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Amanpour
Putin Responds to the Ukraine U.S. Ceasefire Proposal; More Shots fired in Trump's Global Trade War as Canada And Europe Hit Back At U.S. Tariffs.; Columbia University Activist Mahmoud Khalil, Remains in ICE Custody Following Court Hearing in New York. Aired 12:00-1:00p ET
Aired March 13, 2025 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[12:00:27]
CHRISTIANE AMANPOUR, CNN ANCHOR: Hello, everyone, and welcome to AMANPOUR. Here's what's coming up. More shots fired in Trump's global trade war as
Canada and Europe hit back at U.S. tariffs.
While Putin has responded to the Ukraine U.S. ceasefire proposal, I speak to Donald Trump's former E.U. ambassador, Gordon Sondland.
Then, Columbia University activist, Mahmoud Khalil, remains in ICE custody following a court hearing in New York. I'm joined by his attorney, Baher
Azmy.
And Iran's supreme leader dismisses White House overtures and condemns demands from, quote, bullying governments. "New York Times'' Iran
correspondent, Farnaz Fassihi, brings us the details.
Also, Walter Isaacson talks to Canadian economist, Eric Lascelles, about tension in the U.S.-Canada relationship.
Welcome to the program, everyone. I'm Christiane Amanpour in New York.
For the first time since Ukraine and the United States agreed to a temporary ceasefire proposal, Putin has reacted at a joint press conference
in Moscow with his neighbor and partner in this invasion, the president of Belarus. Quote, I am for this ceasefire, said Putin, but I have
reservations.
And the Russian president came up with a whole long list of them, as expected. There are a lot of things that we have to discuss, he said. But
he also thanked President Trump and his other partners China, South Africa and others for trying to end this.
Now, it is the latest twist in this hot war at a moment when the trade war is heating up. Canadian Foreign Minister Melanie Joly mince no words, if
the United States can do this to its closest friend, then nobody is safe, she said. Just hours after Donald Trump's 25 percent tariffs on aluminum
and steel went into effect.
Now, Canada and the E.U., each fired back with retaliatory strikes on U.S. imports, including boats, bourbon, and motorbikes.
Now, Donald Trump threatens another 200 percent tariff on wine and champagne from France and other alcohol from the E.U., calling Europe's
retaliatory measures hostile, abusive, and nasty, and so it goes.
The French trade minister now says that, quote, Trump is escalating the trade war that he has chosen to start. And they won't, quote, give in to
threats. They will always protect their industries.
In the White House yesterday, Trump gave the world a sense of where this is all headed.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Reciprocal tariffs, so whatever they charge us, we're charging them. Nobody can complain about
that. Whatever it is, it doesn't matter what it is.
If they charge us -- if they charge us 25 or 20 percent or 10 percent or 2 percent, or 200 percent, then that's what we're charging them. And so I
don't know why people get upset about that because there's nothing more fair than that.
(END VIDEO CLIP)
AMANPOUR: But who started all of this? And as tensions with allies spiral, overtures to adversaries continue. Here with an inside view is Gordon
Sondland. He served as U.S. ambassador to the E.U. during President Trump's first term. He opposed the president after January 6th, but reversed that
cause and supported his re-election.
Gordon Sondland, welcome back to the program. So I don't know, my head's spinning. Maybe yours is spinning. But in the last few minutes, I want to
go straight first to the Putin reaction to the ceasefire. What do you make of it?
Many, many analysts said that Putin is bound to play nice with President Trump. He appreciates, as he said there, Trump's intervention to end the
war. But again, as suspected, he gave a whole list of reservations. Where do you think this is headed? How do you react?
GORDON SONDLAND, FORMER U.S. AMBASSADOR TO E.U.: Well, the whole list of reservations that he gave is really nothing more than a form of rope-a-
dope. He wants every second to be able to continue to hit Ukraine while these discussions are ongoing.
And he's, you know, giving a nod to President Trump and thanking him for all of the courtesies. He also mentioned his other allies, including South
Africa and others. But while all of this is going on, Christiane, he's going to continue to hit Ukraine very, very hard.
And I think President Trump's appropriate response is if the immediate ceasefire that Steve Witkoff is going to propose in person in Moscow is
rejected or even if it's not rejected, but it's like one of those, we'll take it under advisement and get back to you, we should, without public
announcement or fanfare be surging weapons to Ukraine, as well as intel, and letting them, again, hit hard inside of Russian territory, so that
while Vladimir Putin is taking his sweet time, he's suffering severe casualties in the process.
[12:05:27]
AMANPOUR: He indicated that, in fact, those -- that surge that you're talking about, the fact that it's also been restarted since the Saudi talks
between the U.S. and Ukraine, that's a no-no for him. He's like, really? Ceasefire? But then the weapons have to stop flowing to Ukraine.
So it puts, you know, Trump in a bit of a bind. And Lukashenko, who's always there to nod to Putin, said, I advise the Russian president not to
fall for Donald's tricks. That's -- those were his. So they think -- he thinks that -- everybody thinks they're being played.
SONDLAND: Well, this is like two people that are each holding a gun to one another's head. And the only way out of this is they both slowly, at the
same time, need to lower the guns and put them on the table.
But the last thing either of them wants to do is abruptly put the gun down while the other one is still pointing at your head because you won't have a
head left when this is all through.
I don't think that the Trump administration should make a big fanfare out of resurging weapons, but I think they should do so quietly. Putin will get
the message when all of a sudden the ATACMS missiles start hitting well inside of Russia.
AMANPOUR: All right. Let's move on to the other war because it is massive and that's the trade war. We have a G7 meeting in Canada. Canada is sort of
ground zero for this new Trump, well old Trump, new Trump escalation of the trade war. They are talking in, you know, self-defense terms. They are
refusing to be bullied. I'm just giving you, laying it all out as you know.
Do you understand where this is going? I mean, every day just about, we have trade tariffs, then suspensions, then retaliations, then reciprocals.
I mean, what is -- what is going on?
SONDLAND: Well, what's going on, very simply, is President Trump is trying to do something really, really big. He's not now using the tariffs as a
negotiating tactic because clearly, that initial strategy has not paid off. Everyone has met him tariff for tariff and so on.
So what he is trying to do, very simply put, and it's a big, big move, and it's going to take a lot of patience on the part of the American people
because when you come out the other end, America will be better for it.
And what I'm talking about is reestablishing America as a major, major manufacturing center --
AMANPOUR: OK.
SONDLAND: -- to the point of where everything is made here again the way it used to be 70, 80 years ago.
AMANPOUR: So, Ambassador Sondland, I assume that you agree with all the experts that say even if that's possible, that's going to take a long, long
time. and that it is very rich for the American people to be asked to accept what even Trump is saying, he can't rule out a recession, you know,
prices are going to go up, as he said, there are going to be bumps in the road, but you just have to be patient.
Hang on a second, he ran and won an election based purely and simply on the economy and lowering prices and taking the cost of living drama out of
everybody's pocket. And now, I mean, this is rhetorical jiu-jitsu. How are people meant to react to this?
SONDLAND: Well, I might respectfully disagree with one thing you said. I don't think he ever promised no drama because drama and President Trump are
synonymous.
AMANPOUR: No, no. I didn't say drama. I said cost of living dramas. You know, they have to come down.
SONDLAND: OK.
AMANPOUR: He was -- he was voted on that issue. And now he's trying to say that actually, it doesn't matter if prices go up and if recession happens
and there's a global, you know, economic collapse. You've seen the market. He loves the market. It's not reacting favorably to him.
SONDLAND: Well, we're also talking a matter of days here that this has occurred. This has not been going on for a year or for six months. And what
I think is going to happen is, as these tariffs go up by the minute, at some point, one trade opponent after another, and they're not our
opponents, they're our allies, but one trade opponent after another is going to say, OK, let's de-escalate this while we talk. At which point,
their tariffs on us will have to match us percent for percent. And that's what Trump wants.
Because at the end of the day, he would like to see no tariffs in either direction and no barriers to entry in either direction. He made, for
example, the E.U. that offer back in 2019. He said, let's drop all of our tariffs in both directions, all of our non-tariff barriers, all of our
subsidies, and let's see how it goes. We can always reinstate them later, but the Europeans wouldn't take that offer.
[12:10:06]
AMANPOUR: Well, you know, chicken and egg and all the rest of it, but I do actually want to ask you, you were the ambassador to the E.U., as we said.
"The Wall Street Journal" editorial board, obviously, they are not pro- tariffs and they make that clear even in interviews with Trump.
They said, because you just said, this could be over pretty soon, but they say, the trouble with trade wars is that once they begin, they can quickly
escalate and get out of control. Or the more so when politicians are nearing an election campaign, as Canada now is, or when Mr. Trump behaves
as if his manhood is implicated because a foreign nation won't take his nasty border taxes lying down. We said from the beginning that this North
American trade war is the dumbest in history and we were being kind.
That is "The Wall Street Journal," a traditional conservative supporter of Republicans and their economies. If they're saying that, who are we to
argue?
SONDLAND: Well, I'm a huge fan of "The Wall Street Journal." It's my go-to news source. But I think if President Trump is trying to do something truly
transformational, it is going to take some pain. There are no free lunches here.
Right now, we're hooked on cheap goods, and we have no manufacturing. What President Trump would rather see is a world where maybe we have to pay a
little more for our goods, but our citizens are employed in gainful employment, making great hourly wages working in manufacturing and we don't
have that today.
AMANPOUR: You know, I don't know enough about the economy and manufacturing and all of that to know whether that's even possible to go back to a period
of what you're saying the golden era of 80 years ago. I don't know whether it's possible.
But what I do know is about polls. And the latest is saying that 56 percent of the American people disapprove of the way Donald Trump is handling the
economy, 44 percent approve.
And I heard from a Canadian official that, for instance, the farmers, ordinary consumers, are going to be paying a lot more if, for instance, as
there are big tariffs on the potash, right? The fertilizer that comes from Canada, that's key to farming. It's key to agriculture, food production.
How long are people going to stand for it?
SONDLAND: Well, it's only been a few days, Christiane, and these things can take months --
AMANPOUR: No, no. It's been more than a month with due respect. It's been a month and a half.
SONDLAND: Not where he's gone, you know, in hyperdrive on the tariffs. Those were hours ago that, for example, he put a 200 percent tariff on some
European products. Literally hours ago.
AMANPOUR: Yes. But before that, he put lots of percentages on Canada and E.U. metals and all the rest of it.
SONDLAND: He did. But again, these things aren't mattered -- not measured in days or months. They're measured in longer periods of time.
Where I think he's probably got a challenge is, he has not given a report to the shareholders, the shareholders being the citizens of the country.
They don't really understand the benefit of what he's doing long term. And I think he would be well served without showing his hand as to his ultimate
strategy to explain in layman's terms why in the long term this will benefit American citizens and that hasn't been done clearly yet.
AMANPOUR: I mean you tried to do it in the, you know, joint address to Congress, but again, these polls are since then when he said they have to
be patient.
But I just wonder, you know, history tells us that this kind of stuff back then it was protectionism in the, you know, World War era led to big
depression, led to, you know, the rise of all sorts of nasty politics, led to wars. Are you not afraid of the lessons from history?
SONDLAND: I think this is a big risk. I'm not saying this is without risk. And I do think that we're going to endure some pain. But I understand that
he has a mandate and a tailwind, currently, that no president has ever had. And you combine that with his previous experience and learning from his
previous mistakes.
Everyone said, well, he put tariffs on and then he took them off because they weren't working. He didn't have the runway and he had a couple of
impeachments to deal with back then as well.
I think this time, he's looking at that. He's got basically two years to prosecute this. And if he's successful, the U.S. will be better for it, but
it is not without risk. You're 100 percent correct.
AMANPOUR: Well, we will check in with you again because you're a businessman and you're a Trump supporter and, obviously, you believe in
this and we want to, you know, get to the bottom of it and keep looking at it.
Thank you very much indeed.
SONDLAND: Thanks for having me.
AMANPOUR: Now, to the administration's arrest and threat to deport a green card holder. Palestinian activist, Mahmoud Khalil, a recent Columbia
graduate student, will remain in an ICE immigration detention center in Louisiana following a hearing on his case on Wednesday.
[12:15:00]
Khalil's lawyers told the court in New York, they had not been given any opportunity to contact him since he was hauled off from home five days ago.
The judge ordered that he be given at least one call to his counsel on Wednesday and another today.
Khalil's lawyer, Baher Azmy, is joining me now. Mr. Azmy, thank you for being with us.
We spoke yesterday to the head legal counsel of the ACLU about this. And, you know, she was obviously very clear in the fact that there have been no
charges filed and therefore this, at the moment, has no merit.
Can you tell me, have you spoken to your client? Have you spoken to Mahmoud Khalil? What is the situation with him?
BAHER AZMY, ATTORNEY FOR MAHMOUD KHALIL: Thank you for having me, Christiane. Our legal team spoke with him yesterday for about an hour to
understand the particulars of what happened to him, which is at issue in the upcoming proceedings in the case.
And consistent with what we know about him, he appeared calm, measured, thoughtful as ever, and all things considered, given this remarkable,
sudden, and shocking trauma, managing well.
AMANPOUR: Mr. Azmy, how is he being held? Is it in isolation? Is it a group cell? What are the conditions? His ability to see sunlight, daylight, to go
out and exercise? What are his actual conditions in prison?
AZMY: His conditions are like and sort of typical private immigration detention facility. And he does have access to some media to, you know,
food and healthcare as needed and top -- and access to sunlight. His conditions are far from ideal, but that's not really foremost on his mind
at this point.
The most important and urgent issue for him is to be released first, most immediately transferred back into the jurisdiction of the court in New
York, and at the same time, be released from custody so he could be with his wife who's eight months pregnant.
AMANPOUR: So let me read for our viewers and listeners what his wife has put out lately since this hearing in New York.
So as you said, she's eight months pregnant. She's an American citizen. She said, six days ago, an intense and targeted doxxing campaign against
Mahmoud began. Anti-Palestinian organizations were spreading false claims about my husband. They were making threats against Mahmoud. And he was so
concerned about his safety that he emailed Columbia University on March 7th. He begged the university for legal support.
Quote, I haven't been able to sleep, fearing that ICE or a dangerous individual might come to my home. I urgently need legal support and I urge
you to intervene. This is what he said in his email. Columbia University never responded to that email.
Have you been in touch with Columbia University? Do they have any moral duty, any duty to their student? Should they be helping with the legal
situation? Was there any Columbia University representation at the hearing yesterday? Tell me what you expect from the university.
AZMY: So we have not spoken directly to Columbia. I think for over a year, Columbia has created the conditions that support a level of fear and
repression among Palestinian activists and has, you know, largely been complicit with the broader program of punishing Palestinian activists under
the false flag of anti-Semitism, which has produced intense doxxing, harassment, and now this, ICE agents appearing on Columbia property
entering a building, which video shows happened rather than as the government has put in a declaration.
He was not arrested outside his apartment building. He was arrested inside the building. And Arrested and taken in the spirit away at night to
Louisiana.
AMANPOUR: And do you know whether he was told that he was being arrested because his green card was revoked? And has his green card been revoked?
AZMY: He was initially told that his visa was revoked. And when his wife went inside her apartment and produced his green card, they sort of fumbled
and says, well, no, he's -- also his green card has been revoked.
[12:20:06]
It's not revocable absent legal process, and absent, at least under the statute. They invoked some declaration from the secretary of state that
would justify the revocation of lawful permanent residency under this very broad and vague kind of national security statute they seem to be relying
upon.
AMANPOUR: Well, as you know, Secretary Rubio has talked about that. President Trump has said this is the first of many. And it's because of
actions. And I'm paraphrasing, but this is basically what he said on Truth Social, that this is because of actions that Khalil did that doesn't
comport with our foreign policy agenda. He said also that it was designed to root out anti-Semitism on college campuses.
Can we first -- well, first of all, what activities do you know of that Mahmoud Khalil, your client, did in terms of supporting Hamas, distributing
Hamas materials, being anti-Semitic.
What are the facts there? What does he say? What do you say?
AZMY: OK. I mean, what they're suggesting, the connection to Hamas, is just sort of the typical smear that has nothing to do with the reality on the
ground and is, you know, a bit of an intentional trap.
The activities they are referring to are peaceful protests, including leadership within the Columbia student body, supporting advocacy for
Palestinian human rights, and for a cry to end the ongoing genocide of the Palestinian people, which he is a part, albeit part of the diaspora.
He has no connections to Hamas. The most they suggest is he was part of protests in which other people issued flyers vaguely supportive of Hamas.
And if anyone has ever been in a protest, there are thousands of people who say thousands of things. And lest we go down the road that the
administration seems to want to, this McCarthyist road, guilt by association, is inconsistent with basic democratic principles.
And so really fundamentally what the president of the United States and the secretary of state are saying, and this should be chilling for everyone,
that simply dissenting from the foreign policy aims of the United States government could get you arrested at night, detained, and ultimately
deported.
Again, this is sort of McCarthyist era thought repression. It's about repression. It has nothing to do with security.
AMANPOUR: OK. Because they say it's an immigration and security, but also they talk about anti-Semitism. We know that anti-Semitism is rising. And we
know that there has been just the most awful clashes between both sides in this terrible war on campus, you know, for the last many, many months, all
of last year.
So the question is, how does -- is this a First Amendment case as the ACLU believes? How do you think you're going to defend this?
AZMY: Well, really, not to be too florally pretending, Christiane, it's the government's obligation to defend their arrest and detention.
AMANPOUR: Sorry. Yes.
AZMY: And we filed the habeas corpus petition demanding to know what legal -- upon what legal authority they are relying. And as far as we know,
they're invoking this statute, which could not be vaguer or more unconstitutional in terms of its violation of basic First Amendment
principles.
So they have to come up with a legal and factual authority to detain a law for permanent resin for some reason that is authorized by law. And the law
does not authorize arrest, detention, or removal for constitutionally protected speech activity.
AMANPOUR: Of course --
AZMY: And on the question of anti-Semitism, Mahmoud is a beloved leader of the, you know, cohort of Palestinian human rights activists on Columbia.
Anti-Semitism has nothing to do with his demands for justice for Palestinian human rights.
And it's just yet sort of another cheap smear that Columbia keeps falling into rather than protecting the rights of their students who are activated
by one of the most important moral issues of our day.
AMANPOUR: And, of course, this also has divided the Jewish community, some of whom have come to his defense, others who have done the opposite.
But I just wanted to ask you, because this also is having a wider chilling effect on academic institutions with threats to pull hundreds of millions,
if not more, of federal funding. But I do actually want to ask you to describe a little bit more that video. None of us have seen the video of
him being arrested. Can you walk us through it?
[12:25:10]
AZMY: Oh, it's -- I can. I mean, it's really a heartbreaking view of a family, a couple who is both pleading for to be treated with respect and
dignity, a wife desperate to understand where they are taking their -- her husband under dark of night, not getting answers, being demeaned and
degraded herself by ICE officials.
And, yes, this is -- this is something that I think the public rarely sees aside of what it's like to encounter immigration officials who, at that
moment, are determined to ruin your life. And for that, it's just a powerful humanistic view of this couple, their loving relationship, and
they're trying to understand what's happening to their lives.
AMANPOUR: And I know you can't predict the future. But do you think you have a solid case? Or do you think he's going to be made an example of? And
all the things you say, it's impossible, except for extraordinary circumstances to revoke a green card of a legal resident, et cetera.
Do you -- do you think that -- where do you think it's going to end up?
AZMY: So surely, they want to make an example out of him. And if that's the plan, then we will make an example in court of what it looks like to abuse
the federal government's vast immigration authority and try and come down on one individual.
And the bulwark, the countermeasure to abusive executive power is the Constitution. And the Constitution and our laws prohibit his arrest and
detention and especially prohibit his deportation.
AMANPOUR: And very, very lastly, just confirm to me, have any charges been filed officially? And do you expect any charges to be officially filed?
AZMY: He has had no criminal charges whatsoever in his life here. Recall, he's a lawful permanent resident.
In his immigration form, this bureaucratic form, signaling what charges they have, they have invoked that provision of the immigration statutes
that I mentioned, that basically his activities, namely his constitutionally protected speech activities, the secretary of state
imagines is contrary to the foreign policy interests of the United States.
Again, it is such -- and this is -- this is meant for spies or sort of anti-democratic leaders who come into the country whose presence here would
be a bona fide diplomatic problem. It's -- it cannot be used to deport individuals for simply expressing their thoughts and their beliefs. If it
is, then we are a long road down the path to authoritarianism.
AMANPOUR: Baher Azmy, the lawyer for Mahmoud Khalil, thank you very much for being with us.
And now we go to diplomatic outreach towards another American adversary, Iran. Foreign Minister Abbas Araghchi said, that there can still be nuclear
talks with the United States, but he says they can only take place on, quote, equal terms.
Trump, who pulled the U.S. out of the nuclear deal last time around, now says he wants renewed negotiations on that. Take a listen.
(BEGIN VIDEO CLIP)
TRUMP: You know, we're down to final strokes with Iran. That's going to be an interesting time. And we'll see what happens.
But we're down to the final moments. We're at final moments. We can't let him have a nuclear weapon.
(END VIDEO CLIP)
AMANPOUR: So he also says that he wants negotiations, but Iran's supreme leader has rejected that overture, saying, quote, when we know they won't
honor it, what's the point of negotiating?
"New York Times" correspondent Farnaz Fassihi has chronicled developments in Iran for many, many years and continues to do so. Welcome to the
program, Farnaz.
Tell us where you're -- where your sources are telling you we are right now, because there are mixed messages, not only coming from the U.S., but
also from Iran. As we said, the Supreme Leader says no, and then the U.N., which you cover here, the U.N. mission said maybe, and then the foreign
minister of Iran said on these terms. What do you think is shaping up?
FARNAZ FASSIHI, JOURNALIST, NEW YORK TIMES: Hi, Christiane. Thank you for having me.
You know, I think that Iran is facing a critical moment right now, both economically and politically, because the sanctions are starting to really
manifest in everyday inflation, in an energy crisis. They're short in gas, they're short in water, short in -- shortage of electricity.
[12:30:12]
The currency is free falling every day against the dollar, which is a marker of inflation and price hikes. So they really haven't -- if they want
to improve the economy, they really have no choice but to figure out a way to lift the sanctions.
And I think this is a reality that many politicians understand. So the challenge for them is, how to negotiate with President Trump within the
framework that can be acceptable to Ayatollah Khamenei.
There -- I feel like they are trying to push back on this idea that they can have that the U.S. or Mr. Trump is demanding a wider negotiation than
the nuclear issue. Ayatollah Khamenei has rejected that, saying, we won't concede on our military program around missiles. But it does seem like, you
know, they have to figure out a way to negotiate.
AMANPOUR: So while they're trying to figure out that, as you said, they've not only been weakened massively economically, but also militarily with the
strikes from Israel, with the proxies that have, you know, all but been beheaded around that area.
But this is what President Trump says again about how it could be handled, because he obviously wants to make a deal. Let's listen.
(BEGIN VIDEO CLIP)
TRUMP: There are two ways Iran can be handled, militarily or you make a deal. I would prefer to make a deal because I'm not looking to hurt Iran.
Something's going to happen one way the other. I hope that Iran, and I've written them a letter saying, I hope you're going to negotiate because if
we have to go in militarily, it's going to be a terrible thing for them.
(END VIDEO CLIP)
AMANPOUR: So threats and carrots, but taking from the Iranian perspective, you know, you've talked about where they are in terms of the pressure of
the sanctions, but what about the internal dynamics? Because the president, Mr. Pezeshkian, a relative moderate with a relatively moderate cabinet, has
been pressing for these negotiations.
This last week, was basically, the parliament took some, you know, difficult measures against his negotiating team and his ministers. What is
the internal battle?
FASSIHI: There's a -- there's a very big internal battle and basically a very public debate about negotiating with the U.S. or not negotiating.
There's widespread public support for this. I think the majority of Iranians understand that in order to improve their lives that they got --
they have to get some sort of sanctions relief.
But there's -- the hardliners or the hardline faction are absolutely against it, sort of like, you know, the conservative factions there are
very similar in their thinking to conservative or neo cons here where they say absolutely no negotiations with the Islamic Republic and they say
absolutely no negotiations with the U.S., it's our enemy.
But there is a middle road here. President Pezeshkian, some of the cabinet members, some influential politicians who say, look, we might have to just,
you know, swallow this pill and negotiate because, you know, what is the way out or the economy is only going to get worse.
And remember, Christiane, Iran is also facing -- the government is facing an internal dissent. We saw mass uprising by women in 2002. There's civil
disobedience every day over her job, over other issues.
So the more that the economy deteriorates, there's -- they're going to have to face more discontent even from their own constituents.
So this -- the status quo is not really sustainable for them. And to your point about internal dissent, we've seen President Pezeshkian come out in
Parliament and try to distance himself from Ayatollah Khomeini. He said, look, I campaigned on negotiations. I believe in negotiations in order to
improve the economy. But Ayatollah Khomeini he -- excuse me, has told me, you can't negotiate, so that's that. That's what I'm going to do.
And it was quite a remarkable public acknowledgement of the limits of the power that the president has in Iran and an admission that really the key
policies are determined by the supreme leader.
AMANPOUR: Let me ask you some atmospherics because both Pezeshkian and even in China and elsewhere, people are reacting to what happened in the Oval
Office between Trump and Zelenskyy. That was America and an ally having verbal fisticuffs in public.
And as we know, it caused a lot of reverberations in Tehran as they're looking to potential negotiations. This is what Pezeshkian said about it.
(BEGIN VIDEO CLIP)
[12:35:06]
MASOUD PEZESHKIAN, IRANIAN PRESIDENT (through translator): What he did with that Zelenskyy is really shameful to confront someone in such a way. It is
not acceptable to say to someone that we order you not to do this and that or else we will do this and that to you. I will not even come to talk to
you. Go do whatever the hell you want to do.
(END VIDEO CLIP)
AMANPOUR: So, do you think that that is, you know, a public show of support for you -- for Zelenskyy? Of course, Russia is, in fact, being helped by
Iran. Or is it a real fear about negotiating with what they believe to be a fickle United States government?
FASSIHI: I think it's the latter. I think that, you know, Iran is very close to Russia. They've provided Russia with drones that it uses to attack
Ukraine, and they're very close to Russia's President Putin.
But I think the sort of the scenes in the Oval Office and sort of the confrontation between President Trump and Vice President Vance and Mr.
Zelenskyy really reverberated in Iran in a way that they thought, oh, this is how this administration is treating its ally. How are they going to
treat us?
And immediately, they put banners. So they're trying to also kind of say that this validates our position that you can't trust the U.S., that we've
been right all along. Banners went up. Big banners along highways in Iran that showed that scene with Mr. Trump and Mr. Zelenskyy saying, you know,
lessons from Zelenskyy. And this is what happens when you rely on the U.S.
AMANPOUR: So very, very quickly, we've got 20 seconds. Does Iran believe they're under real threat now, the regime, after what Israel did to their
military standing, you know, and after all these sanctions?
FASSIHI: Yes. I think that the -- that the concern is very real. They've seen sort of Israel's military might. They've seen that they are willing to
go after some of their top allies, that -- like Hezbollah's leader, Hassan Nasrallah, and eliminate him.
And Israel has said very publicly that Iran's nuclear facilities could be a target. And President Trump has also said that. So I think those concerns
are very real in Iran, that if really there's a deadlock over the nuclear issue, and Iran continues to advance as it has been with its stockpile of
uranium, then the threat of a military strike is real. And then what happens after that is very unpredictable.
AMANPOUR: Farnaz Fassihi, thank you so much indeed for that really unparalleled insight.
Returning now to a trade war that seems to be spiraling out of control, the gloves are off between the U.S. and Canada. And Canada's next prime
minister has promised to stand up to Trump.
Is there any way out of this cycle of economic violence? Eric Lascelles is chief economist of the Royal Bank of Canada Global Asset Management, and
he's joining Walter Isaacson to look at what this all means.
WALTER ISAACSON, CNN HOST: Thank you, Christiane. And Eric Lascelles, welcome to the show.
ERIC LASCELLES, CHIEF ECONOMIST, ROYAL BANK OF CANADA GLOBAL ASSET MANAGEMENT: Thank you. It's a pleasure to be here.
ISAACSON: There have been tariffs slapped on the United States by Canada and retaliation for Trump's tariffs on Canada. And now, the Central Bank of
Canada yesterday lowered interest rates by a quarter of a point.
I want to read you something that the governor of the Central Bank said. He said, we're facing a new crisis. And he said the tariffs on Canada could be
severe.
Tell me the state of play and what you think it might do to the Canadian economy.
LASCELLES: Tariffs are an enormous problem for the Canadian economy. This long friendship and partnership and North American relationship has really
integrated these economies. And as it stands right now, about 20 percent of everything that Canada makes is ultimately directly consumed by Americans.
And so you can imagine as these tariffs are put on and begin to impede those flows. It really is quite a concerning development for the Canadian
economy. It's certainly not great for the U.S. either, but it is profoundly worse for Canada. And so it's hard to say with great confidence exactly
what the economic damage will be in terms of magnitude just because there are so many swirling tariffs and on-again, off-again type of arrangements.
But if significant tariffs are applied and if they stick, it's not an exaggeration at all to suggest that it could be a fairly profound recession
for Canada. And so here we now see policymakers responding to that and the Bank of Canada has cut interest rates. It might have done that anyhow, but
certainly it is on a path toward additional rate cuts relative to what might have otherwise been appropriate.
[12:40:07]
And I would certainly think that as we get some additional clarity on just what tariffs are in place and how long they stick around, I would think
that fiscal policy will come into play as well.
ISAACSON: We've seen this go back and forth all the time. Do you think Canada will end up sort of accommodating whatever Trump wants? Or do you
think it's possible that Canada could fight and continue the trade war?
LASCELLES: Well, we've certainly seen Canada, I would say, maybe the more proactive of the two main North American partners in the sense that Mexico
has been notably rather quiet, Canada a bit more pugnacious in the view that it is necessary to reciprocate and to punch back to some extent and
recognizing that presumably a large fraction of this will come down to negotiations. And so there may be some advantage to having tariffs to lift
on both sides of the border if those can be lifted.
It's clear that the White House seeks any number of concessions from many of its trading partners. And I think some of those are perhaps not entirely
unreasonable and perhaps in particular the thought that military spending might increase.
Canada has been very light on that front for quite some time. We've seen already additional resources directed toward border security, though I
would argue that it's much more of a Mexican issue than a Canadian one.
Canada has put several billion dollars in that direction. And I think it's a reality now that this USMCA trade deal will be renegotiated as well, and
Canada likely in a position to oblige for that.
I think maybe the bigger questions that exist, and this is relevant to all of the American trading partners, is the extent to which the thought of
reciprocal tariffs seems to have grown beyond the idea of if you have tariffs on us, we'll have tariffs on you. And it seems now to express some
measure of objection to foreign countries, including Canada, that have sales taxes, that have exchange rates that perhaps aren't precisely at
their long-term fair value, and that have sectors that perhaps have some measure of protectionism, be it transportation, be it broadcasting and
others, which the U.S. has as well.
And so I say all of that just to make the point that I think some of the U.S. asks are going to be difficult to oblige to. And so, as a result,
there is a real chance that these tariffs, or at least some fraction of them, stick around, because I'm not sure that negotiations will be entirely
fruitful.
ISAACSON: Well, one underlying thing is that Canada has a pretty large trade surplus with the United States. Do you think that's the reason Trump
is trying to negotiate this? Or do you think he believes tariffs are kind of a good thing and we should start making aluminum and steel and other
things in the United States and decouple a bit from the Canadian economy?
LASCELLES: I think there are a lot of swirling motivations. I'd be skeptical that it really is about Canadian border security, first of all,
so I think that's a bit of a red herring.
It does seem to me that the White House has some protectionist instincts and the idea that it would be better for the U.S. to be self-sufficient.
And I should say, there are economic losses when one tries to do that.
And for a country with an unemployment rate that's already fairly low, it's not clear there's room for additional industries to come in. And there
always is a loss of selection and variety and quality and so on when countries try to go this alone, but I do think there is just an attitudinal
shift that's taken place.
You're right that Canada does have a trade surplus with the U.S. I would note that it's not quite as large as has sometimes been articulated. It's
more in the realm of about a $60 billion annual surplus. A lot of that goes away if you include the service sector, which of course the U.S. is
exporting all sorts of cultural services and entertainment and many other products as well.
It's been widely noted if you were to remove the four million barrels a day of oil that Canada exports to the U.S., which is done at quite a discount,
it is generally considered to be a positive thing that surplus shifts to a deficit.
And so, yes, there is a surplus. I think that's part of it. But I think you would struggle to articulate why Canada is being so focused in terms of the
tariff attack so far, simply because there are countries with far greater trade surpluses with the U.S. And I'm thinking Mexico and Taiwan and
Vietnam and Germany and others. And yet they, at least so far, have not been hit to the same extent. And so I do think there is some measure of
animosity that for whatever reason exists as well.
ISAACSON: Well, wait, let me -- let me pin that down. Animosity, meaning, personal by Trump towards maybe personally towards Trudeau. Is this an
emotional thing?
LASCELLES: I think possibly. I would struggle to articulate the reasons entirely behind it. But yes, it did seem as though that particular
relationship was not entirely constructive.
And, of course, as you know, Canada is going through a political change now that could perhaps lessen some of that impact. But that's quite
speculative.
ISAACSON: Well, let's talk about that change. Mark Carney is the new leader of the Liberal Party. He's about as stable, as knowledgeable, as down-to-
earth and as calm as you could find anybody.
[12:45:02]
Do you think if he eventually is elected in this new election that'll come in a few months or so that he's the right person for this time?
LASCELLES: Certainly, he has the policy chops and the economic chops. And so you can argue he's the right person for the time in the sense that this
is, for Canada, at least a time of really having to prioritize the economy and find a way forward from a trade perspective and sort out just what the
right level of support is for an economy that could be significantly diminished.
I might broaden it out a little bit, maybe cop out a little bit as well and say, he is the prime minister, at least shortly will be. There is an
election that will have to be held at some point in 2025 for Canada. Let the record show until quite recently actually it was the opposition
Conservative Party with a very large lead in the polls. That's narrowed quite a bit, I suspect in part as there's been a real sense of patriotism
and nationalism expressed in Canada given recent threats toward the country. And so that has favored the incumbent liberals.
And so now it's a really close race. And so I wouldn't want to prejudge exactly who is the prime minister coming out of this, but I would say that
between perhaps Carney being somewhat more of an economic centrist versus a more left leaning set of policies that predated even under the same liberal
party or a conservative win, which is also possible and also envisions some significant economic changes.
I think either way, it's probably one that puts Canada in a better position for growth and for productivity gains and so on. And perhaps in a slightly
better position in terms of negotiating with the U.S. to the extent that there may, as you say, perhaps be some personal animosity at stake right
now.
ISAACSON: Let me read you something that President Trump posted on social media, which is about Canada. We don't need your cars. We don't need your
lumber. We don't need your energy. And very soon you'll find that out. Is he right?
LASCELLES: Well, gosh, it probably depends on timeframe. I think if we could fast forward 10 years, I don't doubt -- or even a few years, I don't
doubt that the U.S. could find other foreign providers for some of those products and could be in a position to increase its production of some of
those products domestically as well, at a cost, I should say, because it would require then de-prioritizing other things the U.S. is already very
good at.
And, of course, that's one of the central charms of international trade is you let countries specialize and everyone is better off as a result. And,
of course, every dollar of trade that's exchanged is entirely voluntary and so therefore to the benefit of all parties.
But I do think in the short run that probably isn't correct in the sense that it would be very hard for the U.S. to substitute away for many of the
things that Canada makes. And so this is maybe stylized, but Canada provides a lot of raw materials to the U.S.
And so when I think about the oil sector as an example or the four million barrels of oil a day are provided to the U.S. The U.S. consumes about 18
million. This is more than 20 percent of the oil supply. That's not likely Americans are going to drive a whole lot less. It's not likely you can
suddenly get oil from another place in that magnitude. It's not likely American refiners could refine any other oil if they were able to find it.
That oil refinery is very specifically focused on Canadian heavy oil.
For potash, Canada provides the great bulk of the imported potash. And while Russia and Belarus produce some, and one might theoretically think of
a way in which that could be secured, they just don't make enough for U.S. needs, even if you were able to swap all of the production over to the U.S.
And, you know, the auto sector, this is a highly integrated North American auto sector. And so, of course, there's pressure now for companies to shift
some measure of production toward the U.S., but you can't build factories in a day. You can't even build them in a year.
And very similarly, and perhaps that apropos, given that the steel and aluminum tariffs have come on, Canada produces the great bulk of the
aluminum used in the U.S. We're talking 10 times more than any other country provides to the U.S., far more than the U.S. produces.
And aluminum is needed for motor vehicles, including pickup trucks. It's needed for planes. It's needed for construction. It's needed for every soda
can that you've seen. And there really isn't another way to get that in any kind of timely way.
And so, you know, the pain is greater for Canada, but the pain is significant for the U.S. And you would expect higher inflation, and you
would expect palpably weaker economic growth as well.
ISAACSON: Well, that's what you do at the Royal Bank of Canada or RBC, is you're very good at making predictions about the economy, doing analysis.
Let's start with the United States. Do you think a recession is in the works in the United States?
LASCELLES: I'm doubtful about that. I can certainly say we've seen evidence of an economic deceleration. I can say that tariffs have applied in a
significant way and there's such radical uncertainty around that. You need to think in a scenarios context, but there are certainly ways in which
there could be significant damage emerging from that.
I still struggle to conclude that that's a recessionary blow. It's one that could significantly dim growth. It's one increasingly that points to
an economy that might grow at its slowest rate since 2020, since the pandemic to the extent these tariffs come on.
[12:50:05]
To me, it's not a full on recessionary blow. And I would say as much as markets are recoiling the sort of scale of market recoil is probably
consistent with that as well. And so would you see higher unemployment? Absolutely. Weaker growth? Absolutely. To my eye, at least, probably not
an outright economic contraction.
ISAACSON: Well, let me then ask you about Canada. Do you think it will be recessionary for Canada?
LASCELLES: Well, listen, if anything, like a 25 percent tariff comes on, on April 2nd, I think the answer is yes. I would assume the Canadian economy
is beginning to shrink almost immediately at that point.
I'd like to think there will be negotiations. I'd like to think that smaller tariffs will ultimately prevail within a matter of months or
perhaps quarters. But either way, you would still have an economy that was shrinking initially and quite a bit of pain being felt.
And maybe the only distinction I can make between the two, and it's not really an economic one, is that Canadians are incredibly united around this
and willing to suffer and broadly in line with the reciprocal tariffs being applied to the U.S.
And so I suspect we will see Canadians rally and perhaps that will dampen some of the blow, but at a minimum. The government or the Central Bank
likely to be rowing in the right direction.
ISAACSON: Explain to me something about the way Canada works. And we see Doug Ford of Ontario's Premier, right, talking about putting his own
tariffs on the United States and coming to meet with Howard Lutnick, the Treasury Secretary.
Could he do things? What do you expect of that meeting with Lutnick? And could he do things that are non-coordinated with the central government of
Canada?
LASCELLES: It's certainly unconventional. I will say that he's been among the more pugnacious of the provincial leaders. And so that's been
undeniable. I guess time will tell whether that's the right strategy or not. It's not -- it's not quite clear yet, but perhaps not the worst thing
to be experimenting with different responses and engaging what the U.S. response to that is.
You can argue perhaps there's been some value in that just to the extent that, as you say, there is now a meeting schedule, but I would note prior
meetings have not been overly fruitful. So I'll believe it when I see it terms of whether there's actual forward progress that occurs.
But I will say that as much as we're seeing slightly different strategies out of different provinces, and it's unconventional for a sub sovereign
level of government to be applying tariffs, ultimately, Canada is rowing in the same direction and these premiers and the prime minister and others are
meeting regularly and are on the same page.
And so I wouldn't say that's particularly concerning right now, but it does reflect the fact that in stage one of the Canadian retaliation is tariffs
in a conventional way. You know, there are other options that exist, whether it be tariffing non-traditional items like electricity or limiting
the export of certain critical products, and I'm hoping that bridge doesn't get crossed, but that option does exist. And, of course, it's so critical
to Canada to get back to some sort of proper trade footing with the U.S.
ISAACSON: You made a very strong point about how coupled the Canadian economy is to the American economy and vice versa, the U.S. economy.
Do you think that this sort of uncertainty is going to lead to a long term decoupling of the two economies?
LASCELLES: It's a great question and it's awfully hard to say because, of course, it's difficult to say what trade policy might look like under a
different administration four years from now or what it look like a decade or two from now.
And I wouldn't want to underestimate the -- I mean, the long and incredible and almost unparalleled friendship the two countries have had. And so I
wouldn't want to write that off on the basis of a couple of bad months.
But I would say that certainly Canada is of a mind that it needs to work harder to diversify its trade. It's been such a positive partnership that
Canada doesn't trade that much with Europe or China or some of the other obvious markets. And so there is quite a scramble underway.
I'm a bit skeptical of the ability of Canada to significantly pivot in short order, just because, again, these other places are far away. They're
already provided with perhaps the potash that they need or the oil that they need and so on. And it's not particularly easy to transit some of
these products to foreign shores.
And so I think that we will see a scramble to reduce reliance on the U.S. And it's been a real wake-up call, I think, for Canada and one I suspect
that won't be forgotten anytime soon. All the same, even with gargantuan tariffs, I very strongly suspect Canada's biggest trading partner will be
the U.S. And I would think it will be probably again a fairly close trading relationship within a number of years.
ISAACSON: But you say there'll be a scramble to reduce relationships with the United States, trade relations. Do you think that would put Canada
more closely aligned with China?
LASCELLES: It's a great question. And I think the natural strategy is to flirt with other countries and perhaps induce some jealousy from the U.S.
and the obvious flirting would be with China and Europe in particular. And so I'm sure those conversations will happen.
[12:55:02]
Do note that Canada already has a free trade deal with Europe. And so I suppose the opportunity there is to trade more that the negative is there
isn't room for an explosion of trade because the barriers have already been fairly low.
One of the challenges for Canada is that Canada and China have often had a contentious relationship, ironically, in part because of the U.S. And so,
for instance, Canada put on a large tariff on Chinese vehicles to synchronize with the U.S. tariff on Chinese vehicles.
China has just punched back at Canada in the last week and is now applying tariffs to various agricultural products on Canada. And so I wouldn't say
that the relationship is entirely proceeding in the right direction right now. And so there are challenges there, but I'm sure Canada will do its
best to diversify as it can.
ISAACSON: Eric Lascelles, thank you so much for joining us.
LASCELLES: Thank you very much.
AMANPOUR: And that's a wrap. Thank you for watching and goodbye from New York.
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