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CNN's The Arena with Kasie Hunt

Stocks Plunge From Shock Over Trump's New Tariffs; Summers: Trump Tariffs Doing Historic Economic Damage To The U.S.; Judge Looking At Whether Probable Cause" Exists To Hold Trump Officials In Contempt For Violating Orders On Deportation Flights. Aired 4-5p ET

Aired April 03, 2025 - 16:00   ET

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

[16:00:00]

BRIANNA KEILAR, CNN HOST: And the closing bell is about to ring. So let's get a quick check here in the markets. The Dow down more than -- well, plunging more than 1,500 points. S&P 500, Nasdaq also down. Both hit their lowest levels since September.

BORIS SANCHEZ, CNN HOST: I'm glad you read those numbers. I try to read one of these percentages earlier, and I was expressly forbidden by the producer. Fractions are really hard.

Listen, all three major indices have been on pace for their worst day since the 2022 inflation crisis. President Trump, though shrugging it off, saying its all part of the plan. We'll discuss further on THE ARENA WITH KASIE HUNT in just moments. Stay with CNN.

(MUSIC)

KASIE HUNT, CNN HOST: It's President Trump versus the world.

Let's head into THE ARENA.

Breaking news, a massive stock selloff. Investors stunned and scared by the president's new barrage of global tariffs now on high alert for a recession.

We'll get reaction from the former treasury secretary and economist who is calling the Trump tariffs masochistic. Larry Summers joins us live this hour.

And what it all means for you, your family, your money, with prices on some of your favorite foods, your next car, many other products set to soar.

ANNOUNCER: This is CNN breaking news.

HUNT: Hi, everyone. I'm Kasie Hunt. Thanks for being with us in THE ARENA on this Thursday, as we are witnessing a market meltdown triggered by President Trump's historic trade war.

Take a look. All three U.S. stock indexes hemorrhaging at the closing bell just moments ago. The Dow losing nearly 4 percent of its total value, down more than 1,600 points. The Nasdaq down nearly 6 percent, the S&P plunging nearly 5 percent. Wall street, responding to the unexpected scope and severity of President Trump's sweeping tariffs of at least 10 percent on all countries and up to 49 percent on dozens of nations that he deems to be the worst offenders.

CNN's gauge of market fear. Yeah, it looks like that. It's been off the charts all day as Trump upends a century of U.S. trade policy and threatens to destabilize America's economy and the world.

A litany of economic experts sounding the alarm. The analysts over at J.P. Morgan now warning that Trump's unprecedented trade policies will likely push the U.S. and global economies into a recession this year by substantially driving up inflation and amounting to a $660 billion tax hike on Americans and the nonprofit Tax Foundation is estimating the average American household will pay $2,100 more on goods per year because of the Trump tariffs.

Of course, this is all if they stick, will they? It seems to depend on who you ask.

(BEGIN VIDEO CLIP)

HOWARD LUTNICK, COMMERCE SECRETARY: I don't think there's any chance they're going to -- that President Trump's going to back off his tariffs.

MARIA BARTIROMO, FOX NEWS HOST: Are you saying that you expect that you will see negotiations around this ahead of that taking effect and perhaps we'll see a change in these tariffs?

BROOKE ROLLINS, AGRICULTURE SECRETARY: I think that's right.

SCOTT BESSENT, TREASURY SECRETARY: Everybody, sit back. Take a deep breath. Don't immediately retaliate.

(END VIDEO CLIP)

HUNT: So, all of that may be confusing for world leaders who do not sound inclined to just sit back and relax, as the treasury secretary advises.

(BEGIN VIDEO CLIP)

ANTHONY ALBANESE, AUSTRALIAN PRIME MINISTER: We will not join a race to the bottom that leads to higher prices and slower growth. We will stand up for Australia.

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

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

BERND LANGE, EUROPEAN PARLIAMENT INTERNATIONAL TRADE COMMITTEE CHAIRMAN: President Trump called it liberation day and I will call it inflation day.

(END VIDEO CLIP)

HUNT: So with us global and global markets reeling, economic fear rising, the American people wondering how badly they may feel the pain.

What is the White House telling us today? Keep calm and carry on.

(BEGIN VIDEO CLIP)

J.D. VANCE, VICE PRESIDENT OF THE UNITED STATES: President Trump is taking this economy in a different direction. Yes, this is a big change. I'm not going to shy away from it, but we needed a big change.

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

(END VIDEO CLIP)

HUNT: Trust in President Trump.

Okay, so what was President Trump up to the day after he blew up the global economic order, as we've known it? Was he meeting with trade advisers or talking to world leaders? No. Right now, he is on his way to Miami to watch a little golf.

Before he left, he was asked about the plunge in stock prices. He insisted it would all turn out just fine.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The markets are going to boom. The stock is going to boom. The country is going to boom. And the rest of the world wants to see, is there any way they can make a deal?

(END VIDEO CLIP)

HUNT: All right. My panel is here in THE ARENA.

But let's get started with CNN chief national affairs correspondent Jeff Zeleny. He is traveling with President Trump. We also have with us, CNN's business and politics correspondent, Vanessa Yurkevich.

Vanessa, let me start with you. Let's be clear here for everyone about what this is actually going to mean.

[16:05:04]

Is it going to mean that President Trump is following through on his promise to lower prices on on day one?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Well, let's start with what we saw on Wall Street today. We saw broad based selloffs. Stocks just plunging today on this news of these tariffs set to take effect Saturday. And then more tariffs set to take effect next week. You saw the Nasdaq and S&P have their worst days since 2020. Investors

really just selling off across tech and retail in particular, stocks like Macy's, Best Buy, Furniture Company, Restoration Hardware, their stock dropped at one point about 40 percent. And this is because a lot of those companies make products abroad at -- in countries which are going to see high tariff rates.

But on the consumer front, as you mentioned, president Trump said he was going to lower prices at the grocery store in particular for everyday Americans. But with these tariffs, it looks like the opposite is going to happen.

Let's take a look at some products, for example, bananas. The U.S. imports a lot of bananas because we don't have the climate to grow it here, and we don't have the capacity. Bananas come in from places like Ecuador, Guatemala. They're now hit with a 10 percent tariff.

Let's talk about something like coffee. Coffee we get from Ethiopia, hit with a 10 percent tariff.

And let's talk about something like French champagne or wine from Italy or France from the European Union, which is now hit with a 20 percent tariff.

Ultimately, yes, suppliers in those countries can choose to eat that cost. That is unlikely. The supplier could split that cost with the U.S. importer or business, maybe. But realistically, what most economists believe is going to happen, Kasie, is that this goes from the supplier to the U.S. business, the importer, and then ultimately to the consumer.

That's when I talk about things like bananas or coffee, something we import a lot of that's going to have an impact on consumers right away because, for example, fruits, vegetables, bananas, those are perishable items. Those come across the border every single day. Thats not something that businesses can stockpile, Kasie.

HUNT: Vanessa, it's making me want to pop something a little stronger than that French champagne that you have there behind you. Certainly. The Italian wine that we drink a lot of in my house is going to get a lot more expensive.

Jeff Zeleny, let me go to you. You are in West Palm Beach. The president set to touch down there any minute. What is he up to? What are people around him thinking?

He -- we know he's worried and focused always on what Wall Street, on what the markets are doing. But in this case, he seems to be set on doing something that he has been focused on long-term. But that obviously Wall Street does not like here, at least in the short term.

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Well, Kasie, there's no doubt in this second Trump administration, the president has gotten quite used to the financial markets recoiling at his policy decisions. But this is something of an entirely different level. So, of course, we know the president watches the markets. He says he doesn't guide his decisions by it.

And in this case, you almost might want to believe him because, you know, we certainly knew the outcome of the markets would be like this after that announcement to yesterday, who knew it would be quite this deep? But look, the president is flying down here to Florida, to a previously scheduled golf charity event tonight at his golf club in Miami. He'll be coming here to Palm Beach County. He'll be spending a long weekend, as he often does, mixing work in with some golf, certainly.

But there's no doubt about hanging over this entire administration right now is one of the biggest policy gambles he's ever made. Yes, he was elected from here in Florida to be a disrupter. Theres no doubt about it. Every Trump voter or many that we spoke to last year, wanted him to shake things up and disrupt things.

But they also wanted him to bring down prices. As Vanessa was saying, we heard that soundtrack and refrain again and again. That is why so many Americans voted for him. So, we will see how much patience voters have for all of this. But as of now, every advisor, every official we are talking to is saying that he is going to stick with that.

Now, of course, there's a deadline on Saturday for some of these tariffs to go into effect. The next one is the next Wednesday for all these individual tariffs with countries. So, that does leave plenty of time for many phone call opportunities for countries to try and reach a negotiation.

But again, yesterday, he called it a national emergency, not a time for a negotiation. We will see if he is using these as a negotiating and a bargaining tool, or if he's using it as a way to raise revenue to pay for his -- his tax agenda -- Kasie.

HUNT: I guess we'll find out.

Vanessa, Jeff, thank you both very much for getting us started.

And our panel is here. David Chalian, CNN political director, Elliot Williams, CNN legal analyst, former federal prosecutor, Adrienne Elrod, former senior spokesperson for the Harris-Walz campaign, and the former House speaker pro tempore, Patrick McHenry.

Thank you all for being here. I really appreciate it.

David, let me just start with you. Big picture, because the short-term effect of this is going to be the opposite of what President Trump promised people on the campaign trail. How is this going to -- how long does he have with swing voters?

DAVID CHALIAN, CNN POLITICAL DIRECTOR: You know, that is the question. And it's one that we haven't heard a ton of answers to in terms of the administration thinking how long they have here. Clearly, President Trump has set the table to buy some time saying, you know, there is going to be some short term disruption for an eventual long term goal. Jeff just described it in his reporting to you as a gamble. And that is what it is, because as assured as Donald Trump may be, that this policy, which we know he has been totally committed to for decades in his public life, is going to pay off. We don't if he actually knows that to be true.

So even forget all the conventional wisdom for a moment from economic experts that this is not wise policy. Even if you believe this is the right course and this is sound policy to change the American and global economy to Americas favor, you don't know that. And so, it is a gamble.

And it is one that, you know, Karoline Leavitt saying trust president Trump, I don't think is going to be the answer to the American people. They're going to want to see proof in the pudding here.

HUNT: Patrick McHenry, what if you told me when I came to Washington in the early 2000s, that a Republican president was about to slap tariffs on the entire world, I would have told you you were absolutely insane. Is this absolutely insane from your perspective?

PATRICK MCHENRY (R), FORMER SPEAKER PRO TEMPORE: Well, the market did go boom today. I mean, to used that phrase. But this is a 30-year buildup of trade imbalances. The effect of the average Trump voter, the view of the average Trump voter on trade is that we've lost. We lost with NAFTA. We lost with China when we brought them into the WTO, gave them most favored nation status. This has built up in places like the district I used to represent in western North Carolina for textiles and furniture.

That is a different wired place now because America is winning in manufacturing. We're winning in energy. We have so much going for us, and these trade balances usually benefit America's and America's consumers.

So, what this president is doing is trying to rewire the global economic system and cure the ills that his voters want cured. Now, the way to do this, this is shock treatment. Theres no getting around it. Erasing all gains of -- from the election in the stock market to now today we're back to where it was the day before the election, actually worse.

So that is a really tough piece of medicine to endure as an elected official. But he wants to endure that pain to get the gain necessary either in two years or four years, that he can show voters he got --

HUNT: Do House Republicans want to endure it?

MCHENRY: Well, a two-year cycle is different than a four-year cycle.

ELLIOT WILLIAMS, CNN LEGAL ANALYST: And I think that --

MCHENRY: And that's a big challenge for the trepidation on the vote you saw yesterday in the Senate. And we'll get to the politics of it, but the effect of this stuff is real. On the average voter paying more. And I think we established at the ballot box that voters really hate inflation.

WILLIAMS: That 2 to 4-year point is a really important one, and it sort of dovetails with Davids point about this all being a gamble. Sure, it all may play out beautifully over 2 or 4 years, but today, just about everyone's retirement savings are smaller than they were when they went to bed last night.

HUNT: Well, I haven't even looked.

WILLIAMS: I know you don't --

HUNT: I don't want to.

WILLIAMS: And, look, and obviously you don't think of investments as one day off things. You know, it's a long-term project, but the simple fact is markets tank today, and virtually every economist who have looked at this and said, you know, there's going to be a lot of pain.

So, it is a big gamble to expect people or to hope that people will be able to get over the pain they are feeling today as a result of this announcement yesterday.

ADRIENNE ELROD, DEMOCRATIC STRATEGIST: Yeah. I mean, first of all, I think Patrick explained this better than any member of Trump's economic team has explained this in terms of like what his rationale may be. So, part of -- first of all, there's a lot of problems here that we've laid them out.

One of the primary problems that the Trump administration is having on this, Donald Trump and his economic advisers, they cannot explain this. They're just going out to the American people. And they're saying, trust us, we're going to take care of this.

The bottom line is Donald Trump won this election narrowly. It was decisive. It was a narrow win because prices were high. Now, prices are going up even more. This is not a smart strategy. A lot of people are looking at the economy and saying things are not terrible. It's just that prices are too high. Inflation is too high.

Now, the entire economy is in chaos, and that's solely due to Donald Trump.

MCHENRY: Well, I don't think -- that's -- one day in the market does not so in this chaos.

ELROD: And this for a lot, but more than one day.

MCHENRY: But I would say, well, the stock market reacted on the election of Donald Trump and the built in regulatory relief and extension of the tax cuts.

[16:15:06]

What the American people were voting for was the prosperity they felt under Trump won. And the assumption we'd have that. What we have so far are is the DOGE initiative that gets a lot of coverage. We haven't seen the regulatory relief of the agency. We've seen agency

cuts and staffing cuts. That's not exactly what the people were voting for. Weve yet to see the tax bill emerge. Thats still working through the process.

Now you have the tariff --

CHALIAN: The tax bill. Sorry to interrupt you, but I just want to ask, does that become more difficult because of the political challenge he invites by enacting this policy? Now, you have a narrow House majority. So, does that tax bill become a little less sure of a thing that passes today, which is part of the total package Secretary Bessent was trying to sell yesterday because now potentially Donald Trump is going to take on some water here politically, and therefore some Republican members are going to get a little more nervous about that total package.

MCHENRY: He's got a long way to go. This this president has the most unified party of any president we've seen since LBJ. The ability to get the agenda through is built on his power. His power is derived from the people viewing him as an agent of a good economy. This runs counter to that on this day.

Can he work fast enough to say, I'm getting results and you're going to feel the benefits? That's a tricky thing. It is a really tricky thing.

HUNT: Can I also ask you, so this is what the Russians are -- what Dmitri Medvedev, former Russian president, put up on Elon Musk's platform X: As it is, Russia barely does any trade with the U.S. and E.U. Nearly all of it is under sanctions. Yet our economy is growing at 3 percent. We will take the advice of Lao Tzu and sit by the river, waiting for

the body of the enemy to float by the decaying corpse of the E.U. economy.

Trump didn't put any tariffs on Russia. He left them off the list. He did put on the list an island where -- and we can show some of these. They're adorable, but they're penguins. They don't buy anything. And they have been slapped with 10 percent tariffs.

So, like, why not the Russians, and yes, the penguins?

MCHENRY: Because we don't do any trade with them. We are actually barred under like three administrations from actually doing trade with -- with Russia. So, the case for his action -- well, we've seen a response in Europe. They're actually starting to pay for their defense now in a way that Reagan, Bush, Clinton, Bush, Obama all criticized the Europeans for not stepping up for their defense responsibilities. They're now doing it. It's a messy way to do it, but they're doing it number one.

Number two, we're seeing this response with Canada saying we're going to have countervailing tariffs. They want to negotiate. Everyone will come to the table in the coming weeks to negotiate with this president. Some of this will be relieved. But the belief in tariffs that this president has is a hardwired thing now into this, this economic universe that we live in.

HUNT: Adrienne, what are you hearing from all of the Democratic politicos? I know you're extraordinarily plugged in with about this. I mean, my guess is everyone with a foreign k is probably lost some money. But I'm curious, are they watching this and thinking, this is going to make it a lot easier for us to win the next election?

ELROD: Yeah. I mean, Kasie, it's a twofer, right? I mean, one part we are going, you know, looking at our TSP or 401(k), our retirement savings and basically throwing up like every other American because it's very stressful.

But yes, on the other side, absolutely. I mean, this is not what the voters signed up for. Again, going back to the election results, it was a decisive win, but he won the popular vote by about 1.4, 1.5 percentage points. This is not what the American people voted for. We just saw three special elections where Democrats overperformed and of course, won the Wisconsin Supreme Court seat. We saw the Pennsylvania state senate seat flipped by a wide margin.

I mean, voters are responding to this in those bellwethers that we pay a lot of attention to. And we got to remember, I mean, your viewers know this, but Republicans have a very, very, very thin margin in the House. And I think David made a really smart point that how much capital are some of these Republicans who are sitting in districts that Biden won? How much capital are they going to put into? Well, you know, supporting this president on some of the major packages that he wants to get through, like the tax bill?

HUNT: Let me play devil's advocate with your point, David, for a second, because I'm curious. I kind of wonder if the economy really is in bad shape. And this bill is kind of is moving through Congress. If you're in those Biden districts, perhaps really like you need it to pass, you have something to run on the economy being tough makes it more imperative that this gets done, so you can at least see if it helps you. Could you see it that way?

CHALIAN: Well, first of all, I am not suggesting -- the Republican Party's belief and commitment to getting these tax cuts renewed. And as Patrick was saying, it's total fealty to Donald Trump and wanting to get his agenda through. That is going to be an enormous force in this. I don't begrudge that, but it's because of how narrow these majorities are. And I know Speaker Johnson got a little bit more of a cushion this week by adding two Republican seats there, but from Republican districts.

I think the question, Kasie, is if Donald Trump becomes a more unpopular figure in the coming weeks because of the reaction to this, that to me, that is also a political force that has real weight.

[16:20:12]

And even in a Republican Party that's dedicated to him and the tax cut agenda, let's see everything in that bill. It's not just tax cuts, right? So, it's going to be a big bill, and its going to be a very tricky affair to keep everyone together on it. MCHENRY: He's got one shot.

HUNT: All right. Stand by. Right now, we want to know, as always, what are you hearing? To my sources and friends, you know who you are. Check your inboxes.

Here's my question for you today beyond the basic one of how much money have you lost today? When do you think voters might start to punish Trump for these tariffs, if at all?

You have the bottom of the hour. Send us thoughts? Tips. Exclusive. If it's the wrong question, tell us what the right one is and viewers will let you in on our conversation coming up later on in the hour.

Coming up next here, the former Treasury Secretary Larry Summers is live right here in THE ARENA.

Plus, how the president's tariffs will impact his own political present and future.

(COMMERCIAL BREAK)

[16:25:28]

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: In 1930, the Republican controlled House of Representatives in an effort to alleviate the effects of the -- anyone? Anyone? The Great Depression. Passed the -- anyone? Anyone? A tariff bill, the Hawley-Smoot Tariff Act, which anyone raised or lowered, raised tariffs in an effort to collect more revenue for the federal government.

Did it work? Anyone? Anyone know the effects? It did not work. And the United States sank deeper into the Great Depression.

(END VIDEO CLIP)

HUNT: It did not work, and the United States sank deeper into the Great Depression. That clip has been rewatched quite a bit online in the last 24 hours.

My panel is back.

We're also joined now by Republican strategist and pollster Kristen Soltis Anderson.

Kristen, thank you so much for dipping in here. We've been talking about the political impact of what we;re going to see here. And you have been writing in "The New York Times" about generally the risks for Republicans and you write this, the data is clear. Democratic voters are enraged by what's happening in Washington. Republicans may say, well, good. Thats a feature, not a bug of the changes that Mr. Trump is pursuing.

But you say the new coalition he's fashioned for the Republican Party is ever more dependent on less reliable voters, meaning a fired up opposition has a greater and greater advantage, especially in special elections and in others with lower turnout. How does what we've seen play out with these tariffs play into this big picture?

KRISTEN SOLTIS ANDERSON, CNN POLITICAL COMMENTATOR: The challenge these tariffs are going to present is that they are almost certainly going to raise the cost of living for Americans, at least in the short term. And so, what Donald Trump is asking is that everybody endure a little bit of short-term pain in exchange for some kind of long-term benefit. Iin his view, healthy reordering of the global economy. But what that really means is that you're going to have people who are feeling concentrated costs, very personal costs in the short term with diffuse potential benefits in the long term, a promise that somewhere, somehow down the road, this is going to be beneficial for you.

And in politics, because we have elections every two years for Congress saying, well, this is going to be really good for you way down the road is a tough sell to a lot of voters, especially when, as Donald Trump was, you were elected ostensibly to lower cost of living because Republicans have voters who really love turning out when Donald Trump is on the ballot but don't turn out as often when he's not, that means that an extra fired up opposition who is personally feeling their cost of living go way, way up, is going to make it harder for Republicans in special elections, possibly in New Jersey, Virginia, these states that have elections this year and the midterms next year in November.

HUNT: Kristen, you sort of looked big picture, too, at what really is the thing that makes the difference in terms of how voters feel and that it's not happiness. It's not joy. It's anger. Explain that.

ANDERSON: Yeah. That voters don't really turn out to say thank you. Weve seen that pattern throughout the course of modern American political history that when a party wins and they feel really satisfied with themselves, they often sometimes rest on their laurels and they think, well, we've won. Voters love us. We're obviously right.

Everyone will obviously see that we're correct. And look, this isn't just a Republican problem. It's not just a problem right now. Parties in the last couple of decades, when they win, they get it in their heads that everybody loves us and they're going to love us forever.

And the pendulum always swings. And if you rest on your laurels too much, you assume that everybody is just going to love you forever and you miss the really intense negative emotion that is often even more of a driver to the polls. You can really pay for it at the ballot box.

HUNT: Well, and, David Chalian -- I mean, this is a phenomenon that we have really seen accelerate in recent election cycles. I mean, remember, the Democrats held the house for decades and decades right until the mid '90s. And since then, it's gone back and forth and back and forth at a rate that seems to be increasing.

I'm not sure, I think -- I think now it can only do it every two years, but we're basically at that point, right? I mean, how -- like, how do you see that dynamic playing out here.

CHALIAN: And what we've seen in that pattern, right, it's in opposition to the -- in many times unified power, right?

[16:30:01]

Which is what the Republicans have now.

So, it's not just to Kristen's point about an angry, motivated Democratic opposition right now. It's different than during the election last year. Democrats who were organizing in opposed to Donald Trump. This isn't just going to be opposed to Donald Trump. This is going to be opposed to what they perceive as negative effects on their economy and their lives, the policies.

It's not just the person. And that's much more powerful and dangerous for a unified party that's in power.

HUNT: All right. Coming up next here, former Treasury Secretary Larry Summers will weigh in here live in THE ARENA.

(COMMERCIAL BREAK)

[16:35:00]

(BEGIN VIDEO CLIP)

LUTNICK: If you're angry and you fight back to the greatest customer in the world, you're going to lose. We are the sumo wrestler of this world. We are the biggest economy, the biggest customer. You can't fight back against your customer.

(END VIDEO CLIP)

HUNT: The Commerce Secretary Howard Lutnick on how he thinks the U.S. can throw its weight around in the global trade war sparked by President Trump.

Yesterday, the president announced sweeping tariffs, a baseline of 10 percent on countries across the globe and significantly higher tariffs on key trading partners like Vietnam, China, on top of a 20 percent tariff, Taiwan, India, South Korea, Japan and the E.U.

Joining us now for his analysis, former Treasury Secretary Larry Summers.

Sir, I'm so grateful to have you on the show. President Trump wrote on his Truth Social platform. The operation's over, the patient lived and is healing. The prognosis is the patient will be stronger, bigger, better and more resilient than ever before.

What has your reaction been to that?

LARRY SUMMERS, FORMER TREASURY SECRETARY, CLINTON ADMINISTRATION: It is utter and total nonsense. This action has taken $3 trillion off the stock market, as a consequence of an hour of rhetoric. The stock market reflects only part of the economy. So, if you took

the cumulative loss, extrapolating from the stock market, it's closer to $30 trillion. Thats more damage than any economic policy pursued by any president in the last, probably in American history.

There is no reason to think that this is particularly going to get better. That's what markets do. If markets thought it was going to get better, people wouldn't be selling stocks because they would know it was going to get better. And it would be exactly the wrong time to sell.

So, markets have made a judgment and the judgment is that this was a disastrous error. There's plenty of basis for that error. Who could have imagined that somebody would have the idea to set reciprocal tariffs without paying any attention to any data on any tariff in any other country? Who could have imagined that we would decide to penalize our closest allies, who were key parts of our supply chains, like, Canada?

This is -- this is -- this is doing to ourselves what occasionally gets done to us when the price of oil gets jacked up by $50. We take a lot of money out of our own hands by pushing some prices way up. And the result is stagflation.

Look, I used to be worried about this administration's not caring enough about the poor. I used to be worried about excesses of power on the part of this administration. I still am. But right now, my primary concern is a lack of basic competence. This is the economics equivalent of having attack plans be discussed on open phone lines, including journalists.

There is no coherent logic to these policies. I don't really understand how any self-respecting analyst can person who holds themselves out as an economic expert can be comfortable remaining in this administration. I've disagreed with administration policies in the past, but I have never seen anything remotely like this.

HUNT: When you joined us earlier, last -- last month, March 10th, you came on and said that you thought we were nearing a 50/50 chance of a recession in 2025. What are the odds today of a recession this year?

SUMMERS: They're surely well up from the well up from that because we've doubled down on the policies we had in place then, or triple down on those policies, rather than, as I hoped, reverse course. I don't know whether they're two thirds or whether they're three quarters, but nobody can say that it's certainty that we will have a recession.

[16:40:08]

But look, this is the kind of market response todays day in the market, worst in five years. Thats the -- and, by the way, it didn't get better as we were moving into the late afternoon. So, there's no reason to think that this is over.

That's the kind of market response you get every few years when a pandemic is hitting, when a financial crisis is hitting, when something hugely consequential is hitting the economy. So, what would -- what would it have meant for the patient to die, if, like, the worst stock market experience in five years, usually when you have a terrible stock market experience. It's because a bank fails or there's a pandemic or because there's a hurricane, or because some other country does something.

We don't have these kinds of stock market responses in response to policies that the president of the United States is proud of. That is something that is entirely without precedent. And it is extremely dangerous.

HUNT: Sir, some of what is going on here from a political perspective is a reaction in no small part to NAFTA. The policy put in place by President Clinton in the '90s. And you saw there was a man who spoke in the Rose Garden yesterday. Youve seen some of the union leaders for the car companies in Detroit talk about this.

I've been to many a manufacturing community in places like Ohio and western Pennsylvania that have been just absolutely hollowed out since then. Was NAFTA a mistake in any way, and does that help explain where we are?

SUMMERS: NAFTA took place 30 years ago. It's hard to know where exactly we would be without NAFTA. My guess is we'd have a much poorer Mexico and a lot more Mexicans working in the United States and a much bigger immigration problem.

My guess is that we wouldn't be able to integrate production in automobiles and countries in Asia and Europe would be cleaning our country's lawn or cleaning up against our automobile industry in a much more serious way. Should more have been done to cushion the various adjustments that took place with respect to NAFTA? Absolutely.

But I'll tell you something. Nobody ever said that NAFTA caused a recession. NAFTA never took trillions of dollars of wealth out of American markets. So, to somehow suggest that this is some kind of corrective of NAFTA, I think there's very little logic to that.

I'll tell you who's had a great day in the global economy, China. They are seeing all kinds of opportunities for trade in Latin America, in Europe, in Africa, in other parts of Asia, that they didn't dream of, because people preferred to do business with us, given our exceptional economy.

But when we stopped being willing to do business with them, that is an immense opportunity that has been created for China. And that's the biggest effect that this is going to have in addition to being poorer because of the way China has been strengthened. This is going to make us a less secure country.

HUNT: All right. Former Treasury Secretary Larry Summers, a very cheerful prognosis you have offered for us today. I really appreciate you joining me. I hope you'll come back soon.

SUMMERS: I wish it were different. HUNT: All right, up next here, a critical hearing in the case over

whether President Trump can use a centuries old law to carry out mass deportations.

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[16:49:01]

HUNT: All right. Welcome back.

A high stakes hearing just wrapped up where the Trump administration made its case as to why they didn't violate Judge Boasberg's order on deportation flights. It's the first step in potentially holding officials in contempt or ordering sanctions.

Katelyn Polantz joins us now.

Katelyn, what do we learn in this hearing?

KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE CORRESPONDENT: Well, Kasie, the importance of this hearing is whether this administration is willing just to ignore a courts order.

And what today was about is the judge hearing from a Justice Department attorney to try and nail down. Did they? Did they do that?

And this hearing lasted about 40 minutes. It was primarily questioning of the judge asking questions of the Justice Department lawyer, Drew Ensign. And I was holding my breath listening to this. It was so tense.

We also heard from reporters and producers over at the courthouse who were there. It was so intense watching Judge Boasberg draw out the questions here, asking who was giving the order for planes to not turn around, that had migrants that were being carried to an El Salvadoran prison at the moment that those flights were in the air March 15th.

[16:50:12]

On that Saturday, Judge Boasberg was holding a hearing in court and saying, you need to turn the planes around. So, he's trying to establish whether there was an intention there. He didn't make a decision during this hearing, but he kept asking who was on the call from the administration, who was listening to the court's orders, who was talking to the justice department attorney who did, the Justice Department attorney tell about this order from the judge? Just getting those names of people in the administration.

The judge ultimately said there's a fair likelihood that this administration violated his orders. And so now we see what happens next with him. And also what happens with this case. Bigger issues of presidential power -- Kasie.

HUNT: All right. Katelyn Polantz, I'm sure we'll be talking a lot more about this as the weeks go on. Thanks very much for that report. All right. Earlier, we asked our sources and friends when will voters

start to punish Trump for these tariffs? Here's what a couple of you had to say.

One Republican campaign operative says, quote, the midterms would be a bloodbath tomorrow, but they're an eternity away. Indeed.

A Democratic campaign operative writes this: people need a month or two to figure out how they got effed. In short, Q1 was the F around. Q2 is the find out.

Our panel is back. I think that's an F around and find out.

MCHENRY: Oh, yes. Yes, that is a lot of what Congress is, right?

HUNT : Right. But in this case its the president and the U.S. economy.

MCHENRY: Yeah, it's a little scary.

HUNT: So, one other one Democratic member of congress wrote in Adrienne, this is the day people start to feel it on a personal level. It will take some time to fully sink in, but its the first time that he, Donald Trump, did something that's negative and broad based. Is that right?

ELROD: Yeah, I think that's exactly right. Again, it does not matter who you voted for in this election, if you are watching your 401(k) go down, if you're watching your pension decline, if you're seeing food prices and the prices of everyday goods still continuing to go up, maybe you want to buy a car. Maybe you want to buy some household goods. Maybe you want to buy some new furniture. Maybe you want to go on vacation.

All those prices are going up and they are seeing this as an unintended or an unintended consequence by a president. Maybe they supported and they're certainly having second thoughts now.

WILLIAMS: Even if they don't. And again, we shouldn't overvalue over index one day in the market. But the simple fact is markets respond to uncertainty. And things are really uncertain right now. And you're seeing that.

The other thing to your point, Adrienne, at a certain point, the president, the administration cant blame Joe Biden for some of the actions.

HUNT: Definitely not after today.

WILLIAMS: Not after today. And quite frankly, you know, the president has had two months of being able to say, wait a second. You know, look, we were left a mess by the last administration. After today, it gets very hard to make that point in a compelling way.

MCHENRY: Well, I think you can safely say everything he's done until this this action today has been broadly popular with the base, the people that elected him, the electorate. You can say that. Maybe I'm interrupting it. You're saying that --

ELROD: You can say that, but you may not believe that. But you can say that.

MCHENRY: Well, you may not believe that, but I'm saying the people out, by and large, are not indexed to what is happening to the Department of Education hirings and firings.

HUNT: People who sent Trump to Washington were broadly happy with that.

MCHENRY: I'm attempting to make that point. I guess what I'm trying to do. But -- but the point here today is this, this assumption that most of us had that the president did not want to take pain. He looks at the market, wants a good market reaction.

That is a judgment on him in an instant. And he decided, you know what? I'm doing something different.

That is not in the calculus. Thats not in the calculus for foreign leaders. Thats not in the calculus for business leaders, certainly not here in D.C.

CHALIAN: And I will say the -- what my sense of talking to some White House officials, the view is similar inside. They think the first 70 days, they were doing a lot of 80/20 issues. In their mind, they really were. And I've had sources inside the White House say, now, we're turning to the much tougher stuff.

And I think they're aware that their whole calculus, how they message, how they're going to communicate to the American people what they're doing, that's going to be different now also because they're encountering -- they're going to encounter many more headwinds at this point.

HUNT: They went from we're going to lower prices on day one to you're going to need to take some short-term pain. And now none of us know how long that pain is going to last.

All right. Coming up, something totally different. Proof. You can be in two places at once. We will explain, apparently.

(COMMERCIAL BREAK)

[16:59:08]

HUNT: Welcome back. Proof. You can be in two places at once. I'm sorry. What? This ones for our sports fans.

There is somewhere you will be able to watch the Auburn-Florida Final Four game this weekend while being in both Alabama and Florida at the same time. Yes, this is happening at none other than the legendary Flora-Bama lounge. It is a real bar in Orange Beach, Alabama, and Perdido Key, Florida, located literally on the state line.

Most of it's in Alabama, so they pay Alabama business and property taxes. I guess they must get their mail there, too. Some members of this shows staff have apparently been there once or twice.

That, though not the point of this story. The number one seed, Auburn, faces off against fellow number one seed Florida on Saturday. The Flora-Bama bar says the game will be on all the TVs, so you can watch it in either state or both, or walk back and forth. Although I bet it's going to be like crossing a picket line.

The winner of Saturday's game will play in the championship next Monday in San Antonio, bringing an end to March Madness in April.

Adrienne Elrod has been to this bar. She unfortunately does not have time to weigh in.

It is time for Phil Mattingly, who is in for Jake Tapper.

"THE LEAD" starts right now.