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World Headlines; NATO Summit; Destination India; Trump Heads Into Tense Talks With Military Allies; China: Potential U.S. Tariffs Are Unacceptable; Thailand Cheers Successful Mission; Death Toll At 175 As Rescuers Search For Survivors; U.K. To Fine Facebook For Information Harvesting. Aired 8-9a ET

Aired July 11, 2018 - 08:00   ET

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


[08:00:00] UNIDENTIFIED MALE: From, as we said, across the political spectrum, almost everybody in the western world thinks NATO is a good

thing. We do value it. And what Trump is trying to do is focus our minds on if you really value it, show me the money.

MAX FOSTER, CNN ANCHOR: Merkel and May stand together. Maybe the E.U. will grow up, and understand that Britain is an ally. They cannot

alienate, says David Williams. Felipe, says there is no future for NATO. Let Paula Newton pick up on that one. Hi, Paula.

PAULA NEWTON, CNN ANCHOR: Hello, Max. Thank you.

ANNOUNCER: This is CNN breaking news.

NEWTON: Hello and thank you, Max Foster. I am Paula Newton, in for Kristie Lu Stout. I want to welcome you to News Stream, and those are live

pictures you're looking at right now from NATO headquarters in Brussels. That is the NATO secretary-general delivering opening remarks after he has

welcomed all of those leaders. They have just wrapped up the family photo, and are about to get down to business.

But Donald Trump proved that he is going to would roll up his sleeves, and get down to the kind of business he wants to talk about immediately causing

a stir already, saying that, in fact, the alliance isn't paying enough, continuing to harp on that point, but also very bluntly, with a lot of

candor, saying that Germany needs to pay more, and a heck of a lot more than that in his statements this morning.

Our Nic Robertson, our international diplomatic editor has been watching all of it. Nic, you are a veteran of these kinds of summits. We all knew

it was going to continue to be unorthodox in the way Donald Trump wanted this to run, but he is basically taunting those European allies to say, I

don't care what you say about NATO funding. It's still not enough.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: This is a very, very tough message. He had a very tough message for Angela Merkel, too, and he

addressed Jens Stoltenberg at that breakfast appearance this morning, and the cameras were rolling. And the NATO Secretary-General is speaking right

now.

But he had to sort of reply to President Trump. He really seemed to have been put on the spot, and he talked about the NATO unity being important.

But, you know, President Trump criticizing the German Chancellor, Angela Merkel.

We've heard from U.S. officials saying that President Trump plans to use exactly the same style and type of language when he meets one on one, face-

to-face with her in a short bilateral later today. So, very much, President Trump we saw this morning, is what we're going to see more of.

And indeed President Trump tweeted out that video of that encounter this morning, saying he wants this to be the message. What I'm hearing from the

leaders of other delegations, I spoke to some Baltic member representatives here today. And they told me that they feel that things are actually

behind the scenes going well.

That a final communique has already sort of been agreed in advance, and they're hopeful still that that could be achieved. So, you know, behind

the scenes it's a slightly different picture than the one that President Trump is portraying.

And I think, you know, although, while they were sort of standing there through that -- through the family portrait picture quite stony faced,

there's a good deal of camaraderie between the leaders there.

It was quite interesting to see that President Emmanuel Macron arrive -- he arrived a little late than some of the others. But he went up immediately

to the Belgium Prime Minister Charles Michel, and gave him, you know, a continental hug, and peck on the cheek, of course, France greeting and

Belgium in the World Cup semi-finals last night.

So, there's -- you know, there is cohesion. That is what the Secretary- General wants to get. And there is -- there is a good temperament behind the scenes, it seems, and some touches of humanity, if you will.

NEWTON: Secretary-General to our Barbara Starr basically alluded to that in a forum before all of this, and he is saying when it comes to the core

message, we actually all agree. But, you know, Nic, what I am wondering about is, Donald Trump is clearly out there saying, look, we will stay on

the U.S. agenda.

I'm wondering how the European allies respond to this? You know, we've already had Donald Tusk, who is the European Counsel President, basically

having a warning, saying look, remember who your friends are, Donald Trump -- remember who your strategic allies are. And yet you wonder how a

country like Germany, for instance, is going to respond to all this, and if they will get tougher.

ROBERTSON: We've heard a response from Germany already. We've heard from Angela Merkel. We've heard from her defense minister about what President

Trump had to say this morning, and Angela Merkel made the point that we also heard from the European Council President Donald Tusk yesterday that

it's not just about the money. There's national blood and treasure.

I think Donald Tusk yesterday said that 870 European service men and women have lost their lives in supporting the United States in the fight in

Afghanistan, and that came about after the 9/11 attacks in 2001.

But what Angela Merkel has had to say again, or you know that re-emphasizes that, if you will, and following on from Donald Trump's criticism of her

this morning, that we know she's going to hear face-to-face from him as well. You know, she has made that point. It's not just about the money.

This is what she said.

(BEGIN VIDEO CLIP)

[08:05:03] ANGELA MERKEL, GERMAN CHANCELLOR (through a translator): The summit has been well prepared, but in the discussions, we will likely have

diverging positions. Germany has to thank NATO for a lot, for German reunification, and for the unification of Europe.

That has a lot to do with NATO, but Germany also does a lot for NATO. We are the second largest donor of troops. We put most of our military

abilities into the service of NATO, and are strongly committed in Afghanistan, where we also defend the interests of the United States of

America.

(END VIDEO CLIP)

ROBERTSON: So there were two other things here that I've been picking up from leaders. You know, particularly in the case of President Trump's

style, but also the response that we've heard from -- you know, from Donald Tusk, the European Council President.

There is a sense that it took somebody like President Trump to really do what was necessary, which was get beyond the niceties and language, the

sort of way that President Obama, the way that President Bush before him had tried to increase NATO spending. There is an acceptance that there was

a problem in Europe, that should be increased, and President Trump has the style and technique to do it.

There is a concern that maybe it sort of -- it breaks the sort of unified appearance of NATO, which they're concerned that it could be damaging. But

there is also concern, I've heard from some diplomats here, that the way that Donald Tusk responded wasn't particularly helpful either.

Let's keep that kind of rhetoric -- that kind of sharper rhetoric, you know, what he said this morning about -- or yesterday, rather, that the

United States doesn't have many allies left. So cherish the ones that you do have.

That was -- that was a very stern warning from the European side. That language isn't helpful. But this idea that NATO nations need to contribute

more, I think the closer you get to the border with Russia, the greater that sense of -- the imperative, and the necessity, and speed required to

achieve that.

NEWTON: Yes. And Russia very much at play obviously in this meeting, Donald Trump, in fact. Again, upping the ante during those breakfast

comments, Nic, and talking about Germany being a captive to Russia, the one who is getting at was the fact of this (Inaudible) two project, this

pipeline, which many have argued including the United States for quite a while now will unfortunately make the European beholden to Russia for a key

energy supplies, I.E. will compromise their security.

Captive to Russia, Nic, that is incredibly undiplomatic language. We are used to that from Donald Trump. But what I'm wondering now is where that

leads the discussion now? This is clearly discussions that have been going on behind closed doors, but Donald Trump has now put that front and center.

ROBERTSON: And this is something that's going to put front and center with Angela Merkel, and the answer from the Germans has been, and we've heard

one answer from Angela Merkel herself, and one from her Defense Minister saying that, look, this pipeline project from Russia was started in 2002,

2003. You don't just suddenly put them on hold.

And I think it's clear that the whole of Europe has concern to the energy security that seen the way that Russia is willing to turn off the gas to

countries that it has a disagreement with. Poland feels threatened. Ukraine, obviously, very much caught up in that.

And there was a -- there was a leaders' meeting in Ukraine over the past couple of days, where exactly this concern was expressed. The Nord Stream

II Pipeline, the concerns are that this bypasses Poland, goes direct to Germany.

So, in a way Putin is able to, you know, provide some NATO members with gas, and bypassing the ones that he wants to have more leverage over, like

Poland. And as a concern, that show as weakness in Europe.

So, you know, what President Trump has said resonates with some of the European leaders. That they're concerned that, you know, Germany is doing

business with Russia. We've seen France, since Ukraine was invaded by Russia and Crimea annex, but France has dropped key, and very important

defense military contracts for naval vessels, and other large-scale items.

The concern is -- and this is one that's been felt in Germany, that there has to be a way to send a message to President Putin that what he's been

doing in Crimea, that what he's done in Ukraine, and what he's done Georgia cannot stand, that the international community won't take that.

And Angela Merkel actually has been quite at the forefront in sending that message. You know, she does speak Russian. She is from East Germany. She

did trust President Putin sort of back in 2013 and 2014.

And has realized she can't trust him. So, actually, Angela Merkel has been something of a vanguard of sort of realizing that President Putin is not a

man who can be trusted.

NEWTON: Yes.

ROBERTSON: And particularly with the energy security of Europe.

NEWTON: And against a backdrop of a lot of criticism, and a lot of lobbying from her own business community in Germany. And, Nic, as you've

been speaking, we continued to watch the opening -- the opening program for those NATO leaders.

[08:10:00] They had the family photo, the pleasantries, watch the military ceremony as well, and now they seem to be walking in to get down to

business. And, Nic, before I let you go, we should talk about the fact that there is this communique in the background. There are developments.

There is this commitment to obviously funding, but also the strategic positioning of NATO, which has become so much more important as those -- as

the geopolitics change. You know, were we in Quebec at the G-7.

We saw that Donald Trump had first signed the communique, and then on Air Force One tweeted he'd refused to sign it. They've got to be a bit nervous

here that his actions will not be all that predictable.

And when you obviously have a question like NATO, with so many people working behind the scenes to make sure that it continues to be for that

united defense, as it's been for decade, they have to be nervous about that communique.

ROBERTSON: Sure, they do. And, absolutely, this is on their minds, President Trump for the first time, you know, seeing again face-to-face

Angela Merkel, Justin Trudeau, Emmanuel Macron, Theresa May, all the people that essentially, you know, he's widely seen as dissing by not signing that

communique coming out of the -- coming out of the G-7.

So, he's coming face-to-face with them again. But I think what gives some of the European leaders here some solace, and some sense they may get what

they want here is number one, they have faith in Jens Stoltenberg as being a strong leader of NATO, who can really pull everyone together.

And the other thing is that, you know, President Trump -- we saw him this morning in that meeting with Jens Stoltenberg, he was flanked by Secretary

of State Mike Pompeo, Secretary of Defense James Mattis was there, National Security Adviser Bolton was there as well, sitting -- all sitting at the

table.

And from what I've been able to understand from different representations, different delegations here is that this communique has come together more

easily and more readily than it did, let's say, at the Wales NATO summit in 2014 that I attended, also the Warsaw NATO summit in 2016 that I attended

as well.

So, it's quite surprising to me to hear this level of hope in other members of the Trump administration being key players in getting this communique

ready. There seems to be some confidence that because it's come from them, their hands have been involved, but that at this stage, our hope remains

that it can be achieved still.

NEWTON: And, Nic, no doubt General Mattis laying the groundwork for that for several weeks, and perhaps, you know, when he has been able to speak to

his president, you know, understanding that, look, we will sign this communique, and these are our geopolitical interests.

Our Nic Robertson, as you were just saying, a real veteran of these summits, continuing to follow this for us. We will continue to have much

more on the summit as this gets underway here, including those comments that President Trump had for Germany. Nic Robertson, thank you, as you

continue to stand by.

And we turn to other news now, and something else that Donald Trump has been doing. His administration has now fired a fresh salvo in the

escalating trade war with China. Now on Tuesday, the U.S. released a list of thousands of Chinese goods that could be subject to another round of

tariffs worth $200 billion.

The value of the list is very significant, and here's why. It includes household items, and clothing, and it comes after the United States has

already imposed 25 percent tariffs on Chinese goods worth $34 billion last Friday. The key there are household items, which could, in fact, impacting

the consumer.

Now as you see there, we now are looking at the markets. The Markets, of course, incredibly jittery about this, had been fairly calm in taking the

trade war in stride, but not now. Beijing shot back with its own tariffs, and global markets continue to be caught in the cross fire.

European markets following Asia lower on Wednesday, Dow Futures, as you can imagine seeing right there, down almost three quarters of a point that will

continue to change in the next hour and a half or so. But clearly markets did not believe this kind of escalation would actually be a reality, and

here we are.

China calls the announcement of potential new tariffs unacceptable, and has vowed to respond with necessary countermeasures. Joining me now from Hong

Kong to discuss all this is Jianguang Shen, he is the managing director and chief economist at Mizuho Securities in Asia.

And I thank you for joining us on what is a very busy morning. I'm not exactly sure if this list caught China off guard. I mean, the United

States had threatened this, and said if you retaliate, we will retaliate again. They will not be imposed until the fall. But I'm wondering from

you about what China's options are now.

JIANGUANG SHEN, CHIEF ECONOMIST, MIZUHO SECURITIES ASIA LIMITED: Yes. I think for China, it's a very important and difficult question right now,

because China cannot retaliate with the same amount, because total Chinese imports from the U.S. is only around $130 billion U.S.

[08:15:02] So that's already -- U.S. already at this time is $200 billion Chinese goods. So there's no way China can come up with a list more than

$130 billion. So that's a big dilemma. But on the other hand, for Chinese option, one way is China saying, OK, we are pro-trade.

So, actually faced with sanctions, we actually tried to open up our market. We will do more reforms. For example, China just, you know, signed a lot

of agreements with Germany, you know, to exchange, you know, trade and open, more market for German financial industries.

So this odd action that China may take to say, you know, rather than retaliating by, you know, imposing more U.S. products for sanction, we will

actually open our market more widely, and we are continuing this opening up process. This actually will gain credit globally for Chinese trade policy.

I think that, I think, may be one way to go for china, rather than, you know, picking up some U.S. goods for sanction.

NEWTON: And as you said, there aren't many goods available. Of course, they could impose some kind of penalty that is beyond the scope of tariffs,

and that would not be good especially for American business.

But I want to ask you, Donald Trump has been very clear that he sees these things as negotiating strategies. Do you think this kind of really tough

stand against China will work as a negotiating tactic?

SHEN: I think that's actually in the beginning, I think, a lot of observers, and maybe I think the Chinese government believed it's a

bargaining technique. So they are very serious about, you know, negotiation.

Chinese actually Vice Premier went to the U.S., and actually received the U.S. delegation, and they actually strike a consensus, China pledge to

increase U.S. imports, already $70 billion more goods from the U.S.

So, everything they believe is working. But then suddenly, you know, the agreement was abandoned, and the tariff was started. So for China, of

course, it's -- there's no other option. Either you have to fight back, or you have to find some other ways.

And also this time, it's also surprising that this $2,000 -- $200 billion in goods, lots of things, it's the U.S. consumer goods that are accounted

for, a huge number -- a very significant number of U.S. market share. For example, the amount is this $200 billion, $34 billion in furniture and

household goods.

That's accounted for almost 50 percent of total U.S. imports. So, the tariffs on these goods probably will, you know, boosted inflation in the

U.S. So, that's also is not -- that can benefit U.S. unilaterally. So, it will be negative for both countries.

NEWTON: Yes. And yet I think the advisers around President Trump are saying no better time with the American economy on fire to try and take

China on. We thank you for your insights today at the story...

SHEN: Thank you.

NEWTON: ... that continues to brew there in Asia. Appreciate it. Now, the Thai Navy SEALs battle cheer hooyah has become the victory cry -- I can

say that again, victory cry all across social media as Thailand celebrates an incredibly successful rescue mission.

Now, the SEALs worked alongside an international team of divers over three nerve wracking days, and much more than that when you consider all the

planning, and the staging. They rescued those 12 boys and their football coach deep inside that flooded cave. CNN asked Major Charles Hodges,

mission commander of the U.S. Air Force unit involved in the rescue operation if he had doubts, if the mission would be successful.

(BEGIN VIDEO CLIP)

MAJ. CHARLES HODGES, MISSION COMMANDER, U.S. AIR FORCE UNIT IN RESCUE OPERATIONS: Absolutely. The whole time we had doubts on this. As

Sergeant Anderson was saying, we had never done something like this, at the same time that we understood that there was no other option.

Working with the Thai, we realized that they had gone through the decision matrix the right now, and every other option was quickly leading to dead

ends, you know. And even though it was extremely risky, a low probability of success, there were no other options. Especially once we found the

kids. We knew that we had to follow through on this.

(END VIDEO CLIP)

NEWTON: You know, after the fact, just so terrifying to hear that. CNN's Matt Rivers has been tracking the story every step of the way. I know,

Matt -- I know, from having spoken to you over the last few days that every time before this rescue was attempted that you guys have been hearing from

people involved that look, the stakes are high, and yet the odds in what we are facing -- the odds are not good?

MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: And what you heard that you -- from that rescuer right there is a really good illustration of where we

were at before this actually took place. You know, it's important to remember that this rescue attempt was the best of a lot of bad options, or

other options, that actually were better in the eyes of rescuers, but just couldn't be done.

They tried for a long time to find a hole in to the top of the cave, so they could lift the kids out, they tried to pump enough water out of the

cave, so the kids could actually just walk out the same way they walked in.

[08:20:04] There were even discussions that were had about whether the kids could last underground for months on end until the rainy season was over

here in Thailand, and the water drained naturally. But for a number of different reasons, none of those were viable, and so they were kind of

forced into that, really, that dive and swim operation that none of them really wanted to do, and it was incredibly long odds, and yet here we are.

We heard about the conditions of all of the kids and their coach in that hospital just behind me right now, and miraculously, they are all doing

pretty well. One of them has a lingering lung infection, but that is being treated, and he's responding well to treatment.

Of course they weak, some them have common colds, they are generally afraid, the doctors are that their immune systems are quite susceptible to

few infections, so that's why they're being kept in quarantine. But overall, they are doing OK, and this rescue operation was an unmitigated

success, and that is truly remarkable, Paula. Something that was not guaranteed when this all started.

NEWTON: Yes, and a lot of heroism on display deep within that cave, which we're starting to hear about now. You'll continue to bring us that story,

as well as the condition of those boys, which I am happy to hear that they are good. And hey, Matt, they can watch the World Cup now. Hooyah again!

RIVERS: That's right. A nice -- a nice opportunity for them.

NEWTON: Absolutely. Thanks again, Matt. Appreciate it. Now, you know, lots of good news there in Asia. But unfortunately not in Japan, where one

of that country's most deadly disasters in years continues to unfortunately claim lives, now, 176 people -- 176, we've watched the death toll rise

here, have since heavy rain started last week, and hope of finding survivors is fading despite a massive rescue mission.

(BEGIN VIDEO TAPE)

NEWTON: The search goes on in flooding ravaged part of southwest Japan. Several people are still unaccounted for, and every day rescuers declare

more lives lost. The rescue operation is now 75,000 strong involving police and the defense force.

The rain that wreaked havoc, and brought so much heartbreak has now stopped, but there are still risks. Damaged infrastructure complicates the

rescue efforts, and there is a possibility of more deadly landslides.

Here in one of Japan's hardest-hit prefectures, Hiroshima, a river clogged with debris overflows Tuesday morning forcing yet another round of

evacuations. Twenty-three thousand more people told to immediately leave their homes.

Canceling an overseas trip, Prime Minister Shinzo Abe visited the devastated area, he met with people who have been forced to take shelter at

an evacuation center. The rising waters forced 2 million people from their homes.

Thousands of houses are damaged. Thousands more still without power. Here in Okayama Prefecture life as it once was is at a standstill. Operations

at Mitsubishi and Panasonic factory were temporarily halted, and smaller businesses can only begin to pick up the pieces.

(END VIDEO TAPE)

NEWTON: Devastating there. Coming up on News Stream, the U.K. is set to fine Facebook for data harvesting, how big the fine could be, and if the

social media giant will even feel the pinch.

[08:25:00] (COMMERCIAL BREAK)

NEWTON: Facebook is facing the biggest fine the U.K. can give over failing to protect user data. British authorities say the company failed to tell

tens of millions of users that Cambridge Analytica was harvesting their data for use in political campaigns. Samuel Burke joins -- Samuel Burke

joins us now from London. And you've been following this for several months. The key word there is the largest fine possible. Wasn't very big,

was it?

SAMUEL BURKE, CNN BUSINESS AND TECHNOLOGY CORRESPONDENT: Not that big. Though I have to say, Paula, we've entered a new phase of the Cambridge

Analytica scandal because this is the first time that Facebook is actually facing a fine, monetary damage for their role in the Cambridge Analytica

scandal.

There are two conclusions that the U.K. government has from this report. Number one, that Facebook did not secure our information. Number two, that

they didn't do enough to alert people, because, of course, they found out about this in 2015, and did not alert users about Cambridge Analytica until

2018, after some journalism happened, reports in papers on both sides of the Atlantic.

What really interests me here, Paula, is that this information could be incredibly useful to the agencies, plural, back in the United States who

are looking into Facebook's role in the Cambridge Analytica scandal.

I'm talking about the FBI, the Federal Trade Commission, the Securities and Exchange Commission. There are a lot of people looking at Facebook. This

information could be very useful to them, but I just want to get back to what you were talking about when it comes to this fine, Paula.

If was can just put these numbers on the screen. The U.K. government has a preliminary fine for Facebook of about 500,000 pounds. Paula, you know,

nobody tracks the pound closer than I do. That's $664,000.

But just take a look at how much Facebook had in profits here in Europe in 2017, $16 billion. That's the big concern that I've had as I've looked at

all the different bodies that are investigating Facebook is, what type of actual power do they have?

Because you know better than I do, the only thing that really speaks to these publicly traded companies is money, and come on, 500,000 pounds,

$664,000 is just a drop in the bucket for these tech -- these tech giants.

NEWTON: Absolutely. And we'll see if the threat of regulation gets them, if the fine actually can't in terms of its capacity to really be punitive.

Our Samuel Burke spelling that out for us. Appreciate it.

Now, as we were watching there, we continue to watch live pictures there from out NATO headquarters in Brussels. And we will have more of that

straight ahead as President Trump goes head to head on U.S. allies on what's sure to be an incredibility NATO summit on going right now.

[08:30:00] (COMMERCIAL BREAK)

NEWTON: Hello, welcome. I'm Paula Newton, in for Kristie Lu Stout. You're watching "News Stream" and here are your headlines.

Doctors say all 12 boys and their football coach are in great condition. Mental health and generally their physical condition is also good, but each

lost an average of 2 kilograms of body weight during the ordeal.

We received this video of some of the boys in hospital. That was just moments ago. As you can see there, rescuers brought out the final four boys

and their coach less than 24 hours ago and doctors leaving nothing to chance in terms of infection. Good pictures to see there.

Now in the U.K., a British man poisoned by the Novichok nerve agent is no longer in critical condition. Late last month, Charlie Rowley entered the

hospital with his partner, Dawn Sturgess, who died on Sunday. They were exposed to the same nerve agent that had previously sickened a former

Russian spy and his daughter in March. They both survived.

And in Brussels, the U.S. president kicked off the NATO summit by criticizing the United States' closest military ally. A confrontational

Donald Trump came out swinging in his public comments, ordering members of the alliance to increase their defense spending immediately.

This is despite a previous NATO agreement giving members until 2024 to increase that military spending to two percent of GDP. But this is what

really was interesting. President Trump saved his harshest words for Germany.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: So we're protecting Germany, we're protecting France, we're protecting all of these

countries. And then numerous of the countries go out and make a pipeline deal with Russia, where they're paying billions of dollars in to the

coffers of Russia.

So, we're supposed to protect you against Russia, but they're paying billions of dollars to Russia, and I think that's very inappropriate. And

the former chancellor of Germany is the head of the pipeline company that's supplying the gas. It's ultimately Germany will have almost 70 percent of

their country controlled by Russia with natural gas.

So, you tell me, is that appropriate? I mean, I've been complaining about this from the time I got in. It should have never been allowed to have

happened. But Germany is totally controlled by Russia, because they will be getting from 60 to 70 percent of their energy from Russia and a new

pipeline.

And you tell me if that's appropriate, because I think it's not. And I think it's a very bad thing for NATO, and I don't think it should have

happened. And I think we have to talk to Germany about it.

(END VIDEO CLIP)

NEWTON: OK, Donald Trump saying you want to talk about Russia? We'll talk about Russia. CNN's Nick Paton Walsh joins us now live from London. Nick, I

will age both you and I. We've been covering the geopolitics of pipelines in that area of the world for literally the better part of two decades.

What is different is that Donald Trump has decided to link this issue to what is going on at the NATO summit. I mean, I know you've been following

this for quite a while. What is that issue here, and what do you think Donald Trump hopes to get from it?

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: I mean, listen to it again. It's extraordinary how he seems to sort of seize upon one

quasi fact that Germany gets 70 percent of its gas from Russia. Maybe a slight overestimate. Then that sort of spins into being 70 percent of its

energy, then 70 percent of the country is controlled by Russia, because it gets its energy from Russia.

It's extraordinary to see how he sort of gets himself into a larger, larger factual hole. But what's extraordinary here is that pipeline deal, yes,

organized by Gerhard Schroder, who was then the chancellor of Germany, when the Putin Russia was significantly less of a threat in the early 2000s,

when the war beginning to be problems within Ukraine, Russia's neighbor, that was used to transit gas into Central Europe and Germany.

Germany seized upon the idea of bypassing most of European land and getting it straight through the Baltic Sea. It annoyed a lot of European allies but

it was seen mostly in Germany's energy interests. Now, fast forward 15 years, Paula, you and I can admit that we are now in a very different place

where there is a proxy war between Ukraine and Russia that spiraled out of control. And frankly, Russia is the key threat for NATO and all of its

allies.

[08:34:53] But to seize on that one singular fact to sort of suggests that actually the core of Donald Trump's being, who said his meeting with

Vladimir Putin might be the easiest one he has as he travels around Europe, that the core of his being in fact is a concern about defending Europe from

Russia. It's so confusing and contradictory based on loose facts.

Paula, you got to deal with one other issue, too. He is flying into Europe that has never been since the fall of the Berlin Wall quite so troubled

about the research (ph) in Russia. If you start in Norway, they have just asked the U.S. to double the number of troops they have there because

they're worried about the potential of some southern Russian military move at some point.

Finland, going south, wants thousands of troops involved in exercises at some point in the next couple of years, U.S. troops that is. Baltics

regularly have U.S. troops and NATO allies do exercises to show their readiness against Russia. Belarus is troubled enough. Russia's sort of

prominence in the area is making positive noises towards the E.U. and its citizens in terms of visa restrictions being lifted.

Ukraine is in a proxy war against Russia. And then further south even more, Georgia was in fact in an open war about 10 years ago with Russia. So that

is a whole part of the world deeply on edge. They look to the U.S., the founder of NATO, to whom you have to ask (ph), if you want to leave NATO

under its constitution for some kind of reassurance, instead they got was this extraordinary exchange.

You know, you listen to it. You think well, maybe he has overstepped the mark, maybe he is sort of perhaps freelancing this, but he interrupts Jens

Stoltenberg, trying to put a more measured case before him, goes back to his central theme, and then his in the White House Twitter accounts put out

videos about exchange within minutes after it happening. Quite an extraordinary moment. It is going to leave nobody in Eastern Europe anymore

relaxed.

NEWTON: Yeah, it was definitely an exclamation point at the end of all of this. Nick, he obviously is pretty depth (ph) at trying to really deepen

those divisions that as you pointed out already exist in Europe. The NATO allies will not be in the mood to have any kind mixed messages here and yet

that is what they're facing around that table. He will continually bring up the issue, because you can tell.

He left the White House calling Russia a competitor, when he was asked if it was a friend or foe. And now I didn't understand the comment at the

time. But now I understand it a little bit more clearly. He is definitely seized by this and is going to tell his NATO allies, you might not want to

talk about this, but I will, especially when it comes to the point that Germany still is not anywhere near two percent contribution to the NATO --

two percent GDP contribution to NATO.

PATON WALSH: Yeah. I mean, you know, his basic base, the idea that America is being taken advantage of domestically by immigration and internationally

by trade and defense spending for decades now. He is selling to that base, the idea that he is the one person who knows the real facts and he can fix

it.

Of course, that applies (ph) in the face of basic actual factual wisdom here unfortunately. But when it comes to defense spending, the Russian

annexation of Crimea did show that after Iraq and Afghanistan, many NATO allies frankly, military is depleted, needed to up spending, needed to get

back away from this sort of woeful state of readiness they found themselves in.

You can't really compare normal defense spending to that which the United States does annually, spending more than all its competitors put together.

Extraordinary military nobody has seen before. But it comes down really to European security here. If you look at the numbers that some strategists

say the U.S. spends on defending Europe, it's about five percent of the total defense expenditure.

The remainder, sort of 80 percent or so, is in fact spent by Europe's nations and NATO itself. So he has to look at the figures carefully here.

But the broader message seemed to be up (ph) spending and certainly that is something that only the slight majority of NATO members are actually doing

now. Paula?

NEWTON: Yeah, and that is not to talk about the benefits that accrue of course to the American military infrastructure of course through all this

as well. Nick Paton Walsh continues to watch this all as do we, as that NATO meeting continues in Brussels. You're watching "News Stream." We'll be

right back.

[08:40:00] (COMMERCIAL BREAK)

NEWTON: We want to continue now with our week-long tour through India. Today's edition, we ride the rails in style in a train fit for a Maharaja.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE (voice over): Since 1853, India's railway system has been taking locals far and wide along its 64,000 kilometers of track. For

many, it's a daily necessity in the form of a crowded commuter train. But for others, it's an adventure, an exciting way to explore the vast country.

And one that can be enjoyed in style.

Welcome aboard the luxurious Maharajas Express. From the moment guests aboard the train, they experience five-star accommodation with first-class

cuisine prepared by executive chef, John Stone.

JOHN STONE, EXECUTIVE CHEF, MAHARAJAS EXPRESS: I was very interested in traveling on the trains. And I still remember vividly that even during the

night when we couldn't see anything outside the window, I would still just keep on peeping out of the window.

UNIDENTIFIED MALE (voice over): John Stone's career transported him from dreaming about trains to working on them, feeding the 88 passengers and 60

crew members on every trip.

STONE: The best part of the kitchen is everything the guests eats on board is prepared on board.

HEMANT KUMAR, GENERAL MANAGER, MAHARAJAS EXPRESS: This is a nice way to see the country through railway. Because when you board the train, it's a

journey of India. So when you first board the train, you need not to pack or unpack your luggage. Just board the train and forget about each and

everything.

UNIDENTIFIED MALE (voice over): That's exactly what Greg and Joanna Newman decided to do.

GREG NEWMAN, MAHARAJAS PASSENGER: Lifelong ambition actually to come to India.

UNIDENTIFIED MALE (voice over): For the Newmans, riding the rails was an easy decision.

JOANNA NEWMAN, MAHARAJAS PASSENGER: It sounded really exciting. I love seeing trains, seeing the world go by, look out the windows, and you feel

as if you're part of it. You're not flying over it, you're not driving. You're just -- you're there.

G.NEWMAN: Trains have this wonderful ability to get you somewhere overnight and wake up in the next morning in a different city. Left one

place, arrived in a totally different place without having really noticed you've moved.

(END VIDEOTAPE)

NEWTON: And that is "News Stream" for today. I'm going to hand you over to the capable hands of Christina Macfarlane and "World Sport" as we continue

to watch those live developments at the NATO meeting in Brussels.

(COMMERCIAL BREAK)

[08:45:00] (WORLD SPORT)

END