>> political and economic warfare. i'm robert costa. welcome to "washington week.">> ou have no choice but to vote for me, because four 401(k)'s, down the tubes. everything is going to be down the tubes. whether you love me or hate me, gotta vote for me. >> after months of growth, thet stock mars rattled. but the president sticks with his trade war. >>hina, how you doing? they're not too happy. not too happy. long millions of jobs. the tariffs are working and they're eating the tariffs, by there's no price increase. >> are there tensions inside the administration? and the president, once again clashes with minority women in congress. this time on israel. next.

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moderator robert costa. thehis week's gyrations in stock market have not changed president trump's hard line on trade. but he did make adjustments as he seeks a deal with china, delayingariffsn some goods until december. and ahead of a rally on thuray, he remained upbeat. >> walmart announced, oth announced, we had some tremendous numbers come out today, which i'm sure you saw, so we're very happy about thae weoing very well. the economy is incredible. the consumerrobablybove all else, the consumer is doing incredibly. >> but the week's losses have investors and business leaders concerned amid global uncertainty and signs of swing growth. joining me tonight, elisabeth bumiller, washingt f bureau chie the new york times. jerry seib, executive washington editor for the wall street jonal. toluse olorunnipa, white house reporter for the washington post. and andrea mitchell, chief foreign affairs correspondent

for nbc news. jerr president trump has put the economy front and center of0 hi re-election campaign. with all of the economic and trade news this week,ow is the outlet for 2020 changed? >> well, this is which people started to talk seriously about, will there be a recession in 2020? that's obviously terrible nrs any presidential candidate. it's hard to predict. peopleay the economists have picked eight -- eight of the f laste recessions. it's hard to know. it's early. but the president keeps saying, as he just did, our economy is doing great. other countries are not havingth same kind of success. and that's true, but it also points to the problem here, that this is a globalized economy. if thes u.s. i doing great but others aren't, the u.s. eventually gets dragged dow the president can be happy now that the chinese are having trouble, and they are b eventually, in a globalized economy, china's problem pecomes ourblem. >> and he doesn't seem to understand what trade deficits are.sn he d understand, at least

until the hint this week, when he talked about protecting christmas shoppers, that it's actually americans who pay his passers. and he doesn't understand if germany stops buying america's goods, that hurts us. he seems to take pleasure in everybody else's global woes. i also don't think he's surroupled by good, smart p on the economy. conflicting advice on trade, friction a ang hisisors. and unlike previous presidents, he doesn't have a goo staff or top advisors. oeunsel of economic advisors. he't have real economists advising him. andrea.d analysis from you've been on the ground with the president, in new jersey, at his golf club. what are the tensions inside the white house on how to proceed on the economy, on trade? >> we did see the president pull back on somet tariffs t were about to go into effect.

he pushed that back until. decemb at the same time, he said tariffs were not having an effect, but here said w going to push this back several months because we are worried aboutri e mas season. as andrea said, he is listening to people who say,aybe you should think about the politics, think about your own political fortes here,aybe push this back until after the elections. he's also hearing other voices saying it's hard to take the hard line against china. let's push for as much as we can iget. >> w in his ear? peter navarro, the hard liner on klein? is it larry kudlow, the former cnbc commentator? who is shaping the policy? >> all of the above. unfortunately, i of depends on who is the last person to speak to the presidt. on some days, it is peter navarro, who is pushing that hard line, saying we need to take on china now, have this and battle, ultimate fight between the two powers. then you have other people like larry kudlow, steve mnuchin, who

are saying, let's try to think fortunes anditical don't have a recession going into 2020. that'sreally depends -- why we've seen this frenetic approach from the president. one day he's listening to navarro, the next day mnuchin. >> so much is driven by tmp's chaotic governing style. that's really bad for investors. the other thing is that he's heading into 2020. we're hearing, despite hiss, positive commehat there's a lot of concern at the white house, behind the scenes, about what this economy is going to look like in september, october 2020. and trump is kind of run out of things to do. he's run out of tools in his tool kit. the tax cut, you know, has kind of run it course. the trade war with china is having a bad eect on the economy. so now he's bludgeoning the fed constantly t try and lower interest rates. that's kind of what he's got left. a lot of economistshink that just lowering the interest rate

a quarter of a point is not going toave that profound an effect on the economy. >> t enomy is as stimulated as it can be. we're running a trillion dollar a year deficit. and you have low interest rates. and you still have the effects. ere's not much more stimulation you can do. the problem here is not the u.s. economy. the reason that the markets went crazy this week was because china put out a whole slew of data that showed the economy ere is slowing. germany reported that economy shrank a bit. this is a global problem, not an american problem. it washes on to our shores quickly. >> the global slowdown. an important point. what does your reportng reveal ab that? >> the global slowdown is clearly the l effect of a of things that have been building up. also this trade rhetoric and the tari ts from president, going against canada, going against mexico. he got what he wanted the in this new deal, which hasn't beei ra yet. the fact is, he does not see the interconnections.

also, to blu the fed, when, as jerry points out, they don't have a tool kit either anymoreow really, given historically low interest rates are. more stimulus right now would st really help, but the president doesnm to understand that. >> a lot of economists say that being tough on china is notba a thing that, the chinese do deserve some toughness. but the presidentut has gone a it in a very peculiar way. rather that, you know, marshaling our allies, japan, south korea, the europeans, to build up a case againsthina, he has actually put tariffs on them. so it's a e very strannomic policy. >> what kind of test, elisabeth r the hong kong protests for president trump as he navigates a trade deal? >> this is actually sort of related to his trade war with china. the president is pretty much isolated in his rhetoric in hong kong, which is very mild. he ieas noty supporting the protesters.

he's n denouncing the crackdown and what the chinese government isoing. he is out of step with both parties and on the hill,bl reans and democrats, out of step with the allies, out of step with his own statert dent. he's even out of step with his own conservative l advisors,e john bolton, who are denouncing china for cracking down on freedom. >> is that because the president nts this trade deal? he looks at the market being a little uneasy this week, but on the hsizon, he s a possible trade deal? is it all about trying to lay offhina, lay off prenpdent xi g of china, to salvage a deal, whether it's in the fall or spring of 2020?h. >> y we've seen this president link trade to all kinds of other issues that other presidents haven't done in the past. human rigs,s abu protests, civil freedoms. this is a president who wants to deal with cna. he doesn't really see the value of interfering in another country's matters even if it is to stand up for human rights if it's not going to benefit him politically. we may talk about him

interfering with the israelind electionsrying to bar american congresswomen from visiting israel, because he sees that as politically beneficial to him. standing up for protesters in hong kong, he doesn't necessarily see the political benefit for that. he does see the political tradet for getting a deal. so that's part of the reason he's not having sort of a strong voice, standing up for human rights in china. instead, hoping can get a trade deal and deal with human rightsater. >> in hong kong -- bitter scenes in hong kong. what are beijing options as they confront this crisis? >> they have staged, as close ad they c be to hong kong military, you know, the army, the tanks are there. president xi, according to all reporting -- i've talked to officials here, as well as other capitals, president xi does not want anothernm tia. he is setting the stage in case he has to reassert control by defining the protesters as

terrorists, by trying to whip up nationalist fervor against them. and i a controlled state media, he is trying to change the narrative, at least in theis way is being interpreted domestically. and as far as president is concerned -- president trump is concerned, you'rebsolutely right in his linking trade and human rights in a way that is counterintuitive to our culture, to republican and democratic presidents. it is really trumpian for him to be hanging back an being so silent about this and silenci the state department on human rights here. it is similar to the way he hasa d in other settings with other totalitarian leaders, because he seems to have an affinity for strong men. >> i think it's interesting to speculate how president xi links these two issues, trade and hong kong. it it seems to me it could go either way. he could say, look, i got problems here. let's do a trade deal and getne that off my plate. or he could say, i need to be really tough here and vio show -- i have to show toughness

right now, so i can't be seen as conceding things to donald trump. i think it could go either way. >> economic questions are also confronting demtiratic presid candidates. for instance, senator elizabeth elizabeth and bernie sanders -- elizabeth warren and bernie sanders, calling for more regulation and taxes to rein in wall street. and at the iowa state fair, c senatoey booker said this. >> the president has hurt farmers, hurt our h economyt working people because of these tariffs. our trade policy will take on ople like china and we will win.'t we won just talk about it with bluster and tweeting. >> as alex shepard wrote, democrats have aifficult task in addressing the possibility of a recession that cannot be seen as eager for economic pain. at the same time, there's been a real reluctance to criticize the obama administration's legacy. toluse, how has the economy he --ped

>> you've heard so many say that the economy isn't working for everyday workers, even though ere are strong numbers on unemployment, on g.d.p. growth. they're trying to pai this economy as being rigged against the working man and womll, basi saying that working families are not getting ahead in the trump economy. they're going again the tax cuts, which they say go disproportionately to the wealthy. they're saying corporate tax cuts help corporations. ou hear elizabeth warren raeaking against big multi-national corons. and she's getting some pickup from a lot of voters who do believe thatorporations are rigging the economy. and they say that trump is helping the corons at the expense of everyday working people. >> are the times reporters picking up on a little bit of traction for the more popous democrats, the democratic socialists amid all thiss? new >> certainly. interesting to think that corey booker was talking about farmers. they have really been ht by trump's trade policies. interesting, just this month,

the farm borough took out a really tough statement, about agricultural exports in the united states, and said this is going to cost us $9 billion this year. and thate're gonna lose all of that. so, yeah, there's certainly a lot of, among younger voters, millennials, there's a lot of support for those kind of policies. >> is this field going to ti ften,mer colorado hickenlooper decided to bow out of the presidential election this week. are we seeing shrinking? >> i think you're going to see a shrinking for whoever does not get ont third debate stage. until they see whether or not ey can find their way on through free media, getting on shows, a finally, they hope, picking up in the polls, i don't know how much room there will be for both warren and sanders. andn fact, warren's organizing

ability, her ground game in iowa, inmp nevada, isssive. and her message on the economy sounds fresher. it's tgh and populist but it sounds newer than sanders does, which sounds like theame theme from 2016. >> she's got a cohesive theory w about's wrong with the capitalist economy on the left. if we actually are going io this economic crisis that we've been talking about, who is better off as democratic candidate? somebody who has got what might be called a radical fix at a time when people are alrea nervous, or somebody who has got a more think it's possible in ah environment, it'jos a -- a radil message is not a good one. >> as the economy is turbulent, there's also a culture war raging out there. we saw president tru stoked it this week. he called on israel to block a visit by two minority women lawmakers, ilhan omar and

rashida tlaib were sch travel to the country for an official visit. but after that tweetsrael denied them permission, then later granted tlaib consent to visit her grandmother in the west bank. she decided not to go. is president trump trying to make these female lawmakers the face of the democratic party? >> i knew what w coming out. yes, absolutely. he's been trying to do that for a long time. >> why? >> because they are so far left, i mean, they are -- nancy pelosi, the speaker, has had trouble with them. they have been criticized by a number of moderate democrats on the hill. but to trump, this is great politics for him. they are extreme on many issues. and the more he can pai them as this is the democratic party, the better he feels he cano. i mean, you saw the tweet this week where he said they hat inael and they hate -- hate big capital letters in the tweet. >> neither of them have said anything like that.

>> right. >> the really incredibly disturng issue here, though, was how unprecedented it is for an american president to pressure a foreign ally to prevent aongressional visit. israel gets more foreign military aid than any other country. israel is the foremost recipient of u.s. aid. congressional be part of that.d and elected members of congress, in the only democracyg visit the only democracy in the middle east, want to be able to go. >> why did prime minister netanyahu go along with this? >> he was bok i boxedn by president trump. they had said a mont month ago t they could do. they were struggling with it in the 24 hours leading up to it. once the presidentss ped them -- he's also being criticized for this. this shows him,s popular as

president trump is in israel, which is enormously popular, at the same time, the ileellectual ers are really criticizing him for this, forhi cave n president trump. it was a reversal, no question. >> but he has made asi strategic de politically to lash himself to donald trump as he job. to save his own if that's your strategy, this comes up. you almost have to follow that path. e, you have no choice. but at the same t she could not go under these restrictions. thhe basically said could go visit her grandmother in the west bank but she s could not anything, as a member of pongress that was unacceptable. >> donald traced so much criticism here. ciapec crid israel, apec, which is so pro-israel, for this decision. there were republicans, democrats, everyone were very critical of trump. >> what isy this rea about? you look at just a few minutes before we went to air, the president, multiple tweets about these congresswomen. he said, tlaib and f omar,t

becoming the face of the democratic party. he's mocking them repeatedly. inside the white house. is this the president alone, or is this part of a strategy? >> this is a strategy that's bein led by the president. the people who are remaining in the whitert house have of made their peace with donald trump and they follow whatever he does. they're following his ld on this. they do believe there is some political strategy. >> what is it? >> well, the president has been very concerned aboutde how crats have always been unified, and it's always been the republicans fightg each other. so he's found a group of women in the congress who force dissension in the democratic party. he wants to inflame those tensions so nancy pelosi has people who are empowered, who may be going against her in the decratic field. that's something he's tried to push. he's tried to elevate these women in partecause he thinks it helps him politically. the president thinks that fightingit these freshmen women of congress helps him in

his 20 race. >> what does this mean for governing? youave gun control on the agenda. does this poisonhe well? >> among democrats on the hill? >> on both sides >> actually, there have been talks at the white house. we're unclear with how far it's going to go, but there have been talks, with key senators on the hill, about some kind of gun control legislation this fall. >> seems to be backing off of it a bit in his thursday night speech, talking about mental health, that people with mental health problemsull the trigger, not the guns. so he may already be backing away from what he had said earlier in the week about background checks. and i don't think it's an accident that hegn red this racial and cultural war with the squad, the so-called squad, after two mass shootings. hist of criticism of behavior in el paso. and, you know, the controversies as well as the 800-point drop in

the market, at least i one day he needed a distraction. that's when he went to war with em. >> i just want to say, we talk about all these things that donald trump does, the response tol paso, the stock market drops, the attacks on the squad. all through two and a half years of his president, he's basically stated 38%, nothing seems to budge his numbers, no matter what he does. >> yeah. bu the key to the re-election for him is to make sure that 40% of the country is as dug in as hard as possible for him. >> but it's still not enough. >> but there's a small group of people in the middle whoon't ke donald trump but think he's doing a good job handling the economy. in o polling, that's about a 10% slice of the electorate. that's where the election will geted. it starts making sure that 45% base is locked in,d guaranto show up, whereas some people might not show up.

>> some of those suburban voters may not be happy about their 401(k)'s this week. >> right. and they'reiously not happy about the way the president conducts himself on culture issues, the fact that he's leading a party in a much more divisive approach to governing. but they have been happy with the enomy. if that starts to tank, the president may end up losing them. but to your poi about how difficult it will be to get things done, it's hard to see congress making much progres on gun control, on -- >> the president says he wants to do background checks. >> he does, but one of the biggest applause lines at his manchester rly in new hampshire was when he said it's not the guns that pull the igger. it's mentally ill people. it's not about -- you know, we have to stand up foron the s amendment. it does appear that the president wants to back away from anything major on gun control. t we will have to leave it thereight. thanks, everybody, for joining us on a friday night.

e "washington week" extra is coming up next. we will discuss the consequences of the trumpdministration's new immigration rule. watch it on our website, facebook or i'm robert costa. have a great weekend! ♪[music] >> corporate funding for "washington week" is provided by... >> babble. a language learning app that uses speech recognition technology and tches real-life conversations. daily, 10- to 15-minute lessons are voiced by native speakers. they're at babble, babblcom. >> financial services firm raymond james. additional funding is provided by the yuen foundion. committed to bridging cultural differences in our communities.

the corporation for public doadcasting. y contributions to your pbs station from viewers like you. thank you! >> you're watching pbs.

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