Return to Transcripts main page

CNN News Central

Trump Tariff Announcement Unleashes Global Shock Waves; World Leaders React to Trump's Historic Global Trade War; U.S. Stock Futures Tumble as Trump Expands Trade War; Massive Wave of Job Cuts Underway at Federal Health Agencies. Aired 7:30-8a ET

Aired April 03, 2025 - 07:30   ET

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

[07:30:00]

SARA SIDNER, CNN ANCHOR: This morning, a massive decline for stock futures after President Trump upended a century of American global trade policy. The president announcing sweeping global tariffs of at least 10 percent across the board on all imports from other countries and much higher tariffs for some nations. The tariffs are on top of previously announced taxes on imports of steel, aluminum and cars.

That went into effect at midnight last night. The president promising it will spur investments and jobs.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Jobs and factories will come roaring back into our country and you see it happening already. We will supercharge our domestic industrial base. We will pry open foreign markets and break down foreign trade barriers. And ultimately, more production at home will mean stronger competition and lower prices for consumers.

SIDNER: As the world mulls how to respond, but they are promising a response, the Treasury secretary had a message for them.

CNN's Alayna Treene is joining us now from the White House. Give us some sense of how the administration is framing all of this and the warning that has been made to other countries.

ALAYNA TREENE, CNN WHITE HOUSE REPORTER: Well, Sara, I think the White House has clearly been very intentional in its messaging of this, the idea that they believe that this is a quote, unquote, liberation. That event yesterday in the Rose Garden was in some ways meant to be a celebration. And it really cuts to this core belief that President Donald Trump has, which is that the United States has been taken advantage of for several years now. That's really what we saw.

These tariffs by design are meant to do essentially break the global trading operation that has been built over the last 70 or 80 years and completely restructure it and really the president's image.

Now, that also goes against what we know many people like on Capitol Hill, Republicans, other defenders of the president who have argued that, you know, he's at his heart a pragmatist, he's a dealmaker, that this is, you know, he'll back off eventually.

It's very clear that that is not the case. And that was very clear in the continued messaging we have heard from some of the president's top advisers. Now, I think the interesting thing, of course, is where this goes from here.

A ton of different countries from the European Union to China, Japan, Mexico, Canada, the list goes on, have threatened retaliatory tariffs, that they are going to respond to these tariffs in kind. Treasury Secretary Scott Bessent really warned them not to do so.

Take a listen to how he put it.

(BEGIN VIDEO CLIP)

SCOTT BESSENT, TREASURY SECRETARY: Everybody sit back, take a deep breath, don't immediately retaliate. Let's see where this goes, because if you retaliate, that's how we get escalation.

(END VIDEO CLIP)

TREENE: Sara, he also went on to say, Bessent there, that, you know, the high end of the number will remain where it is now if these different countries do not retaliate. Essentially saying as well that he believes and this administration believes that the United States will win any sort of trade war with other countries. He actually argued that other countries are surplus countries in their in their trading, their surplus trading partners. And that's why they would lose a trade war.

All to say, I think what's been very clear is how serious the president and his top advisers have been about these tariffs. They are designed, again, to break the global trading operation that has existed for several decades. And while they may be up to negotiation for now, they are effective immediately. And it doesn't seem like any change in plans -- Sara.

SIDNER: So I think the British would call what Treasury Secretary Bessent said pretty cheeky to tell everyone to calm down and not retaliate. We will see how other countries respond, but there are some promises of retaliation already. Thank you so much, Alayna Treene, for your reporting there from the White House -- Kate.

KATE BOLDUAN, CNN ANCHOR: How countries will respond. That is a standby to standby. But world markets, they are already responding and reacting this morning to that historic -- the president's historic escalation of this trade war.

Asia-Pacific markets, as you can see, they fell in response to the new tariffs. Japanese markets led the losses down 2.8 percent at closing. South Korean markets closed down by less than -- less than 1 percent. But then you've got Hong Kong markets closing 1.5 percent down.

CNN's Valeria Leon is in Mexico City and CNN's Melissa Bell is live in Paris to gauge where this goes from here, which is the key question, as Alayna Treene was just laying out. Valeria, let me start with you. What are you hearing from Mexico this

morning?

VALERIA LEON, CNN CORRESPONDENT: So Mexico could almost breathe a sigh of relief as Donald Trump announced reciprocal tariffs for dozens of nations. And Mexico was missing from that list, meaning that Mexican economy appeared to have avoided worst case scenario.

[07:35:00]

Mexican exports to the U.S., already covered by the U.S.-MCA trade agreement, will remain exempt from the new tariffs, and products already penalized with previous migration and fentanyl-related tariffs are also exempt.

Nevertheless, President Sheinbaum will present a response plan to these tariffs today, and she has said she doesn't believe in an eye- for-an-eye response. This is what she said.

(BEGIN VIDEO CLIP)

CLAUDIA SHEINBAUM, MEXICAN PRESIDENT (through translator): We do not believe in an eye for an eye, a tooth for a tooth, because that always leads to a bad situation. Of course, measures are taken because measures are taken on the other side. But the dialogue must continue. It's not about tit for tat, but about what is best for Mexico and how to face the situation.

(END VIDEO CLIP)

LEON: And Mexico's plan is expected to include some reciprocal duties on U.S. imports, but according to Mexican authorities, the plan will mainly be focused on stimulating national production to try to reduce dependence on U.S. exports, which currently stand at about 80 percent of all Mexican goods sent abroad.

BOLDUAN: All right, Valeria, let me go over to Paris now. That's where Melissa Bell has been standing by for us as well. Melissa, the European Commission, not mincing words, the head of the European Commission, not mincing words in responding to this global escalation of this trade war.

What are you hearing from European leaders?

MELISSA BELL, CNN SENIOR INTERNATIONAL CORRESPONDENT: That's right, Kate. This is a war, they say here in Europe, that they did not want, but that they are prepared to fight. This is, after all, is a bloc, the United States' largest trading partner.

And what we've been hearing from European officials is that they're ready. They've been preparing several scenarios as they waited for these to be unveiled. The jewel in their crown, they say, the single market, the biggest in the world, 450 million consumers that they are ready to protect, but to use also to fight back.

Have a listen to what the European Commission president had to say. (BEGIN VIDEO CLIP)

URSULA VON DER LEYEN, PRESIDENT, EUROPEAN COMMISSION: President Trump's announcement of universal tariffs on the whole world, including the European Union, is a major blow to the world economy. The global economy will massively suffer. Uncertainty will spiral and trigger the rise of further protectionism. The consequences will be dire for millions of people around the globe.

(END VIDEO CLIP)

BELL: Now, as part of those scenarios they've been looking at and the possible measures that they might be taking, things like trying to take on big tech that Europeans say make 30 per cent of their profits here in the EU. The Digital Services Act could be beefed up to hit their revenue. There's also a measure, an anti-coercion instrument here in Europe that is used to target things like governments and individuals generally that could now be rolled out to target American banks and their revenue.

So Europeans are looking very hard at how they can answer back, even as they continue to negotiate -- Kate.

BOLDUAN: Yes, absolutely. Melissa, thank you so much. Really appreciate it.

Melissa and Valeria in Mexico for us. Really appreciate it, guys -- John.

JOHN BERMAN, CNN ANCHOR: All right, on top of all of this, breaking moments ago, a new report shows that last month layoffs reached a level not seen since the pandemic and the biggest driver cuts from the federal government. CNN's Matt Egan is with me here this morning, a lot going on, Matt.

MATT EGAN, CNN REPORTER: Yes, a lot going on. Listen, we're talking about 2020 style layoffs, except now it's not being driven by a deadly virus. It's being driven by DOGE.

So these numbers come from Challenger, Gray & Christmas. And a few moments ago, they reported that in March, companies and employers announced almost 300,000 layoffs, 275,000 in March. Now, that is 200 percent more than March of last year.

So for some context on this number, this is the third highest month of layoffs since Challenger started tracking this in the late 1980s. The only two months that were higher were spring of 2020 during COVID when lockdowns were shutting everything down.

And when you look at the trend, look at this. This is announced job cuts by month. And you can see these announcements were relatively low. There was that bump up in the middle of 2022, but now they're going sharply higher.

Now, what's really important to stress here is that the vast majority of the layoffs in March were in the federal government, almost 80 percent. And we've seen that so far this year, nearly 280,000 government layoffs. That is way, way more than the same period of last year.

This, of course, comes as Elon Musk and DOGE, they try to cut government spending. They're trying to make the government more efficient. Of course, there are economic effects there, right, for federal workers who they may be spending less, they're going to vacation less, they might be struggling to pay some of their debt.

[07:40:03]

You look, DOGE was far and away the number one reason for job cuts in March, way more than market reasons or store closures, restructuring those traditional metrics. It's not about that right now. It's really about DOGE.

Gregory Dacko over at Pantheon, he said that cutting government spending indiscriminately has no positive effect on any economy. Moving fast and breaking things is a risky proposition.

So bottom line here, most of these announcements of job cuts, this was driven by DOGE. The rest of the economy had relatively low layoffs. But now, in addition to DOGE, this jobs market has an even bigger test, right? And that's this global trade war that is clearly freaking out investors right now.

BERMAN: Yes, you can see right now, again, the Nasdaq down nearly 4 percent, S&P down more than three. And what we have monthly jobs figures that come out tomorrow, right?

EGAN: That's right. That's right. And we may not see the DOGE effect in tomorrow's numbers to the degree that we did in this Challenger report. And yet they're happening.

And now the jobs market has to contend with all these tariffs and the trade war confusion.

BERMAN: Right, economists, very, very busy this morning. Matt Egan thank you very much -- Sara.

SIDNER: All right, as those laid off Americans try to bounce back, they'll also be dealing with the higher cost of living. This morning, the European Union's trade chief said President Trump's sweeping new tariffs will really harm people on the ground.

Joining us now is Kenneth Rogoff, the author of the forthcoming book, "Our Dollar, Your Problem." He's also a professor of economics and public policy at Harvard University. Thank you so much, sir, for coming in on what is -- we could call it a historic day because it's such an unusual policy that Trump has put forward, where he has dinged all 185 trading partners with the United States and the markets reacting by tumbling there for Dow futures, Nasdaq futures and S&P 500 futures. We will see what happens when the market opens.

What did Trump, in your opinion, just do to international trade? KENNETH ROGOFF, PROFESSOR OF ECONOMICS AND PUBLIC POLICY, HARVARD UNIVERSITY: Well, first of all, historic. It's really hard to find a frame of reference. You might have to go back to Nixon in 1971 saying the dollar was no longer good as gold. Go back to the tariff war of the 1930s to think of a moment like this. This is historic.

You know, indeed, it's hard to know how it's going to play out if it were just the 10 percent. And it's like just the 10 percent tariffs on everyone. It's not a good idea, but it's not the end of the world. The problem is he's putting much bigger tariffs on our biggest trading partners. There's chaos. There's uncertainty. No one knows what's going on.

Historically, the U.S. has been the beneficiary of free trade and goods and investment in people. That's been the secret sauce of why our economy is the envy of the world. And I'm concerned about where we're going from now.

SIDNER: What are you looking for as U.S. trading partners? Many of them are allies who have expressed deep anger at the United States. What do you expect them to do?

ROGOFF: They're going to retaliate. Now, what they're trying to do is have them retaliate one at a time. I mean, I don't think there's anything the Trump administration would like more than to have Vietnam declare what it's going to do and then flatten them with counter tariffs.

But if everyone's doing it fast and in coordination, you know, you can't wrestle with everyone at once. We need our allies. We need to trade. And so Trump thinks he's going to win. He thinks he's going to beat everyone down. He says he'll bring tariffs down to 10 percent. I hope so. I hope he's right. I hope to bring down some tariffs, which are unfair in other countries. He has a point there. But to move first and negotiate second. Wow.

SIDNER: Some of the rates you mentioned that Trump announced are higher than what some economists had expected. How do you think that the White House is going to settle all of these tariffs? You mentioned that you were concerned to see the numbers so high for some of our biggest trading partners -- I think it's 34 percent for China. But you're also seeing places like Cambodia, a very poor nation, getting hit with a 49 percent tariff. What is -- why is he doing it this way? Is it just based on what their tariffs are for us?

ROGOFF: Well, that's what he says, although he has a broad interpretation of tariffs. He looks at other ways he feels they're interfering with trade, some pretty obscure and hard to document, like what he calls exchange rate manipulation.

[07:45:00]

And then the whole thing with the European Union, they have a different tax system than us. Their value added tax is just a sales tax on everyone, on domestic goods in Europe, on imports. So then they can't get rid of that overnight. I mean, I don't know what he's hoping to negotiate away.

SIDNER: Kenneth Rogoff, thank you so much for walking us through that this morning as we watched the markets, things not looking so great. Appreciate it -- Kate.

BOLDUAN: All right let's turn to sports for a moment. Alex Ovechkin, now just three goals away from breaking an NHL record. Ovechkin scored his eight hundred and ninety second career goal last night, bringing him just shy of Wayne Gretzky's record.

Still, though, not enough for the Capitals to defeat the Carolina Hurricanes. But I digress. But anticipation is mounting. It's all getting very exciting.

Carolyn Manno here with much more on this. How close is so close?

CAROLYN MANNO, CNN SPORTS ANCHOR: It is so close. It's right there. I mean, you can feel it.

And a lot of it has to do with the pace that the 39 year old has managed to maintain. He's been unstoppable on the doorstep of now accomplishing something that so many people didn't even think was possible. Kate, career goal number 892, coming with the Caps 4-0 nothing against Carolina. Late in the second period of this game, Ovechkin lighting the lamp on the power play, his 39th goal of the season, his 17th in the last 25 games. He said afterwards he was disappointed that his team couldn't get the win.

This eventually turned into a rough and tumble old school third period. Lots of physical fighting. But the bigger picture, he's now only a hat trick away from breaking Hall of Famer Wayne Gretzky's 31 year old all time scoring record.

And while Caps fans were focused on Ovechkin --

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: ... can you see, by the dawn's early light,

CROWD: Boo!

(END VIDEO CLIP)

MANNO: You can hear that Canadian fans were back booing the United States national anthem during the Vancouver Seattle game at Rogers Arena.

This is a response to President Trump's sweeping new global tariffs that were imposed hours before the puck dropped.

In baseball it was a Shohei Ohtani bobblehead night at Dodger Stadium, more than 50,000 fans lining up hours ahead of time to get one of these things. I don't blame them.

And then what else would you expect from the player that they love fans on their feet, the superstar delivering, stepping up to the plate with a game tied to five in the bottom of the ninth and he crushes a walk off solo shot to lift the Dodgers over the Braves. The Dodgers are now eight and Ohtani.

I mean, on this season, they had this storybook ending in October, and now they just continue to meet the moment. This is the best start ever by defending World Series champ. They already have to walk off Wednesday of six comeback wins this season. And it just keeps getting better and better.

And as March Madness, Kate, gets set to ramp back up this weekend, Juju Watkins from USC is now officially named Women's College Basketball's Player of the Year. The sophomore star has been sidelined during much of the madness. She tore ACL, unfortunately, in the second round of the tournament.

But she was a force to be reckoned with in the regular season, lifting the Trojans to a 31 to 4 record, averaging nearly 24 point, seven boards, three assists per game. She is the first USC player to win the award since the legend Lisa Leslie back in 1994. A lot of people thought that this was pretty much in the bag with some of the performances that we saw from Juju this season. She is incredible. So we wish her the best.

BOLDUAN: Well, absolutely. And her recovery and don't know no question. She'll be back, but also a sophomore, as you mentioned.

MANNO: Yes, she's got time.

BOLDUAN: So she's got time --

MANNO: Plenty of time.

BOLDUAN: To kick some you know what on the court. It's great to see you, Carolyn. Thank you so much -- John.

BERMAN: That Ohtani home run, both massive and enormous.

All right, this morning, the FDA blocks approval of a new COVID vaccine that was on track to be cleared.

And we've got brand new data on just how expensive your children are -- raising them that is. $300,000 apiece.

(COMMERCIAL BREAK)

SIDNER: Some pretty scary moments when people had to climb out of the wing of their plane to evacuate. They say there was a burning smell and smoke in the cabin of the American Airlines jet. The airline says the plane had a maintenance issue.

This was in Augusta, Georgia on Tuesday. And the next day a different plane on that same route had a mechanical issue. But it's unclear exactly what the problem was.

So the cost of raising a child is going way up. Skyrocketing if you will. A new study from LendingTree shows the annual cost rose almost 36 percent since 2023.

And in four states, Hawaii, North Dakota, Washington, and Maryland, parents can expect to spend more than $300,000 over 18 years to raise a child. That includes the cost of daycare, food, and other essentials.

And there is good and bad news about egg prices. They are actually starting to fall but they're still up nearly 60 percent compared to a year ago. Some stores are still limiting the number of eggs that you can buy. But the USDA says the supply at grocery stores has improved.

The American Farm Bureau says there's been a sharp drop in bird flu which of course is the reason the prices spiked so high. And that has helped bring the prices back down -- Kate.

BOLDUAN: Thank you so much, Sara.

[07:55:00]

So this morning, some surprising news out of the FDA. Now delaying the decision to grant full approval of Novavax's COVID-19 vaccine even though it was on track to be cleared.

A source telling CNN that the agency is now seeking more data on the vaccine. The move is noteworthy because, for many reasons, including because it comes just days after the FDA's top vaccine official was forced out of the job. That official in his resignation letter also slammed HHS secretary, RFK, Jr., accusing him of pushing, quote, misinformation and lies.

Also this morning, we're learning some more detail about the massive layoffs and cuts that have come to HHS to the entire department. You see some of the numbers there of how many employees have been let go.

With that, questions are growing about what the cuts now mean for critical safety and regulation around new drugs and food. Congress now wants Kennedy to testify about the cuts next week as some of the fired HHS employees are now speaking out.

(BEGIN VIDEO CLIP)

STEVEN WIENER, PROGRAM SPECIALIST, ADMIN. FOR CHILDREN AND FAMILIES: Oh, it's miserable. It's been awful. It's been awful for weeks. Just this threat, this lingering cruelty of you're going to be let go today. It's just so sad. And I'm so sad as not only a federal worker but as an American. I mean, just a no heart.

JULIE FONG, REGIONAL PROGRAM MANAGER, DEPARTMENT OF HEALTH AND HUMAN SERVICES: I was planning to stay here and retire in this job, so it feels like I'm moving my home.

ERENDIRA GUERRERO, PROGRAM SPECIALIST, DEPARTMENT OF HEALTH AND HUMAN SERVICES: We have an entire office of Head Start who, they're gone. It's been an honor to serve the citizens of this country.

(END VIDEO CLIP) BOLDUAN: Joining us right now is a man who most recently led the FDA, former FDA commissioner, Dr. Robert Califf. Doctor, thank you so much for coming back in. It is really good to see you.

And I was looking at some of what you were writing on social media in reaction to all of these cuts. And one of the things that really hit me was that you wrote, the FDA as we've known it, is finished. What do you mean?

DR. ROBERT CALIFF, FORMER FDA COMMISSIONER: Well, in America we've gotten used to a system in which medical products are developed in a very complex environment where there's a lot of risk and we're doing human experiments along the way because you have to test these things in which most of them fail.

And now we've lost the whole leadership tier with one or two exceptions. And we've lost the middle range people who have the experience of seeing these products being developed and guiding industry through it.

And I don't see that there's enough people left to actually get the job done. I don't know about this latest vaccine delay as to whether it's due to the same reasons or something else, but I would expect we'll see a lot more of these.

Then, of course, our food supply is absolutely critical. Let me just say I'm totally on board with the idea that we have poor nutrition in the U.S. where the easiest thing to do when you buy food is to buy food that's not healthy. So I'm completely in tune with seizing the moment here where a lot of people that used to block efforts to make our food more nutritious are now in favor due to the political changes. Let's do that.

But our food supply is very dependent on FDA -- we call them investigators -- inspectors, and a whole system of support staff who work with farms and supply chains and restaurants and grocery stores. And the workforce is just decimated.

BOLDUAN: When you say that there just aren't enough people left, I mean, do you think with the numbers that you see of these cuts, do you think safety has now been compromised in terms of we're talking about the food supply and also when you look at the safety of drugs and medical devices?

CALIFF: Hang on just a second. I'm sorry.

BOLDUAN: No worries.

CALIFF: One of the problems with being in a hotel and taking these.

BOLDUAN: Also, unfazed, as any cardiologist will say, unfazed by anything. Continue, doctor.

CALIFF: Yes, there are a lot of analogies that could be used, but the pothole analogy may be a good one. If you don't fix the potholes, you save some money. You're not paying the workers who do it. And you know, it'll take a while, but you're increasing the risk that something bad is going to happen when someone hits a hole in the road. And that's the situation that we're in. I think the overall risk level is significantly increased now.

And it's not just the number of people. It's the despondency of the workforce. They've been treated terribly. I think your segment right before I came on captured what I've heard from the people who used to work, you know, I'd say for me, they really work for the American public. A lot of them were fired in a situation where they didn't even get to notice that they reported for work the other day and were just put in a separate line.

And it reminds me of other societies where people get segregated into groups.