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New Donald Trump Tariffs Threaten To Escalate Global Trade War; Japan Calls Donald Trump Tariffs "Extremely Regrettable"; Impacts Of Donald Trump's New Tariffs On U.S. Small Businesses; Trump's Tariffs Overhaul Century of American Trade Policy; Trump's Tariffs Ignite Threat of Global Trade War; New Album Reinterprets Classic Art Into Soundscape; Near Life-sized Marble Statues Found in Pompeii Tomb. Aired 2-2:45a ET

Aired April 03, 2025 - 02:00   ET

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

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[02:00:30]

ROSEMARY CHURCH, CNN ANCHOR: Hello and welcome to our viewers joining us from all around the world, and to everyone streaming us on CNN Max, I'm Rosemary Church.

Just ahead, leaders around the world react to President Trump's sweeping reciprocal tariffs, warning an escalating trade war will have devastating consequences.

Trump's 25 percent tariff on all foreign made autos and parts also took effect at midnight, a move expected to hit Japan particularly hard.

And Israel's military opened an investigation into the deaths of 15 aid workers in Gaza and how they ended up in a mass grave.

ANNOUNCER: Live from Atlanta, this is CNN NEWSROOM with Rosemary Church.

CHURCH: Good to have you with us. Donald Trump has overhauled a century of global American trade policy, announcing sweeping new tariffs on all imports to the United States, a move which threatens to greatly escalate his trade war with countries around the world.

On Wednesday, the president used national emergency powers to impose tariffs of at least 10 percent on most countries with even higher rates for dozens of countries he called the worst offenders. It's an historic move that economists warn will hurt Americans wallets and could push the U.S. and global economies toward recession.

The reciprocal tariffs are aimed at some of America's top trading partners, including 34 percent levies on imports from China and 20 percent for the E.U.

The baseline 10 percent rate will take effect on Saturday, with the customized higher rates starting a week from now. President Trump claims his economic strategy will bring jobs and factories roaring back to the U.S.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: This is one of the most important days, in my opinion, in American history. It's our declaration of economic independence.

(END VIDEO CLIP)

CHURCH: Wall Street now bracing for a steep decline on Thursday with U.S. Futures tumbling overnight. You can see there, the Dow down 2.27 percent, the NASDAQ losing more than three percent.

Markets across Asia are down right now as well, and you can see if we bring those up. Apparently, we don't have them now, but we get more details from CNN's Karin Caifa in Washington.

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KARIN CAIFA, CNN REPORTER: President Donald Trump, on Wednesday, said he is standing up for the American worker, declaring a national economic emergency and reshaping global trade with a sweeping tariff plan that economists are concerned could stifle consumer spending and economic growth.

TRUMP: It's our declaration of economic independence. For years, hardworking American citizens were forced to sit on the sidelines as other nations got rich and powerful, much of it at our expense.

But now it's our turn to prosper, and in so doing, use trillions and trillions of dollars to reduce our taxes and pay down our national debt.

CAIFA (voice over): Trump's plan places at least a 10 percent tariff on almost all imported goods coming into the United States. Those tariffs will take effect Saturday, April 5th.

For countries with higher trade deficits with the U.S., the rates are higher. Those reciprocal tariffs take effect April 9th.

Trump said China faces a 34 percent tariff. Japan, 24 percent and goods from the European Union, 20 percent.

The E.U., Mexico, Canada, China, Japan and South Korea have all pledged to respond to their respective tariffs.

Trump's tariffs mean the price of importing a good into the U.S. goes up and someone has to pay that added cost. It's typically a combination of businesses and consumers who pay, but economists worry about the short term impact of businesses and consumers having to spend more after already weathering recent elevated inflation. If consumer spending is stifled, so is economic growth.

CAIFA (on camera): Also taking effect on Thursday, President Trump's 25 percent tariffs on imported vehicles that could drive up the price of new and used cars.

In Washington, I'm Karin Caifa.

(END VIDEOTAPE)

CHURCH: Governments around the world are deciding how to respond to the Trump tariffs. Some are hoping to minimize the impact through negotiations. Others are planning retaliation.

European Commission President Ursula von der Leyen calls the tariffs a major blow to the world economy. She says the bloc wants to negotiate with the U.S., but is ready to respond to safeguard its interests.

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[02:05:04]

URSULA VON DER LEYEN, PRESIDENT, EUROPEAN COMMISSION: I know that many of you feel let down by our oldest ally. Yes, we must brace for the impact that this will inevitably have. Europe has everything it needs to make it through the storm. We are in this together. If you take on one of us, you take on all of us.

(END VIDEO CLIP)

CHURCH: Canada and Mexico are exempt from the reciprocal tariffs announced Wednesday, but still subject to a 25 percent tax on goods not covered by the Free Trade Agreement. Here's Canadian Prime Minister Mark Carney's response.

(BEGIN VIDEO CLIP)

MARK CARNEY, CANADIAN PRIME MINISTER: We are going to fight these tariffs with countermeasures. We are going to protect our workers, and we are going to build the strongest economy in the G7.

(END VIDEO CLIP)

CHURCH: Let's go live now to Tokyo and CNN's Hanako Montgomery. Good to see you, Hanako. So, what's been the reaction in Japan and China to Trump's reciprocal tariff hikes?

HANAKO MONTGOMERY, CNN CORRESPONDENT: Hanako Montgomery Hi, Rosemary. It's good to see you too. So, in Japan, there's been a lot of shock and a lot of regret expressed about Trump's latest tariff hikes.

In fact, earlier today, the Japanese Prime Minister Shigeru Ishiba held a press conference where he said those exact words, it's extremely regrettable and unfortunate that the United States President Donald Trump did not exempt Japan from his latest tariff hikes.

Now, many leaders in Japan, global leaders and of course, CEOs, were hoping that Japan could be exempt, because Japan is actually the biggest foreign investor in the United States. And actually during an official visit between the Japanese prime minister and the U.S. president back in February, the Japanese prime minister vowed to spend $1 trillion in the United States so as to further their bilateral economic ties.

But clearly, as we've seen, Trump's latest moves in terms of tariffs, no friend or foe was exempted.

Now, earlier today, the Chief Cabinet Secretary also highlighted just some of the concerns that Japan has about these latest tariff hikes. Give this a listen.

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YOSHIMASA HAYASHI, JAPANESE CHIEF CABINET SECRETARY (through translator): Prime Minister Ishiba has already instructed that we continue to strongly urge the United States to exclude Japan from the tariff measures, while thoroughly examining the content of these measures and their impact on Japan.

At the same time, we will continue to examine their impact on domestic industrial employment and take all necessary measures such as cash flow assistance.

(END VIDEO CLIP)

MONTGOMERY: Now, I think you said, Rosemary, that the automobile industry in Japan will also be severely impacted, and that could very much be the case. In fact, the Japanese Prime Minister Shigeru Ishiba, pointed out how Japan created 2.3 million jobs in the United States, specifically in the automobile industry.

But because of these tariffs and because of past moves made by Donald Trump, Japan has been looking to move production elsewhere, for instance, in Mexico.

Now, also in South Korea, these concerns are shared. South Korea, of course, saw tariffs imposed of about 25 percent which could also deliver a huge blow to the South Korean economy.

Now, the country has said that it's going to respond with some emergency measures, and China, as Rosemary, just as a last note, has also vowed to respond and has called the U.S.'s moves bullying.

In a statement actually released by the commerce ministry, the same in reads, "There are no winners in a trade war, and there's no way out for protectionism." China urges the United States to immediately cancel its unilateral tariff measures and properly resolve differences with its trading partners through equal dialog.

So, clearly, lots of frustration here about Trump's latest tariff hikes, Rosemary.

CHURCH: Hanako Montgomery bringing us the very latest there from Tokyo. Appreciate it.

Joining us now is Justin Wolfers, Professor of Economics and Public Policy at the University of Michigan. Good to have you with us.

JUSTIN WOLFERS, PROFESSOR OF ECONOMICS AND PUBLIC POLICY, UNIVERSITY OF MICHIGAN: A pleasure, Rosemary.

CHURCH: So, stock Futures plummeted in afterhours trade in response to President Trump's announcement of the sweeping reciprocal tariffs on 185 nations. What will be the likely impact and how much extra cost will these tariffs have for the average American family do you think?

WOLFERS: So, it looks like the average tariff for imported goods is going to be around about 40 percent. We import about, you know, a sixth of all goods. So, you multiply those two numbers, and that'll tell you how big the shock is going to be to the prices.

So, what is that? 40 percent times 16 percent, that's about six percent. So, the American cost of living just went up six percent. Your paycheck will get you six percent less than it used to. That's going to turn up in prices pretty much as soon as tomorrow. Because businesses, when their costs go up, they tend to pass those costs along, and that's going to really hurt a lot of Americans.

[02:10:14]

We can actually think about this as a tax hike, if you measure how much money Trump thinks he's going to get out of this tax, it's about $5,000 per American household per year. So, this is really going to hurt.

CHURCH: That is shocking. And how likely is it that Trump's tariffs will eventually trigger a recession, perhaps in the next 12 months?

WOLFERS: I think the odds of that have risen dramatically. He was already talking about a very bad, very damaging, very painful, very costly trade war. And today's announcement says, you know what, we're going to double down. It's going to be worse than you thought it was.

There's a betting site where people bet on whether the US is going to enter a recession in 2025, the odds had already risen over the past few weeks as details of this plan came to light and people were willing to bet that it was a 42 percent chance of a recession, that's now up to 52 percent.

And all of this amidst an economy that is otherwise performing spectacularly in a world that is also, if not for Trump, a pretty calm world and a pretty good world to be doing business in.

CHURCH: And President Trump is targeting some of the hardest hit countries in the world, including some of the poorest nations, some even in the midst of war. But how do you expect some of the richer countries will respond in terms of retaliatory tariffs with Japan, China and South Korea joining forces in a stunning move to pull together joint retaliatory action against America?

WOLFERS: Look, let's just pause on the poor countries for a moment. Poor Countries like Papua New Guinea, like Fiji, developing countries where they're only just starting to get off the ground, and the idea that they're any threat to Americans is just absurd.

And just think about a punishing blow to those economies coming from Washington, D.C. And just let your humanity take the pulse of that for a moment and realize that this is really a powerfully evil set of tariffs, and we'll have very, very big damaging effects for relatively poor countries that can't really afford this.

Now, the rich countries are banding together. The rich countries say this isn't OK. The rich countries are going to retaliate. We've already seen that.

And so, even if you thought that, I don't, but if you thought that tariffs from America on the rest of the world are a good idea, if they're also matched by tariffs from the rest of the world on America. All that President Trump has managed to do is isolate Americans from the rest of the global economy.

If you think about it, when a nation misbehaves, we want to punish it. Say, we want to punish the Russians for entering Ukraine. We impose sanctions on them to separate or isolate them from the rest of the world. Well, President Trump has just done that unilaterally to America as well.

CHURCH: And President Trump says that these tariffs are about fairness and bringing manufacturing back to this country. What's your reaction to those claims?

WOLFERS: That's nonsense. Trump is using the term reciprocal tariffs. He's imposing tariffs on some countries of 20 percent, 30 percent, 40 percent and so on.

It turns out that every industrialized country around the world, in fact, it levies, on average, very, very low tariffs.

So, this plan will make the United States by far the most tariff heavy industrialized nation in the world, and it's only above a couple of the very poor tin pot dictatorships in terms of its level of tariffs.

So, the idea that this is in retaliation for what they're doing is simply completely at odds with the evidence.

CHURCH: And is this the biggest gamble of Trump's presidency. Will it likely backfire on him big time?

WOLFERS: It's not just the biggest gamble of his presidency. It's the biggest tax hike on the -- on Americans since at least 1993 and further back. This is also a tax hike because it's a tax on imports, on spending.

Poor people tend to spend more of their income than to rich people. So, this is a set of a tax hike of, as I said before, $5,000 per household, but it's one that will particularly hurt working and middle class Americans.

And so, we are going to see pain starting very soon. And yes, I think this is going to politically backfire on the president.

CHURCH: Justin Wolfers, thank you so much for joining us. Appreciate your analysis. WOLFERS: I wish I had happier news.

CHURCH: Myanmar's military rulers has promised a pause in the country's civil war as it struggles to recover from last week's deadly earthquake. We'll have details on the other side of the break, stay with us.

[02:19:17]

CHURCH: As the Trump administration pushes Russia and Ukraine to agree to a cease fire, a senior Russian negotiator is in Washington for meetings with top U.S. officials, including us envoy Steve Witkoff. Kirill Dmitriev is a close advisor to Vladimir Putin and worked with Witkoff on the prisoner exchange the freed Teacher Marc Fogel, this is the first time a senior Russian official has been to Washington since Moscow invaded Ukraine in 2022.

The U.S. reportedly had to temporarily lift sanctions imposed against Dmitriev in order for the State Department to grant him a visa.

[02:20:04]

Israeli Prime Minister Benjamin Netanyahu has announced a military escalation in Gaza, vowing to ramp up pressure until all the hostages are released. Israel's defense minister was the first to announce a major expansion of the operation, which would involve the seizure of large areas of land in the Enclave. The announcements come as Israel continues its aerial bombardment of Gaza. At least 17 people were killed in strikes in southern Gaza overnight on Wednesday, Netanyahu said this about the renewed offensive.

(BEGIN VIDEO CLIP)

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER (voice over): Last night in the Gaza Strip, we switched gears. The idea is seizing territory, striking the terrorists and destroying the infrastructure, because we are now dividing the strip and increasing the pressure step by step, so that they will give us our hostages, and as long as they do not give them to us, the pressure will increase until they do.

(END VIDEO CLIP)

CHURCH: There are 59 Israeli hostages held in Gaza, 24 are believed to still be alive.

In his statement, Israel's defense minister said the expansion -- the expanded operation, would also involve a large scale evacuation of Gaza's population from combat zones, without providing specific details.

The U.N. Secretary General is calling for an independent investigation into the deaths of 15 aid workers in southern Gaza following an attack by the Israeli military on a medical and emergency convoy. The bodies were recovered from what's been described as a mass grave.

An Israeli military official has admitted that forces did bury the bodies, saying they did so because they expected it would take time to coordinate their retrieval. The Israeli military now says it will investigate.

An IDF spokesperson said in a statement, "The incident from March 23rd, 2025 in which IDF forces opened fire targeting terrorists advancing in ambulances, has been transferred to the general staff's fact finding and assessment mechanism for investigation."

Most of those killed were members of the Palestine Red Crescent Society, the International Federation of Red Cross and Red Crescent says it was the single most deadly attack on its workers in nearly a decade.

Myanmar's ruling military government has declared a 20 day cease fire in its battle against armed opposition groups. Nearly a week after a deadly earthquake devastated the country, more than 3,000 people have reportedly been killed. Hundreds more are missing, meaning the death toll will likely continue to rise.

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UNIDENTIFIED MALE (through translator): To show sympathy to the victims of the earthquake across the country, to provide the effective rescue operation and rehabilitation with regards to the stability, the period between the 2nd and 22nd of April is declared a temporary cease fire by the military.

(END VIDEO CLIP)

CHURCH: Relief efforts have been hampered by Myanmar's civil war with the Red Cross warning, access to health care and clean water is now severely limited.

Still to come, as small business owner speaks out about the feared impact of President Trump's new tariffs, we'll have that and more on the other side of the break. Stay with us.

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[02:28:17]

CHURCH: America's top CEOs are warning the Trump tariffs could cause major damage to the U.S. economy.

The Business Roundtable says tariffs from 10 to 50 percent run the risk of hurting U.S. manufacturers, workers, families and exporters. They say the longer the tariffs stay in place, the more potential there is for damage.

Business Roundtable CEO Joshua Bolten says the U.S. and its trading partners should act swiftly to reach agreements that would remove the tariffs.

Meanwhile, the American Petroleum Institute is praising President Trump's decision to exclude oil and natural gas from the tariffs. We want to find out how small businesses are dealing with all of this.

Adam Leeb joins me now from Detroit. He is CEO and co-founder of Astrohaus, a company that makes productivity tools for writing. Appreciate you being with us.

ADAM LEEB, CEO AND CO-FOUNDER, ASTROHAUS: Thanks for having me.

CHURCH: So, the National Retail Federation says the tariffs would cause more anxiety and uncertainty for American businesses and consumers. What impact will these tariffs have on businesses like yours and other small businesses?

LEEB: No doubt they're going to have a huge impact. We have to make up the cost somewhere, and we're all operating in competitive markets.

So, for businesses like mine and many other businesses in the states here, we're going to have to raise prices. There's really no way around it.

CHURCH: And the National Restaurant Association says that new tariffs will create challenges for restaurants of all sizes, driving up food and packaging costs and adding uncertainty for operators and consumers alike. Do you see these tariffs forcing the closure of many of the smaller restaurants and indeed, businesses in the months ahead?

[02:30:00]

LEEB: You know, I'm not -- I can't speak too much on what's going to happen with restaurants. I know that for us, when we think about our capital planning and purchasing planning, we're thinking out six months, 12 months, 18 months ahead. And with all the uncertainty, in addition to the actual tariffs that have just been added on top of our cost bases, we just have to seriously consider what we're going to do when it comes to hiring and capital expenditures.

So, these are the -- these are the types of things that we're trying to balance and plan for. And the most difficult part about it is just this, the whiplash that's going on with the policies that are changing day by day really.

CHURCH: Indeed. And President Trump is saying that he's doing this to bring back manufacturing to America. How does that work for small businesses?

LEEB: Well, I think that there's a kernel of truth to that, but the unfortunate reality is that there's a lot of industries that have simply disappeared or just don't -- they never existed in the United States. And so, when we talk about some of these reciprocal tariffs that are being imposed, it doesn't quite add up. What we've seen today in the press briefing is that the tariffs are supposedly trying to make up for a trade deficit.

But when you look back at the other reasons why these tariffs were put into place, it was -- first, it was fentanyl trafficking, then it was immigration, illegal immigration. Now, it's to fix a trade imbalance. I think that there's just so many different factors here and it's a lot of change all at once. And unfortunately, we're just going to be bearing the brunt of the storm here as small companies in the United States that can't really do anything other than deal with it.

CHURCH: Right. And what do you expect the landscape for small businesses will look like, say a year from now, if these tariffs are not renegotiated in some way because some may be?

LEEB: I think we're in for some tough times here, both as producers and consumers. I think we need to expect that prices are going to go up as consumers. I mean, look, these tariffs are a tax that are placed on businesses and -- that are importers, that are then going to get passed down to consumers.

CHURCH: How worried are you?

LEEB: I'm very worried, frankly. I think when -- we place purchase orders six months, 12 months, even longer out in advance. And when we are seeing what the -- when the election results came in, I was pretty sure that of all the things that was talked about, it seemed pretty likely that tariffs were actually going to happen again. If we look back at his first term, the two main things that happened were tax cuts and tariffs. And so, just as a betting man, unfortunately, it's more likely than not, then if he's going to say, tariffs are coming back, then they're coming back. And that's exactly what happened.

And so, we've been thinking about this and planning for it for a while, but at the same time, it's almost impossible to plan. We could look at other countries to try and move our manufacturing. A lot of people think that we can just move it to the United States. Why not just make everything in America? It just simply doesn't work that way.

CHURCH: Adam Leeb, thank you so much for joining us. Appreciate it.

LEEB: Thank you.

CHURCH: Have you ever wondered what the Mona Lisa would sound like? A new project aims to turn that painting and more into musical masterpieces. We'll explain when we come back.

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[02:38:30]

CHURCH: Welcome back. Iconic pieces of art are getting a new interpretation through music. Musicians and Dolby Sound teamed up for an album called "Sound of a Masterpiece," using technology to enhance each piece of art for people with visual impairments. Here's a small preview of what Leonardo da Vinci's Mona Lisa sounds like.

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(MUSIC PLAYING)

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CHURCH: All proceeds from the album will be donated to the Royal National Institute of Blind People in the U.K. Bobby Goulder, a pianist on the album, who's also blind, says the project is aimed at helping people more effectively appreciate art.

(BEGIN VIDEO CLIP)

BOBBY GOULDER, PIANIST: So with the "Sound of a Masterpiece," we were aiming not just to kind of write something based on the piece, but actually bring people further into the painting. And you can do that very effectively through music and soundscape.

(END VIDEO CLIP)

CHURCH: Archeologists have discovered two very rare, almost life- sized statues in a massive tomb in Pompeii. Experts believe one of the marble statues may have been for a powerful priestess. It has lavish jewelry, including a necklace with a crescent moon pendant, which was worn to ward off evil forces.

[02:40:00]

Archeologists say the statues shed new light on the power held by priestesses in the ancient city. Pompeii was buried under ash and volcanic glass when Mount Vesuvius erupted in 79 A.D. The statues will be featured in an exhibition which opens in two weeks.

I want to thank you so much for joining us. I'm Rosemary Church. "World Sport" is coming up next. Then I'll be back in about 15 minutes with more "CNN Newsroom." Do stick around.

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[02:45:00]

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