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CNN's The Arena with Kasie Hunt

Stocks Skyrocket After Trump Pauses Many Tariffs, Except For China; Trump On Tariff Pause: People Were Getting A Bit "Yippy" And "Queasy". Aired 4-5p ET

Aired April 09, 2025 - 16:00   ET

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

KASIE HUNT, CNN HOST: There's breaking news on CNN. Let's head into THE ARENA.

A massive turnaround for the stock market after a surprise turnaround from President Trump. He just ordered a 90 day pause on his latest round of tariffs, except for tariffs on China that are set to climb even higher. The closing bell just moments away.

Trump trade adviser Peter Navarro will join us live here in THE ARENA.

ANNOUNCER: This is CNN breaking news.

HUNT: Hi, everyone. I'm Kasie Hunt. It's good to have you with us in THE ARENA on this Wednesday, as U.S. stocks are soaring on the breaking news from President Trump. He is now putting nearly all of the punishing tariffs that went into effect overnight on hold.

Our correspondents covering every angle here as we wait for the closing bell.

We're going to start with Vanessa Yurkevich at the New York Stock Exchange.

Vanessa, what a moment. The closing bell about to ring. I've gotten used to seeing the people who do it clapping. It has not been a great few days as that clapping has been going. But today, obviously, things have turned around dramatically.

VANESSA YURKEVICH, CNN BUSINESS & POLITICS CORRESPONDENT: Yeah, what a dramatic turnaround we are waiting. We're just moments away from the closing bell.

You're going to hear the clapping starting behind me. You're going to hear that bell ring any single moment. But what a turnaround earlier today that just really, really soaring in the markets this afternoon as President Trump announced that 90-day pause.

(CLOSING BELL ON NYSE)

[16:00:08]

YURKEVICH: There it goes. There's the bell closing here on Wall Street. Really capping off a really intense week after President Trump initially announced these tariffs. I'm hearing from investors here that they still expect a bumpy ride

ahead, just because you now have the United States negotiating with so many different countries, trying to work out trade deals.

There is a sort of sigh of relief here that this has turned out the way it has today, but not without damage and not without losses. Wall Street has shed about $11 trillion since the start of the Trump presidency, $6 trillion alone in losses in just the last week or so. People's 401(k)s have taken a hit. People -- businesses have been really uncertain about what the future looks like. We heard from Delta today, from Walmart today really pulling back their forecasts on this quarter because they simply didn't know what the U.S. consumer would look like and what tariffs would look like.

In terms of fears of a recession, that's not completely off the table. We know that Goldman Sachs just said a little while ago that they're still forecasting 45 percent chance of a recession, but certainly the recession fears have been tamed a little bit.

It's worth noting that there are still tariffs in place on autos, on steel and aluminum. And there's that 10 percent universal tariff that is still in place. So, investors here certainly this is the news that they were waiting for. But it is not over yet. There is still so much more runway that they're looking at, just trying to see what the president may say that could turn the tide. But definitely a welcome relief as these markets close here today, Kasie.

All right. Vanessa Yurkevich for us on the floor of the New York Stock Exchange.

And worth noting, of course, that the Dow the day before Trump's announcement, closed around 42,000 points today, it's ending at 40,000 points -- yes, a historic day, but still below where we were before all of this kicked off.

Let's go to Jeff Zeleny at the White House, where, of course, all of this has been unfolding today.

And, Jeff, I know you had a chance to question the president directly. I know his advisers had been saying this was the plan all along, but he seemed to answer your questions differently.

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: He did, Kasie. And of course, that has been something that has really strained all week long that this has been the plan. But the -- some advisers were looking for an off ramp, there's no doubt about it.

The president said he was not one of those. He said he was not interested in putting a pause in place until, of course, he did. So it's been an extraordinary turn of events here, a big retreat from the president. But of course, he solved this or he caused this problem in the eyes of many. And now, he's trying to take credit for solving it as well.

But we asked him what this would do to his credibility on the world stage. (BEGIN VIDEO CLIP)

ZELENY: You said that these tariffs would go into effect on Monday. You said no pause today. There is a pause. So, how can people believe your word today?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: No, you have to have -- yeah, it's not a question of that. You have to have flexibility. I could say here's a wall and I'm going to go through that wall. I'm going to go through it no matter what and keep going, and you can't go through the wall. Sometimes you have to be able to go under the wall, around the wall or over the wall.

These guys know that better than anybody, right? You got to go around them sometimes. You're not going to go through 'em.

So, I consider -- you know, I think in financial markets because they change, look how much it changed today. We went from, you know, pretty moderate today, but over the last few days, it looked pretty glum to, I guess, they say it was the biggest day in financial history. That's a pretty big change.

(END VIDEO CLIP)

ZELENY: So, the president making clear what we've really known all along is, yes, he is tracking the financial markets. Yes. He's been tracking all of these losses.

The president was standing on the South Lawn of the White House at a different event honoring some NASCAR drivers, but he did stop and explain some of his -- his thinking. And he said that, you know, people were getting sort of yippy. People were afraid by what was happening in the markets, and this was part of his response.

But really, at the end of all of this what about that three-month pause? How can people believe his word on that? So, for now at least, there is a big sigh of relief on the market, certainly -- certainly, among Republicans on Capitol Hill.

But the question is, what did this policy end up getting? And was it worth the cost? That, of course, is something that he will have to answer in the coming days, Kasie.

HUNT: Yeah, for sure. And now we're going to ask his trade adviser, Peter Navarro, about that, that quote he gave you also where he said everyone got a little yippy. Jeff, thank you for that.

Phil Mattingly, let's dig into kind of what may have prompted this.

[16:05:03]

I realized we're still in the stages of reporting this out, but the treasury secretary, Scott Bessent, he was supposed to be meeting with House Republicans to try to sell the budget. He ends up in this Oval Office meeting with Donald Trump. It seems to be that his push won the day. He was the one that came out originally, was talking to reporters, seemed to kind of lay the groundwork for this, perhaps at odds with some other advisers in the president's circle who wanted the harder line.

How do you understand what was driving this?

PHIL MATTINGLY, CNN CHIEF DOMESTIC CORRESPONDENT: Yeah, Kasie, an important point you're hitting at it, which was Scott Bessent has always been a little bit more cautious than some of the more hawkish members of the president's economy team. It's not an analog to the first term, where there was just outright warfare bordering on fisticuffs between the two camps, but in this case, specifically, Scott Bessent comes from the markets as a global macro hedge fund manager. He understands the markets. He pays very, very close attention to them, not just because that's his job as treasury secretary. It's also just what he does.

And he is particularly keen on watching the treasury market. Treasuries are a safe haven, in moments of crisis, and you could go track back through the last 15 years where we've had too many of them, that is where investors move their assets towards, not away from.

What's been troubling and has driven a lot of concern, not just in the markets, but I'm told also inside the Treasury Department and something that was reflected by the treasury secretary to Donald Trump earlier today is there has been a flight away from treasuries and no ones totally sure what it means, but it has been fairly sustained over the course of several days. It has been fairly significant over the course of several days.

And it has really underscored a point that while the stock market may reflect kind of the heart, the energy of how people are feeling and thinking at any given moment, the bond market is the brain. If the bond market goes away, if the bond market moves away, a nation is in very, very deep trouble, particularly when that nation is the global reserve currency.

So, there were significant, significant market concerns. We have all been paying attention to the fact that the president seems less inclined to just move as the stock market moves, but the president is keenly aware of the importance of the bond market and that importance in the very real risks that seem to be bubbling up over the course of the last several days, was part of the reason that Scott Bessent, the treasury secretary, made clear this was the right move at this moment. It was not the initial plan going into the day or through the morning, I'm told, but it is very clear that they thought it was a necessity given some of the risks. And I think more just the confusion that was out there, Kasie.

HUNT: Phil, very briefly, how does this interact with what's going on on Capitol Hill? Does this help convince some of those hardline skeptics that they should get on board with the budget and move it forward?

MATTINGLY: Yeah, Kasie, I've been actually and I'm sure you have as well, trying to think through this all day and talking to people all day, trying to understand. I think it's an element. I don't think it was a -- the kind of pervasive reason or rationale why they were doing things.

I think there was a recognition that it is a new thing, that President Trump can't just snap his fingers and get 218 Republicans to line up behind something. Certainly, taking off an issue of significant stress and significant constituent concern doesn't hurt. Whether or not it helps, of course, we're going to have to see in the days ahead.

HUNT: Which we sure are. All right. Phil Mattingly, thank you very much as always.

This really hits Phil's expertise on the nose.

So, if you're anything like me, this has felt like a wild rollercoaster of a week. You've probably lost a lot of money, perhaps gained it back, if you, of course, have a 401(k), if you are invested in the markets, and this has all been the making of one man, President Trump, not something from the outside, but rather a political creation, a problem that he made for himself.

Let's just take a quick look back as we sort of digest this news here, the close of the market today back considerably up and see how we got here.

(BEGIN VIDEO CLIPS)

HOWARD LUTNICK, COMMERCE SECRETARY: There is no postponing. They are definitely going to stay in place for days and weeks.

PETER NAVARRO, TRUMP TRADE ADVISER: This is not a negotiation.

SCOTT BESSENT, TREASURY SECRETARY: President Trump has maximum negotiating leverage.

DAVE PORTNOY, BARSTOOL SPORTS: They don't call Black Monday. It's orange Monday.

LARRY FINK, CEO, BLACKROCK: We are probably in a recession right now.

MODERATOR: Right now?

FINK: Right now.

TRUMP: I know what the hell I'm doing. I know what I'm doing.

(END VIDEO CLIPS)

HUNT: I know what the hell I'm doing. That was just last night.

And then of course, just after this announcement of the tariff pause, the treasury secretary, he went to the White House driveway and told reporters he swore there was a method to the madness.

(BEGIN VIDEO CLIP)

BESSENT: You and I had a long talk on Sunday, and this was his strategy all along. And that, you know, you might even say that he goaded China into a bad position. They responded. They have shown themselves to the world to be the bad actors.

(END VIDEO CLIP)

HUNT: All right. So here we are, panels here to try and help us figure it all out.

Republican pollster and strategist Kristen Soltis Anderson; former Republican governor of Ohio, John Kasich, he's also the author of the new book, "Heaven Help Us" when we need a little bit of that help right now. I got to be honest with you, Governor. Also here with us, Xochitl Hinojosa, former DNC senior adviser, communications director; and Republican strategist. Brad Todd.

[16:10:04]

Welcome to all of you. Thank you very much for being here.

Governor, let me start with you, because it's -- it's actually pretty interesting.

We showed Scott Bessent there saying this was a strategy all along. Maybe this was Scott Bessent's hope all along since Sunday, but even the president seemed to suggest, when he was pressed by Jeff Zeleny that, well, actually, you know, the markets got a little yippy. It seems like he decided he needed to do something.

Where are we right now?

JOHN KASICH (R), FORMER OHIO GOVERNOR: Well, I think his friends. I don't know, necessarily, the cabinet pounded on him and told him that he was in danger of his undermining his legacy and hurting this country economically.

And then I think top of it is, is Jeff did a beautiful report there, the issue of the bonds. When -- when people start fleeing treasuries, when they start raising rates, that sends a signal that the world is getting very concerned.

And, look, he may get this resolved one way or another, but the trust is broken. People don't know what is happening in America. And we saw it with Ukraine, where we are kind of -- we're withdrawing from them and making crazy demands on them. We're seeing it with what happened with this tariff.

This is a -- this is a wound that is self-inflicted. And so, it starts to break our brand, and it creates a trust problem. And none of it was necessary.

And I say one other thing, for 80 years, the global system has worked. We've gotten wealthier. The whole world has gotten wealthier. And now, all of a sudden, you know, there's -- there's big questions and that's not good for peace, security or for, or for wealth creation globally.

HUNT: Brad Todd, I mean, is this how you see it as well? Because, I mean, it does seem to be like there's this sense and Phil Mattingly was hitting -- hitting on it right in the treasury market. When you start to mess around with what, as you point out, is the very foundation, not just of the American economy, the debt we hold, but really the entire kind of global system, is that what drove the change we saw today?

BRAD TODD, CNN POLITICAL COMMENTATOR: Well, Trump's always had a balancing act here, right? His -- he wants to keep the economy strong, but he also wants to reset the whole manufacturing calculus. In fact, if you look at the Republican Party platform this summer, item number five out of 20 said, we're going to stop outsourcing and turn the U.S. into a manufacturing superpower.

And frankly, there's a lot of fairness in play. Like if the motorcycles that are made by Harley-Davidson in Pennsylvania and Wisconsin when they go to India, which is a big market for bikes, they're tariffed at 100 percent. We don't tariff Indian motorcycles.

The president can make a case that we're going to get this fair. The tariffs are going to be the same both ways. And oh, by the way, we're going to disentangle from China.

It's a very simple message. But he's got to do it while he keeps the bond markets and the stock markets calm.

HUNT: Yeah, I mean -- look, I take your point. But clearly, I mean, Kristen Soltis Anderson, this -- what are what are you taking in from voters who, you know, they sent Donald Trump -- yes, they knew tariff was part of the policy. But for your average swing voter, it was kind of like, well, inflation really has me down under Joe Biden. I could really use some more of what I had under Trump one, this doesn't seem like what they bargained for.

KRISTEN SOLTIS ANDERSON, CNN POLITICAL COMMENTATOR: Yeah, this -- well, this is long term challenges and short term pain sort of coming into conflict. I mean, you said over the last 80 years, the world's gotten wealthier. America has gotten wealthier. But if you ask a lot of Americans, a lot of Americans who voted for Donald Trump, they don't feel like they've shared in that. And so, his message of saying, we need to reset a lot of things does have a lot of resonance.

But with that said, if your message of we're going to fix this for the long term and make it more fair means that you have to endure not just the bananas at the grocery store cost an extra dime, but really serious consequences for your 401(k). Suddenly, that tradeoff of endure a little short term pain for this long term gain starts to feel a lot less appealing. And I have to imagine that his inner tensions between he's a guy who loves tariffs, and he's a guy who loves to be seen as an economic whiz, those were coming into real conflict over the last two weeks.

XOCHITL HINOJOSA, CNN POLITICAL COMMENTATOR: The issue, though, is that he isn't being seen as an economic whiz. What is happening is that you saw -- you just played the video a little while ago. He's been all over the place when it comes to tariffs and his strategy on this. He doesn't have a clear strategy. He doesn't actually know where this is going to end up. And if he knew anything about manufacturing, he would know that

businesses -- what businesses are saying, large and small, is it takes time. You have to have a plan. You have to tell us, you know, give us time to build, you know, a U.S. presence.

And right now, it's just a back and forth and back and forth. And I call a bunch of BS on that this is part of the plan. This was not part of the plan. I'm sorry.

We all know Donald Trump. He reacts to the stock market as much as he says he does not like to react. He doesn't watch the stock market anymore. All of a sudden, we know that he does react to the stock market. We know that he reacts to headlines. He reacts to criticism.

This is exactly why he's doing this. This is classic Donald Trump.

TODD: I agree with you that we need -- he needs to communicate that there's going to be some runway. And I think Scott Bessent wants to communicate that there's runway and that there's room.

[16:15:04]

If you drop your tariffs, we'll drop our tariffs.

But one thing Governor Kasich said, I would take a little issue is a lot of people don't think that the trade system has worked well for them for the last 20 years. PNTR was a mistake. If you grew up in a hosiery mill town like I did, there are no more jobs in those places. And PNTR NAFTA were responsible.

Those people don't think this is working. So, I think it's fair to try to reset that calculus. And he's just got to try to show them there's a long-term plan.

KASICH: In America today, we don't make potato chips anymore. We make computer chips. And when you're talking about that business, it found its way somewhere else.

The downside here, and if we think that there's going to have all these steel jobs coming back to America, it's not going to happen. Investors are not going to invest there. They're investing in health care. They're investing in A.I. be realistic.

The key here is grab the manufacturing you can onshore as much as you can. And at the same time, retrain the workers who are not going to go back to those jobs because they're not going to exist. And telling them they're going to exist is leading them down the wrong path and it's not being honest.

America's economy is dynamic. And -- and you are right about the fact there are people left behind, I get that.

But undercurrent of all this is America is a victim. We've been victimized by countries around the world taking advantage of us. We're victimized in America by the rich, taken from the poor. We're a great country, and I don't like that kind of victimization.

And I think it's negative populism. And it's -- frankly, it's a lot of baloney.

TODD: It's okay for us to say we messed up that PNTR went too far.

KASICH: Yes, of course. And you do these trade deals one at a time. You don't take a sledgehammer and look at what's happened.

And I'll tell you one other thing. And I don't like to say this about a president, but he's lost trust, probably, on Capitol Hill. The guy that could fix everything, all of a sudden, he can't talk his way out of this. People can see that it was too much, too quickly, and he's retreated.

I'm glad that he has. Just don't say that everything is great. We just need to -- we can fix these things, but let's do it carefully and let's do it in a way that makes a heck of a lot of economic sense. On that, I think we would agree.

HUNT: Brad, what are you hearing off the Hill? I mean --

TODD: Well, you know, this emergency power that Trump has used to declare these new tariffs can be taken away by Congress. I mean, the Constitution vested the power in congress, and they've given it to the president. He's using it.

I think that people on Capitol Hill want to hear him say that you can get your tariffs lower. The reciprocal part is -- is very sellable on Capitol Hill. But punitive tariffs that are meant to be permanent, which Peter Navarro has advocated, I don't think those are popular with Republicans on Capitol Hill.

HUNT: Do you think that there's legitimate support? I mean, John Thune has been out there saying, you know what, this bill to bring that tariff power back isn't actually going to go anywhere. But there is --

TODD: Well, they've got seven Republican senators on it right now. They would need 13 probably to get it done. And then it still doesn't pass in the House.

But keep in mind, there's a lot of pressure in the House. The House has a lot of cards because it's already difficult to pass the tax cut extension in the House. And so, there's plenty of -- plenty of leverage over on the House side.

So, I think that Donald Trump is trying to make sure he keeps the confidence of people on Capitol Hill. I think it's on their mind.

HUNT: Xochitl, and what position does this put Democrats in? Because I will say I was talking to one from a midwestern state not far from John Kasich's Ohio, but not Ohio, who was explaining that there actually still is some runway with some of these very disaffected Trump voters for what he's trying to do. I mean, they may obviously have some -- some nerves for those, you

know, who are close to retirement, who are in the markets. I think there were some nerves, but there also was this sense that, you know, and I think that it's -- it's really encapsulated in the idea of the American dream, right? They feel like it's -- they feel like a lot of these voters feel like they just no longer have access to it, that that is no longer something that is available to them or available to their children.

And this person was telling me that, well, actually, even with all the market pain, Donald Trump still has some runway to try this out. I mean, where does that leave Democrats?

HINOJOSA: Well, I think the governor put it very well, which is essentially that we all want manufacturing here in the United States. We want to grow jobs. We want to make sure things are built in the United States. The problem is the process in which is this is happening is hurting the American people, and it's hurting small businesses. And there will be layoffs and people will lose their jobs. And that is the problem.

If he had a plan where we could say -- to the governor's point, slowly implement tariffs, only implement them, maybe not on our allies, for example, but on others. And explain that to the American people instead of this chaos, and across the board tariff for everybody, I think that you could see some moderate Democrats get behind that.

I think that if they could explain it back to their constituents and say, you know what? This is, we're trying to all be bring manufacturing here. He has a plan. I actually do think that moderate Democrats might embrace that. But the chaos, not so much.

HUNT: I think that the negative polarization of Donald Trump has been fascinating because typically it has been Democrats who have been more favorable toward tariffs, sort of historically.

[16:20:05]

I think today you saw Governor Gretchen Whitmer kind of struggle to answer some questions around this. I'll be interested to see what Bernie Sanders has to say on all of this. But in my polling, you have seen Democrats get negatively polarized against tariffs and a pretty strong way, being very opposed to them now in a way that I think would have been surprising a decade ago, owned by Trump. Fascinating.

All right. Coming up, we're going to get a live report from Capitol Hill. Republicans have been huddling today on a way to possibly advance the presidents massive set of tax cuts, his legislative agenda. But there are huge questions at this hour about whether or not they have the votes.

(COMMERCIAL BREAK)

[16:25:00]

HUNT: All right. We are back now with some breaking news. This time off of Capitol Hill, where we find our Manu Raju.

The House, of course, is trying to pass the budget blueprint the Senate sent them that represents a key first step to getting the presidents massive legislative agenda passed.

Manu, bring us up to speed. It looks like they actually -- they've run into some speed bumps on this type of procedural votes in the not so distant future, but it seems like its going all right so far.

Do we think they're going to be able to get this done today?

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Yeah. All right is a relative term, I must say. It has been a bumpy ride to get there. And they just cleared a procedural hurdle to advance this budget blueprint to a final vote. And they pass it by the skin of their teeth, 216 to 215 was the final vote.

Three Republicans ultimately voted against this plan. They could only afford to lose three Republicans. Those Republicans, Thomas Massie of Kentucky, Victoria Spartz of Indiana, and Mike Turner of Ohio.

But this is just a procedural vote, Kasie. The actual vote on the underlying budget blueprint is expected later tonight. The speaker of the house had just asked him about this. He said he plans to move ahead with this vote tonight, even though there are major concerns among House hardliners that it does not go far enough to cut spending.

And as you know, this is the first step. This is supposed to be the easy part to pass the budget blueprint, because that's the only way they can unlock the legislative process that they are employing to enact the Trump agenda. That includes the sweeping overhaul of the tax code, more money for immigration enforcement, and those deep spending cuts that are at issue in this fight between the House Republicans and Senate Republicans.

But they need to pass this first before they can do anything else. And so, that's why this vote tonight is so critical to advancing the Trump agenda.

HUNT: So, Manu, where do you think they stand on this whip count? Because I know the president has been trying to twist arms. And there have been some instances since President Trump took office where he's been able to make phone calls and get people in line. Is that tactic working here yet, or is the jury still out?

RAJU: There is still some -- the jury is still out. Theres also some signs that it is working, Kasie, there are some Republicans who are signaling they're willing to vote yes because of the pressure that Trump is putting on these members. Some of these members also want specifics in terms of the spending cuts that may ultimately be agreed to in the final bill, and they're not there yet to vote for this plan.

So, I would say at the moment, we expect roughly about a dozen or so Republicans who are either no or threatening to vote no. And as you know, they can only lose three Republicans. So that means there's some work that needs to be done between now and that final vote to get this across the finish line.

But this is a major moment for the Trump agenda. If it doesn't -- they don't get the votes. This could delay things for some time and make it harder, ultimately to get the ultimate legislation to the president's desk.

HUNT: Yeah, for sure. Briefly, Manu, how has this tariff drama been rippling across the Hill, and does it affect this vote tonight?

RAJU: Well, the Republicans are happy that the president has decided to pause this. There were a lot of Republican concerns about the way that this is being implemented. They're hearing concerns from their constituents, and I caught up with some of them in the aftermath of the news that the president has decided to delay these tariffs. Listen.

(BEGIN VIDEO CLIP)

SEN. RON JOHNSON (R-WI): I still don't know exactly what his total strategy is. We know what his goal was, to a certain, he wants reciprocity. I'm relieved like the markets are relieved. At some point in time, that thing will stabilize. And I don't know what the end game is here yet.

SEN. ADAM SCHIFF (D-CA): I'm going to be writing to the White House also to find out who knew about this most recent change in tariff policy because we want to find out whether people are insider trading on the basis of knowledge about this move or that move on tariffs.

(END VIDEO CLIP)

RAJU: And that last comment coming from the Democratic Senator, Adam Schiff. But you're hearing Democratic outrage, Kasie, and Republican divisions about how this strategy is being implemented.

But universally, Republicans are relieved, as you heard from Senator Ron Johnson there, that this is not going forward, but still uncertain about what it means in the long term.

HUNT: All right. Manu Raju, for us on the Hill -- Manu, very grateful to have you today. Thank you very much.

Our panel is back here.

Governor Kasich, where do you come down on this legislative agenda and this question of whether all of this kind of tariff back and forth makes it easier or harder to get it done?

KASICH: Well, I think, again, I think there's been some doubt, but now that its kind of sitting there, the Republicans are being faced with the fact that they've got to pass something.

Let me just suggest this. Look, we have a $37 trillion national debt. If we don't begin to deal with this, what we've been seeing here in the last couple of days will be child's play what we will see if people stop buying our treasuries, if they stop financing our debt. And then what happens is you've got to run a printing press. And if you run a printing press, you begin to significantly devalue all of Americans hard working effort because their dollars will be worth much less.

[16:30:06]

The need to address this in a bipartisan way, dealing with creative solutions on entitlements and all these programs -- I was the chairman of the budget committee when we balanced the budget.

HUNT: So, you're reminding me --

(CROSSTALK)

KASICH: And we -- and we cut taxes, we balanced the budget, we cut taxes. We paid down the largest amount of the publicly held debt in -- in modern history. And then they went spending again.

If they could, they could understand what this really means for a country. They would get about it. And right now, there's not much interest in this.

TODD: On December 31st, if Congress doesn't act cut, taxes are going to go up on every American that pays taxes. God created Republicans to stop tax increases, and that's what's going to happen. We may look --

HUNT: So, is that why the president is putting 10 percent tariffs?

TODD: It may look janky right now, but the income tax rates.

HINOJOSA: Hanky is underselling it.

TODD: Income tax rates are not going to go up in December. And Thomas Massie and some of the other guys are going to hold out and make a dance and have a kabuki theater. But in the end, Republicans are going to vote to not raise taxes.

KASICH: Bob Novak did say that Republicans were created -- former great journalist -- said Republicans were created to cut taxes and cut spending. Don't forget the second part of that.

(CROSSTALK)

TODD: Well, that's what -- that's what House fiscal hawks are demanding right now. They're saying the Senate's plan doesn't have enough tax cuts -- spending cuts in it.

KASICH: Yeah.

HUNT: First invocation of Bob Novak here on THE ARENA. So, thank you for that.

So, I actually -- I would like to play for a second because this, this really ties into this conversation. So, you made such an interesting point about moderate Democrats. We have a little bit of what Gretchen Whitmer, the Michigan governor,

had to say today about understanding. These are her words, the motivation behind tariffs.

Let's play a little bit of what she had to say. She was very explicit that she wasn't attacking the president here. Take a look.

(BEGIN VIDEO CLIP)

GOV. GRETCHEN WHITMER (D), MICHIGAN: And the motivation behind the tariffs. And I can tell you, here's where President Trump and I do agree -- we do need to make more stuff in America, more cars and ships. More steel and ships. We do need fair trade. Let's usher in, as President Trump says, a golden age of American manufacturing.

I'm hopeful that the administration is taking in the feedback and understands the -- the onshoring will take time.

(END VIDEO CLIP)

HUNT: Xochitl, help us understand what we saw there, because it doesn't sound like she's getting universally positive reaction from Democrats to that.

HINOJOSA: Well, I think that there is a mixed reaction. And part of it is because she's using some of the language that Trump has adopted, but at the same time, she's in Michigan. She's in a very difficult state that she understands kind of the need to bring back manufacturing to the United States, that this is what Michigan is all about.

At the same time, I do think that she did give a very forceful speech and was critical of Donald Trump and the chaos that he has brought with this process, and I will no, I don't think it was just Governor Whitmer. But she was -- after that, he did pause. And it was pointed out somehow --

HUNT: I doubt it was.

HINOJOSA: Right, but it was pointed out to me by her team. But --

HUNT: I'm probably going to get a text message from them actually, commenting that it might not have been but anyway.

HINOJOSA: But -- but, yeah, I think that there are moderate Democrats that want to see America succeed. They want to see manufacturing succeed here. They just want it done in the right way.

HUNT: Are you implying that there are others who don't want to see America succeed?

HINOJOSA: I think that they do. I think to your point and to Kristen's point, that they're very much -- Democrats who will always be anti-Trump, and they will go and try to, you know, whatever -- the president sneezes, they will be against it. The reality is that there are moderate Democrats right now that do want to see policies -- if there are policies that they agree with when it comes to tariffs within Trump, then they would agree with them. But the problem right now is that it's a bunch of chaos.

ANDERSON: So I have asked Democratic voters in my surveys, what approach do you think your party needs to take moving forward? And I've asked on two dimensions. The first is, do you think your party needs to move to the left, move to the center, stay about where they are, and there's much more appetite for moving to the center than to the left. At the same time, we asked, do you think that you should take a more pragmatic, let's find ways to get along with Donald Trump or a more combative approach?

And overwhelmingly, they say, a more combative approach that I think sometimes we conflate moderate with a temperament as well as an ideology, and they're not the same. You can be ideologically moderate, but not ideologically -- or but not temperamentally.

TODD: I'll just note, though, Gretchen Whitmer has the distinction of being perhaps the person thinking most seriously about how to get elected president in the next presidential election. And that's the one Democrat we hear trying to draw a little bit closer to where Donald Trump is.

And she's in a swing state. She knows how to do it. She's won there before. That should tell you something.

The loudest liberals are the ones that have no interest in trying to figure out how to win.

KASICH: I think -- I think she -- she did a good job today, basically, but she had other ideas out there. The problem with the Democrats is they don't have enough ideas. And going left or staying or supporting the status quo, it's not going to work for them.

[16:35:03]

And I think -- I think she realizes that.

You know, another person who is an attractive Democrat is -- is Andy Beshear, the governor of Kentucky. He is -- he is more moderate. He's -- he's got almost the whole package down there.

They have some people on the bench. And her speech today was designed to say, look, I'm -- I'm carving out sort of a Midwest -- you know, moderate position. It's sort of like she's from Michigan. I'm from Ohio, but I -- I think what she did today was positive, and she's going to take some heat, but Democrats are going to have to take some heat if they're going to change and not be where they have been stuck for the last four or five, six, maybe ten years.

HUNT: Well, and, Xochitl, she is -- and we have a picture of her actually in the Oval Office here from our Kit Maher of CNN and posted on X by our, our producer DJ Judd. There she is.

And she's sort of in the back, back of the room with the press pool. And the president actually had some praise for her, saying he was honored to have her there.

You know, I think I've spoken with some other Democrats who've taken meetings with Donald Trump. It can be a pretty isolating experience once they come back to Washington and their colleagues are embracing or not embracing them over it. What do you think the reaction is going to be to that?

HINOJOSA: Good for her. You know, I think one of the things is we've seen a lot of Democrats, especially those running for president, trying to go one extreme or the other, trying to we saw Gavin Newsom in his podcast trying to interview Steve Bannon. This isn't what this is. She is trying to deliver for her state.

KASICH: Yeah.

HINOJOSA: Michigan is impacted by Donald Trump's plan. She is coming straight to Donald Trump and saying not as a presidential candidate, but as the governor of Michigan and just saying, please, you need to slow down.

And -- and you know what? Good for her for doing that. She's not putting on a show. She's doing what is best for her state.

TODD: Gretchen Whitmer may be feeling the heat, but feeling the heat and seeing the light are often the same experience. And I think that what you're seeing here is a Democrat who knows they have to change their posture a little bit.

HUNT: What do you think?

KASICH: Feeling the heat and seeing the light. Thats spoken like a guy from Tennessee who's been from the Bible Belt. That's very, very good.

Look, I just think that she's a pretty smart. She's more centrist, and she realizes the party has to move, and hopefully, other Democrats will move that way. I like to see a strong two-party system.

You know, I'm a Republican, but the Republican Party has never been my master, only my vehicle. And I think the country does better when we can talk to one another and when we can -- we can have a two-party -- strong two-party system.

HUNT: And, of course, feeling the heat, seeing the light. Chuck Schumer actually said Donald Trump is feeling the heat. I guess he's also seeing the light on the tariffs today.

All right. Coming up next here, new warnings today from what many consider to be the beating heart of American tourism. The dire prediction for Las Vegas in the wake of the president's tariffs. Has that changed just in the last few hours? Nevada's senior Senator Catherine Cortez Masto joins us.

(COMMERCIAL BREAK)

[16:40:02] TRUMP: -- the biggest increase in the history of the stock market, that's pretty good. That's pretty -- you're almost you know, if you keep going, you're going to be back to where it was four weeks ago.

But it was a sick market four weeks ago, you know, because this trade was sick. It was only a question of time. I don't blame the tariffs. I think the tariffs just sort of magnified what was happening.

It was -- it was sick. Biden allowed these people to get away with murder. Biden allowed China to just take advantage of us. We had like $1 trillion deficit with China, $1 trillion deficit. So that was going to only be a matter of time.

I think the tariffs brought it out faster and they magnified the problem. But I think this was a problem that existed far beyond tariffs. This is a -- this was a systemic problem. And we're going to cure that problem. And maybe to a large extent we have because we've revealed it and we've revealed it very strongly.

Yes, sir, please?

REPORTER: Thank you, Mr. President. So, it seems China has made some serious missteps here in these negotiations. And Secretary Bessent said earlier you may have goaded them into a tough position here.

I'm wondering is -- are you, in a way, putting together a coalition against China in terms of trade here?

TRUMP: No, no. China -- look, they're very capable. And I don't blame China for what happened. I blame the people sitting right at this desk, right behind this desk or another desk. You get -- you get your choice of seven. I happen to pick the Resolute.

But I blame the people sitting behind in this chair, behind this desk for being stupid, incompetent or not having courage. This should have been done years ago. This should have been done before Obama, in all fairness. Not only Biden, Obama should have been done many years ago.

This started with the World Trade Organization, which was owned by China. It was owned and paid for by China. They didn't even have to do things. They considered them a nation that was undeveloped. They said they were a developing nation.

Well, we're developing nation, too, if you think about it. Look at our inner cities. Look at what's happened. I think we're -- we're starting from ground zero there, right? So we're a developing nation, too.

No, I don't -- I don't -- I know it's -- a lot of people will take heat for saying it, but I blame the people sitting at this desk more than I blame China. If China can get away with. They got away with -- with taking hundreds of billions and trillions of dollars right out of our pocket because our people here were stupid.

They were stupid people, maybe corrupt. I don't know. I don't know how you can be that stupid. How do you get to be president? And you're stupid. But they certainly weren't courageous. And they allowed this to

happen. And with Japan and with many other countries, it took advantage of us. I mean, we-- we had deficits with almost every country.

[16:45:00]

I used to read these things. The first term I'd read them, I'd actually read the agreements. I'd say, how could anybody agree to this stuff?

So certainly, they were rough, and they were tough, and they were smart. And you can blame 'em, but I really blame the people that allowed them to do it. Because, you know, if you could read first grade and you could read these agreements, you'd say, these are terrible deals.

I actually used to say, who would allow deals like this to be made for our country? And maybe it's people that didn't care. Maybe it's people that weren't courageous. Maybe it's people that were corrupt.

I don't know, but I blame those people more than I blame anybody else.

REPORTER: Mr. President --

(CROSSTALK)

REPORTER: Mr. President, you've been very specific in saying that you would like the E.U. to purchase U.S. energy. Is there something specific that you would like China to do?

TRUMP: Well, you'll be hearing about that. Yeah. There are a lot of things I'd like China to do.

REPORTER: Are there some examples?

TRUMP: There are a lot of things that I want China to do. And I'll be telling China what that is, not you. I'm telling China.

(LAUGHTER)

REPORTER: Mr. President, on Iran, you said the other day that if they do not agree to a potential nuclear deal, that it would be very dangerous for them. What specifically?

TRUMP: They can't have a nuclear weapon.

REPORTER: Did you mean military action, though, if they don't agree?

TRUMP: Oh, if, necessary. Absolutely. Yeah.

REPORTER: And do you have a --

REPORTER: Do you have a deadline for these talks?

TRUMP: Yeah, I do. And you're talking about with Iran? REPORTER: Yes.

TRUMP: Yeah, I do.

REPORTER: Do you have something definitive this weekend or do you see this as a start of a process?

TRUMP: It's a start.

REPORTER: Do you have a timeline?

TRUMP: We have a little time, but we don't have much time because we're not going to let them have a nuclear weapon. Can't let them have it.

And we're going to let them thrive. I want them to thrive. I want Iran to be great. The only thing they can't have is a nuclear weapon. They understand that.

You know, the people are so incredible in Iran and they're so smart. They're very smart people. And, you know, they're in a rough situation, rough, rough regime.

But they understand and the leaders understand. And I'm not asking -- I'm not asking for much. I just -- I don't -- where they can't have a nuclear weapon.

And I've said that, and I was a little bit surprised because when the election was rigged, I figured they'd get the weapon because with me they were broke, they were broke, they had no money because of the sanctions. Nobody could buy oil. We did that to Venezuela just recently, and well do it to other countries if we have to.

REPORTER: What is the --

TRUMP: I want to see -- I want to see Russia and Ukraine make a deal. They got to make a deal. When schools get blown up and bad things happen, like I'm hearing about, it's no good. I hope we're going to make a deal with Russia and Ukraine.

But with Iran, yeah. If we -- if it requires military, we're going to have military. Israel will obviously be very much involved in that. He'll be the leader of that. But nobody leads us. We do what we want to do.

(CROSSTALK)

REPORTER: On the talks, so you might -- when would -- when would the talks need to conclude before you might do military?

TRUMP: I can't really be specific. But, you know, when you start talks, you know, if they're going along well or not. And I would say the conclusion would be when I think they're not going along well. So that's just a feeling.

REPORTER: Mr. President, on the subject of U.S. troops stationed in Europe, do you have any plans to reduce the number of U.S. troops in Europe or in other NATO countries?

TRUMP: Well, good. I mean, it depends. We pay for military over in Europe. You know, we don't -- we don't get reimbursed by much. South Korea, too.

So, it would be one of the things we discussed that's unrelated to trade, but I think we'll make it part of it because it makes sense. Be nice to wrap it all up in one package for each country. You know, it's nice and clean.

And we have plenty of law firms. These are great law firms that we signed with, the best. And I think part of the way I'll spend some of the money that we're getting from the law firms, you know, in terms of their legal time will be -- if we can do it, I think we can do it using these great law firms to represent us with regard to the many, many countries that we'll be dealing with. We'll have good lawyers representing us, but we want to have good lawyers. And these are the best -- considered the best lawyers in the world, right? I mean, consider the best in the world. I don't know, they just went off a little bit.

REPORTER: Mr. President, two questions.

HUNT: All right. We have been listening to President Trump in the Oval Office. We're going to continue to monitor whether he says anything else about his decision to pause most of these tariffs, except for 10 percent. And, of course, except for China, we said he said earlier that these this decision was made from the heart.

So, let's start there with Senator Catherine Cortez Masto. She's the Democrat -- Democratic senator from Nevada.

Senator, we're very grateful to have you on the show. Let me just first ask for your reaction to President Trump's decision today to pause these tariffs for 90 days.

SEN. CATHERINE CORTEZ MASTO (D-NV): Well, let me just say like the first three months of his term, continued chaos and uncertainty. And it doesn't bring any comfort to my businesses, to American families who are still struggling under high prices. And that is the problem. Thats what you're seeing with this administration, these decisions one day.

Listen, yesterday, we had the ambassador, trade ambassador before us, the Senate Finance, who was adamant about these blanket tariffs, why they were so important. We're going to keep this on. We're going to try to negotiate with over 50 countries. But they are important.

And then today, I'm sitting on the floor of the Senate and I get a tweet. We all get this tweet from the administration saying, oh, we've changed it. Now, we're just going to do 10 percent.

I mean, it just -- it is causing what we are seeing in our economy, the challenges of a stock market, going down, prices going up, too much uncertainty for our businesses. I hear it from our businesses. And let me just say one final thing. I come from Nevada. Tourism and

travel is important for my state. And what I'm already hearing from all of our businesses that directly or indirectly survive on that travel and tourism is the impact that were seeing because of these tariffs and the actions of this administration that are having an impact on this travel and tourism, not only in the United States but internationally.

People forget travel and tourism is $1 trillion economy for this country. And just the international travel alone is $1 billion impact to our economy in a positive way. And that's true for Las Vegas. It is having an impact.

And my concern, is the continued uncertainty with this administration and these tariffs and every other action he is doing is going to continue to have that negative impact for Nevada and so many states across the country that rely on tourism and travel.

HUNT: Senator, to that point, I mean, Nevada obviously has been a swing state, a place where Republicans have sometimes done well. Would you say your state is more sensitive than most to this kind of economic uncertainty? And do you think that that has political implications?

CORTEZ MASTO: Well, let me just say, the service industry in my state is predominantly around tour and travel, tourism and travel. And I am here, back in the United States -- United States Senate, because I got elected by Democrats, nonpartisans or independents, and Republicans.

Yes, it is a swing state, and we should be listening to the people of our state and what they are, what they're challenged with right now, and where they're looking for solutions from us at a federal level. I can tell you, when I get around my state from individuals, families as well as businesses, they're looking for certainty and they're looking for prices to be decreased.

We still have high grocery costs in my state. We're seeing that. They're looking for somebody that's going to focus on that for them.

And I just have to say Donald Trump, when he was going into office and he won my state. But when he was running for office and won, he said day one, he was going to address those grocery prices. He has not addressed that.

And so I hear it and see it from -- from folks in my state as well that are concerned about all of this uncertainty and chaos, what is happening, but their day to day lives when it comes to being able to pay those energy bills, to put pay for groceries, put food on their table, they're still seeing high costs. And it's challenging for my families.

HUNT: All right. Nevada Senator Catherine Cortez Masto, thanks very much. I apologize for our abbreviated time. I hope we come back here soon. I really absolutely. Thank you.

All right. Very quickly, we're going to kind of put a button on what we've seen today.

And, Governor Kasich, you actually -- your new book out is called "Heaven Help Us", which I'm sure some people are probably feeling as they grapple with, you know, what seems to be universally recognized as the up and down of the Trump administration? What would you say is what our -- our politics needs right now in terms of why you wrote this?

KASICH: Kasie, all the uproar about what's happening up here, which does affect us down here, leaves us in a kind of a whirlwind. And so, this book is about how to use the power of faith institutions, whether its churches, synagogues or mosques, to actually take your dreams and take them into those institutions, get support, get some resources, and change the world, whether it is about homelessness or whether it's about human trafficking or poverty or hunger, any of those things.

So, while people are going to protest, whether its hands off movement or whoever they are, if you're confused, dig into the faith community. Seek support so that you can begin to do things now. And what this will do is to bring our country together, because all change comes from the bottom up.

And my sense is that people, when they realize those institutions are open, and there are so many stories in here that show what is possible, because once you go in the church, it's like being a politician. You need a clubhouse. And when you have a great idea about bringing change, whatever it may be, if you go into those institutions, they will offer you support. You will be joined by crowds, and at the end, you can make the country, the community stronger, the country stronger, and you as a person will find purpose.

[16:55:00]

HUNT: Kristen Soltis Anderson, you talk to voters all the time. It seems like we are more fragmented, and this chaos, too. It's also the thing that got Donald Trump probably in the most trouble with swing voters the first time around, right?

ANDERSON: Yeah. And there's this tension between voters feeling really frustrated by the way things are and feeling really mad at the other party. But at the same time, understanding that we can't go on like this. If there's one thing that people agree on, it's that we feel really divided.

And I always find it fascinating at the end of a focus group, when people figure out that they're in a group of Republicans and Democrats, if the group has gone well at the end, they're like, wow. That was kind of nice. I kind of wish we could do that more often.

KASICH: If you're solving a problem, if you're solving these serious problems, it's amazing how those allegiances go away. And then you become friends.

HUNT: For sure.

We are unfortunately out of time for today. And of course, we had been hoped to be joined by the White House trade adviser, Peter Navarro. He was unable to make it, as the president has been talking, but we're told he'll be here tomorrow at 4:00 p.m. Eastern. So, we hope that you'll join us for that.

That does do it for us today. Thank you to my panel. Thank you all for being here.

Thanks to you at home for being with us as well.

"THE LEAD WITH JAKE TAPPER" starts right after this quick break.