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U.S. Stock Futures Tumble as Trump Expands Trade War; DOGE Drives Layoffs to Third-Highest-Ever Level in March; DHS Wants to Use Migrant Aid for Immigration Enforcement. Aired 8-8:30a ET

Aired April 03, 2025 - 08:00   ET

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

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DR. ROBERT CALIFF, FORMER FDA COMMISSIONER: ... work the other day and we're just put in a separate line and it reminds me of other societies where people get segregated into groups for arbitrary reasons.

So the workforce needs to step up and and as you know we have a new commissioner now just started a couple days ago. So we do have to give him a chance and I hope he will succeed.

KATE BOLDUAN, CNN ANCHOR: But so many questions hanging over this and hearing from you that the risk -- how high the risk now is when it comes to the safety around FDA and everything important that the FDA does is really startling. Dr. Robert Califf, it's always good to see you. I really appreciate your time.

New Hour of CNN NEWS CENTRAL starts now.

SARA SIDNER, CNN ANCHOR: Trump's historic tariffs upending decades of U.S. trade policy, future markets responding declines across the board. We are 90 minutes from the opening bell as we follow the fallout from Trump's global trade war.

And time is ticking for TikTok again. The company has until April 5th to give up Chinese ownership or get banned in the USA. What hurdles must be cleared for the app to stick around and who might save it from deletion?

And at least three people have been killed in Tennessee after a severe storm outbreak and multiple enormous tornadoes. Many more were hurt and the threat isn't over as the storm system could now trigger generational flooding in several states. We are tracking all of that and that threat.

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

ANNOUNCER: This is CNN Breaking News.

BOLDUAN: Looking at breaking news, the breaking news being this is what Americans are waking up to right now. Markets falling, tumbling. Just look at those percentages right now. That's a big fall. That is something you could call as significant, startling, and pretty massive. Trump -- this is all happening after President Trump slapped those new

tariffs of at least 10 percent on all 185 countries that do business with the United States. An historic escalation in his trade war.

What this is adding up to first and foremost, an ugly start to the day on Wall Street. Futures down sharply, as we were just discussing. I mean, you're looking at the S&P 500. It's down more than 3 percent. Look at the Nasdaq as well. I mean, this is still looking not good this morning. This is considered a massive decline.

And overnight, the president's previously announced new 25 percent tariff on all car imports, that also took effect. This move alone is expected to hike prices on millions of vehicles by thousands of dollars.

And breaking just last hour, we have a new report that's been released showing the deep impact of Elon Musk's DOGE cuts throughout the federal workforce.

Layoffs in the United States hitting the third highest level ever in March, a level not seen since the COVID pandemic. DOGE's cuts accounting for nearly 80 percent of these job losses.

With all of that, let us start this hour with CNN's Matt Egan, who's got a look at, well, what we've already seen and what we're about to see. But this is shaping up to be, at the very least, a very rough start to the day.

MATT EGAN, CNN REPORTER: Yes, Kate, very rough. Look, this is a shock to the system, and it is a self-inflicted one, right? We're not talking about a virus like in 2020 or toxic mortgages in 2008, right?

We're talking about a massive trade war of historic proportions that President Trump escalated last night. And this is not sitting well with investors. We see Dow Futures down three percent, Nasdaq almost four percent loss.

These are significant losses, and they show that investors are increasingly alarmed about the economic damage that this trade war could do. Look, I think investors were obviously bracing for tariffs to go higher.

BOLDUAN: They knew something was coming.

EGAN: We knew something was coming. But a number of economists and trade experts that I talked to last night said that in some ways what got announced last night may have been even worse than the worst case scenario that people had been anticipating, right? We're talking about this 10 percent universal tariff and then 60 countries or so having even higher tariffs, notably including China and the European Union.

And this is definitely concerning investors about inflation, right, and what that's going to do to growth. Now, when you look at where tariffs actually have gone, right, because of the tariffs that have been imposed by President Trump, we now have the U.S. tariff rate going from around two percent at the end of last year to about 22 percent, at least 22 percent.

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Fitch Ratings says that that is the highest since about 1910, the highest U.S. tariff rate, exceeding even the rate during the Smoot- Hawley Act of 1930, which infamously made the Great Depression even worse. Now, it's not just the fact that tariffs are going up. It's that they're going up so rapidly.

I talked to Kim Clausing. She's over at the Peterson Institute. And she said it's just astounding that anyone would think that this is a good idea. I'll be stunned if we make it through this without a recession or a complete reversal by the president.

Mark Zandi last night, he told me, look, brace for impact. He said if the Trump administration follows through with these tariffs, he says a recession is more likely than not.

Of course, the big key here, Kate, is if they follow through, because we know that the president has at times pulled back, including when there's been pressure from maybe lawmakers, businesses.

BOLDUAN: Not a lot of time in between when it's supposed to -- between now and when it's set in this weekend.

EGAN: One of the keys is how -- whether or not they kick in and how long do those tariffs stay in place.

BOLDUAN: Absolutely. Talk to me about the new report that just released about -- kind of giving a better look, more detailed look at the massive layoffs to the federal workforce.

EGAN: Yes, Challenger, Gray & Christmas last hour putting out a report showing that layoffs surged in March. They said that March was the third highest month on record since they started tracking in the late 1980s for layoffs.

You see this about 275,000, 200 percent more layoff announcements than last year. If you look at the trend, we can see that layoff announcements were relatively low, relatively stable, and look at this going straight up.

But here's the key, Kate. This is largely being driven by federal government layoffs. Almost 80 percent of the layoffs in March that were announced were from the federal government. And this, of course, is the DOGE effect, is Elon Musk and DOGE. They slash government spending and they try to make the government more efficient.

But look, this shows the pressure that the jobs market was under even before this massive escalation in the trade war.

BOLDUAN: Yes, it's all going to add up to something, that's for sure. It's great to see you, Matt. Thank you so much for starting us off.

EGAN: Thanks, Kate.

BOLDUAN: John.

JOHN BERMAN, CNN ANCHOR: With us now, Doug Heye, Republican strategist, former RNC communications director. And Julie Roginsky, a Democratic strategist and co-founder of the advocacy group, Lift Our Voices.

This is the headline in the Trump-friendly New York Post this morning, World War Fee.

So, Doug, my question to you is, if you truth serum Republicans in the Senate this morning, how nervous would they be?

DOUG HEYE, CNN POLITICAL COMMENTATOR: Oh, they're very nervous. And look, the word tariff is typically the fingernails on the chalkboard for Republicans. That it hasn't been publicly at this point tells you how much the party has changed under Donald Trump.

But privately, there are a lot of conversations happening House side and Senate side with Republicans on nervousness on what this is and what its impacts are.

But also what I'm hearing and seeing downtown Washington, where a lot of trade associations, a lot led by Republicans or former Republican staffers, are signaling their nervousness as well. They may not want to come out and condemn it, but they're talking about impacts and what they may be.

And what I saw from Jay Timmons, the longtime head of the National Association of Manufacturers, pretty important part of this conversation that we've had over the past few weeks, is he's asking a lot of questions. He wants more information to know exactly what's going to happen. That tells you that that sector of the economy is very nervous about what's happening right now.

BERMAN: I want to play something that Republican Senator John Kennedy of Louisiana said about this. Let's listen.

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SEN. JOHN KENNEDY (R-LA): The president saying, if you're a business in a foreign country and you want to sell to America, move your business here and hire Americans. And in the long run, he's right. But as I've said repeatedly in the long run, we're all dead. Short run matters too.

(END VIDEO CLIP)

BERMAN: In the long run, we're all dead. The short run matters too. So let's talk about the short run.

I mean, we were looking at market futures today, which sometimes predict where the market's headed. Sometimes it's not quite an accurate prediction, but they're down. They're down a lot right now.

So in the short term, do you think Trump will blink on any of this if he continues to see numbers like this? JULIE ROGINSKY, DEMOCRATIC STRATEGIST: First of all, I think Senator Kennedy was talking about being dead in the short term politically, because I think this is going to cost the Republicans tremendously. And it's not just the tariffs. It's the uncertainty that the markets are roiling upon the American economy.

I think the president does have a tendency to blink when the markets go down. He always kind of correlates financial success to the markets. And so we've seen him blink before. We saw him blink on the tariffs with respect to Canada the first time when the markets responded.

You know, I'm not so sure that this constant back and forth and this constant blinking that the markets have to send him a message to do is necessarily good for the economy or the markets either. Because again, people and investors and businesses need stability.

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They need a road map as to what's going to happen to the extent that the government can provide one. Of course, there are always unexpected consequences to things.

But this constant chaos, which is what's been unleashed here on our economy, is what's going to rule the markets. So whether he backs down on this or not, I'm not so sure it's going to work anymore because it's the chaotic nature of his decision-making that's causing as many of these problems as the tariffs are themselves.

BERMAN: So the markets are one thing, right? And we know what, 60 percent of Americans own stock, maybe more. But there are people who don't.

Is there a way that Trump can spin this that he's fighting for, you know, the people or is he risking even that group too?

ROGINSKY: It's your 401ks. It's not people who are day trading, sitting at their computer. I mean, it's people whose retirement savings are tied up in the markets.

I mean, I look at my own parents who are retired, who are by no means are wealthy. They're living in some ways off of the 401k that they worked many, many, many years to have money for. And now all of a sudden that's going down.

They're not sure if Social Security is going to be here with all the cuts that are going to probably be made to Social Security and already you're starting to see the ramifications of that with DOGE. You're talking about retirees. You're talking about people who live on fixed incomes who rely on Medicare, rely on Social Security, rely on their 401ks to survive.

And all of those are under threat right now in the first three months of this administration. It's just unfathomable that we're putting people who worked their lives to get to this position in this situation. BERMAN: Doug, this is not hyperbolic. This upends the global trade system that has been in place for decades. It is a complete reworking of that. It sends tariffs higher than Smoot-Hawley levels. Anyone, anyone? The point here, Doug, this is big. And I do wonder if anyone appreciates what the political implications of it might be.

HEYE: Yes, look, I first heard the term Smoot-Hawley when I was a junior in high school, praised his sister Kathleen, who taught me that at Bishop McGuinness. Most voters aren't fixated on things like that. Those are big terms and big legislation that passed sometimes decades ago.

What they are concerned about is, as sort of the senator referenced, the short term on this. They don't think about global trade conflicts and upending systems. Those are very important conversations.

But their day-to-day lives, whether you're buying olive oil at your grocery store or you're buying socks at Walmart, as those prices go up, as we've seen inflation really hit voters over the past several years on seemingly everything that voters spend money on, that's, I think, where the real political problem could be here for Republicans, is if we see these kinds of massive price increases then taken away and then put on something else taken away then and put on a third thing or a 12th thing at that point, that kind of chaos with a real economic impact, that's where Republicans are nervous about this right now.

Donald Trump is always going to say that this is about fixing an unfair fight. He's always going to say that this is about standing up for the people. He's been very consistent on that messaging and on this issue for not just since 2015, when he took the escalator ride down to start his candidacy, but for decades now, he's been remarkably consistent on that.

But the impacts for voters, that's where Republicans are nervous right now.

BERMAN: All right, Doug Heye, Julie Roginsky, thanks to both of you. A lot going on, some big changes here -- Sara.

SIDNER: You can say that again. Also, big changes here, potentially. The clock is running out for TikTok again. It is now just days to find a buyer to be able to stay online in the U.S.

Plus, Homeland Security is eyeing money once set aside to help migrants, they may want to use it to help detain them instead.

Plus, rescued from the rubble, a man saved after being trapped under earthquake debris for five full days. We will show you this rescue. It's incredible.

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SIDNER: This morning, FEMA funding on hold, despite being approved by Congress to house and aid migrants. Sources telling CNN Homeland Security officials want to use that money instead to detain migrants. One source telling CNN, there's more than $800 million in unspent funding that is now sort of up in the air.

The money falls under a FEMA grant program used to support cities and organizations after record surges at the border.

CNN's Gabe Cohen is joining us now. This was for cities, those on the border that struggled so much when a surge of migrants came in, it really puts a heavy burden on all the things that the cities have to do for their own citizens and for the migrants.

What are you learning about where this money is and what's happening to it?

GABE COHEN, CNN CORRESPONDENT: Yes, Sara, that's right. Just for a little background, what we're talking about here is the Shelter and Services Program or SSP. It's administered by FEMA at the direction of Congress, as you mentioned, to help states and nonprofits provide that housing and that humanitarian aid to migrants.

They awarded last year about $640 million, and right now there is a pool of more than $800 million in unspent SSP funds, in part because grant payments have been effectively frozen at FEMA for weeks now.

But what we have learned here is that this week, Trump officials have effectively ended the SSP program as we know it and are now trying to figure out if moving forward, they can redirect those funds so that instead of providing shelter and aid, they can use the money for immigration enforcement and more specifically, detention.

As one source put it to me, quote, the legislative authority for this grant program is extremely broad.

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Their interpretation -- meaning Trump officials -- is that providing shelter for an immigrant is tantamount to a detention bed.

Now, multiple sources have told me no final decision has been made on this. Officials are still trying to figure out whether or not they have the authority to do this. But in the meantime, this week, FEMA went ahead and started terminating the existing SSP grants, sending out letters to those grant recipients, those cities, states, and non- profits, two of which -- two of those letters our team obtained, and what they say is essentially that the grants have been supporting illegal aliens that are not consistent with the administration's priorities.

Sara, to be clear, it is no big surprise that this administration would be going after SSP. It is a program that prominent Republicans, including President Trump and Elon Musk, have been attacking for months now. You may remember, Musk tweeted about an SSP payment to New York City earlier this year. That was an incident, Sara, that snowballed into four FEMA workers being fired. We will see, though, what the future holds for this program as they figure out exactly what they're going to be able to do with that money.

SIDNER: All right, Gabe Cohen, thank you so much for that great reporting for us this morning -- John.

BERMAN: All right, this morning, deadly tornadoes tear across the country, and a new threat of extreme flooding is on the way.

And we are standing by for the opening bell on Wall Street. You can see how futures are responding to these new, just seismic tariffs announced by the president, the NASDAQ down nearly four, S&P down more than three. It could be a raucous morning.

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BOLDUAN: We continue to follow the breaking news this morning, the reaction to the president's tariff announcement. Global stock markets falling and the world's biggest economies vowing retaliation. This in response to President Trump announcing an across-the-board tariff of 10 percent on all imports coming into the United States starting this weekend. And for some 60 countries, the rate is even higher.

Futures have been down sharply this morning. You're take a look at it right there -- ahead of the opening bell coming next hour. The NASDAQ down just shy of 4 percent at this point.

China, hardest hit by the tariffs, responded overnight to the tariffs saying that it will, quote, safeguard its own rights and interests.

European Union saying that it's preparing countermeasures. The European Commission president saying this, if you take on one of us, you take on all of us.

Joining us right now is White House Press Secretary Karoline Leavitt. Karoline, thank you very much for your time this morning. There's been a lot of reaction overnight since the announcement and since we all basically were asleep. What is the White House reaction to, as we just had those numbers up, global markets tumbling this morning and futures down sharply?

KAROLINE LEAVITT, WHITE HOUSE PRESS SECRETARY: To anyone on Wall Street this morning, I would say trust in President Trump. This is a president who is doubling down on his proven economic formula from his first term. We saw wages increase. We saw inflation come down. We had a Trump energy boom. We had the largest tax cuts in history.

And that's exactly what the president intends to do following his historic announcement yesterday for reciprocal tariffs. It's the golden age rule for the golden age of America. And the United States of America is no longer going to be cheated by foreign nations around the world. And as the president declared yesterday, this is indeed a national emergency. We have a $1.2 trillion trade deficit and counting. We've had 90,000 factories close in the last couple of decades.

Since 1997, Americans have been put out of 5 million manufacturing jobs. These are not just statistics. These are real American lives that have been impacted.

And it's about time we have a president who actually does something about it. This is going to restore more wealth, more jobs, more economic prosperity to our great country.

BOLDUAN: The foreign minister of Norway in Brussels for NATO meetings said this morning that the tariffs could violate an article of the NATO treaty that orders members to promote economic stability and collaboration. If this is a breach of the NATO treaty, will the president reassess his approach?

LEAVITT: No, the president is firm in his approach, and the president is ensuring economic stability here in the United States of America. Yesterday, he was joined in the Rose Garden by everyday Americans, middle-class workers. You heard from one of them, who the president invited on stage by name because he knows this man, and he knows what the impact of globalization has done to communities like Detroit, Michigan, where auto workers have been put out of jobs, where we've seen factories shut down.

We have offshored critical supply chains in our country. Do we want our critical supplies, like life-saving medicines and chips, being made in China, or do we want them being made right here in the United States of America?

Every American knows the answer to that question. This is a common- sense policy, and if these countries wanted to negotiate, if these countries wanted to do what's right, they've had 70 years to do it. Instead, they have been ripping off American workers, and President Trump has made it very clear that this is a policy he was going to implement.

He campaigned on the idea of fair trade on tariffs, and nearly 80 million Americans elected him to do it, and he is delivering.

BOLDUAN: You talk about the impact on everyday Americans. I wanted to ask you about that, because the impact on farmers is a big concern for, I've heard voiced by many Republicans, like Senator Tom Tillis of North Carolina. I want to play for you what the senator has said, and also what a local farmer in North Carolina is saying.