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The Lead with Jake Tapper

Trump Escalates Trade War, Announces Expansive Global Tariffs; Musk Gambled Millions on WI Supreme Court Race And Lost; Sen. Jim Banks (R-IN), Is Interviewed About Trump New 25 Percent Auto Tariffs Go In Effect At Midnight; Gaza Family: Son Tortured, Killed For Speaking Against Hamas; American Wine Industry Paralyzed By Sweeping Tariffs. Aired 5-6p ET

Aired April 02, 2025 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(UNKNOWN): ...Squarely behind Donald Trump. It does show his clout in the Republican Party to change free traders into pro tariff Republican senators.

KASIE HUNT, CNN HOST: It has been Democrats who lost (ph) this tool.

XOCHITL HINOJOSA, FORMER DNC SENIOR ADVISER AND COMMUNICATIONS DIRECTOR: Well, I think it's a warning sign because 18 -- we have 18 special elections in this year so far and 17 out of the 18 Democrats have won because they do not believe the American people do not believe that he is doing enough to lower costs.

HUNT: Yes.

HINOJOSA: So if costs go up, it's a big red flag for Republicans because I'm not sure they can come back from it.

HUNT: OK. Sounds like they are, in fact going to go up in the short term. We'll see about the long term. Jake Tapper standing by for "The Lead" starts right now.

[17:00:43]

UNIDENTIFIED MALE: This is CNN breaking news.

JAKE TAPPER, CNN HOST: Welcome to The Lead and I am Jake Tapper. Our breaking news, just moments ago, President Trump officially announcing widespread, what he calls reciprocal tariffs, at least 10 percent on practically all goods coming into the United States, plus higher rates on dozens of countries that have the highest trade deficits with the United States.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: But we will charge them approximately half of what they are and have been charging us. So the tariffs will be not a full reciprocal. I could have done that, yes, but it would have been tough for a lot of countries. We didn't want to do that.

(END VIDEO CLIP) TAPPER: Mr. Trump busted out a giant chart, as is his want to show the specific details. And as Mr. Trump's global trade war escalates, so do the odds of a recession according to economists at Goldman Sachs. Trump's move to overhaul the world economy could end up impacting every American in the short term and the long term. Raising prices in the short term at a time when budgets are already stretched thin from years of inflation. President Trump says that the tariffs in the long run will create more jobs in the United States and revive certain manufacturing sectors and even entire regions by forcing companies to relocate their manufacturing to the United States, in some cases back to the United States.

It is a gamble and it is risky. Some Republican lawmakers are not sold.

(BEGIN VIDEO CLIP)

SEN. JOHN KENNEDY (R-LA): In the long run, we're all dead. Short run matters, too. Nobody knows what the impact of these tariffs is going to be on the economy.

SEN. THOM TILLIS (R-NC): Anyone who says there may be a little bit of pain before we get things right, need to talk about farmers who are one crop away from bankruptcy.

(END VIDEO CLIP)

TAPPER: Senator Kennedy of Louisiana and Senator Tillis of North Carolina, they're both Republicans. Let's go straight to the White House where we find our own Kaitlan Collins.

Kaitlan, walk us through the details of the new tariffs that President Trump just announced.

KAITLAN COLLINS, CNN ANCHOR: Yes, Jake. The markets were waiting for certainty. They just got it from President Trump as he made this announcement here in the Rose Garden. They also handed out this list to reporters who were here in the Rose Garden detailing what these tariffs are going to look like. Now this is a baseline 10 percent tariff on all countries. But included here in this list are some of the closest U.S. allies that are going to be paying two or three times higher than that. That as part of those reciprocal tariffs for what the White House and the president have determined are unfair trading practices, they say, against some of these closest U.S. allies that now will be paying much higher than that baseline rate.

And just looking at this right off the bat, Jake, you see European Union, it is going to be a 20 percent reciprocal tariff. Taiwan 32 percent, Vietnam, 46 percent reciprocal tariff. Japan is coming in at 24 percent and India at 26 percent. Just to give you a small preview, Jake, into these tariffs at the White House is now going to be implementing. We've heard from senior officials about varying dates of when those tariffs will go into place. The president said immediately just now, in addition to that 25 percent tariff on all foreign made cars. What you are seeing here are the most expansive tariffs that we have seen from President Trump, including from his first term. And as he noted here in the Rose Garden, this is something he's been talking about for decades and certainly did on the campaign trail this time around. But of course, the question is how other nations will respond to this and how the stock market will respond to this.

The White House seemed to suggest earlier in a briefing with reporters that they have very little appetite for any kind of haggling with countries that are trying to reduce their tariffs in the lead up to this to try to get this to be lower. And also they issued a warning, Jake, to countries that have promised they will retaliate in response to these new tariffs from President Trump.

TAPPER: All right, Kaitlan Collins, thanks so much. Look out for Kaitlan in just a few hours on "The Source." That's weeknights at 9:00 Eastern only here on CNN.

CNN's Daniel Dale, our fact checker, was closely listening to the president's remark to check out and suss out the facts there. Daniel, what President Trump had to say about Canadian dairy tariffs, is that accurate?

DANIEL DALE, CNN SENIOR REPORTER: It was not even close to accurate, Jake. So President Trump said Canada treats the first little carton of milk that the U.S. exports as a low tariff product. But then after that, Canada applies massive tariffs in excess of 200 percent.

[17:05:08]

It is not just the first little carton of milk that has low tariffs. In fact, under the USMCA deal that Trump himself negotiated, tens of thousands of metric tons per year of U.S. milk are treated as tariff free by Canada. That is guaranteed tariff free market access by Canada. And here's the key thing, Jake, the U.S. is not exporting even close to that tariff free quota maximum. So none of those hefty Canadian tariffs above the quota level are actually being applied.

And that was just one of the false claims he made, Jake. He also offered what I think is some pretty brazen alternative history saying that the U.S. was at proportionately its wealthiest from 1789 to 1913. The U.S. is way wealthier today by any reasonable measure, including per capita income, living standards. And then he said that the U.S. would not have had the Great Depression had the U.S. stayed with tariffs. Well, there was a pretty infamous tariff in 1930, the Smoot- Hawley tariff that is widely seen to have contributed to worsening that Great Depression.

He also repeated his claim that the U.S. took in hundreds of billions of dollars that China paid because of tariffs he imposed in his first term. It is U.S. importers who made those tariff payments. Study after study has found that U.S. consumers and businesses ate the overwhelming majority of the costs of those tariffs. And so it is just not true that China was paying that money.

He also falsely said that the U.S. had the highest inflation in its history under President Biden. Yes, of course it was high, it was troubling, not even close to a record. And he said that gasoline is, quote, "way under $3 now." It is true in some states, but the national average today according to AAA is about $3.24 per gallon, Jake.

TAPPER: Other than that though, any factual errors? I'm just joking. That was a lot.

Daniel Dale, thanks so much. Appreciate it.

Let's bring in CNN's Phil Mattingly and Vanessa Yurkevich. It should talk about the economies and the economic impacts of this all.

Phil, so let's start with you. You have been closely tracking every tariff proposed so far. Are these new tariffs more sweeping than expected? How might they impact the average American?

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: It's a middle ground of the maximal approach that had been laid out and I think options that had been presented to President Trump. What does that actually mean? That means this is more significant, more consequential, more grand on a scale when it comes to tariffs than anything we have seen in roughly 70 to 80 years. It is a complete reorientation of the global trading system as we've known it for the better part of the post-World War II era. The Reciprocal tariffs did not go in full. President saying he cut them in half, therefore it's not necessarily tariff for tariff.

TAPPER: But he was proposing a much bigger deal even though this is a big deal. Yes.

MATTINGLY: Except they are adding in non-tariff barriers as they said they were going to do, what they believe are restrictions that other countries put that are not tariff based. So the scale of them country by country for the 60 ish countries that they are actually putting them onto, significant. He also combined two proposals. At the campaign, he talked about having a universal baseline tariff and then he talked about reciprocal tariffs. It was never really the proposal to do both.

That is exactly what he did today. I think people need to understand, I'm actually, if you look at the markets right now and futures, I don't necessarily know that everybody's grasping one, the scale of this.

TAPPER: Right.

MATTINGLY: And two, just how serious his advisers were going into this, that this is not the start of a negotiation. They plan to implement this regime, they plan to collect revenues from this regime. And maybe there'll be a negotiation at some point, but it's not happening right away.

TAPPER: No. He's a big believer in tariffs as an economic policy --

MATTINGLY: Yes.

TAPPER: -- unto themselves, period. It is interesting that he announced this after the markets closed.

Vanessa, tell us about the tariffs on countries that will impact products that you and I purchase to live.

VANESSA YURKEVICH, CNN BUSINESS & POLITICS CORRESPONDENT: Yes, exactly. And there's a 10 percent baseline, let's not forget, 10 percent baseline tariff on all $3.3 trillion worth of goods coming into this country now, at least 10 percent. But as the President mentioned, there are higher tariffs on countries that he says are bad actors. Ultimately though, he says he cut those tariffs in half sort of to play more fair, to give these countries a break.

But let's just take China for example. Now a 34 percent tariff on China. We get a lot of electronics from China. Vietnam, a 50 -- a 46 percent tariff on Vietnam. Now we got a lot of shoes, appliances from there.

Colombia, a 10 percent tariff. We get coffee from there. Bananas, we get bananas from Ecuador, Guatemala, Costa Rica, now at least a 10 percent tariff there. And ultimately we have these auto tariffs also coming tomorrow, a 25 percent tax on all foreign imports of cars.

On a country like South Korea, for example, they are -- they are the country that has Hyundai, right? So they are going to experience a 25 percent tariff on autos. And now, under this new reciprocal tariff plan, an additional 25 percent tariff on autos and now under this new reciprocal tariff plan, an additional 25 percent on all exports coming out of South Korea. So for any product that Americans import and buy from abroad, at least a 10 percent tariff. If you do not see a made in America sticker or tag, you're going to be paying something.

[17:10:26]

And, and for consumers, this is really important because it's going to hit everything from food to cars to appliances to pharmaceuticals. It's just so wide sweeping. As Phil mentioned, it could have been worse based on what we were hearing. But ultimately, if you think about anything that you consume and buy from abroad, you're likely going to see some sort of price increase in the near future.

TAPPER: All right, Vanessa Yurkevich and Phil Mattingly, thanks so much.

Let's bring in former Biden senior economics aide Gene Sperling. He left the administration to work with the Kamala Harris presidential campaign.

Gene, are there any of the tariffs, any of the moves that President Trump announced today that you think could benefit the United States?

GENE SPERLING, FORMER SENIOR ADVISER TO PRES. BIDEN: I think that in general, the focus on relocating manufacturing where it's going to be part of our economic future is one that was a major Biden message. I think the focus on using tariffs in strategic areas where we think it either -- we've been treated unfairly or it's important to our future, like semiconductors, the CHIPS program, electric batteries. Those are -- so the overall message done right is one President Biden focused on. But what you see here is the fact that, you know, what might be a good, simplistic, historically rewritten speech in a campaign will ultimately turn out -- come down to effect on the economy. The expression the devil's in the details.

Well, here the devil is in prices for consumers. The devil's in jobs. The devil's in uncertainty.

And what we've seen so far, despite the Trump rhetoric, is that he was inheriting -- he likes to say, beautiful, a rather beautiful soft landing. People are expecting growth to be over 2 percent, inflation coming down towards 2 percent. He has set off an almost unprecedented amount of uncertainty at every level. Investor, major manufacturers, small businesses, and a dramatic increase in a loss of consumer confidence. In fact, the conference board, Jake, said that over the next 12 months, it's now the worst it's been in 12 years.

That means worse than the pandemic.

TAPPER: So --

SPERLING: And remember the United Negro College Fund used to say, a mind is a terrible thing to waste. Well, a soft landing is a terrible thing to waste. And what we're -- and so what's going to come down is what is the actual impact on prices, I think will be very negative for consumers. What will it be on actual, the economy, the strength, manufacturing, I think we're already seeing the uncertainty is being harmful. That's going to be the ultimate measure.

TAPPER: So, obviously, President Trump has a big picture goal here to bring jobs back to the United States as firms relocate here to avoid these tariffs, to make it cheaper to build in Arizona and Indiana than to build in Taiwan or China. Do you think that will happen?

SPERLING: Again, I think there's a smart, strategic way to do it. I think he should have built off the CHIPS program, built off the Biden's IRA. Those used not just sticks, but carrots. They were about incentivizing those locations in the areas like electric batteries, like semiconductors, more we could do on AI data centers, quantum computing, and also just making sure our steel and auto industries are being treated fairly.

But I think he has three major blind spots. One is he has no sense of inputs. And I know that sounds like a complicated thing, but look at pickup trucks. Pickup trucks are maybe the favorite truck of many of Trump's supporters. A huge percentage of the parts that come in come in from other countries.

TAPPER: Right.

SPERLING: That makes them more affordable. So you heard the same thing from Mattel about making Barbie dolls. So he seems to forget that in order to not only produce things here, but produce them at an attractive price will, you know, requires a more complicated view of trade. What I hear everywhere from big companies is they have almost a war room on supply. They are worried about supply constraints. [17:15:08]

They're worried about the prices. They are all worried about passing on the prices.

And Jake, why am I here talking to you as a non-White House person? Well, it wasn't that we didn't have a strong economy, the U.S. had the strongest growth. It wasn't that we didn't have strong jobs, we had the strongest jobs of all time. I'm sitting here talking to you because people were unhappy about prices. And it's shocking to me that he seems to care so little about how much basic consumer prices, from avocados to vegetables to iPhones, are going to go up for people and cars by thousands, maybe over $10,000.

TAPPER: Right. So, let me --

SPERLING: And I just feel like it's really a blind spot. It surprises me politically as well as being questionable economically. And I don't think things are going to go well for him at all with this proposal.

TAPPER: Right. I mean, your point is that you're not in the White House for the Harris administration because Trump won in part because of inflation and high prices. And this is not going to help that.

We only have a few -- about a minute left, a little less. Right now futures are pointing downward for the Dow and the NASDAQ and the S&P. Many retired Americans are sitting on fixed income, living off their 401ks. They have to be watching the stock market swings, wondering how much money will be left. What about individuals on fixed incomes of sorts, people watching right now who are worried about higher prices, who are worried about the stock market going down, what's your recommendation to them?

SPERLING: Well, I would have recommended to the president a long time ago if I was a political adviser, whatever you don't spook this smooth economy you inherited and definitely don't do things that will spike the price of -- you know, you talk about Mexico, you know, Modelo beer, guacamole, avocado, but you know, also cars. And yes, I don't believe that any president should focus ultimately on the stock market, but to seem to not even care about people's 401ks. But I tell you, Jake, I've been talking to people all over the world and what's troubling is not the stock market, but why the stock market's going down. It's going down because there is massive uncertainty and it's at every level.

And I learned this a long time ago when we went through the debt limit crisis in 2011. All you need for the economy to go weak is for everybody to pause at the same time, everybody to pause on their vacation, the discretionary spending and building, that next factory. And yes, he'll be able to do, you know, brags about places that come, but the proof of the pudding will be in the economy. And I think that he's headed for trouble. And I know what my Democratic peers are going to say and they're going to have truth on their side.

He is using this trade policy to actually raise taxes and prices on consumers. At the same time, he cuts their Medicaid and cuts taxes for well off.

TAPPER: All right.

SPERLING: I don't think that's a good economic brew or a good political brew.

TAPPER: All right, Gene Sperling, thank you so much.

And later in the program, we're going to get reaction from Republican Senator Jim Banks of Indiana.

The White House today pushing back on reports that President Trump told his inner circle that Elon Musk will be stepping back soon from his role in government. Is the billionaire a political liability for President Trump? We'll discuss that.

And all charges dropped against New York City Mayor Eric Adams, a Democrat. The key detail added to the judge's order goes directly against what the Justice Department requested. Stay with us.

(COMMERCIAL BREAK)

[17:23:06]

TAPPER: Back in our politics lead, is Elon Musk's presence at the White House feeling a bit musty to anyone? President Trump, we should note he continues to publicly lavish praise on his billionaire adviser. But he also said this earlier this week.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Elon Musk's special government tenure is coming to an end, 130 days, I think another month.

TRUMP: Yes.

UNIDENTIFIED MALE: Do you want him to stay longer or is it time for him to go back to running his companies in Europe?

TRUMP: Well, I think he's amazing, but I also think he's got a big company to run. And so at some point he's going to be going back. He wants to.

(END VIDEO CLIP)

TAPPER: This comes this week. There are new questions about Musk's influence after Mr. Musk gambled millions on a more than $20 million on a Wisconsin Supreme Court race that did not work. Perhaps not coincidentally, a Marquette University poll shows 53 percent of Wisconsin voters view Musk unfavorably. That's in February. In March, that unfavorability number in Wisconsin shot up to 60 percent.

From 53 percent to 60 percent in one month is a -- that's big.

Let's talk about this. And Mandela Barnes, I want to ask you about this. Republicans succeeded last night in getting more of their voters out than they did in the 2023 Wisconsin Supreme Court election. But Democrats got many more. And that's why it was such a decisive early victory.

Is Musk part of the reason for that? Did he turn people off?

MANDELA BARNES, (D) FORMER WISCONSIN LT. GOVERNOR: So Musk for sure turned people off, but he also turned people out. That's what happens when you have this historic amount of spending. This is what happens when you have a sweepstakes centered around an election where you're giving out these million dollar checks or paying people to sign a petition. Now, I'll say we expected, we fully expected Republicans to come out in larger numbers than they did two years ago. And that's why we employed a very strategic and robust ground game, especially in Milwaukee.

[17:25:01]

There are many wars in the city that turned out at 40 percent higher than they turned out two years ago, thanks to organizations that have been doing year round organizing. But Elon Musk factor loomed over. It was the dark cloud. And I've told people Brad Schimel is actually a legitimate credible candidate, having served as attorney general. When I was in the legislature, I disagree with him, but I didn't dislike him.

And the thing is, Elon Musk painted a really bad picture of who Brad Schimel actually is. It was the worst thing that could have happened to him.

TAPPER: Mike, what do you think? I mean, ultimately, obviously, look, he's a genius, he's the richest man in the world.

MIKE DUBKE, FORMER TRUMP WHITE HOUSE COMMUNICATIONS DIRECTOR: Right.

TAPPER: He's also a controversial figure. And according to polling in Wisconsin and nationally, more people dislike him than like him.

DUBKE: And he's been performing the duty of a human heat shield for Donald Trump since the inauguration and maybe even during the transition. I thought it was interesting, you know, looking at all the elections that happened last night, you had two in Florida went Republican ways and fairly easily. You had a 10 point victory in Wisconsin here. But Elon Musk is the person that went to Wisconsin. You had a referendum on Donald Trump in Florida and the choices that he's made.

But I would say that the referendum in Wisconsin last night was on Elon Musk and he's provided this ability to shield Donald Trump from the backlash. Today we're talking about Elon Musk. We're not talking about, is this a sign that the Trump administration has stumbled? So he served his usefulness, I think --

TAPPER: Yes, but they're still --

DUBKE: -- very effective.

TAPPER: -- they're still -- well, except that they lost that race, the Wisconsin Supreme Court race.

DUBKE: Oh, they lost the race. But I mean, they sure gave it a good old college try.

TAPPER: Interesting spin.

So, Kayla, Musk spent $20 million backing Brad Schimel, the conservative judge who lost by 10 points. Tesla just reported a 13 percent drop in sales first three months of this year. There's also this horrific vandalism going on against Tesla vehicles inexcusable that we see going on. But he doesn't seem to experience -- he doesn't seem to be having any misgivings about his role in politics, even though, you know, I don't think it's been such a great month for him.

KAYLA TAUSCHE, CNN SENIOR CORRESPONDENT: At least outwardly. But you have to imagine that that's one of the reasons why in recent weeks he started to begun -- begin confirming interviews that he would be ending his time with the federal government when his 130-day period ends. He said that in a Fox News interview just about a week ago.

And previously when he had appeared on Fox a month before that, he had said he would stay as long as he needed to get the job done. And at that time, President Trump was saying basically the same thing. If he were to stay beyond that 130-day period, he would have to not only disclose every single asset and liability under the sun, but he would also have to pledge to divest a lot of that. If much of your net worth is tied up in Tesla stock and it's down 40 percent, are you really going to want to be selling all of it at that time? Probably not.

TAPPER: Yes. Probably not. Thanks to our panel.

In New York today, the judge who dropped corruption charges against Mayor Adams said, quote, "Everything here smacks of a bargain." He had been told by the Justice Department to do so. The stipulations this judge put in place and Mayor Adams reaction, that's next.

(COMMERCIAL BREAK)

[17:32:35]

TAPPER: And we're back with our money lead, which of course is President Trump's sweeping announcement about tariffs, where he stepped up his massive global trade war. Trump declaring today a national economic emergency. He called it Liberation Day.

He announced tariffs of at least 10 percent across all countries, with rates going even higher for countries that have the highest trade deficits with the United States. Joining us now from the White House is Republican Senator Jim Banks from Indiana, who attended President Trump's tariff announcement. Senator, thanks so much for joining us.

So according to the Office of the U.S. Trade Representative, Indiana, your state, exported billions of dollars' worth of goods to several countries last year, $13.9 billion to Canada, representing 23 percent of Indiana's total exports of goods, $7.5 billion to Mexico, $6.5 billion to Italy, $5.1 billion to China, $4.2 billion to Germany. It looks as though Indiana really depends on world markets. Are you concerned at all that your state's economy will survive this trade war and the retaliatory tariffs and -- and on and on?

SEN. JIM BANKS (R-IN): Jake, the -- the -- the decision by President Trump today to impose reciprocal tariffs will be so good for Indiana. We already are the largest manufacturing state per capita in the country, a lot of really good paying manufacturing jobs and the top steel producing state. In my small hometown in northeast Indiana, the best jobs are at a local steel mill called Steel Dynamics. My dad retired from a factory that made axles for cars.

And those are the manufacturing jobs that President Trump is bringing back from overseas to the United States of America. More made in America cars is good for Indiana's economy and Hoosiers know it.

TAPPER: How worried are you that the manufacturing jobs that come back might end up being automated as opposed to good, hardworking Hoosiers?

BANKS: Well, you can't automate all of these jobs. Right -- right now in Indiana, we have -- we have large General Motors plants, Subaru, Toyota plants, Honda plants. By -- by the way, Honda projected to make the next generation Honda Civic in Indiana instead of Mexico because of these tariffs. That -- that's all good news for Hoosiers.

Good paying factory jobs, manufacturing jobs. They give families a shot at the American dream, just like my family. I grew up in a trailer park. My dad was a factory worker and we live the American dream because of a job that eventually was shipped overseas. So bring those jobs back. That's what the -- the -- by the way, these reciprocal tariffs are fairly modest.

[17:35:08]

In a lot of cases, half of what other countries impose on the United States of America I guarantee it and President Trump guarantees these tariffs are going to bring good paying jobs back to the United States, especially in a state like Indiana.

TAPPER: Right. But -- but these cars that are going to be manufactured in the United States and in Indiana that have foreign parts, especially, for example, the Che -- Chevy Silverado manufactured in Fort Wayne. And those foreign parts are going to be tariffed 25 percent.

The same goes for any other cars using foreign parts that are in the Subaru plant in Lafayette. Then that just stands to reason that these cars are now going to be more expensive for Americans. Are you not worried at all about the auto industry being destabilized because of that?

BANKS: As President Trump has said, this -- there -- there will be disruptions in this economy, but other countries are already coming to the table. The President just minutes ago in the Rose Garden signed these reciprocal tariffs and other countries have been put on notice. And I -- I -- I -- what I expect are these countries to lower their tariffs on the United States and give President Trump room to lower our tariffs in retaliation.

That's the whole point of reciprocal tariffs. So he's already put the rest of the world on notice. The kick me sign has been taken off of American manufacturing workers in this country, letting the rest of the world. We're not going to -- we're not going to let you take advantage of us -- of us anymore.

That's what -- that's what the president's announcement today declares. You -- in -- in the Rose Garden, by the way, we had UAW workers. We had union workers from all over the country who fully support these actions because they know that there will be more good paying union and non-union manufacturing jobs in this country because of President Trump's actions today.

TAPPER: I want to ask you about this exchange you had yesterday in the halls of the Senate, an exchange with a former federal employee from the U.S. Department of Health and Human Services who approached you. The exchange went viral. Here's a little bit of it.

(BEGIN VIDEO CLIP)

MACK SCHROEDER, FORMER FEDERAL EMPLOYEE: Hi, I was a worker at HHS. I was fired illegally on February 14th. There are many people who are not getting social service programs, especially people with disabilities. Are you going to do anything to stop what's happening?

BANKS: You probably deserve it.

SCHROEDER: I deserved it?

BANKS: You probably deserve it.

SCHROEDER: I deserved it. Wow. Yes, that's great to hear. Why -- why did I deserve it?

BANKS: Because you seem like a clown.

(END VIDEO CLIP)

TAPPER: So in a statement to CNN asked about it, you said, quote, I have no sympathy for left wing activists who have been let go from overpaid positions that should have never existed. I do have sympathy for the hardworking Hoosiers whose tax dollars have been wasted on bankrolling those positions, unquote. This former federal employee was on CNN a little bit earlier today. Listen to -- listen to what he had to say.

(BEGIN VIDEO CLIP)

SCHROEDER: I was just asking, what are you doing about the social services that are being cut specifically for people with disabilities? And his response was just that I deserve to get fired in response to the piece about left wing activism. As a federal employee, much like all of other civil servants, I am nonpartisan.

(END VIDEO CLIP) TAPPER: Do you have any evidence that he's a left wing activist? Do -- do you have any idea of what kind of work he was doing at HHS?

BANKS: Yes, here's what I know, Jake. He's an instigator. He's in the hallways of the Senate office buildings every day chasing down Republicans like me and cheering for Democrats who walk -- walk through the hallway.

So it doesn't take a whole lot here to deduce from that. He is a left wing activist. And what -- what I -- what I have no tolerance for is anyone who believes they are entitled to a taxpayer funded job. In this case, we know that he made between somewhere $85,000 to $100,000 a year for a job that he can't even explain what he was doing. It was a -- it was a job that wasted taxpayer dollars.

I have no sympathy for that, but I do care about those factory workers, those teachers, the police officers in Indiana who work hard every day and pay taxes. To fund a job like that, they shouldn't belong in the federal government to -- to -- to begin with. So that -- that was my point. That was thought -- I'm not going to shy away or back down or apologize for what I had to say yesterday.

This -- this was a calculated instigator activist in the hallways of the Senate. And I -- I don't have a lot of tolerance for it.

TAPPER: Do you feel that way about every federal employee that's been laid off in -- in all these massive job cuts that DOGE and President Trump have been doing?

BANKS: Look, this guy was chasing me and other Republican senators through the hallways. I -- I -- of course -- of course not. My -- my comments were directed at this fellow, again, who can't even explain what his job was. It was a woke job that wasted taxpayer dollars.

And I'm thankful that President Trump eliminated that job to save tax dollars at a time when we have a $37 trillion national debt. That -- that's what we're getting at. Cut wasteful spending. Save those tax dollars. No -- no hardworking family in Indiana deserves to pay the salary of someone like that.

[17:40:00]

TAPPER: I'm genuinely asking, how do you know what job he has or had?

BANKS: I -- I -- he can't explain it. I've -- I've read online what he had to say about his job. It doesn't make sense. He -- he couldn't even explain it on CNN earlier today when you had him on the -- on -- on the -- on your station exactly what he did do, which is why he was a probationary short-term employee who lost his job because President Trump and DOGE determined that it was a job that we didn't need in the federal government to begin with. That -- that -- that's the heart of the matter.

TAPPER: Republican Senator Jim Banks in Indiana, thanks so much for coming on. I really appreciate it.

BANKS: Thank you.

TAPPER: Coming up, a disturbing report of what happened when one Palestinian dared to speak out against Hamas. That's next.

(COMMERCIAL BREAK)

[17:45:09]

TAPPER: In our World Lead, a decisive moment in the Middle East. Israel's military operations in Gaza are escalating. Today, Israeli Prime Minister Benjamin Netanyahu announced plans to seize new territory, including, quote, dividing up the Gaza Strip and continuing deadly strikes.

Obviously, most Palestinians in Gaza blame Israel and the IDF for killing tens of thousands of so many citizens of the region. Innocence in its attempt to wipe out Hamas. Hamas considered a terrorist group, not just by Israel, but by the United States as well.

But many in Gaza are increasingly publicly faulting Hamas. And they are, in recent days, becoming brazen about it. As CNN's Jeremy Diamond reports, in some cases, the Palestinians speaking out against Hamas are then paying the ultimate price. We want to warn our viewers, you might find this report disturbing.

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JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT (voice-over): Look, children, at what Hamas has done, this man shouts, as others gather around a body in prayer. The man they are mourning is Uday Rabie, a 22-year-old Palestinian from Gaza City. Rabie's family says he was killed by Hamas militants, tortured to death for publicly criticizing Hamas. Rabie's brother, Hassan, told CNN his brother was abducted from the streets of Gaza City by a group of Hamas militants.

Six hours later, he was handed over, barely alive. Cuts and bruises marking his back, arms, feet and face. Parts of his hair and one eyebrow shaved. Rabie's brother says his body was delivered with a message. This is the fate of everyone who disrespects Al-Qassam Brigades and speaks ill of them, referring to the armed wing of Hamas. Rabie died hours later of his wounds.

You killed the boy. May God hold you accountable, one man shouts, as another fires into the air. As his body is carried through the streets, the crowd erupts in chants, calling for Hamas to get out.

His family now demanding justice and retribution. Hamas' government media office did not reply to a request for comment. And the Al-Qassam Brigades has not publicly commented on the accusations.

Rabie was killed a week after he and thousands of other Palestinians took to the streets in Gaza's largest anti-Hamas demonstration since the war began. Rabie had already scuffled with Hamas members a month earlier, his brother said, and feared Hamas would kill him.

They want to take me, they want to kill me, he said in this video. I don't know what they want from me. A week later, he was dead.

Jeremy Diamond, CNN, Jerusalem.

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TAPPER: And our thanks to Jeremy Diamond for that report.

[17:48:13]

Coming up, the widespread feelings of unease among small business owners, even well before President Trump formally announced his sweeping global tariffs today.

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TAPPER: We're back with our money lead now and wine is one of the many industries bracing for impact from the President's tariffs that he announced today. For American winemakers, stress has been fermenting for weeks as the tit for tat between the U.S. and its allies plays out.

CNN's Natasha Chen shows us how this is paralyzing small businesses and affecting what you pay per bottle.

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NATASHA CHEN, CNN NATIONAL CORRESPONDENT (voice-over): It takes years from planting a vine.

GREGORY GONZALEZ, DIRECTOR OF AGRICULTURE, THORNHILL COMPANIES: Boom, the buds start to burst.

CHEN (voice-over): To turning grapes into a drinkable wine. But those years of planning are being uprooted by tariff wars.

NICHOLAS MILLER, MILLER FAMILY WINE COMPANY: We understand they're trying to make the best decisions possible, but without guidance it's sure hard to have a business plan.

CHEN (voice-over): These are muddy waters for Nicholas Miller, a fifth generation owner of Miller Family Wines on the central coast of California.

MILLER: This is our pastoralist cab fronk.

CHEN (voice-over): The company makes wines under different labels.

MILLER: It tends to be a lot more kind of that chocolate, that mocha.

CHEN (voice-over): From very high end to more affordable ones. Miller says 10 percent of their wines are typically exported to Canada, including some custom blends.

MILLER: We became the official wine partners for the Calgary Flames and the Edmonton Oilers.

CHEN: Wait, so what happens to that wine like we're in hockey season?

MILLER: Right, that's what we're trying to face right now is what happens to that wine.

CHEN (voice-over): Canada is typically America's biggest wine customer, importing $435 million worth of U.S. wine per year. But province controlled liquor boards there have largely stopped stocking American wine in retaliation for President Trump's tariffs on aluminum and steel. About 12,000 Miller Family Wine bottles or $90,000 worth of their wine is stuck in a California warehouse. They're already packaged with Canada specific labeling requirements, but going nowhere. And what about slapping on the required American label to sell it domestically instead?

MILLER: It may sound like an easy fix of just putting a -- a label on, but it really is tantamount to going through a second bottling.

CHEN: That's not a cheap process to do that.

MILLER: It's not.

CHEN (voice-over): So they continue to sit in storage at a cost while Miller waits for more information.

MILLER: The politics of all that's happening right now is costing everyone something, right?

[17:55:02]

CHEN (voice-over): Even Trump's idea of imposing a 200 percent tariff on European wine imports.

MILLER: It feels a little bit like fighting fire with fire, which doesn't seem like that's the right solution.

CHEN (voice-over): Miller says there has to be a conversation about the real problem, an unfair fight where American wines, often highly regulated and costly to produce, are up against heavily subsidized European ones. And while there are clues about the future harvest if you read the grape leaves.

GONZALEZ: This tells us a lot about how the season's going to be for us when we start seeing clusters and or tendrils.

CHEN (voice-over): There's no clarity for the makers of the wine these grapes will become.

Natasha Chen, CNN, Santa Barbara, California.

(END VIDEOTAPE)

TAPPER: And our thanks to Natasha Chen for that report.

About an hour now after President Trump imposed these sweeping new tariffs for -- to all around the world, world leaders are now starting to react, Canada among them. We're going to go there next. (COMMERCIAL BREAK)