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U.S. Stock Futures Tumble as Trump Expands Trade War; Violent Tornado Produced Heavy Damage in Northeastern Arkansas; Now, Secretary Rubio Meets With NATO Foreign Ministers in Brussels. Aired 7-7:30a ET

Aired April 03, 2025 - 07:00   ET

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

[07:00:00]

SARA SIDNER, CNN ANCHOR: Breaking this morning, could we see market mayhem? Stocks open in a couple of hours, U.S. stock futures are falling, as President Trump launches a historic global trade war. The International Chamber of Commerce calls a clear systemic risk to the global trading system. We will have live, real time updates on the markets across the world.

JOHN BERMAN, CNN ANCHOR: One critical question, how will other nations strike back? New threats to hit the U.S. where it hurts the most, as you can see, global markets taking a serious hit.

KATE BOLDUAN, CNN ANCHOR: And breaking overnight deadly tornadoes ripping through the Midwest, thousands of people are also now waking up without power, as we are going to get a first look at the devastation left behind and the threat not over.

I'm Kate Bolduan with Sara Sidner and John Berman. This is CNN News Central.

SIDNER: This breaking overnight, President Trump slapping tariffs on 185 U.S. trading partners overhauling more than a century of American policy. A dramatic expansion of his trade war, sending shockwaves across the globe and as other nations are threatening to retaliate. The markets around the world already reacting in a downward spiral as we wait for the U.S. markets to open.

On top of those stunning new sweeping tariffs, Trump's previously announced 25 percent tariff on imported automobiles now in effect. It's all setting the stage for potentially a very ugly day on Wall Street. U.S. stocks are pointing towards a sharply lower open. The S&P 500 futures down more than 3 percent, a massive decline. Trump's 25 percent tariffs will now be charged on all imported vehicles, and beginning May 3rd, that will also apply to all imported car parts. The move expected to hike car prices across the board, including on U.S.- made autos. Stock futures for American automakers also down this morning.

And here's the impact for you. The auto tariffs will raise the cost of buying even an American-made car by about $4,000, according to analysts by Bank of America. I'm joined now by CNN Anchor and Business Correspondent Rahel Solomon. Give us a sense of just the enormity of these new tariffs that are put in place at this time by Donald Trump.

RAHEL SOLOMON, CNN BUSINESS ANCHOR AND CORRESPONDENT: Yes, enormous is a good way to put it this morning. So, it's hard to picture a product, an industry, a country that does business with the U.S. that won't be touched by this in some way. I want to actually start with futures because, as you rightly pointed out, it is shaping up to be an ugly day, that's a technical term for it, an ugly day on Wall Street.

Now, I can tell you that at about 4:00 A.M., futures were all solidly lower, but this is an actual acceleration from all of that. So, as we get closer and closer to the opening bell, it looks like these losses are holding.

Only thing I will say, and an important caveat here is when we're talking about pre-market trading, volume is thin. So, sometimes this can sort of distort what we might actually see in the session that day. But no other way to put it, this is not what you want to wake up and see at all.

Now, when we're looking at sort of industries, I can tell you that when it comes to Tech Industry Analyst Dan Ives, he just put out a note ten minutes ago, he called these tariffs illogical. He said that they're absurd. Yesterday, he called them baffling. And when you sort of take a bigger picture out, when you look at a bird's eye view of what we're talking about here, China among the worst hit here, an additional 34 percent for China, Vietnam, Cambodia, between 46 to 49 percent higher. So, when we're talking about enormity, this is what we're talking about.

Now, earlier this morning, I spoke to Rhett Buttle, who's the co- executive director of the Small Business Roundtable. And he said, look, I'm concerned about the short-term impact of this. I'm concerned about stocks, but what he said he's really concerned about is the long-term impact in terms of hiring for small businesses. Take a listen to what he told me.

(BEGIN VIDEO CLIP)

RHETT BUTTLE, CO-EXECUTIVE DIRECTOR, SMALL BUSINESS ROUNDTABLE: Because of who small businesses employ and how they do their planning, there's a potential that it could also affect unemployment. It would allow businesses to not be able to project out as long or maybe hire as much as they should. So, we're going to see some of the immediate effects of the stock market and the price on consumers.

I also affect this -- I also am worried this is going to affect the U.S.'s long-term growth in terms of how small businesses hire.

(END VIDEO CLIP)

[07:05:00]

SOLOMON: Now, speaking of growth, obviously the president has said that these policies will actually be positive for economic growth. He said these will be positive, net positive for American businesses, consumers, net positive for the economy. Obviously, the debate on that is still out and only time will tell. But, clearly, Wall Street's speaking very loudly here, both in the U.S. and around the world, and at this point markets don't like it.

SIDNER: Yes, clearly don't like it across the world, and we have not even yet heard what the retaliatory tariffs will be, which are being promised even by some of our closest allies, like Australia.

SOLOMON: Yes.

SIDNER: Rahel Solomon, thank you so much for being here on such a busy, busy day in the markets. John?

BERMAN: Yes, we just saw the NASDAQ dip below, you know, a 4 percent drop on futures this morning, which by some definitions is pretty big.

Again, as Sara was just saying there, the key question here is the reaction, retaliation from other countries. What will they do? Some friends, some foes, we've seen overseas markets drop overnight. China is now facing a whopping 54 percent tariff on good ship to the United States. The Chinese call it bullying. They are vowing retaliation.

So, let's get right to CNN's Marc Stewart in Beijing for the latest. Marc, what are you hearing this morning?

MARC STEWART, CNN CORRESPONODENT: Well, John, I think it is very safe to say that anxiety is very high, not only here in China, but across Asia. Let's briefly look at the markets today in Asia, how the close went, everything in the red. Hardest hit, Japan, seeing the steepest losses, which is really not a surprise, because if we look at Japan, it's home to the auto giants, like Toyota, like Honda, like Mazda.

But then we have the bigger question about China, where I am right now, seeing the harshest of tariffs and what will China do next as far as retaliation. We heard from one analyst today who I think brought up a really good point. The real question is, who's going to fold first? The United States or China?

For the moment, China has not unveiled its plan to retaliate. In fact, today, a lot of calls for diplomacy and discussion. Perhaps it could be part of a bigger strategy leading up to that April 9th implementation day of these additional tariffs. If things don't go as to the liking of China, it certainly will respond in a very harsh way. It has a lot of tools in its box, including targeting agriculture, farmers, the heartland of America, which was hit in the past during the first Trump presidency, and could certainly be a target in this latest round.

There is certainly economics involved, John, but there's also ego, because neither Xi Jinping nor President Trump want to appear weak in front of their own nations, but also the rest of the world.

BERMAN: Yes, no doubt about that. Again, we're watching the markets. They will be the first to react. But people everywhere could soon start feeling the impact of these tariffs of a true global trade war.

Marc Stewart in Beijing, thank you very much for that. Kate?

BOLDUAN: A lot going on this morning. Right now, Secretary of State, Marco Rubio is in for some awkward meetings in Brussels to meet with NATO allies, the first cabinet member to face those allies since the president escalated this global trade war.

And also breaking overnight, multiple tornadoes, reports of tornadoes ripping across the Midwest. Deaths have been reported, homes leveled, power knocked out for hundreds of thousands of people, and the threat continues today.

Plus, how much does it cost to raise a child in the United States? A new study showing that number is skyrocketing and has done so in just a few years.

(COMMERCIAL BREAK)

[07:10:00]

BOLDUAN: Overnight, powerful storms turned deadly in Tennessee, a huge storm system just ripped across parts of the Midwest. The line of severe thunderstorms extended nearly 700 miles across five states. And so far, at least 20 tornadoes have been reported. In Arkansas, one person shared this video, we're going to show you right here, of a massive tornado touching down, and you can hear just sirens blaring in the distance.

CNN's Ryan Young is in Lake City, Arkansas, one of the places hardest hit by this round of storms. It looks like you've got devastation around you, Ryan. What are you seeing?

RYAN YOUNG, CNN SENIOR NATIONAL CORRESPONDENT: Yes. Kate, it's still completely dark here. We were -- because we could smell the gas, that odor, very strong pungent, because of vehicles like this one that were just tossed by the wind. And as we look around this area, we see car after car that were just sort of picked up and thrown.

There's another field just across from me that we can't even light it all the way just yet, because obviously the light's not up with the sun, but we can see several cars over there. And as we walk down this way, you see the signs of destruction. This chimney, we're not sure if it comes from the house behind me, but if you look here, look at the top of that chimney or the house over here, if you move in, Bart (ph), if you come a little closer, you can see just the power of the storm and how it ripped this place to pieces.

And one Lake City resident told us this was something, a powerful storm they'd never faced before. Take a listen.

(BEGIN VIDEO CLIP)

CHASTITY VANKIRK, HOUSE HIT BY TORNADO: I just knew that it was going to get bad, so I took me and my family to the nearest shelter. When the first one touchdown. We watched it come through, but we was hoping it missed our house. But as soon as we drove up, we realized there we have nothing left.

(END VIDEO CLIP)

YOUNG: Yes. So, again, as we are starting to look around here, lightning is still popping all around us.

[07:15:02]

Some people are starting to come out and survey the damage for themselves. The mayor of the city has told us at least five homes destroyed. And as we look around from the spot that I'm standing in, I can count three others.

We just talked to a man who was driving by because there are people who are doing surveys. He says there's at least three other on the other side of the highway that were also flattened by the storm.

Now, look at these trees as well. You can see how the storm moved through here. You can see the damage that's been left behind. Just in the last 30 seconds or so, another truck has pulled up to this home. So, maybe we can see if the homeowners were here during the storm and were able to survive, or maybe they went somewhere else. It's the shelter in place. That's what we're doing as we go through this situation.

We have seen police officers around this area doing surveys as well, still trying to figure out if anyone was hurt in this area, but the damage so far, at least in this pocket, very severe.

BOLDUAN: Yes, and very evident. As first light comes up, you'll get a better picture of just what that community's dealing with.

Ryan, thank you very much. We're going to get back to Ryan for sure. Sara?

SIDNER: All right. Getting that, you know, real time. Look at some of the damage there by Ryan, pretty extensive. Those storms are now targeting the south expected to bring once in a lifetime flooding to some areas.

Let's get straight to CNN Meteorologist Allison Chinchar.

Allison, obviously, people terrified when you see the enormity of these tornadoes, but it is often the flooding that takes more lives. What can you tell us about that this morning?

ALLISON CHINCHAR, CNN METEOROLOGIST: Right, that it's going to be a multi-day event. This storm system is not very fast, but it's impacting a lot of states. Even the tornadoes, look at these, all three of these videos coming from three separate states, from three separate individual storms, but all part of the same system. This was all of the warnings that came through the last few days. All of those boxes indicate either a tornado warning or a severe thunderstorm warning that was issued in the last 48 hours.

Here's a look at the radar now. You've got this tornado watch in effect for portions of Kentucky and Tennessee, as we speak. A severe thunderstorm watch in effect for portions of Texas because it extends all the way back. You've got active warnings as we speak, including some severe thunderstorm warnings and also the flashflood warnings because again, this is a very slow moving system, so you have those storms training over the same towns and communities just dumping a continuous amount of rain.

That's going to be the big concern going through today is all of this area here has a high risk for excessive rainfall. You could end up seeing some portions of the area that pick up more than a foot of rain.

SIDNER: I recognize some of those places like Branson. I used to work near Paducah, Kentucky and Cape Gerardo. So, this is an area that is used to getting some of this, but this is something they really need to watch out for.

Thank you so much, Allison Chinchar. I really appreciate it.

All right, by playing with matches, the United States will end up getting burned. It's one of the reactions to President Trump's sweeping tariffs pouring in from around the world. What the White House is saying and how it's responding this morning.

And hours after those tariffs did go into effect, Canadian hockey fans booing the U.S. National Team.

(COMMERCIAL BREAK)

[07:20:00]

BERMAN: All right. The breaking news we have, our eye on market futures as Wall Street. The market's open in just a little bit. You can see right there, the NASDAQ down just under 4 percent, the S&P down more than 3 percent. Pretty big drops. Would you call that massive? Well, they're big.

And, look, happening now, talk about awkward timing, Secretary of State, Marco Rubio is on the ground in Brussels for a conference of NATO ministers, and it comes just hours after President Trump announced sweeping new tariffs against every last one of their countries.

Let's get right to CNN's Alex Marquardt, who is in Brussels for these meetings. Add to this the tension over Russia and Ukraine and may be different positions between the U.S. and these NATO countries. It makes for some interesting meetings out, Alex.

ALEX MARQUARDT, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: It certainly will, John. And Rubio just arrived. In fact, he came straight from that tariffs announcement in Washington yesterday here to NATO. And even though this will be a meeting of the NATO foreign ministers about NATO issues, you can be sure that he will be facing questions from the fellow foreign ministers about what the Trump administration is thinking, what their strategy may be here.

Of course, so many of the NATO members are also members of the European Union, which President Trump blasted during that announcement yesterday, saying the E.U. was ripping off the United States, calling them pathetic.

But, certainly, these foreign ministers who deal much more with diplomacy than with economics, will be trying to focus more on these NATO specific issues, questions over the unity of NATO, the war in Ukraine, and pushing back Russia, and then defense spending, which has been such a talking point of the Trump administration. Trump wanting to see NATO members spend 5 percent on their defense. And we have just heard Marco Rubio saying that he wants to hear a commitment out of this meeting for each member to put themselves on a pathway to that 5 percent of GDP.

Rubio also dismissed, John, what he called the hysteria over questions of the U.S. membership in NATO. Take a listen to what he had to say as he arrived at NATO headquarters.

(BEGIN VIDEO CLIP)

MARCO RUBIO, SECRETARY OF STATE: As we speak right now, the United States is as active in NATO as it has ever been, and some of this hysteria and hyperbole that I see in the global media and some domestic media in the United States about NATO is unwarranted. The United States, President Trump made clear, he supports NATO. We're going to remain in NATO. He's made clear.

(END VIDEO CLIP)

MARQUARDT: John, some of that concern though is warranted. We have heard President Trump talk about pulling out of NATO. He has criticized NATO. He has said that he would encourage Russia to, quote, do whatever the hell they want if NATO members didn't pay their fair share.

[07:25:06]

And now we have the Trump administration threatening to annex possibly by military force the territory of a NATO ally, Denmark. John?

BERMAN: Yes, a lot going on. Great to have you there monitoring the situation. Alex Marquardt in Brussels, thank you very much. Kate?

BOLDUAN: Much more to come from that, for sure, John. Also this ahead overnight, the treasury secretary has a new warning to countries thinking about retaliating against President Trump's global tariffs is warning simply don't. We're live at the White House next.

And there's also a new report coming out in just minutes with a fresh look at the impact of the sweeping government layoffs on the economy.

(COMMERCIAL BREAK)

[07:30:00] SIDNER: This morning, a massive decline for stock.