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Retired Supreme Court Judge Criticizes Trump; China Trade Talks End Without a Deal, Tariffs to Hit Popular Consumer Goods; Trump Raises Tariffs But Touts Ties With Chinese Leader; Interview with Rep. Gerry Connolly (D-VA) Regarding Trump Tax Returns. Aired 5-6p ET

Aired May 10, 2019 - 17:00   ET

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


[17:00:00]

WOLF BLITZER, CNN: Breaking news, tax man cometh. A powerful House democrat has just issued subpoenas for President Trump's tax returns sharply escalating the fight over the president's financial records.

Growing contempt, complaining of unprecedented stonewalling by the Trump Administration, House democrats threaten to package multiple contempt citations in a single vote.

Still possible, former FBI Director James Comey says it's still possible that the Russians have very personal compromising material on President Trump and says, and I'm quoting him now, "It sure looks like the president committed obstruction of justice."

And hitting your wallet, as China trade talks stall and the president's new tariffs kick in, you may soon end up paying more for your shoes, clothing and toys. I'm Wolf Blitzer. You're in the "Situation Room."

ANNOUNCER: This is CNN "Breaking News."

BLITZER: Breaking news, one of the most powerful democrats in Congress has just issued subpoenas for President Trump's tax returns. The Ways and Means Committee Chairman, Richard Neal, is demanding six years of financial records with subpoenas to the Treasury Secretary and the IRS commissioner who had spurned an earlier request and faced with what they call unprecedented stonewalling by the Trump Administration. House democrats are considering wrapping together multiple contempt citations into a single package for a floor vote.

The Judiciary Committee has already voted to hold the Attorney General William Barr in contempt. Chairman Jerry Nadler says a deal is still possible in Barr's case, but he's setting an ultimatum for testimony by the former White House counsel, Don McGahn, threatening possible contempt action. Nadler says negotiations are still under way for special counsel Robert Mueller to testify. I'll speak with Congressman Jerry Connolly of the oversight committee and our correspondents and analysts, they will have full coverage of the day's top stories. Let's start with our senior Congressional correspondent, Manu Raju. He's up on Capitol Hill. Manu, this is a significant escalation that we're seeing right now. Will the subpoenas get the democrats the president's tax returns? MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: It remains to be

seen, Wolf. The subpoena setting the stage for what could be a The House Ways and Means Chairman Richard Neal consulted for days with the House counsel about the best strategy to get those tax returns and settle on issuing a subpoena giving another week for the Treasury Department to turn over the tax returns after Steven Mnuchin, the Treasury Secretary told Richard Neal that this was not a legitimate legislative request and denied turning over those tax returns.

But in a letter sent to the IRS and the treasury department, Richard Neal says this. He says, "Compliance is not discretionary under any circumstance, even if the taxpayer is under audit." What Richard Neal is arguing here is that they need this information because they are considering whether they need legislation in order to look into how a president's tax returns are being looked at by the IRS. Republicans have said this is all politics and they dispute that notion. But nevertheless, Richard Neal is citing a provision in the tax code that says the Treasury Secretary shall furnish these tax codes to the House Ways and Means Chairman when it is requested. Wolf, this is a largely untested area of law. Both sides of girding for an ultimate court fight and who wins is a question that we just can't answer at this point, Wolf.

BLITZER: Manu, the administration is basically stonewalling Congress on almost all of its requests. House democrats have already had one contempt vote this week and are threatening more. Will the strategy, bottom line, work?

RAJU: Well, they're planning on multiple contempt citations if they don't get compliance with their subpoenas, and House democrats are considering bundling up multiple contempt citations to have a series of votes on the floor of people that are not listening to their demands. That could potentially include the former White House Counsel, Don McGahn, who earlier this week was instructed by the White House not to turn over records to the House Judiciary Committee despite facing a subpoena.

Now Jerry Nadler, the chairman of the committee, told me earlier today that McGahn could be held in contempt if he does not appear by May 21st when the committee has issued a subpoena for him to appear in a public setting. Also Adam Schiff, the House Intelligence Committee Chairman, said that his committee could hold Bill Barr in contempt after the House Judiciary Committee voted to do so because he has a subpoena asking Barr to turn over more information from the Mueller report.

Now, at the same time, Wolf, a letter that just came out from the House Judiciary Committee Chairman Jerry Nadler to Bill Barr offering a last-ditch effort to reach a compromise of sorts before the full house were to hold Bill Barr in contempt. He says this in this letter. He said, the full House has not yet taken action on this matter.

The committee stands ready to resume the accommodation process to attempt to reach a compromise. And Wolf, this same committee wants of course to hear from the Special Counsel Robert Mueller.

[17:05:00]

Nadler said today that he does not expect Mueller to appear next week but he said negotiations continue and Adam Schiff wants him to appear before the House Intelligence Committee. Schiff told me Mueller will testify.

WOLF: So it doesn't look like Mueller will be there on Wednesday as earlier had been suggested. All right, Manu, thank you very much.

Hours after President Trump stepped up the trade war by raising tariffs on Chinese goods, the latest rounds of talks with China has ended without a deal. Let's go to our chief White House correspondent, Jim Acosta. Jim, what is the latest?

JIM ACOSTA, WHITE HOUSE CORRESPONDENT: Wolf, there is no end in sight for President Trump's trade war with China. Trade talks ended today without any announcement of a breakthrough as the president is facing new accusations from House democrats that Mr. Trump's outside attorney, Rudy Giuliani is improperly looking to work with Ukraine to damage Joe Biden's 2020 chances, a sign that perhaps the Trump Team has not learned much from Russian meddling in 2016.

President Trump's lead outside attorney, Rudy Giuliani, is making a startling admission, that he plans to turn to Ukraine's incoming president in an effort to dig up dirt not just on the special counsel's investigation into Russian meddling but also on Joe Biden's son's Hunter's ties to the Eastern European country. Giuliani first confirmed his plans to "The New York Times," saying somebody could say it's improper and this isn't foreign policy. I'm asking them to do an investigation that they're doing already and that other people are telling them to stop. He also told CNN, quote, "I don't want any favors, I just want this investigated." Top democrats are calling foul.

REP. JERRY NADLER (D-NY): We've come to a very sorry state when it's considered okay for an American politician, never mind an attorney for the president, to go and seek foreign intervention in American politics.

ACOSTA: Democrats say Giuliani's plans sound eerily similar on the president's infamous call on Russia to meddle in the 2016 election.

(BEGIN VIDEO)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Russia, if you're listening, I hope you've able to find the 30,000 emails that are missing.

ELIZABETH WARREN, (D) MASSACHUSETTS: We've had enough of that. And Rudy Giuliani should just back off.

(END VIDEO)

ACOSTA: Giuliani's trip to Ukraine comes as former FBI Director James Comey is blasting the president, saying in CNN's town hall he agreed with hundreds of former federal prosecutors who said Mr. Trump could be charged with obstruction of justice if he weren't office.

(BEGIN VIDEO)

JAMES COMEY, FORMER DIRECTOR OF THE FBI: Yes, I agree.

UNIDENTIFIED MALE: No doubt?

COMEY: No doubt. Again, there's ten different episodes. I actually think the ones that would be most likely charged are not necessarily the ones that involved me, but particularly this McGahn episode.

(END VIDEO)

ACOSTA: Comey added that Russia could still have compromising information on the president.

(BEGIN VIDEO)

COMEY: I don't know the answer to that.

UNIDENTIFIED MALE: Do you think it's possible?

COMEY: Yes.

(END VIDEO)

ACOSTA: He also slammed Attorney General William Barr.

(BEGIN VIDEO)

UNIDENTIFIED MALE: Do you think he's behaving less than honorably?

COMEY: I do. Look, I'm sorry...

(END VIDEO)

ACOSTA: And former Deputy Attorney General Rod Rosenstein for their handling of the Mueller report.

(BEGIN VIDEO)

UNIDENTIFIED MALE: So Rod Rosenstein you're saying is a person not of a strong character?

COMEY: Yes, I don't think he is. Of accomplishment, very bright. But he's not strong enough.

(END VIDEO)

ACOSTA: Part of a pattern, Comey told CNN, the president eating his subordinates' souls one bite at a time.

(BEGIN VIDEO)

COMEY: Far more often it shapes and bends and pulls in weaker souls. He does it, it's happened to me. The man lies constantly. (END VIDEO)

ACOSTA: Away from the Mueller probe, the president is escalating his trade war with China, raising tariffs on $200 billion worth of the economic giant's products coming into the U.S. and tweeting build your products in the United States and there are no tariffs. Even some republicans are questioning what Mr. Trump is doing.

(BEGIN VIDEO)

UNIDENTIFIED MALE: But the way you deal with that is not using a tit for tat tariff war because ultimately a tariff, we should think of a tariff like a sales tax.

(END VIDEO)

ACOSTA: The president's critics say he's a trade hypocrite as Mr. Trump has manufactured his own products in China in the past.

(BEGIN VIDEO)

DAVID LETTERMAN, LATE NIGHT TELEVISION HOST: The ties are made in where, China? The ties are made in China.

TRUMP: Well, I'll tell you, and you know what, David, in all fairness, I've been very open about that. And not all of them, by the way, but I've been very open about that.

(END VIDEO)

ACOSTA: As for China, the president tweeted late in the day that the new tariffs may or may not stay in place depending on these ongoing negotiations that were suspended earlier in the day. That may be a signal the president is hopeful for some kind of resolution in the trade talks as Mr. Trump is well aware for potential of damage to the U.S. economy if this all-out trade war continues, especially with the 2020 election on the horizon. And Wolf, when it comes to the Russia investigation, we should point out Secretary of State Mike Pompeo is on his way to Sochi, Russia, next Tuesday to meet with Russian President Vladimir Putin. All eyes, of course, will be on exactly what Mike Pompeo says to the Russian leader with respect to Russian meddling in 2020. Wolf.

[17:10:00]

BLITZER: All right lots going on. Jim Acosta, thank you.

Joining us now democratic Congressman Gerry Connolly of Virginia, a member of the Oversight and Foreign Affairs Committees. Congressman, thanks so much for joining us.

Do you think this subpoena for the president's --

REP. GERRY CONNOLLY (D), VIRGINIA: Good to be with you.

BLITZER: -- taxes over the past six years will wind up to be effective?

CONNOLLY: Yes, I believe the law is very clear upon which the subpoena is based. That law's been on the books for decades and it gives absolute power to the chairman of the House Ways and Means Committee and the chairman of the Senate Finance Committee, access to any tax return in the United States, including that of the president. The defiance by Mr. Mnuchin and the IRS commissioner is unprecedented. And of course we had the absurd statement by Mnuchin that he didn't think there was a legitimate legislative purpose. It's not for the secretary of the Treasury to decide for the legislative branch what is or is not a legitimate legislative purpose. I think -- I think courts can handle this one expeditiously.

BLITZER: Well, do you believe, given your -- your position that you just spelled out, are Democrats being aggressive enough right now in pursuing the president's tax returns?

CONNOLLY: Well, I think especially in the case of Ritchie Neal, the chairman of the House Ways and Means Committee, Democrats want to be methodical. They want to build a case that's going to be iron clad if and when it goes to court, and I think that's what Ritchie Neal is doing.

BLITZER: Democrats are also trying to obtain testimony from multiple current and former administration officials but they're also being met with resistance virtually across the board. You sit on the Oversight Committee. Do you think packaging contempt citations will be an effective way to force compliance from the White House, in other words putting all of these contempt citations into one piece of legislation?

CONNOLLY: I think that's one way to proceed and maybe an effective way to proceed. It's one tool in the kit bag. I mean, we can go to courts and get the subpoenas enforced and then if someone defies it, you're in contempt of court, not just in contempt of Congress. We can impose fines or have a court impose fines, we can disbar attorneys who are not cooperative like Mr. McGahn, going at their ability, frankly, to continue to practice law. If you're an attorney, you're really taking a gamble here. You're an officer of the court by definition and to defy a legally-issued subpoena is a very grave matter in the eyes of most courts.

And then of course as you know, Wolf, I believe that we need to resurrect inherent contempt, and that's a process whereby congress can enforce its own subpoenas. Again, with the help of the sergeant at arms, we can impose fines, we can also frankly detain people until they cooperate.

BLITZER: But given -- given that position that you just spelled out, do you think there will actually be any of those consequences, fines, even jail time, disbarment of lawyers for any of those officials who simply ignore your congressional subpoenas?

CONNOLLY: Yes. I believe that is ultimately in our future because of the reckless defiance across the board of the Trump administration and former Trump administration officials. Congress is not going to roll over and play dead. And we won an election in November and part of our mandate was to provide checks and balance on an unchecked, unbalanced presidency. And we're going to do that, whatever is required.

BLITZER: The president's personal attorney, the former New York City mayor, Rudy Giuliani, says he's now planning to travel to Ukraine to dig up dirt on former Vice President Joe Biden's son, Hunter. What do you make of that plan?

CONNOLLY: You know, this is another one of those far-right conspiracy theories that there was some connection between whatever Hunter Biden was doing and what vice president -- then Vice President Joe Biden was doing as part of the Obama administration. Anyone who's looked at it, Bloomberg, New York Times, others, has dismissed it as completely without foundation. That of course doesn't stop Mr. Giuliani from trying to pick a -- pick an issue, create an issue for the leading Democrat for the 2020 nomination for president.

I will say besides the fact that it's without any foundation and Mr. Biden was joined by the IMF and many European leaders in calling for the dismissal of the lead anti-corruption investigator in the Ukraine at the time for his own corruption, but the idea that the president's personal attorney, after everything we've been through in the 2016 election in terms of foreign interference, would go to a foreign leader, newly elected, and ask him to interfere in our election process is stunning and overt and deeply troubling and ought to be deeply troubling to every patriotic American.

[17:15:09]

BLITZER: Congressman Connolly, thanks so much for joining us.

CONNOLLY: My pleasure, Wolf.

BLITZER: Up next, more breaking news. A powerful House Democrat has just issued subpoenas for President Trump's tax returns, sharply escalating the fight over the president's financial records. And House Democrats are considering a new weapon, wrapping together multiple contempt citations into a single package for a floor vote.

(COMMERCIAL BREAK)

[17:20:40]

BLITZER: We're following multiple breaking stories in the escalating standoff between the Trump administration and Congressional Democrats, who are determined to try to push forward on their investigations. And just a little while ago the House Ways and Means Committee issued a subpoena for the president's tax returns, six years of his returns. Let's bring in his experts who will discuss these late-breaking developments. Susan Hennessey, this new subpoena from the chairman of the House Ways and Means Committee, is that the Democrats' best hope of getting those tax returns in their hands?

SUSAN HENNESSEY, SENIOR FELLOW IN GOVERNANCE STUDIES, BROOKINGS INSTITUTION: I think it shows sort of how careful and deliberate the committee is being in going after these tax returns. So technically the Treasury Department has already indicated they have no intention of turning over this material. Now, the chairman could have gone straight to court. He didn't have to stop and actually issue a subpoena, wait for them to fail to comply with that subpoena. But really what he's doing is -- is dotting every I, crossing every T. The first he did was issue a very, very narrowly tailored request stating a clear legislative purpose, then he allowed them -- he -- he made that -- that voluntary request, they missed the deadline, now he's going to issue a subpoena.

In all likelihood the IRS and -- and the Treasury Department will fail to comply with that subpoena and then they will move to the court. Now this is a little bit of a frustrating approach for people who really want to see the Democrats moving more quickly, but this is the kind of approach that is going to allow the Democrats to have really a rock solid case whenever this goes to court. And I do think that it strengthens the possibility and the likelihood, at this point, that ultimately they are going to have to turn over these records to the committee.

BLITZER: Jeff Zeleny, is this the fight the Democrats really want right now, politically speaking?

JEFF ZELENY, SENIOR WHITE HOUSE CORRESPONDENT, CNN: You know, it's an open question but they have been very methodical in terms of how they've gone about this. I mean, Chairman Neal in particular, he did not come guns blazing, you know, earlier this year when Democrats took control of the House. They are following, you know, the rule of the law and the order of things here. But look, politically it is risky. There is a sense -- and the president, of course, is stoking this sense -- that the Democrats simply want to obstruct, they simply want to block anything he's trying to do. But look, there's also pressure on the left side of the Democratic party to try, you know, and begin impeachment proceedings.

So I think following, you know, the rules here, the incremental steps here I think is what they want to do. But Speaker Pelosi still is, you know, in charge of all of this for now. And this is, you know, very much following in the lines of what she has said, that the House should be doing in their oversight capacity. So I think as of now Chairman Neal, you know, and the other chairmen certainly (ph) are going about this in the right way.

BLITZER: Mark Preston, what do you think?

MARK PRESTON, SENIOR POLITICAL ANALYST, CNN: Well, a couple of things. One is I think the methodical approach is only helpful to them because they are going to have to go to court, they're going to have to make the case, they're going to have to show that they've exhausted all options for the court to say why are you taking this, you know, into our chamber.

But I also think the timing is critical on this. If they let this go very much longer, you know, into the summer, perhaps into the beginning of fall, then there's just no way that they're going to be able to get any of this information without making it look absolutely political because we're going to be so much closer, you know, into the 2020 race. And then really, I think at this point the House Democrats do have to give a jolt in the arm to, you know, their base, who has been clamoring, you know, as we've discussed and has been very anxious and angry that there hasn't been action taken against Donald Trump in a more aggressive way.

BLITZER: You used to work in the executive branch, Shawn, you were the director of communications for U.S. National Intelligence. Could you imagine, in the years you were in the executive branch of the U.S. government, officials simply ignoring subpoenas issued by the legislative branch?

SHAWN TURNER, NATIONAL SECURITY ANALYST, CNN: Yes, no, I couldn't imagine it because it's unlikely that it would have ever happened. Look, by ignoring these subpoenas the administration has sent a very clear message. And they're not only demonstrating contempt for our system of checks and balances but what they're doing is they're sending a clear message that the rule of law does not matter. And as has been laid out here, I think that is the reason why when this goes to court, it's very clear what the outcome's going to be.

So on the one side you have Democrats who are being very measured, very methodical in the way that they're addressing this issue. But on the other side, we know what the end game is. We know that they're going to get access to this information. So no other administration would have done this because it's clear what the outcome would have been.

BLITZER: You know, the -- a lot of people have suspected, Susan, that the administration is trying to run out the clock right now and drag this through the courts. But a federal judge has just fast-tracked some of the legislation involving the tax returns and that potentially could cause some problems for the administration.

HENNESSEY: So it's certainly possible. The administration's strategy has really just seemed to be to be able to delay as much as possible.

[17:25:00]

Now we have a court that appears to be recognizing the -- the public interest, they're moving to fast-track that process. Now, fast- tracking a court process doesn't mean it's going to go fast by an objective measure. These are likely cases that are still going to have lengthy appeals periods. But from the perspective of the Trump administration, it does appear that their calculus (ph) for now is just more delay is better.

And so maybe they have to turn over the records three months from now, four months from now, but are they any worse off than if they just handed over -- handed them over willingly right now. Now, one thing that might change is as we get closer and closer to the general election, potential costs of -- of negative and damaging materials being disclosed in a court process ramping up a little bit, they may be less inclined to stall if they don't think they can ultimately wait out the general election.

BLITZER: Everybody stick around, there's a lot more to report on and cover. We will right after this.

(COMMERCIAL BREAK)

[17:30:36] WOLF BLITZER, CNN ANCHOR: We're back with our political and national security analysts.

Susan Hennessey, pretty impressive quote from the retired former Supreme Court Justice, John Paul Stevens. He's got a new book that's coming out, and he's weighing in on whether or not the administration, the President, should comply with all of these congressional subpoenas.

Let me put up on the screen a quote from Justice Stevens. The President is exercising powers that do not really belong to him. I mean he has to comply with subpoenas and things like that.

SUSAN HENNESSEY, CNN NATIONAL SECURITY AND LEGAL ANALYST: Right. So I think he is -- he is stating a relatively obvious legal position, which is that the administration's position of essentially rejecting oversight is ultimately an assault on the separation of powers, the basic constitutional structure.

Stevens is not one known to be one to hold his tongue. He is an outspoken former justice, and I do think, you know, this is a very small group of living former justices. And so I do think whenever he makes public statements like this on the record, one thing he's doing is reminding the sitting court that the Supreme Court is an apolitical body.

It has a higher purpose. It serves the rule of law and not just presidents who appointed them. And so I do think that, ultimately, this is the kind of on the record statement that's maybe intended for a very small audience of nine sitting justices.

BLITZER: That's what's so impressive, among other things, in the substance. This is an article in "The Wall Street Journal" that was just posted.

He granted an interview with "The Wall Street Journal" in connection with the release of his book, Justice John Paul Stevens. He's 99 years old, and he's thinking very, very sharply.

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Wolf, it is extraordinary. He was doing an interview with Jess Bravin who, of course, covers the Supreme Court for "The Journal." And it was an interview in his Florida condominium.

The fact that he's writing a book, so all of that, at 99 is -- you know, is extraordinary. But, look, he was appointed on the Supreme Court right after the Watergate era in 1975, I believe. Of course, a liberal justice, so he brings that point of view to this as well.

But, look, it is the members of the current Supreme Court, which is far, far different than at any point that he sat on it, whose politics will bring this to bear. But I think that, you know, most legal scholars agree that, at some point, the President and his administration will have to be forthcoming on this.

But the President -- President Trump and his lawyers clearly want to slow this down. He is looking for a fight to be taking place during the confines of the 2020 election campaign. There is nothing, you know, that he believes would fire up his base more than that.

So a lot of the politics at play in this is what President Trump has often done with litigation, slowed it down. And certainly, if it's happening during the 2020 campaign, he believes it helps him regardless of the final outcome.

BLITZER: And let's move on to another sensitive subject. Rudy Giuliani, the President's former -- I mean, current private lawyer, the former mayor of New York City, is planning on traveling to Ukraine to try to dig up dirt on the former Vice President, Joe Biden, a Democratic presidential candidate, and Biden's son, Hunter. What do you make of that?

SHAWN TURNER, CNN NATIONAL SECURITY ANALYST: Look, you know, there are two issues here. First, there is the political gamesmanship that's associated with this.

I mean, basically, we know what they're doing here. They're -- look, they're saying, look, you investigated us by looking into Russia. Now, we're going to turn the tables on you and we're going to look into having, you know, the Ukraine investigate Joe Biden and his son.

So that aspect of it is obviously inappropriate and something we should all be concerned about. But, look, I -- I've said before, Wolf, I see everything through a national security lens. And I do think there's a national security issue that we should be concerned about here.

You have Rudy Giuliani, who is the President's private attorney, saying that he is going to go to a foreign country, and he is going to invite them to meddle in an ongoing election.

I know he's saying it's an investigation, but he would not be doing this were it not for the fact that Joe Biden is running for president.

Look, you know, when we get to a point where we -- where we're inviting others to meddle in our democracy and to, you know, get involved in our elections, then I think, at that point, we all need to be concerned about the national security aspects.

BLITZER: What I'm hearing -- and, Mark, you're an expert in the area -- is that some of the President's political supporters, his re- election campaign, they're so worried about Joe Biden getting the Democratic presidential nomination.

They fear he would be very competitive in several battleground states, including Pennsylvania and Michigan, Wisconsin, but also in Ohio and Florida, for example, that he could threaten the President's re- election. And that's why they're targeting him.

MARK PRESTON, CNN SENIOR POLITICAL ANALYST: You know, the irony is it's just not the President's top advisers, it is people on the left who don't like Joe Biden either and don't want him to be the Democratic nominee. They think he is too centrist for them, so he is taking it from both sides.

[17:34:57] But, yes, the fact that he is at the top of the polls right now that he just entered the race, that he seems to have all the wind behind his back, is only going to encourage the likes of Rudy Giuliani who, I might add, we all once looked at and called him America's mayor.

You know, we once looked at him and said, wow, you did a really good job as a prosecutor. And now, we're looking at him -- he says he's going overseas to do an investigation. It's just -- it's kind of sad.

BLITZER: The polls are showing, Jeff, right now, that Biden is doing well, not only nationally among likely Democratic voters but even in New Hampshire.

ZELENY: Exactly, in New Hampshire and Iowa. And he'll actually be traveling to New Hampshire for the first time.

BLITZER: You say even New Hampshire because --

ZELENY: Yes.

BLITZER: -- we got two major Democratic candidates from neighboring states to New Hampshire.

ZELENY: Exactly, because he is the fomenter. He still has to have the burden, of course, of proving that he's the front-runner once he actually gets out there and gets knocked around a little bit. And Bernie Sanders, of course, is already trying to define him early on.

But, look, there is no question the White House has its eye on Joe Biden. And they are trying to sow chaos in the Democratic primary all the way around so that's what part of this is.

I think it's also part of just a distraction here that Rudy Giuliani -- you know, the President not pleased at all that his son was subpoenaed this week by the Senate Intelligence Committee. So it's a little bit of a shiny object thing here.

We'll see if Rudy Giuliani actually goes through with this, but Hunter Biden, you know, without a doubt, has been a lobbyist for a long time. It is something that the left, as Mark was saying, is going to seize on here as well.

So it's part of the whole, you know, Trump apparatus of trying to sow a little chaos here and see if some liberal Democrats pick up on this as well.

BLITZER: He did -- Hunter Biden, he did have some contracts in Ukraine. Is there -- legally speaking, is there anything wrong with what he was doing -- legally speaking, anything wrong with what Giuliani is doing? HENNESSEY: Well, in terms of the Biden contacts, it does appear that

this is mostly a conspiracy theory in large part because the timing just doesn't line up at all, sort of the story of an investigation that was ended during Biden's time. The dates actually just don't match at all.

Now, in terms of what Giuliani is doing, it's sort of like a reverse FARA situation, right?

Instead of having the Foreign Agent Registration Act, instead of having foreign nationals operating within the United States illegally, what you have is Americans operating outside the United States for the purpose of encouraging a foreign country to take action that's going to have domestic political consequences.

That's probably not illegal. It was until very recently and should still be considered fundamentally unacceptable and is an indication of the extent to which our norms, really basic norms, have eroded.

BLITZER: Stick around, guys. There's a lot more news we're following. We have more on the breakdown in trade talks between the United States and China. Some popular consumer goods are likely to see price increases because of the President's new tariffs on Chinese imports.

[17:37:41] (COMMERCIAL BREAK)

BLITZER: Our breaking news, trade talks involving top U.S. and Chinese officials ended today without any breakthrough. Just a little while ago, President Trump tweeted that new tariffs which took effect at midnight may or may not be removed depending on future negotiations.

The President's latest escalation in the trade war is expected to significantly drive up prices for a lot of popular consumer goods.

CNN's Tom Foreman has been looking into all of this, what will be affected. Tom, tell us more.

TOM FOREMAN, CNN CORRESPONDENT: One of the big problems here, Wolf, is when he says future negotiations, we have no idea when those future negotiations will happen or when this impasse may be broken.

(BEGIN VIDEOTAPE)

FOREMAN (voice-over): Despite friendly handshakes between team Trump and the Chinese delegates, trade talks have stalled. No deal on the horizon.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Hello, everybody.

FOREMAN (voice-over): And no sign of President Trump giving an inch on the 25 percent tariff he's launched on Chinese goods.

TRUMP: I happen to think that tariffs for our country are very powerful. You know, we're piggy bank that everybody steals from, including China.

FOREMAN (voice-over): But American consumers could soon feel a greater impact if the tariffs expand to consumer products as threatened. China would be expected to pass on those expenses, jacking up prices on smartphones, computers, televisions, fitness trackers, and much more.

The extra cost for the average American family of four is expected to be close to $800. What could drive it? Three-quarters of the toys bought in the U.S. are made in China, including these hugely popular dolls.

Ninety-three percent of Chinese-made footwear, including some shoes for Nike, could be hit. So could clothing, Bluetooth headsets, and even drones.

Trump's tariffs on China last year steered away from consumer goods and focused on industrial items, such as solar panels, steel, and aluminum. Those costs were passed on by American companies.

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: American consumers are already paying. They just don't really know it. It's kind of a stealth tax. But it's going to become a very obvious tax not too -- not too far from now if this -- if this continues.

FOREMAN (voice-over): The major markets are already showing unease over the clash. In the next three years, if China and the U.S. continue warring over trade, economists say both countries could see their economy slow down, and close to a million American jobs might be lost.

Still, the President has long insisted China is cheating the U.S. by stealing intellectual property, manipulating currency, and most recently reneging on a framework for a deal.

And he's convinced China will blink first, tweeting tariffs will make our country much stronger, not weaker. Just sit back and watch.

(END VIDEOTAPE)

FOREMAN: So the President is betting on his strategy here, but, Wolf, this is a slow-moving supertanker of troubles. And if the President does not win, when it arrives, yes, American consumers will feel it in a big way.

[17:45:10] BLITZER: It is almost like a hidden tax on average families already --

FOREMAN: Absolutely.

BLITZER: -- paying a lot more.

FOREMAN: Absolutely.

BLITZER: All right, thanks very much, Tom Foreman, for that. Up next, President Trump's preference to negotiate one-on-one with

leaders like China's president, Xi Jinping, North Korea's Kim Jong-un, and Russia's Vladimir Putin. Does it help or hurt his chances of getting things done?

(COMMERCIAL BREAK)

[17:50:11] BLITZER: Even as he escalates the trade war with China by raising tariffs, President Trump is counting on his personal connection with China's leader to get a deal done. And the President is taking the same approach to some bitter foes of the United States.

Bryan Todd has been looking into this. Brian, is this approach working?

BRIAN TODD, CNN CORRESPONDENT: Wolf, it is working on one level. Trump's relationships with Kim Jong-un and Xi Jinping as of tonight could be the only things which actually save potential deals with those countries.

But on another level, analysts say, Trump is taking an enormous risk that the backstab -- backslapping, excuse me, personal style he used in New York during his real estate days is going to work in the complicated world of international politics.

(BEGIN VIDEOTAPE)

TODD (voice-over): It's one of President Trump's favorite boasts.

TRUMP: He's a friend of mine.

TODD (voice-over): His so-called close friendships with world leaders, enemies, and allies.

TRUMP: President Trump Xi is a friend of mine, great guy.

TODD (voice-over): And tonight, with trade talks with China stalled, the President, again, appears to be counting on personal relationships rather than professional negotiators, including his connection to Chinese President Xi Jinping.

TRUMP: Well, he just wrote me a beautiful letter. I just received it, and I'll probably speak to him by phone.

TODD (voice-over): CNN has learned as the trade talks stalled overnight, China's Vice Premier told his American counterparts that Trump and Xi Jinping would need to work the differences out themselves.

SCOTT SNYDER, DIRECTOR OF THE PROGRAM ON U.S.-KOREA POLICY, COUNCIL ON FOREIGN RELATIONS: I don't think we've seen the personalization of foreign policy at the presidential level to this degree, to the degree that we see it under Trump.

TODD (voice-over): With China, North Korea, Russia, Trump has counted on his personal one-on-one relationships with men who have stood as America's adversaries to score major deals. The results mixed.

SNYDER: You know, one benefit has been that he was able to establish a good relationship with Kim Jong-un. In both instances, it serves their interests to be able to have a relationship, even if they might not be going in the same direction.

TODD (voice-over): Trump's style has created personal dynamics we've never seen in public before from any president, like how he's spoken of his rapport with the violent North Korean dictator.

TRUMP: And then we fell in love, OK? No, really. He wrote me beautiful letters.

TODD (voice-over): He's displayed those personal letters from Kim, including one delivered in a comically oversized envelope.

JOHN BOLTON, NATIONAL SECURITY ADVISOR TO PRESIDENT DONALD TRUMP: He sends him pictures, he sends him letters, happy birthday to Kim Jong- un's grandfather on his birthday on April the 15th. Really, this has been a full court press by the president.

TODD (voice-over): But there are also frustrations that come with one-on-one diplomacy. "The Washington Post" reports Trump has complained privately that Kim Jong-un is mercurial as a negotiating partner.

MICHAEL D'ANTONIO, AUTHOR, "THE TRUTH ABOUT TRUMP": He thinks, well, we're getting along great. This is going to work out because they like me. Well, they don't like him. They are just being polite.

They are our adversaries. They're engaged in a negotiation to get the best for their side.

TODD (voice-over): Negotiations that can apparently get downright bizarre. "The Post" says a person present at private discussions with Trump heard the President tell a graphic story, that after Kim executed his own uncle, he displayed the uncle's head for others to see.

There had been no other reports to corroborate that account, and that uncle is believed to have been killed by anti-aircraft fire.

Trump's reliance on personal relationships, his biographers say, goes back to his view of the business world.

D'ANTONIO: In the New York real estate world of his youth, it was all about who you knew and who owed you a favor and how you might then later do something for them. He has been struggling in foreign affairs, and I think it's because it's a level of negotiation that he's never experienced before.

(END VIDEOTAPE)

TODD: And how can these one-on-one relationships backfire on the President? Analysts say he's risking making a handshake deal with someone who many believe is fundamentally untrustworthy like Kim Jong- un.

They say if the lower level people under the President cannot hammer out the real details of these agreements, then the handshake deal could blow up in the President's face -- Wolf.

BLITZER: Brian Todd, reporting for us, thank you.

Coming up, breaking news. A powerful House Democrat issues subpoenas for President Trump's tax returns, sharply escalating the fight over the President's financial records.

[17:54:24] (COMMERCIAL BREAK)

BLITZER: Happening now, breaking news. Tax demand. A top Democrat just issued a subpoena for the President's tax returns after the Treasury Department refused to turn them over. Tonight, the escalating fight to obtain Mr. Trump's secret financial records is likely heading to court.

Supreme smackdown. A former U.S. Supreme Court justice says President Trump is exercising powers he doesn't have and that he must comply with congressional subpoenas. Will the current justices feel the same if Mr. Trump's stonewalling is judged by the Supreme Court?

From Russia with peace. Convicted Russian agent Maria Butina speaks out from prison, claiming she came to the United States to help make peace, not to spy. Is she being honest about her Kremlin and Republican connections?

[18:00:06] And held hostage. Local governments here in the United States --