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ROBERT COSTA: President Trump rattles global markets after threatening China with

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billions in new tariffs. I'm Robert Costa. U.S. troops head to the border and the

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embattled EPA chief fights to keep his job, tonight on Washington Week. Trade war.

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PRESIDENT DONALD TRUMP: (From video.) You have to go after the people that aren't

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treating you right.

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ROBERT COSTA: President Trump calls for an additional 100 billion (dollars) in tariffs

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on Chinese goods, escalating the dispute between the world's two largest economies. Plus -

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EPA ADMINISTRATOR SCOTT PRUITT: (From video.) This president has shown tremendous

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courage to say to the American people that America is going to be put first.

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ROBERT COSTA: Will EPA Administrator Scott Pruitt's unwavering support for the president

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help him weather a storm of ethics controversies?

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ED HENRY (Fox News): (From video.) Are you embarrassed?

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ROBERT COSTA: Questions keep mounting about his housing arrangement, first-class travel,

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and staff management. And President Trump returns to his campaign pledge to crack

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down on undocumented immigrants.

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PRESIDENT DONALD TRUMP: (From video.) We cannot let people enter our country we have no

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idea who they are, what they do, where they came from.

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ROBERT COSTA: And orders the deployment of National Guard troops to the U.S.-Mexico Border.

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PRESIDENT DONALD TRUMP: (From video.) Until we can have a wall and proper security,

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we're going to be guarding our border with the military. That's a big step.

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ROBERT COSTA: We discuss it all with Kayla Tausche of CNBC, Michael Scherer of The

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Washington Post, Geoff Bennett of NBC News, and Susan Glasser of POLITICO.

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ANNOUNCER: This is Washington Week. Once again, from Washington, moderator Robert Costa.

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ROBERT COSTA: Good evening. Another volatile day on Wall Street after President Trump

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stood by his threat of new tariffs on $100 billion in Chinese imports.

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The stock market, it plunged on these trade fears and a weaker-than-expected jobs report.

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Despite the unrest, Mr. Trump defended his decision during a radio interview on Friday.

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PRESIDENT DONALD TRUMP: (From recording.) We've already lost the trade war. We don't have a

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trade war; we've lost the trade war. But the easiest thing for me to do would be just to

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close my eyes and forget it, and if I did that I'm not doing my job. So I'm not saying

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there won't be a little pain, but the market's gone up 40 percent, 42 percent. So we might

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lose a little bit of it, but we're going to have a much stronger country when we're finished.

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ROBERT COSTA: The standoff comes after China proposed 50 billion (dollars) in tariffs on

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a variety of U.S. goods, including beef, pork, and soybeans and wheat, as well as

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airplanes and cars. Kayla, the administration, in spite of all what happened today

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with the market - we watched it all day, watched your reporting - they're still

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standing by their position. Why?

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KAYLA TAUSCHE: Well, they believe that this is what will bring China to the table.

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The president's Cabinet and his economic advisors have defended the president and said

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he's the first president to actually stand up to China, to do what no one else has.

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But then other people - outside advisors, corporate executives - are saying we don't

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really see how there's an endgame here. We don't see how this gets resolved.

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And you had - you had a couple people - Larry Kudlow, Steve Mnuchin, the Treasury

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secretary - today talking about potential negotiations with China, but saying that

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they're not going on right now, that they refuse to actually say when they are happening,

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what they are talking about, where things stand. And that's something that the markets

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didn't like, because they want this to get resolved behind the scenes.

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They don't want these tariffs to come into effect.

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ROBERT COSTA: That's a good point, Geoff, because when I talk about the administration I should

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probably be careful. The president says one thing, Larry Kudlow, the White House's new economic

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director, he says another thing. Who actually is speaking for the administration? Is it Kudlow with

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this reassurance to the markets that it's not really tariffs yet, or is it the president?

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GEOFF BENNETT: Good question. I mean, there appears to be sort of a good cop/bad cop

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strategy here. I was at the North Lawn of the White House when Larry Kudlow this morning

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was giving interviews to all the big cable networks, just as the markets were opening,

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doing his level best to really - to sort of tamp down fears of a trade war, suggesting

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that these tariffs might not ever take place.

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But I was talking to somebody who's known the president for a while and says that the

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way the president is approaching these negotiations reflect the way he's approached

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negotiations his entire adult life. He talks tough, he starts negotiating from an

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extreme position, he expects the opponent to ultimately give in.

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But in this situation, it's not clear how or whether China will ever give in.

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It's not entirely clear what a win looks like.

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And in Chinese President Xi Jinping you have someone who's effectively president for

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life. So he could continue this rhetorical trade war indefinitely.

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ROBERT COSTA: What to make of China's position here? They called the U.S. arrogant

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today in a statement from the ministry of commerce. They're not pulling any punches.

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SUSAN GLASSER: Well, that's right. I think it's super significant that there are

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not actually any negotiations already underway, first of all. Second of all, the Chinese,

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it seems to me, are playing this pretty savvy when it comes to American politics, right?

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They have tried to - in their response to President Trump's initial round of proposed

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tariffs - they've tried to go into the United States and respond with things that are

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maximizing pressure on Trump from within his own party. The American farm belt, the

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Chinese have, I think smartly calculated, voted overwhelmingly for Donald Trump.

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Their hope and calculation is that the potential pain hitting American food producers,

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hitting the American farmers will cause them to put pressure on Donald Trump.

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You saw that already happening, by the way, with Republican Senator Joni Ernst from

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Iowa. Not known as a big opponent of Donald Trump, coming out yesterday saying: I

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called up the president. I said: This is not a good idea. And I think it's really

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interesting. The Chinese are learning to play American domestic politics.

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ROBERT COSTA: Well, you reported on this, Michael, this week.

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Are the congressional Republicans actually going to push this administration around?

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MICHAEL SCHERER: You know, they're not just going after the farm belt.

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They're microtargeting some of these tariffs on specific congressional districts.

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You look at the middle of Washington state. They make cherries, pears and apples.

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That was on the initial list of tariffs. You look at the central valley, almonds

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big business. You know, the prices are going to be set in a few weeks.

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They went after almonds. Iowa's huge and the whole Midwest - pork, soybeans.

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You know, the politics of this domestically are rather complicated.

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You have Chuck Schumer coming out saying: I actually think this is a good thing.

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We have to stop being pushed around by China. You had Mitt Romney today, you know,

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traditional conservative running for Senate in Utah, say also that he thinks this

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is a good thing as an opening gambit. Everybody's just playing this as a bluff

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though at this point. No one knows who's going to blink.

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The Chinese have two big advantages. One, it's an authoritarian regime.

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They don't have to worry about these political factors, whereas Trump does.

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And, two, they've - Trump has yet to sort of rally the world around his cause.

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The U.S. is sort of acting unilaterally here. And China keeps dressing itself

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in the language of the international order, which is going to make it harder.

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KAYLA TAUSCHE: I think Congress feels a little powerless as well, because last year they

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were able to focus singularly on tax reform, take the president's mind off trade.

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They called a truce on the hardline on trade rhetoric during that time so that they could

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get everyone rallied around that one issue.

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After tax reform got passed, you saw GOP senators and members of the House coming to the

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White House in droves to try to lobby the president not to do exactly what he's doing

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now. And the president sat there, and he listened. And you had people like

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Chuck Grassley, like Joni Ernst, like Pat Roberts of Kansas, saying: Please

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don't do this. This will come back in revenge that is exacted on my

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district, on my state. And the president did it anyway.

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ROBERT COSTA: What's next, though, Kayla? Is it going to be a bilateral

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negotiation between the U.S. and China?

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Or does the World Trade Organization step in and try to mediate?

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KAYLA TAUSCHE: Well, we have a few weeks here. I mean, the Office of the U.S.

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Trade Representative has left an open window here.

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Ambassador Lighthizer has been very careful to say nothing's in effect and won't go in

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effect for at least a couple of months at this point.

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So we're looking at late May that the administration has to either meet with China or

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figure out a way to resolve this through appropriate global trade channels.

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But China has a lot of very powerful tools in its tool chest that it hasn't used yet.

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And so if the U.S. continues talking tough, China won't back down.

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ROBERT COSTA: It's not just talking tough, in a sense. That's part of it, on the

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trade aspect. Politically, though, the president just keeps wanting to go back to

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his campaign pledge.

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GEOFF BENNETT: It's a great point. And I think Kayla makes a great point, that

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we're going to hear the president talk more about trade. I spoke with someone

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who's familiar with the president's thinking in this midterm election year.

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And this person said: Expect to hear the president talk a lot about the tax cuts, of

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course, trade, and immigration - in part, because the omnibus bill that he signed, I

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guess two weeks ago now, was the last big legislative item that this Congress will

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probably pass in this election year.

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And there's no - there's nothing left on the Trump legislative agenda.

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So in many ways, there's this vacuum here and he's filling it with talking about the very

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same things that made him effective as a presidential candidate.

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ROBERT COSTA: There's a lot more filling the vacuum this week.

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We have trade, but we also have more turmoil inside of the administration.

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President Trump said today on Twitter that EPA Administrator Scott Pruitt is doing a,

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quote, "great job but is TOTALLY under siege."

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That statement left Pruitt - embattled by a barrage of reports on potential ethics

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violations over his housing, travel, and security expenses - hanging on to his Cabinet

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post, for now. Pruitt, has been scrutinized daily this week amid a flurry of

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headlines about his conduct, from his $50 a night condo deal from an energy

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lobbyist spouse, to first-class travel, and unrest on the EPA staff.

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As all these stories piled up, Pruitt took to Fox News to defend himself.

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ED HENRY: (From video.) President Trump said he would drain the swamp.

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SCOTT PRUITT: (From video.) I don't -

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ED HENRY: (From video.) Is draining the swamp renting an apartment from the wife of a Washington lobbyist?

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SCOTT PRUITT: (From video.) I don't think that that's even remotely fair to ask that question.

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ED HENRY: (From video.) OK, so why did you then accept $50 a night to rent a condo from

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the wife of a Washington lobbyist?

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SCOTT PRUITT: (From video.) Well, let's talk about that. That is something that,

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again, has been reviewed by ethics officials here. They've said that it's market rate.

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ED HENRY: (From video.) You're renting it from the wife of a lobbyist.

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SCOTT PRUITT: (From video.) Yeah, who has no business before this agency.

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ROBERT COSTA: Pruitt also reportedly bypassed the White House and used an obscure rule

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to secure tens of thousands of dollars in pay raises for two senior advisors, advisors he

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has known for years. And The New York Times reported the he asked a security

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detail - no joke - to flash the lights last year to get through traffic in

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Washington on the way to dinner at Le Diplomate, one of those French

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restaurants on 14th Street. Susan, amid all this, he survives.

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SUSAN GLASSER: Well, that's right. Listen, if anybody would be immune to firing

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somebody because they overly enjoyed the perks of their office, it might be

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Donald Trump. But there's a substantive issue as well.

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Pruitt has a lot of defenders among Donald Trump's conservative supporters.

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He is perceived as really carrying out the ideological agenda of the administration.

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He has been a particular favorite of the right, even predating his tenure in Donald

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Trump's Cabinet. And so I think Trump is reluctant on substantive grounds to fire him.

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He's also - he's got that contrary streak in him. Remember a few weeks ago when

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The Washington Post reported that H.R. McMaster was on his way out.

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Donald Trump was already planning to fire H.R. McMaster at this period of time.

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But he didn't like The Washington Post revealing that before he was ready to do it.

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He still did it, right? He went ahead and dumped him anyways.

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But he didn't want to do it right away.

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So are we looking at a situation where perhaps the coverage of this and the burgeoning

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scandals around Pruitt have just extended his life in the Cabinet by a few additional

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days? Or is it a situation where Trump really just doesn't want to get rid of him?

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Reading the Kremlinology, I actually found it fascinating today, there were not one but

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two stories - one in The New York Times and one in The Wall Street Journal - saying that

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White House Chief of Staff John Kelly had urged President Trump to dump Pruitt.

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And Trump was still resisting. To me, that seemed like really undercutting

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John Kelly. So maybe his is the job that's on the line.

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ROBERT COSTA: Everyone says their job's on the line in this White House

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when you're up at 1600 Penn.

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MICHAEL SCHERER: And very often there are reports of your demise multiple times before

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your demise finally comes. So I don't think Scott Pruitt's quite sleeping well having

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gone through this week. And it's also possible that more stories come out.

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You know, there are a lot of reporters working on stories about Scott Pruitt now because

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there is obviously so much there to dig into. And I don't think we're done with that.

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The other thing, though, the president has to worry about is how do you replace probably

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the most controversial head of an agency, the EPA? He got through with 52 votes when

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he was first in the Senate, when he was first confirmed.

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But you've lost one of those Republican senators. Another Republican senator -

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ROBERT COSTA: Do they even have time? Do they even have time in the Senate?

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MICHAEL SCHERER: Well, that too. And another Republican senator, John McCain, isn't

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voting right now. So they may not be able to confirm somebody, which may be something

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that extends his life as well.

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ROBERT COSTA: Business likes Pruitt. When you talk to people on Wall Street,

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because of all the regulations he's cut away there's not only support among the

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movement conservatives, as Susan was talking about, but the business community.

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KAYLA TAUSCHE: And the president is in touch with executives from the oil and gas

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industry, the mining industry, the companies that are feeling the benefits from the

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deregulatory agenda that Pruitt is leading. The president talks to them a lot.

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He hears that those companies like what's Pruitt - what Pruitt is doing and that's what

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informs his view of Pruitt.

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If you look at the White House's own dashboard on how agencies are doing in deregulating

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their own industries, the EPA is right up there with some of the highest-volume rollbacks

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of any agencies in the government, and that's something that, you know, you hear the

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administration talking about quite often. But the White House said they're investigating

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this and there could be a situation where whatever they find could be impermissible.

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ROBERT COSTA: Geoff, you were at the White House all day.

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What did you make of the Pruitt visit to the West Wing for a meeting with the president

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and, as Susan mentioned, the advice from General Kelly last week to get rid of Pruitt?

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GEOFF BENNETT: That's right, General Kelly and other top White House aides, we're told,

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have told the president that it's time for Scott Pruitt to go. The president apparently

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thinks otherwise. And I think the implicit and perhaps troubling takeaway is that for

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all of these sort of ethical issues, as long as a Cabinet member stays in the

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president's personal good graces, a lot seems to be overlooked.

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So the president will certainly have to account for that.

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ROBERT COSTA: We've seen Ben Carson have trouble, the secretary of housing and urban

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development. A lot of these outsiders who come to Washington and they join the Cabinet,

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and they don't realize - and reporters realize it because you cover an administration -

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everything that's public information gets covered, but a lot of these officials come in at

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these - in these big jobs and they don't realize every part of the budget is under scrutiny.

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MICHAEL SCHERER: Well, the other interesting thing is that, you know, a lot of times in

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government people take their cues from the person above them.

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And, you know, President Obama ran a pretty frugal, straightforward operation.

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You notice a lot of these scandals - first-class airfare, private planes, redecorating

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the office - I mean, those are the kind of things that echo the lifestyle, the life that

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the president lives. And so I think a lot of people came in thinking, well, look, I'm

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now the head of an agency, I shouldn't have scuffs on my desk, I shouldn't have a torn

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carpet; you know, if I have to fly overnight, I should be flying first class.

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And that's what's now getting them in trouble.

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KAYLA TAUSCHE: But you don't have those headlines from the members of the Cabinet who

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are independently wealthy. You don't have those headlines about Betsy DeVos, about

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Wilbur Ross, about Steven Mnuchin. You only have it from the people who are either

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career government officials or who, you know, had perfectly affluent lives, but perhaps

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not to the level of some of the other people that they're sitting around the table with.

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GEOFF BENNETT: And don't forget it was just a few weeks ago that Chief of Staff John

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Kelly brought together the group of misbehaving Cabinet members and basically told them

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to get their acts together and that they should, you know, be more responsible in the

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ways they run their agencies and with their travel expenses.

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ROBERT COSTA: But the president is digging in on Pruitt, at least - it's Friday night;

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we'll check our phones after the show, maybe something has changed. (Laughter.) But

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for now he's there. The president's digging in on a lot of things this week - another

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front, immigration. Mr. Trump has ordered 2(,000) to 4,000 National Guard troops to

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secure the U.S.-Mexico border and beef up customs and border enforcement. The president

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literally threw out his prepared remarks at a West Virginia roundtable this week where he

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was scheduled to talk about his tax overhaul. Instead, he seized on illegal immigration.

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PRESIDENT DONALD TRUMP: (From video.) And remember my opening remarks at Trump Tower

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when I opened? Everybody said, oh, he was so tough, and I used the word "rape."

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Women are raped at levels that nobody's ever seen before.

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They don't want to mention that. So we have to change our laws.

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ROBERT COSTA: Deploying the National Guard along the border is not unprecedented.

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President George W. Bush and President Barack Obama both did it in two operations

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that cost a total of more than 1.3 billion (dollars). Critics called those deployments

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costly and inefficient. Michael, you cover the president on the campaign trail, again

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this week coming back not only to the trade issue but to immigration.

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What is going on at this presidency at this time?

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MICHAEL SCHERER: I think, you know, when the president won election, if you actually go

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back and look at that first 60 Minutes interview and he's talking about how he's now

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going to be the president, you can almost see in his face that he was nervous about it.

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And I think it was very evident in those first few months that he wasn't sure he knew how

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to do the job, he was worried about the burden that had been put on him, and he

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surrounded himself with a group of advisors he's never been happy with.

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And now this latest generation has kind of gone out the door, and I think the president

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feels - as he's felt all through his life and career - that in moments like this he

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should go back to his gut instinct, and that's what he's doing. And we're, as you said,

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entering an election season. Legislating is done. He's trying to get back on message.

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He has to get Republicans excited to vote if there's going to be hope in the fall, and

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he's taking a gamble here.

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ROBERT COSTA: And it's about that core base voter, and when you think about it it's also

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about the media that base watches. So much of this was driven by conservative media

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this week and the coverage of Central American migrants moving up through Mexico and

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the way that was covered on the right, the way the White House watched it.

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But it was - it was factually under a lot of the - under the spotlight this week as well.

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SUSAN GLASSER: Well, that's a very charitable way of putting it.

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I mean, let's be real: Like, there was no crisis.

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This is a literally brought to you by Fox News crisis, OK?

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This is, you know, they covered a caravan of immigrants that was supposedly on its way to

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invade and rampage in the United States. Donald Trump is ordering troops to the border

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in response to a manufactured, not real, crisis.

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Now, in the past you talked about both President Bush and President Obama have had to at

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various points, in response to real events, order National Guard troops to temporarily go

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to the border. So this is - it's ersatz in every possible way. So I find that to

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be - it's basically a real metaphor for the politics that we're living in right now.

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You know, you see President Trump throwing up the papers; to me, that's like the

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signature visual of the presidency. Like, ah, this script is boring; OK, I'm going to

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offer you a new immigration-related plotline. But I want to go back to this idea that

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he's in campaign mode, which I think he really is.

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I mean, he feels untethered or he's out there doing what he wants to do, having the

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Cabinet I've wanted to have, having the presidency I want to have.

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What I'm struck by is that he's still treating it as a reality show or as if

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everything is a campaign. Actions do at some point or another have consequences.

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In Mexico this week, in response to this manufactured-on-TV crisis, you saw the president

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of Mexico, after two years of forbearance, actually give an address to the Mexican people

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and say enough is enough, basically: Donald Trump, if you want to talk about American

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domestic politics, you should do that and leave Mexico out of it. He may lose his job

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in the July 1st Mexican presidential election because of the American politics here.

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GEOFF BENNETT: And to Susan's point, the president - this crisis wasn't just brought to

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us by Fox News - you're totally right about that - it was also brought to us by the

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president's friends and allies who were in his ear at Mar-a-Lago last weekend, folks like

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Corey Lewandowski, Judge Jeanine Pirro, Sean Hannity, conveying the message, we're told,

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that the base was growing impatient and softening with the president's perceived, I

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guess, giving in on immigration. Remember, he signed that omnibus bill that didn't

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have the full funding for the - for the border wall, and he was very upset about that.

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And so that is what prompted what we've seen this past week in many ways.

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MICHAEL SCHERER: You know, he's -

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SUSAN GLASSER: By the way, Mexico is not going to pay for the wall.

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GEOFF BENNETT: That's right. SUSAN GLASSER: You know that, right?

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ROBERT COSTA: Are congressional Republicans going to back up the president here and

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change their tune to immigration, immigration ahead of the midterms, or they - were they

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- would they rather sell the tax cut?

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KAYLA TAUSCHE: I think they'd rather sell the tax cut. I think that there is still

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confusion about exactly what type of immigration plan would pass Congress the White

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House would sign off on. And at this point there is the absence of a deadline, which

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as we know is what really lights a fire under Congress and causes them to act.

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MICHAEL SCHERER: The real problem the president has in the midterms is that the people

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who elected him in 2016 are not going to decide who controls Congress. These are

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different districts that matter in this election. They are moderate House districts

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in suburban areas. There are a couple rural red-state areas. But there are like 54,

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50 districts that are not depressed working-class parts of Michigan or Pennsylvania

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that were the ones who delivered him the White House. So he has the same playbook,

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but he's not playing the same game, and it's not clear whether he won't do more

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damage to a lot of - a lot of these candidacies if he pursues this path.

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ROBERT COSTA: And he keeps talking about voter fraud as well with immigration, the president.

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GEOFF BENNETT: He does, but again, his own commission that was formed to look into voter

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fraud disbanded finding no evidence that it ever existed.

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ROBERT COSTA: So where do we - where do we see this president going next?

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Does this just become more campaign mode the whole time?

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SUSAN GLASSER: Well, it's a really good question if there's not really a legislative

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agenda. First of all, Michael's point is a really important one.

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What districts is Donald Trump going to be welcome in to campaign?

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ROBERT COSTA: Well, he went to West Virginia this week, so at least West Virginia.

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MICHAEL SCHERER: He can always go back. (Laughter.)

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ROBERT COSTA: He can always go back to West Virginia, wild and wonderful West Virginia.

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I love it. We're going to have to leave it there tonight. Thanks, everybody.

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We'll discuss President Trump's battle with Amazon - another battle - in the webcast.

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You can find that later tonight and all week long at PBS.org/WashingtonWeek.

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I'm Robert Costa. Thanks for joining us.