E.U. Tariffs On U.S. Goods Go Into Effect Friday; Sarah Netanyahu Indicted
HOWELL: Welcome back. The European Union is retaliating against President Trump's tariffs on steel and aluminum by imposing its own tariffs on U.S. products. Starting on Friday more than $3 billion worth of U.S. goods will be taxed. This includes motorcycles, orange juice, bourbon and peanut butter. The measures largely target products manufactured in red states, those states that voted for President Trump. E.U. officials say that if the trade disputes continue they will expand the tariffs to include more American products. It isn't just the E.U. battling the U.S. on trade. India and Turkey are also announcing retaliation measures of their own. India says that it will increase tariffs on August 4th on a number of U.S. agricultural products including chick-peas, walnuts, almonds and lentils. It's backed away from an earlier threat to raise duties on motorcycles. And Turkey, the list of new tariffs includes tobacco, rice, whiskey and cars there. There's always a risk whenever a country hikes tariffs. Our Clare Sebastian looks at the implications from past U.S. trade disputes.</s>CLARE SEBASTIAN, CNN CORRESPONDENT: In 1930 prohibition was still in force, Herbert Hoover was still in the White House and the global economy was in the grip of a catastrophic depression. Two U.S. senators Reed Smoot and Willis Hawley set out to stem the tide of the tariffs.</s>UNIDENTIFIED MALE: Smoot and Hawley were people whose districts were producing industrial products and competing with foreign industrial products and looking for protection in order to help their districts.</s>SEBASTIAN: Smoot-Hawley are the tariff in 1930 ballooned into hundreds of tariffs affecting all countries that exported in the U.S. Over 1,000 economists had urged the President to veto the bill warning the (inaudible). They were right. Countries from Europe to Canada retaliated over U.S. exports fell by 40 percent in two years.</s>UNIDENTIFIED MALE: We had just an escalation around the world of tariffs going higher. Most economists wouldn't say this caused the great depression, the great depression had already started, but this made the recovery of longer, maybe great depression worst.</s>SEBASTIAN: Smoot-Hawley was repealed in 1934. These two figures have haunted U.S. administration ever since.</s>UNIDENTIFIED MALE: Now, some of us remember the 1930's.</s>SEBASTIAN: This was 1985.</s>UNIDENTIFIED MALE: If the ghost of Smoot-Hawley reappears its ugly head in Congress, if Congress crafts a depression making bill, I'll fight it.</s>SEBASTIAN: While Reagan's rhetoric touted free trade some of his actions told a different story. Over the course of the 1980's he put restrictions and tariffs on Japanese cars, electronics and motorcycles to protect domestic companies.</s>UNIDENTIFIED MALE: Harley is back and standing tall.</s>UNIDENTIFIED MALE: Did that help certain U.S. producers, yes, but it was probably harmful to the economy as the whole.</s>SEBASTIAN: And that refrain rang true again.</s>UNIDENTIFIED MALE: If this administration doesn't give us the kind of remedy --</s>SEBASTIAN: In 2002 the U.S. steel industry was struggling under surging imports and falling prices. The Bush administration stepped in with tariffs of up to 30 percent on foreign steel imports.</s>UNIDENTIFIED MALE: They still need time for a breathing room so they can restructure.</s>SEBASTIAN: After about a year the World Trade Organization ruled them a violation and they were repealed. One study has made, that 200,000 American jobs will be lost due to highest steel prices. Be it all out trade war or trade disputes history shows protectionism in all forms is fraught with risk. Clare Sebastian, CNN Money, New York.</s>HOWELL: Clara, thank you. Now to the wife of the Israeli Prime Minister Benjamin Netanyahu. She was indicted Thursday on charges of fraud and breach of trust. Prosecutors allege that Sarah Netanyahu misused state funds spending more than $100,000 on meals and private chefs. CNN's Ian Lee is following the story live for us in Jerusalem. Ian, tell us more about the nature of these charges.</s>IAN LEE, CNN CORRESPONDENT: Well, let us just break it down George, what we are looking at here. First off, these are charges of fraud and breach of trust. The State prosecutors are alleging that she used $130,000 of public money to pay for meals, also accused of illegally paying $10,000 to private chefs and also illegally hiring waiters for private events. And with all of this she could serve up to eight years in prison. Although, talking to legal experts they say that is unlikely. So why is this all illegal? Well, according to Israeli law the Prime Minister's office cannot bring in outside food, if they pay for outside food when there is a cook at the residence. And they're saying there was a cook at this residence. They're also saying that the Prime Minister's wife also tried to cover up these indiscretion. There's someone who's working at the Prime Minister's office at the time who's also being charged, but for her part the Prime Minister's defense is that they're denying all this. They said in a statement that it's the first time in Israel and in the world that the wife of a leader is put on trial for food entrees. There was no fraud, no breach of trust or any other felony. So they're sticking to it that the fact that, you know these food wasn't for them in the first place it was for the people who are working at the Prime Minister residence. But now we will see this case going forward although it could be quite some time before we do get a final verdict, George.</s>HOWELL: All right, Ian, and also the Prime Minister himself also facing some legal concerns of his own.</s>LEE: Yes, that is right. This power couple -- Israel's premier power couple has had some legal. Both the Prime Minister himself was -- there's two cases in particular where the police have presented the evidence to the public prosecutor. They say that they believe he should be charged over a near series of offenses. It's up to the public prosecutor to determine whether or not to move forward with that. This also include fraud, bribery and breach of trust, to the two cases include one, the first one where the Prime Minister is accused of accepting bribes from a businessman, the second case is where the Prime Minister allegedly coordinated with a publisher of a newspaper to get favorable coverage. In turn he would try to decrease the circulation of arrival paper. There's also a third case that the Prime Minister is also being questioned as a suspect in. So a lot of legal woes for the Prime Minister Netanyahu and his wife.</s>HOWELL: Ian lee live for us in Jerusalem. Thank you. Still to come we are about to mark the second anniversary of Britain's vote to leave the E.U. And we're gauging public opinion on London streets. What we found may surprise you.