Trump threatens trade war. TRANSCRIPT: 04/06/2018. The Last Word with Lawrence O'Donnell

Guests: Jill Wine-Banks, Joyce Vance, David Corn, Neera Tanden, John Harwood, Lena Taylor

Show: THE LAST WORD WITH LAWRENCE O`DONNELL Date: April 6, 2018 Guest: Jill Wine-Banks, Joyce Vance, David Corn, Neera Tanden, John Harwood, Lena Taylor

RACHEL MADDOW, MSNBC HOST: -- winning upset elections there. In January, a Democrat won a Wisconsin Senate seat in a district that had gone for Trump by 17 points.

Last week, a liberal-leaning candidate for the Wisconsin Supreme Court won a 10-year term. That was the first a candidate backed by liberals had won an open seat on that court in 23 years. And that lead -- that was constant win for liberals, led to lots of blue wave prognostication by excited Democrats these weeks -- this week and lots of blue wave fear by Republicans.

But if that gold standard political prognostication at the "Cook Political Report" tonight is right, then more upsets are on the way. Not only in Wisconsin but beyond.

That does it for us tonight. We`ll see you again on Monday. Now, it`s time for THE LAST WORD tonight with the great Ali Velshi.

Hi, Ali.

ALI VELSHI, MSNBC HOST: Rachel, great show tonight. Thanks as always.

MADDOW: Thank you. Happy weekend.

VELSHI: And you. Talk to you later.

Good evening, everyone. I`m Ali Velshi in for Lawrence O`Donnell.

Tonight, there are new indications that President Trump may be preparing to speak to Special Prosecutor Robert Mueller. Plus, reports in the last 24 hours reveal that Mueller is strengthening his case against key figures in the Russia investigation.

There`s a lot to talk about tonight. We`ve got an all-star panel coming up to break it all down -- Jill Wine-Banks, Joyce Vance, and David Corn. But before I get to the three of them, is President Trump preparing to sit down with Special Prosecutor Robert Mueller?

Here is a new report tonight from CNN. Quote, President Donald Trump has begun the initial steps of preparing for a possible interview with the Special Counsel, a White House official and a person familiar with the situation said on Friday.

One source familiar with the proceedings stressed the preparation effort is in its infancy. The preparations have been short and informal and included going over potential topics with the President that Mueller would likely raise in an interview, the people said.

Now, the President has not formally agreed to speak with Mueller, but this is the clearest sign yet that Trump and his legal team are open to the idea.

Also developing tonight, new evidence that calls into question whether a Trump ally may have misled Congress.

According to a report from ABC News, Robert Mueller has obtained evidence into -- that calls into question congressional testimony given by Trump supporter and Blackwater founder Erik Prince last year when he described a meeting in Seychelles where the Russian financier close to Vladimir Putin had a casual chance encounter over a beer.

Documents reportedly obtained by Robert Mueller suggest that Erik Prince met before and after that Seychelles meeting with George Nader, an adviser to the United Arab Emirates who visited White House -- the White House frequently in the early months of the Trump administration.

Well, George Nader apparently shared information with Erik Prince about that Russian financier during several encounters, and those sources are telling that to ABC News.

Now, that appears to be inconsistent with Erik Prince`s sworn testimony before a House investigative panel that the Seychelles meeting happened by chance.

And Robert Mueller`s office has released a trove of documents related to its case against former Trump campaign chairman Paul Manafort. The documents contain seven search warrants.

One of the warrants for data from five AT&T phone numbers was just obtained last month on March 9th, two weeks after Mueller issued his second indictment against Manafort, suggesting that Mueller`s team might still be investigating new lines of inquiry against Manafort.

The timing of the warrant is also significant in that it was issued a week after former Manafort partner Rick Gates accepted a plea deal with Mueller`s team.

All right. Joining us now are Jill Wine-Banks, former assistant Watergate special prosecutor and MSNBC contributor.

Joyce Vance is a former federal prosecutor and professor at the University of Alabama law school. She is also an MSNBC contributor.

And David Corn is the Washington bureau chief for "Mother Jones" and co- author of the new book, "Russian Roulette: The Inside Story of Putin`s War on America and the Election of Donald Trump. He is an MSNBC political analyst.

Welcome to all of you.

Jill, let me start with you. The idea that the President is getting ready to sit down with Donald Trump, as early in the planning stages as that may be, first of all, would that be Donald Trump and his team`s decision? And if so, what does that tell you?

JILL WINE-BANKS, FORMER ASSISTANT WATERGATE SPECIAL PROSECUTOR: Well, first of all, I think it`s interesting that they`re saying it`s in its infancy in preparation and that it`s short and informal, which is exactly what you would expect from a president who doesn`t read and doesn`t have a very big attention span. So it would have to be short in order for him to pay attention.

And, no, it isn`t his choice because if Mueller wants to get his testimony, all he has to do is issue a subpoena, and then he can ask anything he wants. The President would have to then invoke a Fifth Amendment privilege, which he would keep with him.

He does not have any other privilege that he could use to avoid answering questions particularly those that involve his conducting anything that has to do with a crime. There is no protection for that.

VELSHI: Joyce, let`s talk a little bit about this. In January, Donald Trump told reporters -- and he`s told them since -- that he would be looking forward to sitting down for an interview with Robert Mueller. Let`s listen to what he said.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Are you going to talk to Mueller?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I`m looking forward to it, actually.

UNIDENTIFIED FEMALE: You want to --

UNIDENTIFIED FEMALE: Do you have a date --

UNIDENTIFIED FEMALE: Is that --

UNIDENTIFIED FEMALE: Do you have a date set, Mr. President?

TRUMP: Just so -- just so you understand, there`s been no collusion whatsoever, there`s no obstruction whatsoever, and I`m looking forward to it.

(END VIDEO CLIP)

VELSHI: Joyce, we`re about a day out from Donald Trump saying something on an airplane that made Stormy Daniels lawyer very happy. Donald Trump, if he is going to talk to Robert Mueller, may not want to be telling reporters what he`s got in mind.

JOYCE VANCE, FORMER UNITED STATES ATTORNEY FOR THE NORTHERN DISTRICT OF ALABAMA: It seems like the worst possible strategy for someone in his position.

It`s interesting that we learned this week that the President has been told -- or alleges that he`s been told through sources that he is a subject of the investigation, not a target. One of the implications of learning that is that it makes it a little bit easier, as Jill points out, for Mueller to subpoena President Trump.

DOJ has a longstanding policy of very sparingly subpoenaing targets to the grand jury, but that prohibition doesn`t really apply to subjects. And once he`s in front of the grand jury, his team has no control over what he`s asked.

He can`t take a lawyer into the grand jury with him. He has to answer the questions. Unless he asserts a Fifth Amendment privilege and says, in essence, I can`t answer this question because if I answer it, I`ll be incriminating myself as a criminal.

So this is a real problem for him, but he has foreclosed the option of not testifying, saying that he is willing to go. And we know that Mueller can enforce that, one way or the other.

VELSHI: David, let`s talk a little bit about Erik Prince, the Blackwater founder, the brother of Education Secretary Betsy DeVos, who spoke with great bluster about this meeting in the Seychelles that is now being investigated, reportedly, in greater detail.

Let me tell you what he told Stephanie Ruhle -- let`s listen to what he told Stephanie Ruhle and me right after talking to the congressional committee.

(BEGIN VIDEO CLIP)

STEPHANIE RUHLE, MSNBC HOST: So you were in the Seychelles. Why should you meet that Russian guy? What was the reason to meet him?

ERIK PRINCE, FOUNDER, BLACKWATER USA: The Emirati guys said it`s someone they`ve done business with before, and it would be an interesting guy for you to know. Because we were both involved in the commodities and energy space. So I had a beer with him. I don`t know if he had a beer. He probably had vodka, but --

RUHLE: And in that meeting --

PRINCE: And after that, I had no contact with him or any of his colleagues at all.

VELSHI: Did you know that he was --

PRINCE: So really, it`s --

VELSHI: -- an associate of President Putin`s when you met him?

PRINCE: He was described to me as a Russian hedge fund manager.

(END VIDEO CLIP)

VELSHI: Let`s play this out, David.

DAVID CORN, WASHINGTON BUREAU CHIEF, MOTHER JONES: Yes.

VELSHI: A Russian hedge fund manager. He goes to the Seychelles and casually meets for a drink with a Russian hedge fund manager who was introduced to him by that Emirati guy who turns out to be George Nader. What do you make of this?

CORN: Well, you know, he also gave testimony to the House Intelligence Committee that was -- you know, the transcripts were provided to the public. And if you read those, he seems even more arrogant and casual about this than he did in his interview with you guys.

You know, no big deal. I was just there. He was -- you know, he doesn`t mention that this guy, George Nader, who is an associate, it seems, of everybody, from the Russians, the people running the UAE, United Arab Emirates, and of course, you know, people related to the Trump campaign.

So really, you know, if the stories are true that Robert Mueller has testimony from George Nader that he set up this meeting purposefully to create a back channel between the Trump transition at the time and the Russians.

Erik Prince is in a lot of hot water. It indicates or gives a strong indication that he lied or didn`t tell the truth when he was talking to Congress. And whether you do that under oath or not, as you know, that`s a crime.

VELSHI: Yes.

CORN: So, I mean, I think this is, you know, a very, very significant issue and speaks to the idea of collusion. At least, collusion during the transition.

VELSHI: Right. Joyce, we`re starting to see a picture here, right? We`ve got -- as David Corn says, we`ve got this George Nader who Erik Prince refers to as that Emirati guy, who seems to be like Waldo -- everybody -- he is all over the place. He keeps popping up with connections to all sorts of people.

We`ve got Erik Prince who has a lot of connections to Trump and has been trying to do business with the Trump administration. He wanted to take over the war in Afghanistan.

And it looks like these two guys maybe didn`t casually and accidentally meet, a Russian and American, in Seychelles. Put this together for me.

VANCE: You know, there have been an awful lot of forgotten meetings with Russians or meetings with Russians that weren`t very important among people in the Trump camp. I`m sure Mueller has noticed that.

And now, he has a very interesting hook for learning more about those meetings because we have Erik Prince who, by all appearances, is on the hook for perjury. That`s the sort of thing where Mueller may be able to approach him and flip him.

That would mean, give him sort of a plea bargain where he would get better treatment in terms of sentencing than he would get if he were simply to go to trial or be prosecuted for this crime of perjury. And perhaps Mueller will then be able to use Prince to explain all of these unexplained and forgotten meetings held by so many people in the Trump camp with Russians throughout the campaign.

VELSHI: Jill, let`s talk about Oleg Deripaska, one of the Russians who was sanctioned. He is somebody who has ties to Paul Manafort. This has been established. He is the one who was paying Paul Manafort for lobbying work on behalf of the Russian government and some say, perhaps getting some access to the Trump campaign as a result.

What do you think about this new development?

WINE-BANKS: I think it`s very interesting. But I`d also like to add to the comments about Erik Prince because --

VELSHI: That`d be cool.

WINE-BANKS: -- anybody who ever believed that that was a casual meeting in the Seychelles, I would like to offer them, as a very investment, the 666 Building that the Kushners now have.

(LAUGHTER)

WINE-BANKS: Because it was never believable. That was ridiculous.

And Deripaska is another contact to Russia. It is another thing that is -- Manafort and Gates are clearly involved with, and they were very much involved in the Trump campaign. So that we`re looking at not just obstruction, we`re looking at collusion. And I think that the evidence is growing on both of those cases.

VELSHI: Joyce, I want to ask you about this. Randall Eliason who teaches white-collar criminal law at George Washington University writes about the Rosenstein memo this week authorizing Robert Mueller to look into Manafort`s business dealings. Obviously, Manafort is the connection to Deripaska here.

It says, the memo specifically authorizes a focus on collusion by the former campaign chairman himself. The investigation of Russian ties within the campaign, clearly, is not limited to more fringe players such as George Papadopoulos or the ever-surprising Carter Page. The Rosenstein memo means the FBI had a basis to suspect Russian collusion involving the very highest levels of the Trump campaign.

The reason I ask you this, Joyce, is because this gets interesting. When people look at the indictment against Paul Manafort, a lot of people will say, hey, it`s a lot of money laundering, not disclosing business interests, maybe tax evasion, but it doesn`t actually look like collusion.

Now, the pieces are starting to fall into place that Paul Manafort, Oleg Deripaska, and a lot of money changing hands.

VANCE: It looks like Mueller has been circling the whole time, bringing in various players and pieces of this investigation but never losing sight of the fact that what he`s really investigating is whether or not there was Russian interference in the U.S. election. And if so, whether there were people in the Trump campaign who were involved.

It begins to look, increasingly, like there are players who are very close to the President himself, who had relationships with people in Russia, who were enmeshed with them for business or other purposes.

There are all sorts of allegations from the NRA receiving Russian money to Russian oligarchs who were funneling money in the campaigns using straw contributors, people in -- who are American citizens to whom they funneled money.

So it`s very interesting to watch this all come to the middle with Manafort who, increasingly, now there is evidence that he was directly involved with oligarchs. That he was involved in the creation of back channels, that he was present when meetings were held with Russians.

And at the end of the day, these complaints that we`ve heard so far from many people that Mueller is well beyond his jurisdiction are going to be put to rest.

VELSHI: Right.

VANCE: We look at that memo that Rod Rosenstein wrote. And as Paul Fishman, the former U.S. attorney in New Jersey, pointed out yesterday, there are two little sentences that follow the grant of jurisdiction from Rosenstein to Mueller as regards Manafort.

And the second one ends with a semicolon, and then the rest of that memo is blacked out. So there`s more about Manafort than what we actually know at this moment that Mueller has been given authority to investigate.

VELSHI: Joyce Vance, thank you for your analysis tonight as always. David and Jill, stick around.

Coming up, first, Michelle Obama gave the nation this advice.

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, FORMER FIRST LADY OF THE UNITED STATES: When they go low, we go high.

(APPLAUSE)

(END VIDEO CLIP)

VELSHI: Now, she`s back telling us what she thinks about the current state of the nation. But, first, we`re on Pruitt watch tonight after even more calls for his firing, including one call from a top West Wing official. But the President himself is viewing Pruitt as the victim here as scandals pile up against him. That`s next.

(COMMERCIAL BREAK)

VELSHI: Sixty-four House Democrats want the President to show Environmental Protection Agency Administrator Scott Pruitt the door.

In a letter to the President, the Democrats wrote, Scott Pruitt`s unethical behavior, wasteful use of taxpayer money, and his efforts to undermine the EPA`s core mission to protect our environment and public health demand an appropriate response -- his resignation or his firing.

Hasn`t happened yet. It`s a Friday night. "The New York Times" and "Wall Street Journal" report that White House Chief of Staff John Kelly is also calling for the President to fire Pruitt.

"The New York Times" reports, Kelly told President Trump last week that Scott Pruitt needed to go in the wake of damaging allegations about ethical infractions and spending irregularities.

Tonight, "The Hill" is reporting House Oversight Committee Chairman Trey Gowdy has begun probing Pruitt`s $50 a night housing arrangement.

Yet according to "The Wall Street Journal," the President is not ready to fire him. Mr. Trump welcomes the deregulatory measures taken by Mr. Pruitt and also values him as a strong advocate for the President`s agenda.

This morning, Trump tweeted, Pruitt is doing a great job but is totally under siege. Today, the President met with Pruitt to discuss rolling back fuel efficiency standards imposed under President Obama.

The Associated Press reports during that meeting, Pruitt also laid out his case for why he should remain in his post.

Joining us now is Neera Tanden, president of the Center for American Progress.

Jill Wine-Banks and David Corn are also back with us.

Neera, not only did he get a $50 a night room in D.C., which is a great bargain because, normally, you get bed bugs for $50 a night.

(LAUGHTER)

VELSHI: Not only did he tell Ed Henry from Fox that the people from whom he was renting that apartment had no business before the EPA, which was an entire lie. But it turns out he was stiffing the landlord too. They had to get rid of him because he wasn`t paying his bills. There`s just nothing about this story that makes sense.

NEERA TANDEN, PRESIDENT AND CEO, CENTER FOR AMERICAN PROGRESS: The only thing that makes sense about this story is that Scott Pruitt and the entire Trump administration culture of corruption is -- emanates from the top.

Why is Donald Trump not going to get rid of Scott Pruitt? Because Scott Pruitt is role-modelling behavior of Donald Trump himself who has looked at the presidency as a way to, you know, profit himself, his hotels, his business.

Basically, you have -- basically, we have an entire administration which looks at feeding at the public trough as an opportunity instead of serving the public. That starts with -- not with Pruitt but with the President himself.

And I think the other reason why no one`s going to get rid of this guy -- I do not believe he will be gotten rid of -- is because the people who backed the President, the Mercers, the Koch brothers, they -- Scott Pruitt is their favorite, favorite cabinet secretary. He does the bidding for the oil and gas industry against the public every day.

VELSHI: So here is my question, Jill. He is doing the bidding for the oil industry. He`s been doing that for a long time. He`s from Oklahoma. He`s in tight with the oil and gas industry.

But, you know, if deregulation is the goal, Mick Mulvaney is doing it over at CFPB. And Ryan Zinke is doing it over at Interior. Wouldn`t you want to just do it -- there are lots of people who do it and not get all this attention?

Scott Pruitt is drawing attention. He already has enemies because he is deregulating the EPA, which a lot of Americans believe protects the Americans from the excesses of corporate America who would pollute our air and our rivers if they could. Why make all this noise about it?

WINE-BANKS: I think the real reason is because Donald Trump can`t afford to have another cabinet secretary undergoing a confirmation hearing now. He already has so many because he`s had to fire so many of his people.

So for the man who is going to bring us the best, he hasn`t. He has created a deeper swamp than we`ve ever had, we need to sweep it clean. And that can be the only reason, but I think Neera was absolutely -- you couldn`t have said it better because it is true. The role model is at the top, and that`s what`s happened.

He -- at the top, Donald Trump doesn`t believe that there`s any ethics that apply to him. And so it`s OK if these people cheat the taxpayers and kill the environment and deregulate to the point where all of us are going to suffer. Science has gone out the window at EPA. And animals are in danger, people are in danger, we need to stop this.

VELSHI: David, I want to just read you the tweet that Donald Trump put out about Scott Pruitt today.

CORN: Yes.

VELSHI: It says, do you believe that the fake news media is pushing hard on a story that I`m going to replace A.G. Jeff Sessions with EPA Chief Scott Pruitt who is doing a great job but is totally under siege? Do people really believe this stuff? So much of the media is dishonest and corrupt.

You can sort of replace some of those names and words with anything, including about the Russia investigation. What is this tweet, this defense of Scott Pruitt, which he also made while getting on to Air Force One yesterday? What does this tell you about Donald Trump`s position and Scott Pruitt`s future?

CORN: I think it tells you that he would not fire Scott Pruitt today.

(LAUGHTER)

CORN: You know, I can tell you, I run a newsroom with one --

VELSHI: All right. What time is it here?

CORN: Yes, yes.

VELSHI: It`s still -- wait, we got three more hours on the West Coast.

(LAUGHTER)

CORN: I`m going out -- I know I`m going out on a limb here, Ali, but, you know, I run a newsroom with 20 people. We came in this morning. What`s going to be the big news of the day? Is it going to be Scott Pruitt?

We saw that tweet and go, great, at least we`re clear into Saturday, Sunday, maybe even to Monday.

I mean, Donald -- you know, the worst thing -- as a Trump cabinet member, the worst thing that he can say about you is that he has full confidence in you because that lasts about, you know, a week or so. We can do an average at this point.

So I don`t think Scott Pruitt is secure and not because Donald -- you know, he is not doing what Donald Trump wants him to do, or he`s acting in an unethical manner. I think Donald Trump, at some point, doesn`t like him when there`s more noise coming from another part of the government than from the White House.

And he has indicated with Tom Price. It looks like Ben Carson just sort of hung on by the skin of his teeth here, but that -- you know, he doesn`t like the mess outside the mess he causes. He gets jealous of other messes.

So I think, you know, if I was Scott Pruitt, I would -- you know, I won`t try to sign a long-term lease, even at $50 a night.

(LAUGHTER)

TANDEN: No one will let him. No one will let him. They`ll point him out.

VELSHI: Neera, let me tell you about this --

CORN: Yes. His credit rating wouldn`t allow for that.

VELSHI: Yes, I got -- well, he did get a -- you know, I will tell you, the couple -- the lobbyist was Steve Hart. The couple, Vicki and Steve Hart, according to POLITICO, became so frustrated by their lingering tenant that they eventually pushed him out and changed their lock.

TANDEN: Changed the lock.

VELSHI: Changing your lock to the Administrator of EPA.

CORN: On a cabinet member. On a cabinet member.

VELSHI: Yes, that`s kind of weird.

TANDEN: Because they were lobbying.

VELSHI: Let me ask you about this, Neera. Reuters is reporting that Pruitt held 25 times more meetings with industry representatives than with environmental advocates during his first seven months in office.

According to a Reuters analysis of his schedule, Pruitt met with representatives of the industries the EPA regulates at least 105 times from February 22nd to August 10th of last year, making up 77 percent of his total meetings during that period.

OK. So separate and apart from -- I actually care less about Pruitt`s spending habits. It`s bad but I`m a little more worried about the fact that a lot of Americans, myself included, hold the EPA dear.

Amongst Republican administrations and Democratic administrations, the head of the EPA has been someone who at least sort of side glances a hug to the environment.

TANDEN: Yes.

VELSHI: Scott Pruitt doesn`t seem to care. He doesn`t believe in climate change. He has said that the science is not clear on this. That`s not typically a position held by the person who holds that office.

TANDEN: Absolutely. He knew -- this is actually, I think, one of the key issues here. Donald Trump has had many incompetent cabinet secretaries. He`s had many corrupt cabinet secretaries.

The issue with Scott Pruitt is he is an enemy of this agency. He hates the mission of this agency, which is to protect the environment. And he is very smart about his tactics. He is rooting out climate scientists.

This agency is a shell of what it was. Obviously, we`ve heard stories in the news recently about people who opposed his spending habits. The people -- you know, people who believe in climate are being pushed out of this agency.

And that`s why I said earlier that donor class to Donald Trump, his strongest backers are the group that loves Scott Pruitt the most because they are rolling back regulation after regulation that has protected people but has some -- you know, cost a dollar or two or some money to the oil and gas industry.

Scott Pruitt was well known for this in Oklahoma, and he`s bringing those tactics effectively. He`s lost and poor to us (ph), but he has been smart about destroying, his effort to truly destroy this agency that was actually created by a Republican president.

VELSHI: Yes, the legacy of the EPA may be a bigger concern than Scott Pruitt`s spending habits in the end.

David Corn and Jill Wine-Banks, thanks for joining us tonight.

Neera, stay with us.

CORN: Sure thing.

VELSHI: Up next, how Trump`s penchant for bluffing is bringing us closer and closer to a trade war.

And coming up, Michelle Obama speaks freely about this moment in the Trump presidency.

(COMMERCIAL BREAK)

VELSHI: Today, Axios wrote, Trump governs by bluffing. He has lived his whole life promising big things and creating on the edge "Apprentice" style drama then changing his mind. The word Trump uses all the time, privately and sometimes publicly, is flexible. Everything is up for negotiation. Everything is zero-sum.

And the latest zero-sum game for Donald Trump is bringing the United States to the brink of a trade war, but the stock market doesn`t think he`s bluffing.

The Dow Jones industrial average fell more than 760 points at one point on fears of that very trade war. It was down 2.3 percent at the closing bell -- 2.3 percent. If you make six or seven percent in a year on the market, you`ve had a good year. To lose 2.3 percent in a day is a thing.

China threatened, quote, fierce counter strikes in response to the Trump tariff. Meanwhile, Donald Trump and his advisers are all saying completely different things about a potential trade war with China.

(BEGIN VIDEO CLIP)

TRUMP: Well, fellas, we`ve already lost the trade war. We don`t have a trade war. We`ve lost the trade war.

LARRY KUDLOW, ECONOMIC ADVISOR TO PRESIDENT DONALD TRUMP: We`re not running a trade war. So nothing has happened.

STEVEN MNUCHIN, SECRETARY OF THE TREASURY: There is the potential of a trade war. And let me just be clear, it`s not a trade war.

TRUMP: I`m not saying they won`t be a little pain.

KUDLOW: I don`t want to talk pain.

TRUMP: But the market`s gone up 40 percent, 42 percent, so we might lose a little bit of it.

KUDLOW: I don`t want to disrupt the economy. The President doesn`t want to disrupt the economy. We did not disrupt the economy.

TRUMP: We may take a hit, and you know what, ultimately, we`re going to be much stronger for it. But it`s something we had to do. And ultimately, if you take a look, it`s not only trade with China. It`s everybody.

KUDLOW: Don`t blame Japan. Don`t blame Europe. Blame China.

(END VIDEO CLIP)

VELSHI: Truly, we didn`t make that up. Joining me is John Harwood, the editor-at-large for CNBC.

John, good to see you, my friend. You and I talk business a lot, but this is -- there are some politics to talk here. President Trump said we`ve lost the trade war. Larry Kudlow says there`s no trade war. Steve Mnuchin says there`s potential for a trade war.

President Trump has said it`s easy to win a trade war. It`s just -- it doesn`t make sense, if you`re going to any sort of war, to have your generals not have the same message that you have.

JOHN HARWOOD, CNBC CHIEF WASHINGTON CORRESPONDENT: Well, to some extent, the conflicts that you just described reflect the conflict within the Republican Party -- the pro-business wing, the Wall Street wing, the wing that Paul Ryan, the House Speaker, subscribes to.

They don`t want tariffs. They don`t want the chaos of tariffs. They don`t want to see the market going down.

But some elements of Trump`s White working class base thrill to the idea of a fight with China, a fight with other countries over trade, and Donald Trump is speaking to that particular visceral instinct.

The question is, how does it net out politically in the campaign?

And I was kind of surprised today to talk to some Republicans and some outside analysts who say, well, this tariff issue is not such a bad one because it`s going to rouse some elements of the Trump base. We saw him invoking it yesterday in West Virginia when he was going after Joe Manchin, the Democratic senator he`s trying to knock.

And when I talk to David Wasserman of the "Cook Political Report," who`s a nonpartisan analyst of House races. He said tariffs are not a bad subject for Republicans if it gets them off of their tax cut. Because that tax cut is so unpopular, it`s better to focus on other things, so --

VELSHI: Yes. The problem with this one is it may have a very direct result in higher prices on a lot of goods. The degree to which we are all enamored of Chinese products is something that maybe we don`t all realize.

HARWOOD: No question about it. And that gets to the issue that you brought up at the beginning. Is this just sound and fury, just a bluff to make noise and then he`ll back off?

Remember what he did on the steel and aluminum tariffs. He announced those with big fanfare. They said there would be no exceptions. There were objections. Then the exceptions were carved out for U.S. allies, and you have a much less stringent policy than they advertised.

Is he going to announce that he is fighting with China? And then sort of slink out of the ring and not actually impose those kind of tariffs. That would be the difference. That kind of approach would be the difference between noise without consequence.

VELSHI: Yes.

HARWOOD: If we get the consequences, then we`re going to find out in farm states that hurt from exports and from consumers everywhere else who, based on your prices, we`re going to see whether they blame that on Trump or sort themselves out politically given their, you know, pre-existing alignments.

VELSHI: Well, from the farm state of Nebraska, Republican Senator Ben Sasse said this about the Trump tariffs today.

He said, if he`s even half-serious, this is nuts. The President has no actual plan to win right now. He`s threatening to light American agriculture on fire. This is the dumbest possible way to do this.

We`ve heard this from Nebraska. We`ve heard it from Iowa. We`ve heard it from Kansas. We`ve heard it from Illinois.

We sell a lot of soybeans to China. We`re one of the biggest providers of soybeans in the world. China`s one of the biggest buyers. So these farmers want to know that if we`re going to get into this fight, there is something for them that they can look to as a win, and it`ll be worth it.

HARWOOD: Right. Well, if we get into this fight, it`s not going to be worth it for them until a lot of financial blood has been shed. So this is a difficult situation.

Remember, there was a strategy on the table when President Trump took office of dealing with China and trying to put pressure on China. That was the Trans-Pacific Partnership that was negotiated by President Obama, even --

VELSHI: A deal with 11 other countries that would have created a trading arrangement.

HARWOOD: Which excluded China.

VELSHI: Without China.

HARWOOD: Exactly. And it was designed to put pressure on them. President Trump withdrew from that.

Now, the Trans-Pacific Partnership also had new terms for NAFTA. The modernization of NAFTA was imbedded within that deal. That was also thrown overboard.

Now, the President, separately, is trying to go renegotiate NAFTA with Canada and Mexico. There is no sign that those negotiations are getting closer to resolution. And so the President says, if we don`t get a new deal, I`m going to pull out of NAFTA.

If that happens, he pulls out of NAFTA and goes to trade war against China, you can have serious economic consequences throughout the American economy and a significantly higher risk of recession in 2019 as he`s preparing to run for re-election.

VELSHI: John, good to talk to you as always.

HARWOOD: You bet.

VELSHI: John Harwood joining us tonight.

Coming up, Michelle Obama tells us what she does now that she`s on the sidelines observing the current political climate.

(BEGIN VIDEO CLIP)

OBAMA: Well, take a deep sigh.

(LAUGHTER)

(END VIDEO CLIP)

VELSHI: More from the former first lady up next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: There has never been a presidency that`s done so much in such a short period of time.

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VELSHI: Well, there`s certainly something Donald Trump can take credit for, and that is spurring political activism. Among the resistance for sure but even among those who support him.

From the first Women`s March the day after Trump`s inauguration, reported to be the largest single-day protest in American history to the Parkland students` March for our Lives last month in Washington, D.C. and across the country to the teacher walkout that continued tonight in Oklahoma.

Today`s "Washington Post" sums it up -- "Rallying Nation. In reaction to Trump, millions of Americans are joining protests and getting political."

The sheer size of these protests and the fact that they have maintained their intensity after more than a year of the Trump presidency have political analysts musing about waves. And even Mitch McConnell admitted this week that Republicans could be facing a Category 5 storm in the midterms.

Today, the "Cook Political Report" shifted the ratings of 13 congressional races all to the left. But we now have some numbers to explain who is in these pictures and why they are there.

"The Washington Post" and the Kaiser Family Foundation have conducted what they say is, quote, the most extensive study of rallygoers and protesters in more than a decade, one of the first attempts to quantify how many Americans are motivated by Trump to join these increasingly frequent political events.

Here`s what they found. A stunning 20 percent of Americans say they participated in a political rally or protest in the last two years.

The issues that motivated them to rally were women`s rights and the environment, closely followed by LGBT rights, the Affordable Care Act, abortion, and police shootings.

Forty percent of them say they`re Democrats, 36 are independent, 20 percent are Republican. Seventy percent of them disapprove of President Trump. Eighty-three percent of them say they are certain to vote in November.

Former first lady Michelle Obama shared her thoughts about the current political moment yesterday at the Simmons Leadership Conference in Boston.

(BEGIN VIDEO CLIP)

OBAMA: There are times in history when we feel like we`re going backward, but that`s part of the growth. You know, you take two steps forward and one step backward, but you`re constantly moving forward. And that`s a hard thing for people to understand.

HELEN DRINAN, PRESIDENT, SIMMONS COLLEGE: Yes.

OBAMA: Especially when they think or know that they`re right about many issues. But that`s how things go. And I think we`re at a point in time where we have to figure out who we want to be as a nation.

And we`ve had two stark examples of what we can be. I certainly know what direction I want the country to go in. We`ve got to fight for that vision. It just doesn`t happen. And we can`t take it for granted.

And I think a lot of what we`re seeing is what happens when we take things for granted, when we think that everything`s OK. And I always sort of felt like the eight years that Barack was president, it was sort of like having the good parent at home.

(LAUGHTER)

OBAMA: You know, the responsible parent, the one that told you to eat your carrots and go to bed on time. And now perhaps we have the other parent in the house.

(LAUGHTER)

OBAMA: And we thought it`d feel fun. Maybe it feels fun to some for now because we can eat candy all day and, you know, stay up late, and not follow the rules and you know -- and we`re going to sort of, at a point in time, be able to look at those two experiences and see how we feel.

DRINAN: Yes, yes.

OBAMA: And I think it`s going to take young people, the next generation of leaders, to really determine what kind of world they want to be in. And voting has got to be a part of that equation.

(END VIDEO CLIP)

VELSHI: Well, will Americans listen to Michelle Obama`s advice and turn out for the 2018 midterm elections? That`s up next.

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SARAH CHADWICK, STUDENT, MARJORY STONEMAN DOUGLAS HIGH SCHOOL: And to the politicians that believe that their right to own a gun comes before our lives, get ready to get voted out by us.

(END VIDEO CLIP)

VELSHI: Joining me now is Lena Taylor. She`s a state senator for Wisconsin`s fourth district, representing part of the great city of Milwaukee.

And Neera Tanden is back with us.

Lena, good to have you with us. Thank you for being here. You`re in a state that is purple, that Donald Trump risks losing the next time around.

What are you seeing in Wisconsin in terms of groundswell movements and protesters and people who have decided that they are not going to sit by the sidelines as Donald Trump leads this country?

SEN. LENA TAYLOR (D-WI), MEMBER, WISCONSIN STATE SENATE: Well, the first I`d like to say is, I like to say that we`re a blue state with red polka dots.

(LAUGHTER)

TAYLOR: But I will say, in the last election, that it`s very clear -- that we had just on Tuesday, that there is, as the Governor tweeted, a potential blue wave that will come.

I know that Justice Dallet was able to flip several districts, several counties, that had gone for Trump. She flipped those and those districts went to her.

In all areas of the state, the west, the north, the southeast -- only one flipped in the southeast. As well as there have been many rallies around the issues of the Women`s March in Madison, in Milwaukee. And so there really has been a huge movement.

And then the youth. They even marched to Paul Ryan`s district to tell him that they need to do something about gun control, in particular, saying that universal backgrounds should be, you know, done. And they said they are not going to take no for an answer, and they`re going to be involved not only in marching but in registering people to vote and going to vote.

And that really is what`s most important, people must vote.

VELSHI: Neera, a couple of weeks ago, I was out there on the mall in Washington for the March for our Lives.

And I will say, a lot of the groups that we`ve talked about in the causes for which people march are people who`ve had some experience or at least they`ve known other people or they`d been part of a constituent group that has marched.

The March for our Lives introduced yet another constituency into politics, a constituency, in many cases, too young to vote or not yet able to vote. That tells me that this is multigenerational.

TANDEN: Absolutely.

TAYLOR: It definitely is multigenerational.

TANDEN: Yes. I guess, I would just say --

TAYLOR: I`m sorry.

TANDEN: Yes, I know. I`d just say that there are so many dark spots to the current moment. The one silver lining is that, in the United States, Donald Trump has at least created a counter response, a large-scale resistance that started with women but is moving across the country.

It`s reaching millennials. It`s reaching out to college students. As that -- as the polls show, that you indicated, we`re seeing people who`ve never been in politics take political action, and 83 percent of them will vote.

And more importantly, if they stay engaged in politics in the future, they will transform this country, not in 2018 or 2020 or not just in those two times, but for decades to come. Just as the generation of civil rights activists and activists against the Vietnam War changed the country as well. And so that is the one thing I am incredibly optimistic about in these special elections.

You`re seeing Democratic turnout much higher than Republican turnout. That happened in the Wisconsin Supreme Court Justice race. That happened in Conor Lamb, in Northam`s race in Alabama. Just Democrats are just voting at higher levels than Republicans.

VELSHI: Lena, I remember back to the day when public service workers were staging protests in the Wisconsin State House.

Back then, that was a big deal. We covered it for days and days and days. But here, we -- "The Washington Post"/Kaiser Family Foundation poll indicated that 40 percent of adults polled had contacted their officials, their elected officials, in the last two years.

So there`s a sense of citizen responsibility here, a sense of movement amongst people who are not the most active. But the idea that they`ll just call or e-mail or let their elected officials know what they think, that alone is a development for America where our voter turnouts are not all that great.

TAYLOR: That is very true. As a matter of fact, if nothing else, you can say that the 45th President has inspired individuals who normally have not been engaged in politics to be in politics. And I even see individuals from, you know, senators like Pat Spearman in Vegas that is running for Congress to citizens like Kim Hill-Knot who is running for Congress.

You have all types of individuals who normally had not been engaged to people who have been engaged who are not only running for office. They are engaging in talking to their elected official. Young people are engaged. People that I had not heard from are asking to volunteer and to be involved.

And now, it`s also showing that people are doing it by going to vote. So if we can keep that momentum, I really believe, if nothing else, the 45th President has truly encouraged people to be engaged, to be the change that they want to see.

VELSHI: Well, we talk about being the change that you want to see. We talk about Michelle Obama`s admonition that people should get involved. Neera, do you see the Obama`s getting more involved?

TANDEN: I hope so. I think, you know, they are uniquely inspiring not just to Democrats but to the whole country. And I think the contrast between the demeanor and adulthood, I think Michelle Obama would call it, of President Obama and what we`re experiencing every day with Donald Trump is really important.

I appreciate President Obama`s interest in not being in the news every day and not being the foil for Donald Trump, but I think you`ll see -- as he did for Ralph Northam and in other races, I think you`ll see more in the summer and the fall of him campaigning for Democrats.

I think the Obamas recognize that the 2018 election is the most important midterm we`ve ever been through. Every day, we know Republicans will not hold this president accountable. If we care about accountability, rule of law, democracy, we need people to vote on Election Day. And the President and Mrs. Obama can both inspire that kind of action.

VELSHI: Neera Tanden is the president of the Center for American Progress. Lena Taylor, Wisconsin State senator. Thanks to both of you for joining us tonight.

Tonight`s last word is up next.

(COMMERCIAL BREAK)

VELSHI: Time for tonight`s last word.

(BEGIN VIDEO CLIP)

SETH MEYERS, HOST, "LATE NIGHT WITH SETH MEYERS": According to "The Washington Post," advisers are concerned that Special Counsel Robert Mueller told President Trump`s lawyers he is only a subject of the Russia investigation to bait Trump into an interview that could put him in legal trouble. And apparently, it`s not the first time they`ve tried to bait hi him.

(LAUGHTER)

JIMMY KIMMEL, HOST AND EXECUTIVE PRODUCER, "JIMMY KIMMEL LIVE!": Trump has been trading tariffs with China this week. We`re getting closer to a trade war.

Today, he proposed an additional $100 billion of tariffs on Chinese goods, which just about everyone on both sides thinks is a terrible idea.

So yesterday, he defended his plan by highlighting our trade deficit with the Chinese. He tweeted, when you`re already $500 billion down, you can`t lose. Which, by the way, is the Trump company motto.

(LAUGHTER)

KIMMEL: That`s not open casino (ph).

(END VIDEO CLIP)

VELSHI: And that is tonight`s last word.

Up next, President Trump`s trade ideas are getting slammed by a lot of Republicans. One of Mitt Romney`s policy advisers reacts next on the "11TH HOUR WITH BRIAN WILLIAMS," which starts now.

END