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Trump Unveils 10 Percent to 50 Percent Tariffs on 185 Countries; ; Canada Retaliates With 25 Percent Tariff on Certain Cars Imported From U.S.; Temporary Layoffs Start at Auto Plants in U.S., Canada, Mexico; Stocks Plunge as Recession Fears Grip Wall Street; U.S. Trade Allies and Rivals Vow to Retaliate Against Trump's New Tariffs. Aired 2-2:30p ET

Aired April 03, 2025 - 14:00   ET

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

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[14:01:00]

BRIANNA KEILAR, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": Markets are down, the odds of recession are up, and hundreds of workers have already been laid off, and we're less than 24 hours into Trump's unprecedented economic gamble.

BORIS SANCHEZ, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": Plus, a high- stakes hearing. The administration set to d defends deportation flights today in court. We are following a fierce legal battle. And later, the cost of cuts, Milwaukee officials say the CDC team helping respond to a lead crisis in city schools has been laid off as part of widespread firings. We're following these major developing stories and many more, all coming in right here to "CNN News Central."

KEILAR: Happening now, we are nearly 24 hours in to President Trump's new tariffs on 185 nations, including an uninhabited island, and the losses on Wall Street, they're really staggering. Just take a look at the Dow 30, some of the most well-known companies in the world. In the lower-left corner, you see Nike, American Express, Apple. Apple's been hovering around a 9 percent loss, which equates with a $300 billion drop in market value.

SANCHEZ: And again, fewer than 24 hours after the announcement, layoffs, hundreds of layoffs have already been announced. Automaker Stellantis announcing that about 900 U.S. hourly employees at plants in Canada, Mexico and the United States do not have work today, as production pauses. The White House response to all of the negative news coming out today, trust us.

(BEGIN VIDEO CLIP)

KAROLINE LEAVITT, WHITE HOUSE PRESS SECRETARY: To anyone on Wall Street this morning, I would say trust in President Trump.

HOWARD LUTNICK, COMMERCE SECRETARY: Let Donald Trump run the global economy. He knows what he's doing. He's been talking about it for 35 years. You got to trust Donald Trump in the White House. That's why they put him there. (END VIDEO CLIP)

SANCHEZ: U.S. global trading partners today though, are not really trusting the White House Canada, one of our closest allies has launched the first counter tariff. Other countries are also vowing to get in line. All of this as we're learning that this entire gamble, this unprecedented bet is apparently not based on reciprocal tariffs at all, which is what was originally promised. CNN's Phil Mattingly joins us now with the latest.

Phil, help us understand this formula that they're pitching as reciprocal tariffs. This has to do more with trade deficits.

PHIL MATTINGLY, CNN CHIEF DOMESTIC CORRESPONDENT AND ANCHOR: Yeah, it's a critical, critical identifier there, Boris, because I think a lot of people going into yesterday said, look, reciprocity on a tariff basis, this tariff for tariff, we'll see what that number actually looks like. What the administration came up with or what they utilized was this. And if you don't understand what this means, it's actually rather simple. And also, you and everybody else doesn't understand what this means.

But this is what the U.S. Trade Representative's Office put out late last night as there were a lot of questions where the actual numbers from this came from. Obviously, President Trump holding this up, showing the tariffs charged by the U.S. in one bracket, and then the reciprocal tariffs that the U.S. was going to be charging them in response based on the executive order, the emergency authorization that he signed yesterday. Now, something to point out here that I think is important, this word right here, 'tariffs charged to the USA.' This is actually not based on tariffs at all.

Important point going forward, because I think that had long been the assumption. What about one of these countries in particular I want to point to, Vietnam. If you look at the chart, 90 percent tariff charged to the USA is what the administration says when it comes to Vietnam. That is a staggering number. Also staggering, the 46 percent tariff that the U.S. is going to be putting on Vietnam. How did they get to that number?

Well, let's start with the fact that Vietnam's most favored nation average tariff rate is just a little bit over 9 percent. Not 46 percent. Not 47 percent, 9 percent. So where did they get this? It turns out, what they were looking at was trade deficit and overall exports to the United States. What do I mean by that? Well, Vietnam exports to the United States, $136.6 billion.

[14:05:00]

The United States exports to Vietnam $13.1 billion. So, you put that together and you understand that there is a fairly significant trade deficit. In fact, it's an enormous trade deficit. You take $13.1 billion away from that overarching export number, $136.6 billion, and you get $123.5 billion. Now, it's worth noting, President Trump has often talked about trade deficits. He hates trade deficits. It's also worth noting that in the initial order setting the pathway that we ended up with yesterday, "Destructive trade deficits were a focus of what his team was trying to put together." So how did they come up with this math? What does that equation actually mean? Well, they took $123.5 billion, the trade deficit divided it by $136.6 billion, the overall export total, they came up with 0.9, which becomes 90 percent, and that takes you to the top-line number.

Now, where did they get this number from exactly? Again, this isn't a tariff for tariff basis. This isn't based at all on any of the tariff rates, products or overarching average. It is based on the trade deficit with the country. That was the formula they used across the board. Now, why did they decide to use this formula at all? I think it has been one of the questions that people are asking. And the reason why they're asking this is because that's not normally how trade economics works.

It's not the traditional pathway forward. In fact, economists, Republicans and Democrats throughout the evening yesterday, were just skewering the idea of using this as the methodology. The trade representative put out this, he said, while individually computing the trade deficit effects of tens of thousands of tariff, regulatory tax and other policies in each country is complex, if not impossible. They decided to go with what they believed was going to be a proxy.

The formula that they ended up utilizing, the point there being the scale of the labor, work effort going into going tariff by tariff was enormous. They thought they could capture it like this. They understood that this was the essential component of Trump's plan and the plan his team was pursuing, and this is what they went with. Even though economists make very clear this isn't at all what they expected or have ever seen before.

SANCHEZ: And now, the ramifications are an open question. Phil Mattingly, thanks so much for breaking that down for us. Let's dig deeper on this with Neil Irwin. He's Axios Chief Economic Correspondent, and Betsey Stevenson, Professor of Economics at the University of Michigan. Thank you both for being with us. First to you, Neil. We were talking yesterday about what these tariffs might wind up looking like. And I wonder, as you write in today's Axios Macro newsletter, "The World Economic Order is Shifting Beneath our Feet." Talk to us about what these tariffs specifically mean.

NEIL IRWIN, CHIEF ECONOMIC CORRESPONDENT, AXIOS: Countries that have historically been very close U.S. allies and trade partners, Canada, European Union, Japan, they are not happy at all. They believe that this fundamental sense of deep economic relationship with the U.S. is in question. In the near term, there's not much they can do. There'll be some retaliation. There'll be some, maybe some deal making, maybe some things that'll bring these tariffs down in the near term.

But over the medium to long term, they feel like we are not a trustable partner anymore, and that the U.S. is no longer a partner where they want their companies investing in U.S. soil. They don't want to count on us as an export market. This has really thrown into disarray relationships that are really decades, centuries long. KEILAR: And Betsey, we know what the long-term stated goal here is, which is trillions and trillions of dollars in investment, which will lead to more jobs in America's community, higher wages. Is that a deliverable here in, in the long term? And what's the impact on the workforce in the short term?

BETSEY STEVENSON, PROFESSOR OF ECONOMICS, UNIVERSITY OF MICHIGAN: And so, first of all, I do not think that it's going to succeed in the long term. In the short term though, it's very obvious what's going to happen, which is that people are going to lose their jobs and we are going to see the economy slow down. The question will be if it can sort of slow or whether it actually tips into a recession. But either way, the economy's in a pretty tough stance for at least the short term.

And particularly, when you combine that with the fact that it's going to come with some rising prices, and those rising prices are going to be pretty immediate. And I -- that puts things in kind of a tough place. Look, the -- if you're thinking about like the longer run, now what President Trump keeps emphasizing is he would like to see more manufacturing, employment in the United States. But he seems to be forgetting about all the employment that we have gained because of the amount of trade we actually do around the globe.

And a lot of that trade is focused on, bringing the talents of the American workforce, which are different from the talents of other country's workforces, and they're not going to be as beneficial to every single country.

[14:10:00]

And particular -- it seems particularly cruel that he's punishing very low-income countries, because we buy a lot of things from their factories, but they don't buy a lot of the high-skill exports that we provide. I don't think that that's going to change by these tariffs. I don't think us paying a lot more for our clothing from Bangladesh or Vietnam is going to fundamentally change our global economy. But what I do think it will mean is Americans are going to be paying a lot more for clothing.

SANCHEZ: Yeah. It's kind of deceiving in a sense to present global trade as a measure of deficits and surpluses, because what's actually being traded is vastly different, to your point, Betsey. I wonder though, Neil, what about the argument that the U.S. needs to restructure its industrial base because, for example, it couldn't fight a war against China given the size and scale of its supply chains and its industrial base. Is that at the very least a potential goal that these tariffs advance?

IRWIN: Potentially, but the problem is they're very broad based. They're applying to pretty much everything. So, whatever you think about the need for weapon systems and semiconductors and other very strategic goods, that doesn't explain why we're going to have tariffs on toys and avocados and clothing, as Betsey said. So, if you want to do targeted tariffs to try and re-industrialize key national security issues or kind of key strategic sectors, that's a reasonable policy and can be done smartly. That's not quite what this is.

This is a much wider, expansive kind of trade initiative that is, as Betsey says, is going to cost people a lot of money in the grocery store, in the clothing store, in different places we buy things.

KEILAR: And Betsey, this math that our Phil Mattingly went through on how they got to these reciprocal tariffs, which I think we can maybe use air quotes for the reciprocal, right? Because it's not actually that. Does that create though some flexibility when it comes to countries trying to negotiate their way out of this before the ones that were announced yesterday kick in here in six days?

STEVENSON: The best thing I can say to that is that the -- because these tariffs, and I don't know, maybe it's even worse because if it was a reciprocal tariff, then the country could say, OK, we'll lower our tariff. But that's not what it is. So, it's a very made up number. It's a very chaotic number. Maybe that means you can negotiate because who knows what they think of it as real. It -- there's not a lot some of these countries can do.

Again, Vietnam can't turn around and say, yes, we will buy as much from America as you buy from us. That -- I don't think that's feasible. And if you look at the statement for why they said they were doing this formula is they want a zero -- they want full balance with every single country, which is as crazy as you trying to get trade balance with your grocery store or with your hairdresser, or with any of the people that you buy from.

SANCHEZ: I keep trying to offer my hairdresser some of my wares, and they won't take them.

(LAUGH)

SANCHEZ: I don't know why. Betsey, one more question for you. I do wonder what this means for American consumers as not just because of the cost that these tariffs might create for them, but also because of the ways that domestic corporations might try to take advantage of this. I point to Mark Cuban, a billionaire entrepreneur, saying that he wouldn't be surprised if U.S. companies started raising their prices and using tariffs as a justification.

STEVENSON: Well, actually that's what is supposed to happen, right? If all of a sudden now, they don't have to compete as hard with goods from -- that are sourced internationally because of the high tariffs, they can raise their prices. They -- we've actually seen that. When we put -- when President Trump in the first term put tariffs on washing machines, we saw that American manufacturers of washing machines, so that was supposedly done to help Whirlpool. It did help Whirlpool. It allowed American washing machine manufacturers to raise their prices by the same amount as the tariff. And they didn't just do it on washing machines. Let's go for dryers as well.

So we know that the companies will do that, and we can expect to see pretty big price increases that are not just the goods we buy from overseas, but the ones we're buying that are made in the U.S.

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KEILAR: Really interesting and alarming. Betsey Stevenson, Neil Irwin, thank you to both of you. Really appreciate it.

Still to come, the White House has fired three staffers on the National Security Council after a meeting, between President Trump and right-wing conspiracy theorist, Laura Loomer, what she reportedly told the president. Plus, we're following a critical hearing on controversial deportation flights to El Salvador. It's the first time since the administration admitted that it put a Maryland father on one of the planes by mistake.

SANCHEZ: And later, TikTok once again on the brink of being banned. The latest on potential buyers for the popular social media app. These stories are much more, coming up on "CNN News Central."

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[14:20:25]

SANCHEZ: CNN has learned the White House has fired multiple administration officials after the president met with a well-known far-right activist.

KEILAR: That's right. That activist is Laura Loomer, who you see there in red. She was seen there at the White House yesterday, greeting Commerce Secretary Howard Lutnick, very much so there. CNN's Alayna Treene outside the White House for us. Alayna, your sources say Loomer urged Trump to terminate these employees. Can you tell us who they are, why they were let go?

ALAYNA TREENE, CNN REPORTER: Yeah, she actually went in, I was told, to the West Wing with a list of around a dozen names and urged President Donald Trump to fire them. A lot of this was more about loyalty tests and whether or not these people had the president's best interests at heart, at least from her point of view. Now, this was first reported by The New York Times, but what we've learned since is that the White House has actually moved forward with firing multiple administration officials, at least three national security staffers were also on that list.

And look, it's interesting because we know that National Security Advisor, Michael Waltz, he was actually meeting with the president in the Oval Office before Loomer had entered the West Wing and came in to meet with him. So we ended up staying back, and he was there while she was doing this, while she was telling him how many of the staffers who served beneath him, including his principal deputy national secretary -- his Deputy Secretary, Alex Wong saying that he was too hawkish, that he wasn't loyal as well.

So, a very interesting meeting and I want to give you just a little bit of context on Loomer because she's someone, as you mentioned, she's a far-right activist. She's actually someone who had a lot of access to the president while he was on the campaign trail. We did a story last fall about how she had traveled with President Donald Trump to a 9/11 Memorial, something that actually caused a lot of consternation within his inner circle. And she's been complaining in recent weeks as well that she hasn't had enough access to the West Wing.

But yesterday, of course, we saw -- we know now that she has met with him, and I'm told as well that the president actually moved forward with a lot of these firings because of her urging of him to do so. Now, I did speak with Loomer as well. I want to read you just a bit of the statement she sent me. She confirmed that she had met with him and said, out of respect for President Trump and the privacy of the Oval Office, I'm going to decline on divulging any details.

But she went on to say, that it was an honor to "Present him with my findings. I will continue working hard to support his agenda and I will continue reiterating the importance of strong vetting for the sake of protecting the President and our national security." So you can hear there how she's clearly saying that she believes that people somehow got into the National Security Council without really being as loyal to the President as we know that many of these people who were actually vetted by Sergio Gor, the Head of the Presidential Personnel Office. She's arguing that they weren't that loyal and now, we're seeing many of them actually get fired. Boris? Brianna?

KEILAR: All right. Alayna Treene, thank you for the report. In less than an hour, a federal judge is expected to hold the Trump administration to account and determine whether its lawyers violated his order when it comes to these deportation flights to El Salvador. Judge James Boasberg directed on March 15th that any flights that were deporting migrants under the Alien Enemies Act of 1798 be turned around or halted as the courts determine if it's legal to use the wartime authority in this way. It was an injunction.

The judge issued both a verbal and written order by 7:26 p.m. that day. 10 minutes later, the first flight arrived in El Salvador. Two more deportation flights landed overseas later that night. With us now, CNN Legal Analyst Michael Moore, who's a former U.S. Attorney. Michael, as you look towards this hearing, what are you expecting?

MICHAEL MOORE, CNN LEGAL ANALYST: Yeah, well, I'm glad to be with you. I would much rather be on the side of the petitioners and not the government in this case, because I think they've essentially just flouted all the power they can and sort of just spit in this judge's face. And it sounds to me like he's had enough. And so to -- you could think back to what they've said at a prior hearing.

One of those was that his oral order shouldn't have been binding on him, and then they didn't want to give him information because somehow it may be classified or they wanted to use State Secrets defense to keep from giving and divulging information to the court. It is interesting, especially during the same week, they were texting each other about war plans.

But, this hearing is not going to go well for the government, I expect, and I'm sure that this judge is probably loaded for bear. And it'll be a tough afternoon for the government's lawyer.

[14:25:00] KEILAR: So the government's lawyer, the Trump administration lawyer arguing that Boasberg's written order didn't include what he said in his verbal order. That's something that we had heard the day out -- in the days following these flights landing in El Salvador. Turn the planes around if they're carrying migrants under the authority of the Alien Enemies Act. Do you expect that he's going to view that as holding water?

MOORE: I think it's one of the weakest arguments you could make to a federal judge. When they sit on the bench and make some proclamation or give you a direction, whether it's in a written order or whether it's an oral or verbal order from the bench, you know you have to follow that as a government lawyer or any lawyer that practices in federal court. If you have a discrepancy between what ends up in the written order and what was said from the bench, you can ask the court for some clarification.

But just to thumb your nose at the court after he -- and there'll be a little more history, I think, about this when we hear that he -- there was a comeback hearing. They were talking about the fact that these planes were gone, that this may already be there. And I think he's just not going to put up with sort of this silliness from -- or an excuse. So, I do think you're going to hear about it. I think he'll address it. And again, I just think it's a weak position for the United States to argue that at some point, we were told by a federal judge what not to do. We just decided to do it anyway. That's not who you want to be when you're standing in the courtroom.

KEILAR: If Judge Boasberg finds that the Trump administration did violate his order, you don't think he's obviously going to look charitably at that argument.

MOORE: No.

KEILAR: If he does find them in contempt, if he imposes sanctions, what makes them adhere to those sanctions?

MOORE: That's been the problem over the last couple of weeks and months, as we've seen that really the administration thinks that they don't have to report to anybody. And frankly, Congress has done some of the same thing. They've not held the administration to account on really anything at this point. I have to think about these cases a little bit like a series of football games and you play through the season, and there are wins and losses. And then ultimately, maybe you get to the Super Bowl.

At some point, all of these things and all of these teams are going to end up at the supreme court, and that court is going to have to give some direction. But in the interim, I think you'll see Judge Boasberg say, look, I'm going to find you in contempt. I'm going to order that you pay some type of sanction or that the government do something to compensate these lawyers for having to come in here again to point out that you violated my order. And I think you're going to have to bring them back.

He's doing all this as well sort of through the lens of the fact that the administration has now admitted that they clerically made some error and deported somebody, and they can't get the man back. Whether he -- no matter what you think about his past or whatever else, the administration has coming in now and said, we've made a mistake, sorry, so bad. We've got him down there in the prison. And he's a little more now than, I guess, a stage prop for Secretary Noem.

And so, they've got a lot of hill to push this rock up, to get on the good graces of the court. And I think the judge will say, this is exactly why I said, I don't want you sending those planes. We had to have a hearing. Now, you're saying you can't get people back. And that's the kind of irreparable harm that is necessary for courts to issue injunctions and to actually freeze an administration prevent (ph) to move forward with the executive actions like we've seen.

So, we may start at some point with some contempt, and it may go up from there, depending on how egregious that the court thinks that the conduct was.

KEILAR: Michael Moore, always great to have you. Thank you so much. And next, markets are tumbling. The dollar is weaker. Hundreds of Americans have been laid off, all of that less than 24 hours after President Trump announced huge new tariffs. We are getting reaction from Republican lawmakers.

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