Return to Transcripts main page

Inside Politics

S&P 500 Falls 4 Percent, NASDAQ Down 5 Percent, DOW Sheds about 1,300 Points; U.S. Stocks on Track for Worst Day Since 2022; Stocks Plunge as World Comes to Grips with New Trump Tariffs; Trump Gambles World Economy on Biggest Tariffs in 100 Plus Years; Trump Slaps 10 Percent Tariff on Island with no People, Only Penguins. Aired 12- 12:30p ET

Aired April 03, 2025 - 12:00   ET

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

[12:00:00]

(COMMERCIAL BREAK)

DANA BASH, CNN HOST: Welcome to "Inside Politics". I'm Dana Bash in Washington, and we are following Breaking News. Carnage on Wall Street. Stocks are having the worst day since 2022. The DOW was down by more than 1500 points at one point, this morning and the reason President Trump's trade war.

Here's an important fact, virtually no one alive today has seen anything like this. An American president slapping tariffs on nearly every country in the world. Markets are reeling U.S. allies are dumbfounded. Americans are fearing the impact on their wallets. But minutes ago, President Trump's Commerce Secretary said everybody needs to relax.

(BEGIN VIDEO CLIP)

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. Our markets are going to be up.

And I understand that it's tough for the global markets, but our market, you should be betting on Donald Trump and the United States market, we are going to do much, much better.

(END VIDEO CLIP)

BASH: Well CNN is covering this developing story from all angles. Alayna Treene is at the White House. Vanessa Yurkevich is in New York, following everything going on Wall Street. Vanessa, I do want to start with you. You just heard Howard Lutnick, the Commerce Secretary, talking about the reaction of the market. You are following this very closely. What is the market doing as we speak?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Well, markets are reacting to this trade plan by President Trump. It is a worse than expected scenario that investors are looking at right now, and you're seeing markets react tumbling on this news. You see the DOW down more than 3 percent, the NASDAQ down more than 4 percent and the S&P down more than 3.5 percent.

And this is all because President Trump essentially escalated this global trade war yesterday, with this announcement, you're seeing sell offs in the tech space and the retail space, in particular at companies like Best Buy, Macy's, Lululemon, Restoration Hardware, their stock is down more than 40 percent because they source so many of their products from our foreign trading partners that were just hit with very robust tariffs.

Wall Street is ultimately looking for the president to acknowledge the pain that is happening, to understand whether or not he is willing to negotiate, which the Commerce Secretary, Howard Lutnick, said that he is not, commerce secretary, said that he is holding at these tariffs Wall Street trying to understand what is the pain threshold.

And ultimately, Dana, maybe we did get some certainty about what these tariffs would look like, but now comes additional uncertainty. What do reciprocal tariffs from other countries look like? That is why you are still seeing markets tumbling today as they wait to see and hear what other countries are going to reciprocate with, Dana.

BASH: Yeah. And just looking at some of those brands that so many of us are engaging with and buying from every single day, that really does help to hit home. We'll go back to that in a second. Don't go away, Vanessa. Let's just talk about what we're hearing this morning from the White House, Alayna, we played a little bit of what the commerce secretary said.

We heard Vanessa underscore that he insists that the president is not using this as a negotiating tactic, that he is going to stick with the tariffs that he sort of said that he was going to impose yesterday. Part of that is because almost worse than the imposition of these tariffs is uncertainty about whether they're going to stay. What is the messaging framework we're hearing this morning from the White House?

ALAYNA TREENE, CNN WHITE HOUSE REPORTER: Well, the White House, Dana, has been very intentional in its messaging. I'd put it this way, you know, for all of the defenders of President Trump on Capitol Hill, others who had said he's a pragmatic deal maker at heart, he's going to pull away from these tariffs. This is just a negotiating tool.

They were clearly very wrong. That is not the case, and we've now heard this from several top officials, cabinet, even level officials, saying that these tariffs are not going anywhere anytime soon, and that's partly because it really cuts to the fundamental nature of what the president believes in, which is at his core.

He believes the United States is being taken advantage of, and that they have been taken advantage of for 70 or 80 years.

[12:05:00]

And what he really wants, regardless of what we're seeing in the short term with the stock market on how it's falling today and the response from other countries retaliating, or promising at least, to retaliate with their own tariffs, is that he believes the world global economic order needs to be realigned. And we heard Vice President J.D. Vance really try to put a finer point on that today, listen.

(BEGIN VIDEO CLIP)

J.D. VANCE, VICE PRESIDENT OF THE UNITED STATES OF AMERICA: Borrow money from Chinese peasants to buy the things those Chinese peasants' manufacturer that is not a recipe for economic prosperity. It's not a recipe for low prices, and it's not a recipe for good jobs in the United States of America. President Trump is taking this economy in a different direction.

He ran on that. He promised it, and now he's delivering. And yes, this is a big change. I'm not going to shy away from it, but we needed a big change. What I'd ask folks to appreciate here is that we're not going to fix things overnight.

(END VIDEO CLIP)

TREENE: We are not going to fix things overnight, Dana, that is the message. And it's clear that for a lot of people who are wondering, how long will this pain be? We've heard short term pain. We've heard that, you know, you might need to take a pause and see how this works out. How long will that be?

Well, it sounds very clear to Vance and others that have been speaking this morning, and we've been talking with, that it could be much longer than people had originally thought.

BASH: And what about the short-term cost that Americans will see almost right away, Vanessa?

YURKEVICH: Yeah, one of the items that people are probably going to see prices increase on first are food items. And this is because these are perishable items, things that come across the border every single day. And we import, you can see right there on your screen, we import a lot of products, and food products because we don't have the capacity or the climate to grow them here in the United States, bananas coming from Ecuador, Costa Rica, Brazil.

Now those countries have a 10 percent tariff. Coffee, we get coffee from Brazil, Ethiopia, those countries now slapped with a 10 percent tariff. Wine, get a lot from Italy and France now slapped with a 20 percent tariff. And ultimately, for the consumer, maybe the only way you could be shielded from prices if suppliers in those foreign countries absorb the tariffs.

However, most economists agree, Dana, that's not what is going to happen. The supplier will pass the tax down to the business, and the business will ultimately pass that tax down to the consumer.

BASH: Yeah, absolutely. Thank you both for your terrific reporting and across the globe, the shock is still sinking in, after the president ripped up 100 years of global commerce. No one really knows exactly how this ends, even what happens in the short term. We know what is happening as we speak, and that is 185 nations are bracing to feel a whole lot of economic pain.

And as we've been reporting in the run up to this moment, that pain will be passed on to the American consumer. You just heard that emphasized by Vanessa, you're looking at the country slapped with some of the largest new tariffs. It includes places the U.S. relies on for imports, like China, which is now facing a combined total tariff rate of 54 percent.

Now that could impact, we talked about food, also the cost of your computers, your smartphones, your toys. Vietnam, where a lot of your furniture, footwear and apparel comes from, that is now going to be at a 46 percent tariff. Taiwan, which the U.S. depends on, for semiconductors, metals and plastics, is getting a 32 percent rate.

I have a terrific group of reporters here to break all this down and tell us what their sources are telling them. CNN's MJ Lee, Jonah Goldberg of "The Dispatch", Tamara Keith of "NPR" and CNN's Phil Mattingly. Phil, I am going to start with you, and as I do, I just want to bring back some of what I just mentioned, because I think it's important for people to kind of absorb the real-life impact that they are likely to feel when it comes to the goods that they buy. We're talking about the computers from China, electronics from Vietnam, others from Taiwan.

PHIL MATTINGLY, CNN ANCHOR & CHIEF DOMESTIC CORRESPONDENT: Americans in this moment who aren't living in the space of circus like insanity that we have been over the course of the sheer scale, what I think has been covered and has been done by the Trump Administration in the first 70 plus days.

Need to understand that they don't know of a time where the U.S. has not been the central and most important player, but of a global, international system within which the U.S. consumer the most powerful force in that system utilizes that force with foreign countries in order to bring in import cheaper goods.

That has long been a goal, that globalization effort, which has had unquestionably bad results in manufacturing -- large manufacturing, certain communities in the nation, there was a tradeoff for that. That tradeoff has been understood, I think, over the course of the last several years.

[12:10:00]

The question has been what to do about it. There have been efforts at large multilateral trade deals. There have been efforts in bilateral trade deals. There have been tried efforts to work around it. The Trump Administration what they did yesterday and what Donald Trump campaigned on in 2016 and 2020, 2024, is they broke it.

And they broke it intentionally, and they believe their plan will do all the things that failed over the course of the last 10 years. No one knows that, that's the case. Economists say it's impossible, but that's the bet they made.

TAMARA KEITH, WHITE HOUSE CORRESPONDENT FOR NPR: Yeah, they are attempting, as J.D. Vance said in the Fox and Friends interview today, they are attempting to reverse a 40 year plus decline in U.S. manufacturing by force, by completely restructuring the U.S. economy and the global economy. That is not something that happens overnight.

I will go back to what happened when the Trump Administration imposed tariffs on China. That was a big disruption. Some American companies did better --

BASH: In the first term.

KEITH: In the first term.

BASH: Yeah.

KEITH: Some American manufacturers did better. Some did worse. It depended on where their inputs came from. A lot of companies said, oh gosh, I can't do business in China anymore. I'm going to move my production to Vietnam or Cambodia. Well, now they're being hit in the new country that they went through the trouble of moving to with additional very large tariffs from the Trump Administration.

And so, it's clothing, its furniture, it's all of these things that we talk about. It's bicycles. It's just a huge part of what American consumers consume like if we looked at our tags right now on our clothes, odds are it doesn't say made in the U.S.A.

BASH: Yeah, Jonah, I want to read for our viewers. This is what I like to do -- I'm going to quote you back to you.

JONAH GOLDBERG, CO-FOUNDER/EDITOR-IN-CHIEF AT THE DISPATCH: -- do you --

BASH: -- It's brilliant. It's not about your dog. I'm not going on social media. I'm going into your -- to your deep strong analysis and understanding. Politically, the idea of deliberately making things like literally, all the things more expensive, when you were elected in large part due to popular exhaustion with inflation, is so irrational it's like the economic policy equivalent of a Dali painting. I love that

GOLDBERG: -- nuance. So, first of all, I'm going to disagree a little bit, not entirely, with the story that's been told here. I don't guess there are losers in the last 40 years of trade liberalization. There are also enormous winners. And I think there are more winners than losers, and a lot of the jobs that have been lost to -- in the churn in the American economy, and one of the things that makes our economy great is its churn.

Michigan didn't lose all of its jobs to foreigners, and lost a lot of its jobs to Tennessee and to Alabama, and the center of auto manufacturing moved south because it was more competitive down there. No one's talking about the outrageous trade deficits between, say, Michigan and Tennessee, because, in fact, they don't matter at all.

If you want to take shoe, you know, shoe selling jobs from Vietnam that don't pay very well by American wages, and bring them to America, there are only two things that can happen. Either we're going to keep paying at Vietnamese wages, which are not the good jobs that Lutnick is going on talking about, or we are going to pay American style manufacturing wages for jobs that will make sneakers cost 300 $400 more.

BASH: Right --

GOLDBERG: That doesn't help anybody. There's just no really good defense of any of this, which is why Lutnick is so bad at what he does.

BASH: Well, I'm so glad that you -- I'm going to not comment on that last part, but I'm so glad that you brought up the question of, what happens if this is successful, and manufacturing for all of these goods that we're talking about that are done in internationally, come back to the U.S., it's a big if, first of all, if that can even happen.

GOLDBERG: And success means these things will be more expensive, if --

BASH: That's exactly. Exactly, and that was --

MATTINGLY: That's a critical point.

BASH: That's a critical point. I know MJ, you have been out in the world, in the real world, talking to voters. And, I mean, you tell me, but it sounds like you are hearing, in addition to the trepidation about things like that, also, well, like, OK, let's give it a chance.

MJ LEE, CNN SENIOR NATIONAL ENTERPRISE CORRESPONDENT: Yeah, I think it is so important for us to not conflate the panic that we are seeing, the tumbling in the global stock markets, all of the doom and gloom language we are seeing from so many economists with the idea that every single American is going to hate this idea.

You know, when you survey a diner some part of the country. And you ask every American in there, what do you think about these proposed tariffs? You get mixed reviews, right? Some people will definitely say, I don't think this is a good idea. I don't want to have to pay more.

[12:15:00]

But the people who are in the camp of being at least curious or encouraged by this idea, they are using language like things have been unfair for so long. The U.S. has been taken advantage of for so long. And when will somebody, at last, sort of show strength, that the U.S. has strength?

So, there is a real sentiment, and an emotional sentiment at that the president is trying to harness. And I do not think that we should underestimate it.

BASH: Yeah.

LEE: I'm not saying sort of the economic analysis here around the table is wrong, but just what the voters are feeling. I do not think we should --

BASH: -- that word unfair, that is the through line, that is the sort of word and the sentiment that Donald Trump has been hitting home since he -- since he first got into politics, but since the first time somebody put a microphone in front of his face and that is clearly something that is resonating.

The unknown now is whether people are still going to be willing to give it a chance when and if they are paying so much more on everyday goods and services.

MATTINGLY: Yeah, I think, and I appreciate Jonah's clarity, imprecision and kind of what he was laying out. I think what I was trying to identify at the front end was, this is the animating force behind why they've decided to go this route. And the Biden Administration was trying to address it in a different way.

The Obama Administration was kind of late to understanding what it actually meant. I think the reality is when people talk about short term pain, or is it going to be an adjustment period, or just give it a little bit of time, they are not being honest with the reality of, when Donald Trump says, if a foreign car is more expensive, I couldn't care less, which was his quote.

People -- he wasn't misspeaking, and he didn't make a political mistake. From a 30,000-foot perspective, he was making the point that I want foreign goods to be more expensive in this country. That's the plan. That's quite literally what we're going for here, to try and drive market forces, to bring manufacturing back home.

BASH: Yeah.

MATTINGLY: The difficulty in this moment, in an interconnected global world, is cars have a ton of U.S. parts in them, wherever they're built, and vice versa.

BASH: Right, it's already interconnected economies has been --

GOLDBERG: Right -- under that scenario, get cheaper, right? Because, first of all, when you make anything scarcer, you make it more expensive, right? So, there were already seeing used cars getting more expensive, used American cars, used foreign cars, because people know that the new cars are going to get more expensive. When they raise tariffs in the first term on foreign steel, American steel prices went up too.

BASH: Yeah.

GOLDBERG: Because when you impose scarcity, you increase prices.

BASH: I just have to go to break. I just want to on that note. You were talking a lot about the first Trump term and what he did. We also can't forget that the United States Congress helped to bail out farmers who got hurt by the terrorists, specifically on China, $28 billion that's what we all paid at home to help these farmers because of those tariffs. And that was just sort of a drop in the bucket compared to the tariffs we're seeing. Coming up the pike. Don't go anywhere, because nowhere, no place on the planet appears to be safe from tariffs, not even an uninhabited island, just ask the penguins of the Heard and McDonald's Island. Yes, we are talking about penguins. We'll explain after a break.

(COMMERCIAL BREAK)

[12:20:00]

BASH: No one is safe from President Trump's new tariffs, not even penguins. A remote island near Antarctica that is home to mainly penguins, no humans is now subject to a 10 percent American tariff. This is not a joke. We are not kidding. These penguins who do not trade goods or services with the United States, as far as we know, are on the receiving end of a new tax. My panel is back. Let's just get some of the headlines up about that.

MATTINGLY: That's a non-tariff trade barrier.

BASH: OK, well, that's true. I mean --

GOLDBERG: -- currency manipulators --

KEITH: -- buy our products.

BASH: I mean, that's the thing. So, the "Wall Street Journal", Trump tariffs are truly global. Just asked the penguins of McDonald islands. Then we saw another headline, Trump tariffs hit Antarctic islands inhabited by zero humans and many penguins. And then Rolling Stone, Trump launches new trade war with penguins, not Putin.

This is so remote, and I know we're having a little bit of fun with this, but we'll talk a little bit more later about how they came up with these formulas, but this is kind of the reason why we're talking about it in addition to it just being ridiculous. Is the question of, how did this even happen?

MATTINGLY: Quickly with --

BASH: -- the answer. That's a rhetorical question.

MATTINGLY: Oh, sorry -- has to. Well, USTR -

KEITH: So, they said they were showing their work, right? They had all of these charts with all of these numbers. They said they were showing their work, and then we all looked at the work and found penguins and other things and sort of weird math. And essentially, this was put together very quickly, even though Donald Trump has been talking about this very thing for years.

LEE: And it's fine for us to joke about the penguins, like it's genuinely funny, but I think the not funny side of this is definitely like for an announcement and a policy decision of this size and this gravity, what was happening behind this scene -- [12:25:00]

BASH: Well exactly. That's exactly right --

GOLDBERG: -- just before the show came on, saying the commerce secretary saying, trust Donald Trump to run the global economy. And there are lots of people, small businesses, they're going to go out of business. There are small businesses, they're going to suffer lots of consumers who are going to have to pay more at the grocery store.

And we're supposed to trust them to run the global economy, and they're taxing penguins. And it goes to the credibility of the administration that they really thought this through. And my general rule, almost all policy fights, whether it's about NATO or about this, or about anything else, if you have a strong position, you don't need to lie right, because if the facts are on your side, you use the facts --

BASH: -- that this was a lie. This was just like --

GOLDBERG: No -- the history that Donald Trump gave yesterday about the history of trade, but we've been -- and all this kind of stuff, and how we're poor than we've ever been and all that kind of stuff, and we were richer 110 years ago, which is just crazy, if you have -- if your case is strong, you don't need to make stuff up.

BASH: Jonah, we first started covering this town, the Republicans were all in on free trade. The Democrats certainly, when I started covering NAFTA, it was kind of the first big thing that I covered on the trade front. It was the Democrats who were very concerned about free trade. Now everything is upside down. Listen to what the Democrats are saying about this Trump tariff plan.

(BEGIN VIDEO CLIP)

REP. HAKEEM JEFFRIES (D-NY): Republicans are crashing the American economy in real time and driving us to a recession.

SEN. CHUCK SCHUMER (D-NY): When the average American family sits down and tries to figure out how they're going to pay for things, and they hear they may pay $5,000 more than they've had to pay before, and they may not be able to buy a new car. They may not be able to support that new drug that grandma needs.

They may not be able to take that vacation they were planning for, for a year. They're going to be outraged, and they should be outraged.

(END VIDEO CLIP)

BASH: I mean, this should be like shooting fish in a barrel for Democrats who are desperately looking for a political sort of thing to cling onto.

KEITH: Yeah. So, there was a Fox News poll that came out over the weekend that said 69 percent of people believe that these tariffs will make the things that they need to buy more expensive. There was a CBS News you got poll over the weekend that said that an overwhelming majority of people would like Trump to focus on tariffs less and lowering costs more.

So, the political groundwork is there, Democrats, this is like, it's on a -- They don't have to do much. The American public has already predisposed to believe that this isn't going to be great for them, and that Donald Trump has something to do with it. I mean, he announced it. He did it.

LEE: Can I say though.

KEITH: Yeah.

LEE: On the Democrats don't need to do much part. Plenty of Democratic strategists I've spoken to have said, we want Republicans to completely own this. We're going to sit back and let them be responsible for everything that is about to unfold. The political fantasy here is that everything will be so disastrous that the folks that are watching this happening will think, OK, this was so bad that the Republican Party is clearly the party that is responsible for all of this.

However, I think it's important to say that inaction is generally not a fulsome political strategy. In addition to that, there has to be clearly some sort of parallel agenda that the Democratic Party is putting together. And I don't know, I mean, you guys correct me if I'm wrong, but I haven't heard anything that indicates that the party is behind something clear right now.

GOLDBERG: I haven't either -- a lot of this stuff is basically what Bernie Sanders wants, or at least want, right? And talk about people, parties, switching sides. I'm also, you know, you talk to people on the Hill, you talk to reporters who cover the Hill. Republicans are still talking about how this is all a negotiation tactic.

BASH: Yes.

GOLDBERG: And the White House keeps screaming, it's not a negotiation tactic.

BASH: Yes.

GOLDBERG: At some point, Republicans are going to hear from a lot of small businesses that are going to be pretty ticked off.

BASH: Yeah. They're still even saying it today, don't go anywhere, because coming up 49 percent that's the tariff on Cambodia, 47 percent on Madagascar, 31 percent on Switzerland. How did the White House come up with these numbers? Tamara talked about showing their work.

Economists, mathematicians are still a bit confused. You know who has some answers? This guy, Phil Mattingly, don't go anywhere. He'll be at the "Magic Wall".

(COMMERCIAL BREAK)

[12:30:00]