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Trump Weighing Tariff Options; Markets on Edge Ahead of Tariff Announcement; Mark Zandi is Interviewed about New Tariffs; Tariffs on Imported Cars and Auto Parts; Rep. Jason Crow (D-CO) is Interviewed about Yesterday's Special Elections. Aired 9-9:30a ET

Aired April 02, 2025 - 09:00   ET

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

[09:00:00]

KATHLEEN SEBELIUS, FORMER HEALTH AND HUMAN SERVICES SECRETARY: With local officials, tribal lands. It took me months to just learn about the amazing assets within this department. What at - what they did, how they interfaced. And as a governor, I worked with them on childcare programs. I worked with them on foster care. I knew about mental health services, the Department of Aging. I certainly knew about the Medicaid program deeply. That's the most money run to states in the whole country.

What I know is these folks have no idea what harm they're causing. They have no idea what these people do. They don't know who's under them. And remember, Kate, this is now leadership and two tiers under the leadership that they're now picking out and firing. Already the probationary employees have been fired. That means the youngest, most tech savvy, brightest folks who wanted to work in Health and Human Services, who were recruited and trained and ready, on the job, often for up to two years, or people who had just been promoted, that whole layer of employees is gone.

So, you are going to have very dysfunctional agencies, people who want a drug approved, people who have been waiting for a research grant, folks who want to know, in their home community, if they're safe and sound, if their kids should go to kindergarten because the vaccination rates may be varied. That information, that kind of safety and security is going to be gone in these agencies and create sheer chaos.

KATE BOLDUAN, CNN ANCHOR: Something that needs to - much more reporting and continued follow. And which we will do. And we know it is in - very critical.

Secretary, thank you for coming on.

A new hour of CNN NEWS CENTRAL starts right now.

JOHN BERMAN, CNN ANCHOR: All right, most Americans say it is a policy they do not like. Many economists say it is a policy that does not work. The president says he will make his big announcement on tariffs today. It's telling, he moved it to after the stock markets closed. Could it be a sign he's nervous about the reaction?

What "Axios" calls MAGA's brutal jolt. Special election results give a boost to Democrats. What have political insiders just learned about the strength or weakness of Elon Musk.

And then, indelible roles, incredible characters. This morning, remembering Val Kilmer, who passed away at the age of 65.

I'm John Berman, with Kate Bolduan and Sara Sidner. This is CNN NEWS CENTRAL.

SARA SIDNER, CNN ANCHOR: This morning, American and the whole world really on tenterhooks, worrying about what's going to happen with tariffs. We are just hours away from President Trump's long promised announcement of sweeping new tariffs on potentially all of the countries the U.S. trades with.

Just a short time ago, the president posting, quote, "it's liberation day in America." The White House saying the new tariffs will free Americans from unfair trade practices. But there are many economists who are warning they could end up raising prices on just about everything you buy.

Trump is set to speak this afternoon from the White House Rose Garden. That much we do know. The president still, though, weighing tariff options as of late last night, we hear. But many other questions are swirling about on, what are the specifics, and who might be directly affected. How high and far will the tariffs go, and what will be the impact on jobs and the entire U.S. economy, nary the world economy.

With just minutes before the opening bell, the markets are already reacting, as they have been, negatively. The futures for all the major indexes are pointing downward this morning.

CNN's Alayna Treene is at the White House for us.

Do we know anything more about what Trump's plans are? Because, as of this moment, as I understand it, we have very few details.

ALAYNA TREENE, CNN WHITE HOUSE REPORTER: We do. And that's by design in part, Sara. I mean part of this is, they do want this to be veiled in secrecy and have this Rose Garden ceremony today. His first Rose Garden ceremony, I should say, of this new administration.

They want it to be with the pomp and circumstance, of course, of an announcement of this magnitude. But they want some of these details to remain hidden until he's ready to announce them. That's part of it.

The other part is what you touched on as well, is that, you know, the president has still been, I was told, and our colleague, Kevin Liptak as well was told this, that they were working on this and perfecting this all day yesterday, even up until the 11th hour, really, the president was hearing from friends and allies, talking to his trade advisers about the best way to move forward with this.

And all of this comes, of course, as there are some real questions and concerns about exactly what this is going to look like, not only from, of course, the United States trading partners who are, you know, warily watching this to see how this is going to impact them, but also from Republicans and Democrats alike on Capitol Hill, financial experts, economists, the list goes on.

And then, of course, a key question is, could these tariffs potentially lead to higher prices for U.S. consumers?

[09:05:06]

That's something we've heard many different experts argue that is likely to happen depending on how this goes. But as you mentioned, we do have few details.

What we do know is that this announcement is going to take place at 4:00 p.m. in the Rose Garden. I was told that this was actually originally slated, this announcement, for 3:00 p.m. And then, of course, as we saw, it was pushed back to 4:00. A notable difference given 4:00 p.m. is after the markets close.

But look, I do want to get into one thing - one concern, really, I've heard repeatedly now in some of my conversations with folks is that, you know, no one really knows what the long term strategy is here. We've heard the president talk about tariffs, even before he was in office. He called it a big, beautiful word. He talked about a lot on the campaign trail as well - as well. But still unclear and really what the White House has had trouble articulating is what is the end game? What is this long-term strategy.

And some reporters tried to get at this yesterday in that White House briefing with Press Secretary Karoline Leavitt. And she essentially, and others have done this as well, tried to point everyone back to his first term, say, you know, if you look at the stock market then and what the president did in his first administration, that should be justification enough. But as we know, that isn't enough clarity I think that people are looking for. We should get more of those answers today.

One other quick thing, Sara, is that even with these announcements, we are told that these tariffs are going to be effective immediately. The president has reserved the right to continue negotiating them down the road. So, one thing to keep in mind as well.

SIDNER: More uncertainty. Markets generally do not like that. We will see what happens today at 4:00.

Alayna Treene, thank you so much for all of your reporting on this. Everything is muddy. Everything is confusing. Much like my life. That's the problem.

BERMAN: Sara, investors aren't putting money on - on your life right now. Investors are putting money on the market.

SIDNER: It's a good thing.

BERMAN: And right now the market is a little uneasy this morning. You can see sort of splitting the difference around a 1 percent drop the futures are pointing to. The markets open in about 22 minutes right now. Right around 1 percent off before it opens. That's the number which gets people a little bit uncomfortable. With us now, CNN's Matt Egan.

What are the issues here? When Alayna and Sara talk about the uncertainty, what type of tariffs this could be, these are wildly different tariffs he's considering. The fact that he hasn't landed on one is really interesting.

MATT EGAN, CNN REPORTER: Yes, it's interesting and it's nerve wracking from the perspective of investors. You see, look, no liberation day celebration on Wall Street this morning. We're seeing stock futures move solidly lower.

There's a couple of things that we think we know about what's coming today. The White House says that these tariffs would take effect immediately. That's a point that has kind of unnerved some investors and economists I've talked to. Normally you would want to kind of phase this sort of thing in, not do it all at once. A range of proposals are still being considered, including perhaps tariffs on just certain countries.

But the most extreme option is this universal tariff of up to 20 percent that is apparently still under consideration. Now, we don't know if that's what's going to happen, but economists warn that that is what could be the most damaging.

The budget lab at Yale found that if there's this 20 percent universal tariff on top of the other tariffs that are already in place, that would tick the U.S. tariff rate up to 33 percent. That would be the highest since 1872, when the president was Ulysses S. Grant.

Now, the budget lab says that this would do real damage, right? It would eat into everyone's take home pay, their inflation adjusted income, because it would increase prices, including on food, clothes, leather, computer, electronics and even oil.

Now, again, we don't know if this is what's going to happen. It's possible that the president ends up picking a far more modest choice here. But I do think the bottom line is the cost of living right is the biggest issue for many Americans. It's arguably why Trump got elected again. And yet economists are not just saying that aggressive tariffs are going to fail to fix the cost of living. They're saying it's going to make it much worse.

BERMAN: Again, one thing that's notable, the announcement comes at 4:00 after the markets close. The tariffs will go into effect immediately. Investors looking for certainty. Although as Alayna just reported there, the president saying he reserves the right to keep negotiating with countries on the tariffs even after today. That may not be the certainty investors are looking for.

Matt Egan, thank you very much.

EGAN: Thanks, John.

BERMAN: Kate.

BOLDUAN: Thank you so much, sir.

Joining us right now is Mark Zandi, the chief economist for Moody's Analytics.

Thanks for coming back in, Mark.

OK, so I definitely want to hear what you have to say tomorrow as well. But leading into today, when we still don't know exactly what he's going to roll out, best case/worst case scenario today in your view is what?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Oh, geez, there's - there's no good case here, Kate. It's just dark - variations on a dark theme. I mean, Matt mentioned a 20 percent kind of effective tariff rate across the board, across all countries.

[09:10:03]

You know that - that may be this scenario, just because that's easier to implement. If you're going to implement them on day one, that would be the way to go. Twenty percent would put the tariff back to where it was in the 1930s. That's the Great Depression, Smoot-Hawley. That - and presumably other countries would respond to that. They would retaliate because they would recognize that these tariffs are in - are big and they're going to remain in place for quite some time.

So, you add that all up. That's a pretty dark scenario. That gets us into recession pretty fast.

Just to give you context, we've run some simulations of what that might mean. The current unemployment rate today is 4 percent. In that scenario, you get unemployment that's north of 7 percent. So, that would be a pretty significant recession.

The alternative scenario, maybe the best case/worst case scenario would be these so-called reciprocal tariffs. These are tariffs that would be designed to be specific to individual countries. So, if a country has tariffs on our products or imposes other non-trade barriers on our products, we would raise tariffs to be consistent with the - with those - those barriers and those tariffs. That that - that would result in a 15 percent effective tariff rate. That would probably result in a recession. We'd get pretty close. But not nearly as much damage.

But as you can see, you know, a boatload of uncertainty here. This thing can go in lots of different directions. None of them good.

BOLDUAN: And also, what Trump ultimately announces, they say the White House does, that it will be effective immediately. That is what they have said. How does that work?

ZANDI: Yes, I - that - that's going to be tough. Now, maybe that's the - signaling that these tariffs are going to be implemented, you know, relatively quickly over, you know, days and maybe a few weeks.

If - if they're reciprocal tariffs, that's complicated, right, because it's - it's country by country. You have to really work through the arithmetic, I assume. And that would take a lot of time. And then actually implementing that would be complicated because you've got different tariff rates for different countries, different products, so forth and so on.

So, I - you know, I'm not sure. I mean, if it's across the board, I suppose you could do that more quickly. But, you know, I'm - I'm struggling here, Kate. I'm not sure how you would do that immediately. But, you know, regardless, you know, for a 15 or 20 percent tariff rate, the impact on inflation is going to be very significant. I mean, just to give you context, if we go to 20 percent, that will push the consumer price index up by a full percentage point and a half. So, we'll go from 3 percent inflation, which is where we are today, to 4.5 percent inflation. And, obviously, that's a real hardship for many Americans.

BOLDUAN: One of the things I've been struggling with, and there's a lot of questions around it is, what's - what's the policy driving this? Because there are two things that they have said. And I'm not entirely sure how they line up. The president wants to both raise revenue with tariffs and also use them as leverage to get other nations to lower their tariffs or make other policy changes. But if tariffs are subject to negotiation, as he's kind of discussed and alluded to, they could - and could go away at any moment, how does that line up with leaning on this to raise revenue?

ZANDI: I don't know. It's a - I don't see it. I don't get it. I mean if you raise the tariff rate, say, to 20 percent, and if you get a recession, the net impact of that on our fiscal situation is going to be very negative. Yes, it will generate more tariff revenue. But think about the hit to other taxes. You know, income taxes will be down. Corporate income tax will be down. Sales taxes will be down. And also it raises government spending with high - higher unemployment, that causes unemployment insurance costs to rise, SNAP, which is food assistance, rental assistance.

So - and then, of course, the - there's already a lot of talk about providing benefits of - cash benefits to like farmers who are getting creamed by the fact that they can't sell into China because of the - the Chinese retaliation. You add that all up, I'm not sure we're going to raise any net revenue whatsoever.

And then, you know, as you point out, these tariffs are being done by executive order. It's not in a piece of legislation. So, they - they can be here - they're here today, can to be gone tomorrow. So, you can't count on these revenues. Let - you know, next year, let alone ten years from now.

So, I - I'm totally confused by the thought that you're going to raise a lot of revenue here and that it's going to be sustainable revenue to address our longer fiscal problem.

BOLDUAN: Yes, because Peter Navarro had said very clearly that he's in - he - he's talking about numbers.

ZANDI: Yes. BOLDUAN: You know, this is how much we'll raise ten years out, which is a question of, how are these tariffs - can you anticipate these - this whole policy will still be in place ten years out.

Regardless, let us see what happens today.

ZANDI: Exactly.

BOLDUAN: Important to get your take then tomorrow.

Mark, great to see you. Thank you.

Sara.

SIDNER: All right, it's President Trump's first big test at the polls since taking office. He passed in Florida, holding on to two House seats, but Democrats won the day in a hotly contested supreme court race in Wisconsin.

[09:15:05]

The warning signs for Republicans and Elon Musk following last night's elections.

DANNY FREEMAN, CNN CORRESPONDENT: Plus, we're out here at a car dealership in the suburbs of Philadelphia, talking to folks as they are bracing for the impact of auto tariffs that are expected to take place by the end of the night.

SIDNER: And paging Doctor Robby. Actor Noah Wyle has taken a break from the adrenaline rush of Pittsburgh's ER to give us the scoop on the upcoming season's finale of Max's medical drama, "The Pitt."

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Other hospitals are managing this crisis. Either step up or step aside.

UNIDENTIFIED FEMALE: Are you OK?

NOAH WYLE, ACTOR, "THE PITT": Why wouldn't I be?

UNIDENTIFIED FEMALE: It was five years ago today. You can't block your feelings forever.

WYLE: Oh, you'd be surprised.

(END VIDEO CLIP)

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SIDNER: President Trump's 25 percent tariffs on imported finished cars are set to take effect tomorrow.

[09:20:01]

Tariffs on imported car parts will hit no later than May 3rd, he says. So, what does this mean for auto prices and your car repair bill?

CNN correspondent Danny Freeman joins us now from a car dealership in Glen Mills, Pennsylvania.

What is going down there? Tell me about the prices. I hear that people are buying up cars before these things take effect. That's what I hear.

DANNY FREEMAN, CNN CORRESPONDENT: You know, Sara, there are a lot of interesting dynamics that are happening all at once as people are really bracing for the impacts of these tariffs.

Just explain a little bit about specifically where I am. Like you noted, I'm in Glen Mills, Pennsylvania, Delaware County, suburb of Philadelphia. Of course, an important place electorally, I'll note.

We're at David Auto. This is a dealership that predominantly sells American made cars. It's a Stellantis shop, Chrysler, Dodge, Jeep. And those are the types of cars they sell here and yet still this particular dealership, they're bracing for impact because of these looming tariffs.

And, Sara, there are really three predominant reasons why the folks here are concerned. First is that there are still cars on this lot from these companies that are imported. Cars from Mexico, cars from Canada, even a car from Italy that's on the lot over there. The owner here tells me that those cars will immediately become more expensive once these tariffs come into effect.

The other thing, Sara, as you noted, parts coming later on in the early part of May at this point, those tariffs are going to be happening. But the concern from customers here is that when I take my car in to get repaired, even the American made ones that might have parts that were made overseas that were imported, will the repair costs go up as well?

And the last thing, Sara, that I'll note is that the owner here told me that he fears that just tariffs in general is going to put a freeze or a chill when it comes to folks wanting to come buy a car because of the fear that some of these cars may be more expensive.

Take a listen to how he described how his customers might immediately feel the impact of some of these imported cars.

(BEGIN VIDEO CLIP)

DAVID KELLEHER, PRESIDENT AND OWNER, DAVID AUTO GROUP: That car could go from $30,000, ostensibly, to $37,.500. And' its that quick. And that kind of change in a price moves that payment $175 a month. And our customers, they're middle class people. They just can't afford that kind of pop (ph).

(END VIDEO CLIP)

FREEMAN: So, Sara, you alluded at the top that Ford, in fact, said that they have actually seen more car sales in the month of March. Well, Dave told me, anecdotally, this - just this past weekend cars were flying off the lot. He said he couldn't say definitively if it was because of tariffs, but he said people and customers definitely have been asking about them.

Sara.

SIDNER: All right, well, if you want, you can pick up that Italian car, whatever that is, Maserati, Ferrari, whatever you got, you can pick it up for me and I'll pay you later.

FREEMAN: Got it. Got it. For you.

SIDNER: John.

BERMAN: All right, with us now is Congressman Jason Crow, a Democrat from Colorado who was just named co-chair of candidate recruitment at the DCCC. And it's in that capacity I want to start in this conversation because we had these special elections in Florida, Democrats lost, but they did better than five months ago in the presidential election. And in Wisconsin, no congressional races up there, but the Democratic-backed candidate won the supreme court race.

As someone involved in elections looking forward, what did you learn?

REP. JASON CROW (D-CO): Well, it's really clear that what's going on right now, not just in Florida, not just in Wisconsin, but around the country, is people are waking up and saying, you know what, I voted for Donald Trump to reduce costs, to make my life better, and that's not at all what's happening. It's not happening on health care. It's not happening on veterans' benefits. It's not happening on the cost of goods. It's not happening on the cost of housing. He's not delivering in any way in the ways that he promised to do.

So, that's an opportunity for us to restart a conversation in places of the country that we have lost, that have turned away from us, right? We - we lost 90 percent of American counties in the last election. You know, that is not a governing majority. This is an opportunity for us to go back to the places where I grew up, where I'm from, and say, let's have a conversation about how we can move forward here.

BERMAN: It's an opportunity, you say, because you've also said that in these places you just talked about, they don't think that Democrats respect them.

CROW: Yes, that - that is true. I mean, listen, you can't lose in vast swaths of the country with folks who's - who will benefit from your policies, actually. If you just ask people what policies they support, they overwhelmingly support the things that we support.

So, a lot of this is about respect. It's about culture. It's about, you know, a sense of belonging. And that requires an honest conversation. It requires authenticity, right?

You know, when I - when I grew up, I worked in construction growing up. I started working when I was 15. I worked at Arby's and McDonald's, then I worked in construction to put my way through school. And, you know, what I learned is, when you get onto that construction site, you shake someone's hand, you're feeling their hands, right? You're trying to figure out, are they one of me? Do they understand my life, right? A lot - there's a lot of folks in the country who divide people up by whether you shower in the morning before work or you shower in the evening after work.

[09:25:01]

And we have to understand that, that people live different lives and have different experiences.

BERMAN: So, Elon Musk - when it comes to Elon Musk, you have a little bit more nuance of a message, I think, than a lot of Democrats do. And it was a message sent, perhaps in Wisconsin, that Elon Musk might not help Republican candidates if he goes and campaigns.

But you've said Democrats have to be careful to be seen not as defending government, but defending government reform. And at a certain level, what Musk is doing, maybe in an unpopular way, is a type of government reform.

CROW: Well, DOGE is a - is a outgrowth of a really important need. Listen, I'm a government reformer. I - I don't believe the government is working the way that it should. And - and almost all Americans see that, right? You drive past a construction project, a big infrastructure project. It takes eight years to build a bridge. It takes decades to build a rail line or a tunnel. That's not OK, right? We are wasting vast amounts of taxpayer dollars in infrastructure projects that could be built faster, right? And people see it. It's very obvious.

The - the solution to that is not taking a sledgehammer to the system and removing people's health care, cutting veterans benefits, firing some of our most talented civil servants. That's not the solution. It's actually going to make it worse. The solution is a bipartisan effort to reform government and to make it more efficient. And that is where we really need to be. DOGE is actually standing in the way of that effort.

BERMAN: I want to ask you about an article in "The Washington Post" this morning which shined a spotlight on what they found were more questions of communications inside the National Security Council. What they wrote was, "a senior aide to Mike Waltz used the commercial email," Gmail, "for highly technical conversations with colleagues at other government agencies involving sensitive military positions and powerful weapons systems relating to an ongoing conflict. Waltz has a less sensitive, but potentially exploitable information sent to his Gmail, such as his schedule and other work documents. Officials said Waltz would sometimes copy and paste from his schedule into Signal to coordinate meetings and discussions."

Again, it was an aide sending on the Gmail, but Waltz maybe getting some Gmail. What questions does this raise after the whole Signal scandal? CROW: Well, first of all, you know, what happened with Signal-gate, as

it's now called, is actually part of a larger pattern of carelessness and recklessness from day one in the Trump administration. They - they have done things basically every week that show a sloppiness at best, a recklessness at worse, that is putting our men and women downrange, serving around the world, at great risk, right? That's why this is important. We can talk about what the law requires. We can talk about process and protocol. We can talk about all those things. But why this is important is we are asking men and women to go around the world and do incredibly dangerous missions.

As we sit here right now, John, having this conversation, there are people doing really tough stuff on our behalf. And our adversaries Russia, China, Iran and others are actively trying to gather information to undermine those missions, to - to kill American troops. And that sloppiness puts them at great risk. So, that's why that's important.

You know, I served three combat tours in Iraq and Afghanistan. I was a paratrooper and an Army Ranger. So, I know what we're asking our service members to do. I know how tough these missions are. There is - there is zero - zero ability to make mistakes.

So, at the top, right, at the top, the messages being sent from the Trump administration is that, the rules don't apply to us. You know, we can make mistakes. There is no accountability. The rules that apply to the privates, to the sergeants, to the captains, to all the other people don't apply to us. And that's simply not OK.

BERMAN: It's got to be a zero fail system.

All right, Congressman Jason Crow from Colorado, nice to see you this morning. Thanks so much.

CROW: Thank you.

BERMAN: Kate.

BOLDUAN: Still ahead for us, opening bell on Wall Street, minutes away. How are investors feeling right now as the world prepares for President Trump's much hyped and much anticipated big tariff announcement today. We will soon find out.

And a 63-year-old woman trapped in the rubble for 91 hours after that earthquake in Myanmar. Details on - on the - how she was incredibly rescued alive, just as the death toll there is now in the thousands.

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