Trump: Call with China Was "Productive"
KING: Welcome back. We got some live pictures here still from the Hong Kong airport. We'll continue to monitor developments there. Police went in earlier, clashes with protesters. Some people who were injured were taken out or treated by medical personnel. Things appear to be calmer at the moment but we have correspondents, producers on the scene and will continue to monitor that and get back to it if the news warrants. Back here in Washington, a major blink today in the trade war with China. The Trump administration announcing it plans to cancel or delay looming tariffs on some products from China. The U.S. trade representative says it will delay tariffs on some consumer products like laptops, cell phones, video came consoles, and certain toys and clothing items. The president just last hour saying negotiators from both sides had a productive call yesterday and there's an appetite to get back to the table.</s>TRUMP: We'll help I think a lot of different groups of people. And we had a very good talk yesterday with China, very, very productive call. I think they want to do something. I think they'd like to do something dramatic. I was not sure whether or not they wanted to wait until a Democrat has a chance to get in. Hopefully that's not going to happen or the economy will go to hell in a hand basket very fast but they really would like to make a deal.</s>KING: The president also saying his administration trying to avoid disruption during the Christmas holiday season here. With me at the table to share their reporting and their insights, Seung Min Kim of the Washington Post, Jackie Kucinich of the Daily Beast, Margaret Talev of Axios. I'll just show you the big board on Wall Street, they like this, the investors like this, they have not like the trade war. We've seen turmoil in recent days, some down days on the market. The market up more than 400 points now as we watch this play out. This also announcement coming as the president, not coincidentally I would argue, is traveling to western Pennsylvania for an economic message. He's visiting a petrochemicals plant under construction there. That's going to bring jobs to Beaver County which is just outside of Pittsburgh, a part of the state critical to his 2016 win. On the one hand, this is the president blinking. He said this was a big deal, he said these tariffs would go into effect. On the other hand, he says China called and wants to get back to the table. So we really don't know is it a blink, a retreat that in the long run is a good thing or is it a retreat that is largely for domestic political purposes here in the United States?</s>MARGARET TALEV, CNN POLITICAL ANALYST: Well, we know it is at least the latter. I mean, there are two kinds of buzz words that guide how we should think about this. One is election and the other is recession. And the president is worried about the second and intent on, you know, winning the first. And since the beginning of his presidency, he has used this tension with China as a lever to kind of show that he could be tough on foreign policy, to try show that he was different than President Obama. And he's had the advantage of a really strong economy to allow him to do some of these things. But all of a sudden you look at these numbers, some trouble in manufacturing, a slowdown, economists more and more talking about not just recession but the potential for recession to emerge before Election Day. For the president, that would be potentially politically catastrophic, and he understands that. And this is something -- look, whether Xi really wants to make a deal or is kind of willing to do something to allow the tariffs to come off, same difference. I mean, it will -- the president is looking for some way to slow the brakes a little bit on the full manifestation of his threats.</s>KING: And when he talks about these things, he's very transparent in the sense that he says China called, they want to get back to the table. He thought they were going to wait to see who won the election, see if they're going to have</s>JACKIE KUCINICH, CNN POLITICAL ANALYST: Well, and that's after he said that this isn't going to affect consumers, that this isn't going to affect Americans. They've been subsidizing farmers for months and months in order to lessen the effect there. There is some surprise in this administration that China would dig in and that the amount of pain that they'd be willing to sustain throughout these tariffs. And yes, he's looking at the election. And he knows that the Chinese know the political calendar and they know his pressure points. They know where his base is. They know the political environment in the United States.</s>SEUNG MIN KIM, CNN POLITICAL ANALYST: And that's why this makes his one kind of final major legislative priority that much more important which is the ratification of the U.S./Mexico/Canada trade deal. And we were -- just before we went to the break we had talked to a lot of lawmakers and it really can be characterized as being in limbo right now. I mean, it is up to Nancy Pelosi to put it on the floor. She has a lot of leverage here to give the Trump administration that one major economic win that would certainly help his -- the economy and his political prospects in these key states such as Iowa and Wisconsin. Clearly very much in peril right now.</s>KING: And she is -- in her heart, if this was just her decision, she would bring it to the floor. The question is she faces a lot of pressure from her base, number one on the trade issue period which divides the Democratic Party much like President Trump has changed the Republican calculation on this. But you're also giving -- to your point giving the president a gift, the question is where is the state of the economy. And if you listen here, this is before this big announcement today, Christine Romans sat down with David Solomon, he's the CEO of Goldman Sachs who said, you know, look -- he was -- a lot of several analysts saying the economy could tip in a recession next year if things even stayed as they are now. Mr. Solomon saying he's more rosy than that but adding the big China question.</s>DAVID SOLOMON, CEO, GOLDMAN SACHS: But I think when you look at the base economy, the bas economy is chugging along OK. There are things that are getting added to the equation, in particular the trade war with China that is having an impact. It's having an impact on growth. I don't think that impact is significant yet but we're watching that very, very carefully. And I think those are the kinds of things. What's going on with monetary policy, what's going on with trade, how that is all linked? That has the potential to slow down growth if it's not handled correctly over time.</s>KING: Morgan Stanley going further in an analysis saying that if the next tariffs went in as full as originally planned until today, it had the potential to, quote, cut into the muscle of the economy. So this is a -- the president often relishes being a contrarian, going against traditional Republican economic orthodoxy, going against the advice of the Wall Street CEOs. This appears to be a day where he has decided the combination of that advice is in his best political interests.</s>TALEV: Well, yes, and I think -- look, we talk about the economy in national terms, but much like electoral politics, the economy in certain places really matters when you overlay those two maps. And when you look at where he's going today, for example, this is a place that's never really recovered from what happened to U.S. steel, right. That's trying like get into plastics, stay into plastics, right? And then flipped for Trump in 2016 and then flipped pack for the midterms. Places like that help voters in some of these key places in the rust belt manufacturing states perceive the economy in their own lives. Employment, future prospects, buying power, all that stuff really matters to whether they're motivated to vote for the guy they backed in 2016 or to the extent that some of them were Democrats, whether the pendulum swings back, and the president knows that.</s>KIM: It's interesting. You're already seeing some of the blow back though come from his base after the tariff announcement this morning. You saw Laura Ingraham tweeting that Trump caved when it came to the tariffs. So he's going to have to watch that part of his base as well.</s>KUCINICH: Promises made, promises kept. And he needs to be able to show places like this area in Pennsylvania that he's keeping their promises because as you pointed out, the tax cuts didn't really help this sector of his base. And so he needs to point to something else and that's manufacturing.</s>KING: Right. And for all we talk about the national numbers which are pretty -- most of the national economic numbers are pretty good. All politics is local and it's your main street, your community. The president will be in Beaver County, Pennsylvania, in a little bit. And we'll talk more about that tomorrow. But before we go to break, a quick update from the 2020 race. The Democratic candidate Tom Steyer announcing today he has reached the donor qualification for the September debates. He has not yet, at least, met the polling requirements. Steyer needs one more qualifying poll. So far, nine candidates have met all the criteria and will be featured on that debate stage in Houston next month. We'll be right back.