling tour groups and other stuff like that, which China has denied. But even internally -- even right here in South Korea you've got a little bit less than half of all people who were polled recently who said they're against THAAD. It's caused some internal political strife where some people here are

against it, including some of the presidential candidates who are running for election next month. And yet, the U.S. and some of the top defense officials here in South Korea have said that this system is urgently needed -- that it will actually be operational --

ROMANS: Wow.

FIELD: -- for days and that it has to be installed because of this grave threat from North Korea.

ROMANS: Fascinating -- and the president wading right in there and, you know, just totally changing the debate. OK, thank you so much for that, Alexandra Field.

BRIGGS: So, do Americans see North Korea as a threat to the U.S.? Most do not, at least not right now. A new CNN/ORC poll released overnight shows 37 percent -- about three in eight say Pyongyang is an immediate threat. Just under half say North Korea poses a long-term threat.

[05:35:00] ROMANS: Thirty-seven percent is actually a drop from the share of Americans who called North Korea an immediate threat four years ago. In 2013, 41 percent said that was the case. We also asked people about President Trump's handling of other foreign policy challenges during his first 100 days.

BRIGGS: So, you thought Alex Field had a challenge? Ron Brownstein has a bigger challenge trying to help analyze all of this. He's a senior political analyst for us and the senior editor at "The Atlantic." Great to have you on --

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST, SENIOR EDITOR, THE ATLANTIC: Good to be here, yes. Good morning.

BRIGGS: -- because there's a lot to get to.

BROWNSTEIN: Every morning.

BRIGGS: All right, let's start with the North Korean threat --

BROWNSTEIN: Yes.

BRIGGS: -- and let's talk about what President Trump said about --

BROWNSTEIN: Yes.

BRIGGS: -- Kim Jong Un, in a sense humanizing the North Korean leader -- listen.

(BEGIN VIDEO CLIP)

TRUMP: He's 27 years old. His father dies, he took over a regime. So, say what you want but that's not easy, especially at that age. I'm not giving him credit or not giving him credit, I'm just saying that's a very hard thing to do. As to whether or not he's rational, I have no opinion on it. I hope he's rational.

(END VIDEO CLIP)

BRIGGS: OK. So, usually, we have to go back months --

BROWNSTEIN: Yes.

BRIGGS: -- even years --

BROWNSTEIN: Yes.

BRIGGS: -- to show an about-face. Not in this case --

BROWNSTEIN: No.

BRIGGS: -- regarding North Korea. A statement on April 4th from the administration regarding a ballistic missile launch. Those 23 words essentially saying, "The United States has spoken enough about North Korea. We have no further comment." That was from the Secretary of State and that was applauded.

BROWNSTEIN: Right.

BRIGGS: What do you make of these two completely opposite strategies?

BROWNSTEIN: Well, it is similar to what we have seen -- and first of all, that comment -- those comments about the North Korean leader was similar to some of the things he said about Vladimir Putin during the campaign. I'm not saying he's a good guy but it's impressive the way he runs his country. And it's kind of this interesting -- look, I think there's another example where the diplomatic bureaucratic process is producing one set of language and rhetoric and the president's tweets and interviews are producing another.

You know, you noted that he was talking about asking South Korea to pay for the missile defense system. Yesterday, in interviews with "The Washington Post" he talked about pulling out of and terminating the U.S.-South Korea Free Trade Agreement in the middle of this, you know, intensified, diplomatic conflict and potentially military conflict on the Peninsula. He's also kind of, you know, adding that issue to the mix at a time when you would not expect a U.S. president to be kind of raising economic tensions with South Korea when certainly we are facing this larger challenge.

ROMANS: Let me ask you, is this president taking the bait? Is he taking Kim Jong Un's bait because, you know, he thrives on -- the North Korean dictator thrives on telling his people -- propagandizing with his people --

BROWNSTEIN: Yes.

ROMANS: -- that there's going to be --

BROWNSTEIN: Right.

ROMANS: -- a war. That the United States wants a military conflict. We're going to invade and they're going to be ready. Is Donald Trump taking the bait?

BROWNSTEIN: I think other presidents have been more cautious about avoiding that -- I think, certainly. I mean, you know, I think whatever we say, Kim Jong Un is going to be saying we're coming -- the U.S. is coming. And that certainly is the way they kind of keep their hold -- one of the ways they keep their hold on power. But yes, I mean, I think -- look, this is -- this is part of, as I said, a kind of a larger question of who -- is he speaking -- and people all over the world, they're asking this question. When they hear from President Trump, is he speaking for his government in the way that you would have connected it with previous administrations or is there ultimately something -- a set of filters between the actual policy and the words that come out his mouth?

BRIGGS: Look, so much for 'America First' -- we know that.

BROWNSTEIN: Yes.

BRIGGS: And so much for the rhetoric about no NAFTA.

BROWNSTEIN: Yes.

BRIGGS: We're going to tear that up --

BROWNSTEIN: Yes, right.

ROMANS: Right.

BRIGGS: -- and many other agreements. One interesting behind-the- scenes on this NAFTA thing is how the Agriculture secretaryactually brought him a map --

BROWNSTEIN: Right.

BRIGGS: -- and said if you tear up NAFTA here's who --

BROWNSTEIN: Yes.

BRIGGS: -- is in big trouble. These are Trump voters.

BROWNSTEIN: It's a little hard to imagine that nothing like that happened in the previous two years, right? And I -- and I would say America --

ROMANS: Well, but if he was running.

BROWNSTEIN: It would --

ROMANS: If he was running.

BROWNSTEIN: Well --

ROMANS: Running is different than governing.

BROWNSTEIN: Well, I mean -- but, you know, I would say that -- I would not say 'America First' is completely out the window. I say what we're seeing is a constant negotiation or tension between his 'America First' economic nationalist kind of inward, insular nationalism instincts and the preferences of essentially almost all Republicans in Congress -- the vast majority of Republicans in Congress -- the existingRepublican foreign policy establishment.

When he says I am not going to declare China a currency manipulator because I need their help on North Korea, you see that tension as explicitly as you can. That is essentially a version of the calculus that every other president has kind of gone through. I need China on other things --

ROMANS: True.

BROWNSTEIN: -- so there's only so tough I can be with them on economics. But he is working it out in public and in this kind of two wings of the party reflected in kind of the Bannon versus the Cohn, Kushner. But it really reflects -- it's not just them. It is -- it is the overall Republican coalition. The president talks to the "Times" of London. He says I could care less if the E.U. dissolves. And then, he is like at a podium with the European leaders and he said no, I love the E.U. Same thing with NATO. That is just this working out and I don't think it's ever going to be entirely resolved for one side or the other. He did not pull out of NAFTA but he's kind of rattling sabers --

[05:40:03] ROMANS: Right.

BROWNSTEIN: -- on other trade fronts. On immigration, he's staying tough. On NATO and other things he's moved past the most.

ROMANS: I want to just tick through some of these things because if you're a --

BROWNSTEIN: Yes.

ROMANS: -- Trump supporter and all of the sudden you say hey, wait a minute, I thought you were going to be hard on China so you can get my --

BROWNSTEIN: Yes.

ROMANS: -- job back, but now you're saying North Korea is important.

BROWNSTEIN: Yes.

ROMANS: I mean, I wonder. He's going to -- he said would gut NAFTA, now he's not. He said China was a currency manipulator. No, it's not. He said Wall Street is killing us.

BROWNSTEIN: Yes.

ROMANS: He's rolling back protections for consumers.

BROWNSTEIN: Right.

ROMANS: He said the border wall had to be funded right away. No, he's going to let the government -- he's not going to shut down the government over it. Deregulation -- he's really helping Wall Street and corporate profits. Not the working guy yet --

BROWNSTEIN: Yes.

ROMANS: -- but corporate profits. I mean, is this the Goldman Sachs wing of faction in the White House --

BROWNSTEIN: These are --

ROMANS: -- trumping the populous wing?

BROWNSTEIN: Yes. No, these are examples -- I mean, look -- and not only in the White House but in the party, I think. I think that's really important to understand that it's not just a question of personalities. And, you know, these debates -- the first administration I covered was Reagan and you had, supposedly, James Baker was the pragmatist and Ed Meese were the true believers. In fact, there were different wings of the party that they each represented and I do think you're going to see this conflict.

There are other things we could point to, like when he says I may pull out of the South Korea Free Trade Agreement or, you know, there are things on the populous side of the -- he's continuing on the immigration -- very tough enforcement. So I just think it's going to be an ongoing back-and-forth without a clear winner. But there's no question, I think, that the overall movement is more toward conventional Republican views of how the U.S. interacts with the world. That is the magnetic pull kind of pulling him away from some of the things he ran on.

BRIGGS: So, no real points on the board for the 100-day mark.

BROWNSTEIN: Yes.

BRIGGS: You think tax reform gets through. Health care -- I know it's tough to do this quickly. Do you think it gets through?

BROWNSTEIN: I think it's really hard to get anything like what the House has passed because you ultimately have to get it through Senate. And even if you can resolve the issue over the -- bringing in more of the conservatives. You saw the problem of Republican senators from states that expanded Medicaid who realized that many of the voters who will be hurt by this are their own voters. The reality is Obamacare extended coverage to over 20 million people, as you know. Not all of them are Democrats, shockingly, and as Republicans have become more the party of older and lower-income whites, they face this -- what I call the 'Trumpcare Conundrum.'

That -- you know, if you look at the five states that tipped the election, for example -- Ohio, Michigan, Iowa, Wisconsin, Pennsylvania -- in all of them, the principal beneficiaries -- the people who gain the most -- the most people getting the coverage under Obamacare were non-college whites, the core of the Trump coalition. So that is a -- that is a real structural challenge that makes it tough to go free. As one more example, in Kentucky, seven times as many people as two years ago are getting opioid substance abuse treatment under Medicaid --

ROMANS: Wow.

BROWNSTEIN: -- than they were. So it's their own voters, their own concerns, and I think that makes it tough.

ROMANS: All right, Ron Brownstein.

BRIGGS: Thank you.

ROMANS: Friday -- a lot of great analysis. Thank you, sir.

BROWNSTEIN: Thank you.

ROMANS: All right. President Trump said he wanted to create 25 million jobs over 10 years, so how's he doing so far? We're going to look at all the numbers as we approach 100 days, next.

(COMMERCIAL BREAK)

[05:47:00] All right. The president swept into office with the promise of creating and keeping American jobs, pledging 25 million jobs over the next 10 years, but on the eve of his 100-day mark where does he stack up? On job creation, he's actually doing pretty well compared with the past few presidents. He's got 317,000 jobs added in his first 100 days. That's better than Obama but you might recall it's hard to compare anything to those first 100 days of Obama. I mean, he lost 1.5 million. It was a huge recession -- a financial crisis, nearly a depression.

In fact, Trump's numbers are the best since Clinton, who went on to create 22.9 million jobs during his eight years in office. However, the nineties economy helped, right? There was the advent of the internet, there was the U.S. signing major trade deals -- this real push toward globalization. And if Trump wants to reach that 25 million goal he's a little behind. Here's what he'd have to do. He needs to create about 208,000 per month. The numbers just aren't there yet and despite the rhetoric and executive orders coming from the White House, American companies continue to ship jobs overseas.

A CNNMoney analysis of Labor Department data shows more than 4,000 jobs have been outsourced in the first 100 days, another 2,000 set to leave in coming weeks and it's not to Mexico and China. When we look into this data, the government data shows more jobs headed to India than any other country.

BRIGGS: All right. New trouble this morning for former national security adviser Michael Flynn over his decision to accept payments from Turkey and Russia after he retired from the military. We have new information that the Pentagon inspector general has opened an investigation into the retired Army general and that the Defense Intelligence Agency warned Flynn back in 2014 against accepting foreign payments.

ROMANS: That's according to documents obtained by the House Oversight Committee, released by ranking Democrat Elijah Cummings. He says the documents raise grave questions about why Flynn concealed the payments.

BRIGGS: When asked about all of this, Press Secretary Sean Spicer says he thinks it's "appropriate" for the Pentagon to look into Flynn if they think there is wrongdoing but questioned why Flynn wasn't more thoroughly vetted. Spicer pinned that on the Obama administration.

(BEGIN VIDEO CLIP)

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: He was issued a security clearance under the Obama administration in the spring of 2016. The trip and transactions that you're referring to occurred in December of 2015. All of that clearance was made by the Obama -- during the Obama administration and apparently with knowledge of the trip that he took.

(END VIDEO CLIP)

ROMANS: One source familiar with the case admits Flynn did make a mistake, failing to fill out the proper forms seeking permission to get paid by a Russian state T.V. channel for that 2015 trip to Moscow. But the source strongly denies any effort to conceal the payment and says Flynn briefed the Defense Intelligence Agency before and after that trip.

BRIGGS: Boy, that story is far from over. Time for a look at what's coming up on "NEW DAY." Chris Cuomo joining us this morning. Great to see you, my friend, and again --

CHRIS CUOMO, CNN HOST: Always.

BRIGGS: -- no shortage of news for you guys.

[05:50:00] CUOMO: You know, it is true. There are a lot of headlines but it's interesting, Dave, how they're starting to weave together, you know. This is coming into what we're seeing as a rhythm and a pattern coming out of the White House and how we are posturing as America, at home and around the world. Just recently we've seen the president take an aggressive stance and now, there's a new high point to that with North Korea. We're going to be live in Pyongyang with reaction to the president's comments about how there really could be an imminent bad situation between the two countries and their leaders.

Plus, we're going to talk to the reporters who did interviews that are creating these headlines with the president, getting inside those conversations. Plus, the future of the Democratic Party. It is easy to stand back and watch the difficulties going on within the GOP right now and the White House, but what should they be doing to forward the American cause? Senator Bernie Sanders is helping to shape that answer. He's going to be on "NEW DAY" to be tested.

BRIGGS: Well, and you wonder, Chris, who is the Democratic leader on all of this? You can say what you will about the bad news for Republicans but it's worse for Democrats, you might argue.

CUOMO: Well, fair point. When you are the out party you usually are a little bit more formless, right, because you have commander in chief -- you have the presidency as a putative head of your party's organization efforts, but that's not an excuse. At the end of the day if you want to make progress, which the Democrats have been big on, right -- they said they would be different than the years of obstruction -- the proof is in the performance.

BRIGGS: Right.

ROMANS: All right.

BRIGGS: And what's their agenda?

ROMANS: They are the wilderness who's going to lead them out. All right, Chris. Thank you so much. Nice to see you.

CUOMO: Happy Friday.

ROMANS: Yes, you too.

BRIGGS: And to you.

ROMANS: All right, if you have money in the stock market, President Trump's policies are helping you make money. The investor class doing wonderfully under the presidency of the guy who won champion of the working class. How do the gains in the stock market, though, stack up against past presidents? We'll check -- get a check on CNN Money Stream next.

(COMMERCIAL BREAK)

[05:55:55] BRIGGS: President Trump facing a number of foreign policy challenges during his first 100 days. Chief among them, Syria, and our new CNN poll shows increasing anxiety among Americans about the crisis. Fifty-one percent saying they are very concerned. Compare that to a 2013 CNN poll when only 36 percent of Americans were very concerned.

For more on the global challenges facing Mr. Trump moving forward, let's bring in CNN's Nic Robertson, live with us from London. Nic, great to have you. It was 'America First,' it was stay out of foreign conflicts. What do world leaders make of the new strategy and is there one?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, let's think. Syria is a great example because that really changed the dynamic. You know, this was, if you will, for the international community Trump's -- President Trump's unpredictability. No one expected this strike on Syria because of its use of chemical weapons, but he did it. But the international community now wants him to sort of get to the -- help get the parties to the negotiating table. Well, we don't see a strategy towards that at the moment. That would be a concern for the international community.

At the same time, you know, you had a lot of European leaders and others saying hey, we're worried President Trump is getting -- or potentially could get too cozy with President Putin and they advised him against that. Well, that strike over Syria's use of chemical weapons kind of changed the dynamic. President Putin went from being potential friend to a foe because he backs Assad and he won't stop backing Assad.

So, you know, there's a lot that's happened. You can look at China, as well, where China has gone from being viewed negatively -- a currency manipulator -- to where it's being viewed as a potential ally to help North -- to help bring North Korea down on using its -- or developing nuclear weapons. So, you know, a lot learned, but a lot of unease about where things have yet to go.

BRIGGS: Level of unease sums it up. Nic Robertson, thanks so much.

ROMANS: All right, let's check Money Stream this morning. Stock futures in global markets are mixed. Another record high for Nasdaq. Earnings simply amazing for many of the big tech household names. Google company -- parent company Alphabet, Amazon, Microsoft showing great profit. The rest of the market finished flat after, well, worries about Trump's tax proposal weighing on Wall Street and how long it's going to take to get those corporate tax cuts. Still, it's been the strongest earnings season in years. Corporate America rolling in profit.

On the eve of the 100-day mark, the Trump rally is now the second-best since JFK. The S&P 500 up almost 12 percent since the election. That's just behind George H.W. Bush. But even if Trump's promises to American businesses have helped the recent spike remember, the U.S. is still the second-largest bull market of all time -- look at that -- since 2009.

All right. Thanks for joining us. I'm Christine Romans.

BRIGGS: And I'm Dave Briggs. Enjoy the weekend. "NEW DAY" starts right now.

(BEGIN VIDEO CLIP)

TRUMP: We could end up having a major, major conflict with North Korea. Absolutely.

REX TILLERSON, SECRETARY OF STATE: The Chinese informed the regime that if they did conduct further nuclear tests, China would be taking sanctions actions on their own.

UNIDENTIFIED MALE: This is front and center on our national security radar.

UNIDENTIFIED FEMALE: All scenarios are on the table, so it really is all up to North Korea.

REP. PAUL RYAN (R), HOUSE SPEAKER: We're going to when (INAUDIBLE).

UNIDENTIFIED MALE: When it comes to health care, once again, Republicans have fallen short.

SEN. CHUCK SCHUMER (D), NEW YORK: I say to Republicans in the House, you'll pay a huge price in the 2018 elections if you vote for it. TRUMP: This is more work than in my previous life. I thought it would be easier.

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.

ALISYN CAMEROTA, CNN HOST: We want to welcome our viewers in the United States and around the world. This is NEW DAY. It is Friday, April 28th, 6:00 here in New York.

President Trump warns that a major conflict is possible with North Korea. Despite these ominous words, the president, though, says that he hopes diplomacy prevails.

CUOMO: Also, the president's tough talkabout passing health care has fallen short again. There's going to be no vote on a new health care bill today or perhaps anytime soon. Also, we have the president's very revealing admission about the presidency he just gave in an interview. A lot to cover on the eve of President Trump's 100-day milestone. Let's begin with CNN's Joe Johns, live at the White House. Good morning, Joe.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, Chris.