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Stocks Tumble, Dollar Weakens as Recession Fears Grip Wall Street; Trump Remains Defiant Amid Fallout from Widespread Tariffs; Trump's 25 Percent Tariff on All Imported Vehicles Takes Effect. Aired 10-10:30a ET

Aired April 03, 2025 - 10:00   ET

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

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PAMELA BROWN, CNN ANCHOR: I'm Pamela Brown. Happening now, breaking news, stocks are tumbling. The Dow, NASDAQ, and S&P 500 all down as the fallout grows on President Trump's historic tariff.

WOLF BLITZER, CNN ANCHOR: And the global backlash, world leaders are slamming President Trump's tariffs, France calling it imperialist posture. China says its typical unilateral bullying practice. And Belgium is warning, by playing with matches, the U.S. will end up getting burned.

Welcome to our viewers here in the United States and around the world. I'm Wolf Blitzer. You're in The Situation Room.

And we begin with the breaking news from Wall Street. Trading has been underway now for just about 30 minutes, and nervous investors, very nervous investors, are weighing in on President Trump's historic new global tariffs. The early assessment, deep concerns. Almost all goods entering the United States will face a new tax of at least 10 percent, and that means inflation-weary Americans will see even higher prices on virtually everything. And that adds to the deepening concerns among economists that the U.S. and indeed much of the world may be on a collision course with a recession.

Let's begin this hour with CNN Business and Politics Correspondent Vanessa Yurkevich. She's in New York watching all of this unfold. So, Vanessa, where do the markets stand right now?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Wolf markets are tumbling as investors are really digesting worse than expected tariffs. You have the Dow, the NASDAQ, and the S&P all down below, as you can see there, 3 percent. Retail stocks, in particular, really selling off, Nike, Adidas, Lululemon. These are companies that source a lot of their goods from abroad, countries that are now under higher tariffs.

And just look at the countries that were hit in yesterday's announcement. You have the European Union, 20 percent tariff, You have Japan, 24 percent, China, 34 percent, and Vietnam, 46 percent. Key trading partners to the U.S. investors are worried what this means for businesses and then, of course, those business' profits.

But let's just reset where. What do we know right now? We know that there are auto tariffs in effect right now, but coming on Saturday is that 10 percent universal tariff on Wednesday, higher tariffs on about 60 countries, tariffs on auto parts, foreign auto parts on May 3rd, and then maybe coming additional tariffs on lumber, semiconductors, and I'll add copper there as well.

And as you mentioned, Wolf, there is talk of what this could mean for a recession. I just spoke to an analyst who says that the longer that these tariffs stay in place, the more likely that there will be a recession. We also heard from Mark Zandi from Moody's Analytics who said, if they follow through, if these tariffs go into effect, I'd buckle up and brace for impact, a recession seems more likely than not. Wolf?

BLITZER: All right. Vanessa Yurkevich in New York for us, thank you very much. Pamela?

BROWN: Well, Wolf, the White House and Republican lawmakers concede that the ripple effect of the terrorists will cause some pain to Americans. But the White House says it's the initial cost to revive manufacturing jobs in the U.S. Here's what the vice president said this morning.

(BEGIN VIDEO CLIP)

J.D. VANCE, U.S. VICE PRESIDENT: For 40 years, we've had an economy that rewards people who ship American jobs overseas and raises taxes on American workers, and we're flipping that on its head. We're going to cut taxes for American workers and for American companies that build here. We're going to make it harder to ship American jobs overseas.

It's a total shift in the way that we've done economic policy in the United States of America, but it was necessary.

(END VIDEO CLIP)

BROWN: All right. Let's go live now to CNN White House Reporter Alayna Treene. Alayna, what else are you hearing from the administration this morning?

ALAYNA TREENE, CNN WHITE HOUSE REPORTER: Well, Pamela, it's clear that the White House has been very intentional in its messaging. You know, despite some of the president's defenders, Republicans on Capitol Hill, others who ha have argued that the president is a pragmatist at heart, that perhaps he would pull back on some of these tariffs. It's clear they were wrong. The president was serious about this. And as Vance just laid out, and as we've heard from other top advisers this morning, he is committed to these tariffs, really because he fundamentally believes the United States is getting taken advantage of and he wants to really break the trading system that has been built over the last 70 or 80 years now and see this realignment.

Now, we heard from Press Secretary Karoline Leavitt this morning. She was speaking with CNN. She said that, you know, this isn't going to be a negotiation. This is a national emergency. Listen to how she put it.

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KAROLINE LEAVITT, WHITE HOUSE PRESS SECRETARY: The president is firm in his approach, and the president is ensuring economic stability here in the United States of America.

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.

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TREENE: I think, Pamela, the end of her answer there saying they, it's 70 years to negotiate is really key here, because that's the question now, where do we go from here? We're going to see, as Vanessa just laid out, all of these different countries likely respond and in kind to these tariffs and retaliate that could further escalate this trade war now. And so that's really the key question.

One thing as well, just as we watch the stock market, is that the president has been far less reactionary to how the stock market is in this term, in his second administration than in his first. We have been told repeatedly now not to see him react to the stock market directly because of this. Instead, he has said repeatedly now that he believes there will be some short-term pain. So, I'd keep that in mind as well as we cover this. Pamela?

BROWN: All right. Alayna Treene, thank you so much. Wolf?

BLITZER: All right, Pamela. As we mentioned, analysts now say that President Trump's tariffs will likely plunge the global economy into recession this year. Some countries say they're hoping they can negotiate with the U.S. while others have vouched swift retaliation. Listen.

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SHIGERU ISHIBA, JAPANESE PRIME MINISTER: We had been requesting the U.S. government to review its unilateral tariff measures at various levels, and we are extremely disappointed and regret that such measures have been implemented, nonetheless.

KEIR STARMER, BRITISH PRIME MINISTER: Our intention remains to secure a deal, but nothing is off the table.

ANTHONY ALBANESE, AUSTRALIAN PRIME MINISTER: We will continue to make the strongest case for these unjustified tariffs to be removed from our exporters.

MARK CARNEY, CANADIAN PRIME MINISTER: We are going to fight these tariffs with countermeasures. We are going to protect our workers.

OLAF SCHOLZ, GERMAN CHANCELLOR: The entire global economy will suffer from these ill-considered decisions.

(END VIDEO CLIP)

BLITZER: Stock makers across Asia have already tumbled after President Trump's announcement. Now, China has vowed to counter what it calls bullying tariffs by the United States.

I'm going to go live to Beijing. CNN's Marc Stewart is on the scene for us. Mark, what kind of retaliation potentially could we see from China?

MARC STEWART, CNN CORRESPONDENT: Right. Well, good morning. China says it is ready to fight back. But if this is a war, it's not necessarily revealing its plans about how and when it will strike. It certainly has the option though of continuing on the tariff theme by instituting more tariffs, more punishment, specifically targeting American farmers. Right now, China imports a lot of soybeans from the United States. There are existing tariffs. Certainly, China could double down on that.

But what's been interesting all day today, China's been very much taking on this diplomatic tone, talking about themes of resolving differences, urging the United States to cancel the tariffs. So, it's kind of this wait and see mode as this April 9th deadline approaches.

There is certainly an economic side to all of this, but there's also a lot of ego involved. Both Xi Jinping and Donald Trump want to look strong on the world stage. As one analyst mentioned to us today, it's the real question of who will fold first.

Nonetheless, as you mentioned, this is creating a lot of anxiety, not just here in China, but across the entire regions. Markets are not looking at this favorably. We saw declines across many of the markets in Asia, including Japan, which, of course, is home to the auto giants, including Toyota and Honda. Wolf?

BLITZER: All right. Marc Stewart at Beijing for us, Marc, thanks very much. Pamela?

BROWN: And stock markets in Europe also took a tumble after President Trump announced 20 percent tariffs on imports from the E.U.

So, let's go live now to Paris and CNN Senior International Correspondent Melissa Bell. Melissa, how big of a blow are these tariffs to Europe?

MELISSA BELL, CNN SENIOR INTERNATIONAL CORRESPONDENT: Look, senior European officials been talking to me just a short while ago about the figures. They were handed this 30-page document yesterday. Europeans are contesting a bunch of the figures. They say that it's full of mistakes. There are things that have been seen applied tariffs applied to them twice.

Overall, what Europeans are saying is that if you look at the last three rounds of tariffs that have been applied to them, it is 70 percent of all European goods that head to the United States that are now the subject of tariffs. That is 380 billion euros worth of goods. So, it's a huge blow to the European Union.

And what's interesting is that the commission is saying on one hand that it's going to seek to negotiate the high level negotiations with Washington begin, we understand even tomorrow afternoon, but at the same time, they're really preparing for a war they say that they did not start, but that they are ready to wage. And what they say their biggest asset is the biggest single market in the world. So, 450 million consumers that they say they're going to protect, but also use in their fight, so things like, for instance, sourcing soybeans elsewhere than the United States motorcycles, the sort of goods that you would expect them to seek to buy from other partners in the United States.

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But more than that, the commission has a bunch of more measures, retaliatory measures, up its sleeve that could hurt, for instance, big tech that make, say, Europeans, 30 percent of their profits in the E.U. Europeans are preparing to fight back and to fight back quite aggressively, Pam.

BROWN: All right. Melissa Bell, thank you. Wolf?

BLITZER: All right, Pamela. Let's get some more right now on all the breaking news. Joining us, the New Jersey Democratic senator, Cory Booker. As you know, he just set the record, I should say, this week for the longest floor speech in the modern history of the U.S. Senate. Senator, thanks so much for joining us.

I want to talk about your marathon speech in just a few moments, but let's get to the breaking news first. What kind of impact, Senator, are you expecting these massive Trump tariffs? What kind of impact do you think they will have on American consumers?

SEN. CORY BOOKER (D-NJ): Well, I'm already hearing an explosion of a reaction from across my state, and people from across the political spectrum are angry and upset because they know the impact it's going to have in New Jersey on jobs, on businesses. But for our consumers who were already struggling under a president this last 73 days that said he would cut their costs.

Before he even did this, inflation was going up, before he even did this, the stock market and people's 401(k) accounts were going down. Before he even did this, the consumer confidence was down, before he even did this, grocery prices and eggs and things were going up. So, this is now going to put about a three to $4,000 added increase for the average New Jersey family. They will be paying between $3,000 and $4,000 more per year just to meet the basic needs that they need for their family. And for a lot of families they can't afford that. They're already struggling and they're seeing a president who made a lot of really powerful promises, break them over and over again.

BLITZER: America's allies, Senator, as you know, and America's trading partners have very quickly slammed these Trump tariffs. Many foreign leaders across the world are vowing to retaliate big time. What is your message to them as they weigh how to respond? BOOKER: Well, look, Trump declared a unilateral war, not on one country, not saying, hey, we're going to meet the Chinese. He did this over all -- dozens of countries and all over Europe. And so he's now declared a war. And every action has a opposite reaction. And so we're going to see now some really bad things start happening as the president continues with this dire, bad policy.

And I am so frustrated. I am so angry. There's no strategy in this. There's no thoughtfulness in this. There's no pulling together a bipartisan group of a business, American saying, hey, let's think this through and do this wisely. What he has done is going to have catastrophic effects on the American economy, and, frankly, a lot of our closest allies are going to be feeling that pain too. And they're going to retaliate against us.

And so globally, he's pulling out of -- he's turning his back on our NATO allies, globally, on people we need critically right now to meet the challenges from the Middle East to the challenges in the South China Sea as opposed to strengthening alliances, creating more possibilities and promise. This ban is isolating America and really endangering us economically, and I believe in other foreign policy aspects as well.

BLITZER: Senator, an JPMorgan analyst note to investors today, they're warning the tariffs threatened to plunge the U.S. and the global economies into recession. Markets around the world have fallen in the wake of these tariffs. U.S. markets are now down sharply as well, as we just reported. Are we looking, do you believe at a potential global recession?

BOOKER: The risks are there. Economic analysts are saying the risk is growing significantly. You see large business associations across the country now coming up with dire statements to try to shake this president back to common sense. So, do I worry? Yes.

But I keep centering in my concern the average New Jerseyan, the average American who, what they're going to see in their lives is prices going up, the challenges that they're facing, that they had hoped, at least some of them, at least half of our country, who voted really hoped that the president would bring some relief. In 73 days, there's one question people should be answering, am I better off than I was 73 days ago? And the answer unequivocally in terms of the cost of everyday goods or the cost of living is you are not better.

And so we need to brace ourselves, but I'm telling you, we're not helpless. We have agency. More and more Americans have to step out. If it wasn't enough, there's a tax on veterans. If it wasn't enough, there's a tax on Social Security. If it wasn't enough, what he's doing in threatening and menacing Medicaid that millions and millions of Americans rely on. Let this be the moment that you say, enough is enough. I'm going to start to stand up, speak up and push this president back from hurting my fellow Americans.

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Because his policy so far in this country have caused chaos and now they're making disaster actually more probable.

BLITZER: President Trump says these tariffs will bring jobs and manufacturing back to the United States. The Trump administration is acknowledging there will be what they call short-term pain, but say the US will benefit in the long run. How do you respond to that?

BOOKER: You know, there is a place for strategic, thoughtful tariffs, Democrats and Republicans have worked together at times, especially targeting him towards people that are engaging in unfair trade practices, like the People's Republic of China. So, I'm not saying that that's not what to do. But what he has unleashed on this world through what he has done is going to cause so much harm, harm to people that Americas really, frankly, works with in partnership.

And remember what our economy is. It is an economy that's driven in many ways by consumer consumption, a service economy. And what he has done is created an environment where our economy is going to be shaken. And a lot of the people, as we've said already, who are predicting what's going to happen if he stays this course could be disastrous.

Now, we know this, Wolf, that in America people with wealth have done very well over the last 20 years. Heck, under Obama alone, the stock market doubled. But most Americans, 50 percent of us, haven't seen that share of that wealth. They've been struggling, especially recently with high inflation and other high cost challenges.

We have a real problem in this country that if the same president that is causing this kind of economic disaster right now, is also threatening Medicaid, Medicare, prescription drug costs, I could go on how he's hurting the average American that's struggling. And so this is a time in our country that more good people of good conscience have to begin to stand up and speak up, because I've seen it before. We stopped Trump in the first administration by a chorus of people across the political spectrum saying, do not take away the Affordable Care Act and healthcare from 20, 30, 40 million Americans. I was proud of people like John McCain and Lisa Murkowski who stood up to Donald Trump and actually backed him down.

This has to be one of those moments where we stop him from doing what he's doing. And this tax plan he's about to try to push through Congress, that's going to cut Medicaid by $880 billion, that's going to blow a massive hole in our deficit by trillions of dollars that are going to make our children and our grandchildren have to pay for that debt, all to do what, to cut taxes and corporations and the wealthiest Americans. Because the disproportionate number of those tax cuts, the majority of those tax cuts are going to go to the wealthiest who are already doing okay.

What is he doing for the struggling American who has been asking from Democrats and Republicans alike for relief from these challenging economic times? Well, the answer he's given is, I'm going to make it harder for you, I'm going to make this more difficult for your families, I'm going to make everyday living more expensive. This we have to stop. BLITZER: Senator, as all of our viewers know by now, you set the record this week for the longest speech in the modern history of the U.S. Senate, speaking for more than 25 hours. This wasn't a filibuster. So, what do you think you actually accomplished and has the reaction to this speech been what you wanted?

BOOKER: Well, I'm grateful to now, over these last two days, hear from a lot of people who were appreciative that I centered their stories, that I read letters from veterans, read letters from teachers. I read letters from people who have really been struggling in America, and especially over the last 72 days where chaos and fear and cuts and the firing of our veterans, the ending of the Department of Education, I read their letters.

And so, for me, it's really important that folks know that Democrats, that leaders in this country recognize the pain and hurt of people, recognize that they have a responsibility to do more and to stand more. And I'll tell you the most moving things I've heard is from the Americans that we don't talk about, that are standing with more endurance than me, the person on at an iHop in Newark, New Jersey, he's pulling two shifts on her feet, an extra shift if you can catch it just to provide for her family, or some of the farm workers in New Jersey that asked me to come out and work a day with them. That was the most backbreaking work I've ever done. I did it for one day and I was sore for a week, but they do it every day. There are so many hardworking Americans who stand every day just to try to provide for their families, and they want to know who is standing for them.

And so I this was 25 hours, but I, like many of us realize, that we have to still do more, we still have to fight harder because the threats and the challenges still remain. And Donald Trump showed it yesterday that he's coming after this country not to make it better, not to lower costs, but to do things that cause more pain. And so I'm in a fighting spirit ignited by so many of the voices from my state and I'm going to keep fighting until we end a lot of the pain and the hardships that this president is keeping on average Americans.

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BLITZER: Senator, one final question, a quick one before I let you go. How are you feeling after standing for 25 straight hours?

BOOKER: You know what, I have not -- my body's not back to 100 percent, but my spirit is on fire, ands, soaring. And I'm just grateful for a lot of the people who've been reaching out to me and encouraging me to keep going, keep fighting, keep pushing, and I appreciate the stand I took.

BLITZER: Well, we hope you get back to being very, very strong. Senator Cory Booker, thanks so much for joining us. Pam?

BROWN: Still ahead, tariffs for imported cars are now in effect. What you need to know before you buy or lease your next vehicle.

BROWN: And later, widespread damage, storms leaving behind a trail of destruction across several states. We're live in one of the hardest hit areas.

Stay with us. You're in The Situation Room.

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BROWN: President Trump's new tariffs on all cars shipped to the United States are now in effect. It's a 25 percent hike on every car, truck and SUV that crosses the border. Now, to put that into context, an imported car that costs $40,000 yesterday will now be hit with an additional $10,000 in tax as it crosses the border and costs you $50,000 with the new tariffs.

So, let's go live now to CNN Correspondent Omar Jimenez, who is in Southfield, Michigan, the heart of the U.S. auto industry. Omar, what has the reaction been so far from car dealers and customers?

OMAR JIMENEZ, CNN CORRESPONDENT: Well, car dealers like this, we're at Glassman Auto Group in Southfield, Michigan, they're essentially trying to process what they are going to do next. And it's happening on a few different levels.

So, one, we've spoken to a few customers who have come in somewhat of a dash as what's been described to us because they're trying to buy before these tariffs actually affect prices, sort of in this period where they've been announced, they sort of know what's coming, but it hasn't quite rippled down to them just yet.

And on that front, the dealers here say, look, they've got probably about a month or so worth of supply before they believe the tariffs are going to have to increase those prices, and they do believe that is going to happen. In fact, the president of the auto group here at this particular spot in Southfield told us that not only is he going to have to increase prices, he worries about what that is going to do to sales.

He also anticipates that is likely going to push some folks to buy more used cars, which sure sounds great, but then also higher demand could then lead to increased prices there. To put it in his words, he's worked here, this has been in his family since his dad started this back in the late 60s, he, in his words, has not seen anything as disruptive as far as what he anticipates to see. They're just trying to figure out what they're going to do next.

BROWN: Yes, a lot of companies are doing that right now. Omar Jimenez, thank you. Wolf?

BLITZER: And joining us now to explain what this all means, the economist, Natasha Sarin, who served as counselor to the former treasury secretary, Janet Yellen, she's also a professor at the Yale Law School. Thanks so much for joining us.

What kind of impact will these massive Trump tariffs have on international trade? NATASHA SARIN, ECONOMIST: So, the reality is we've never seen anything like this in the last 200 years of our history in the United States. Tariff rates are going to be higher as a result of what was announced yesterday than they have been at any time since 1902.

And importantly, like when you teach tariffs, when you talk about things, like Smoot-Hawley, it can all sound a little sort of complicated. The thing that consumers and the American people like really need to understand and do understand and already are starting to see, they're feeling it today in autos, is that prices are going to go up. We ran the numbers yesterday as a result of the Trump trade actions that we've seen so far. Prices for American consumers are going to go up by about $4,000 annually, and that's a regressive tax because it's going to hit low income people the hardest because those are the ones who consume most of what they earn.

BROWN: So, let's dive a little bit more into that. What more specifically will go up as a direct result of these tariffs and how long do you think that could last? We've heard the Trump administration say, well, there'll be some short-term pain. What do you say to that?

SARIN: So, I mean, there's like a couple of challenges here, right? When you say what prices are going to go up, and I heard yesterday Secretary Bessent was on CNN and his suggestion for people about what to do about the tariffs was buy American. That suggestion doesn't really work. And if you take the context of autos, it's a very clear example. You think about automobile companies, like a Ford and G.M., those are American companies, but 60 percent of the car parts they use to build their cars here in the United States come from abroad and are going to be hit by these tariffs.

If you buy avocados, if you buy Modelo beer, if you buy literally anything, if you go to the toy store and you're looking for toys for your children and you go to Walmart, you're looking to buy toys for your children, prices are going to rise because these are goods that are imported into this country that American consumers rely on.

And to your question of like what's going to happen and what the endgame is here, what's interesting is when the Trump administration took office, the prediction markets thought that the likelihood of a recession was something like 15 percent, and that's kind of normal. That's what it is basically in a year. As a result of all of these actions that they've done unilaterally, the likelihood of a recession is now at over 50 percent and it went up 10 percent yesterday as a result of that Rose Garden event.

So, this is significant pain, not just in the short-term. The American economy is going to be smaller for a long time to come, and it's totally unclear for what purpose we are doing all of this.

BLITZER: Natasha, let me just follow up on that. Where do you think American consumers will first start to feel these price hikes?

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SARIN: I think they've already started to feel them.