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The Lead with Jake Tapper

Trump's Massive Tariffs Rattle Markets, Fuel Recession Fears; Some Economist Questions Methodology Of Trump's New Tariffs; DOW, S&P 500, NASDAQ Have Worst Day Since 2020; Putin's Envoy Joins The Lead After Meeting With Top U.S. Officials; Trump Fires 3 National Security Council Staffers After Meeting With Far-Right Activist Laura Loomer; NYC Mayor Eric Adams Seeks Re-Election As An Independent. Aired 5-6p ET

Aired April 03, 2025 - 17:00   ET

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

KASIE HUNT, CNN HOST: There 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 T.V.s 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.

[17:00:38]

UNIDENTIFIED MALE: This is CNN breaking news.

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Welcome to lead. I'm Phil Mattingly in for Jake Tapper. It has been 25 hours now since Donald Trump unleashed tariffs at a level the world hasn't seen in a century. Companies, investors, American consumers just now starting to get their heads around things. The administration's intentionally radical move to change global trade has the stated goal of leveling the playing field for American workers and businesses, forcing more American production and jobs.

But economists say it's not that simple. And there are early indications that the economy here at home in a little bit of trouble right now, starting with the stock market. Global markets, you can see them right there, closed sharply down. The DOW, S&P 500 and Nasdaq posted their biggest single day drop since 2020.

And here's a look at U.S. futures free market trading. It is obviously TBD if markets continue in this direction ahead of trading tomorrow. The U.S. dollar, also wiped out all gains that he's made since President Trump was reelected in November. Then there's the expected impact on everyday goods. The nonpartisan Tax foundation finds the tariffs will cost the Average American household $2,100 more per year for goods. And if you're wondering if there's a chance the Trump administration could, you know, back down on the tariffs in response to any serious and sustained economic pain, well, two of his top officials insisted no. And then Trump said this.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think it's going very well. It was an operation like when a patient gets operated on, 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)

MATTINGLY: We start things off the CNN's Vanessa Yurkevich.

Vanessa, let's start with the question that just has to be on everybody's minds right now. Cost of living, how much is this going to cost people every day?

VANESSA YURKEVICH, CNN BUSINESS & POLITICS CORRESPONDENT: Well, the place where people will feel the price increases first is on food. These are perishable items that come across the U.S. borders every single day. These are not things that can be stockpiled. So when these tariffs hit, you're going to feel immediate impacts in places like this.

Look at bananas. We get a lot of bananas from countries like Ecuador, Costa Rica, Brazil. Well, now those countries are slapped with a 10 percent tariff. Coffee, for example. We import a lot of coffee into the U.S. because we don't have the climate to grow it here.

We get it from Brazil and Ethiopia, those countries now slapped with a 10 percent tariff. And wine, we get wine from abroad, from Italy, from France, from the European Union, which is now facing a 20 percent tariff. Also, let's look at cars. We know this tariff just went into effect today. So the increase foreign car imports according to Anderson Economic Group could be anywhere from $8,000 to $20,000.

You're talking about brands like Lexus. These are cars that are fully imported. And then I will mention, Phil, cars that are assembled here in the U.S. but have foreign parts, those are going to be hit on May 3. Car prices for those types of vehicles could rise anywhere from $2,500 to $15,000.

MATTINGLY: Vanessa, I'm always a little bit cautious about looking at the stock market on a day like today, following a day like yesterday. Never really know how things are going to net out as things start to get priced in. But the stock market is representative of major companies, really important companies in the U.S. Who's getting hit the hardest right now?

YURKEVICH: Yes, and these are -- these are real time numbers. The markets obviously just closed here in the U.S. But look at these stock prices. This was a big sell off on Wall Street across the board. Apple stock down almost 10 percent.

Look at Restoration Hardware, 40 percent in stock price. The stock price dropped by 40 percent. You had the CEO in real time on the earnings call this morning saying, oh, expletive when he saw that his stock was falling by that much. That's because Restoration Hardware, a luxury brand, imports so much of their furniture from Asia, which are getting hit with high tariffs.

And then look at Stellantis. This is a U.S. car company. They announced that they were shutting down idling plants in Mexico and Canada because of these tariffs. And as a result, about 900 people in the U.S. are going to be on temporary layoff because that's the supply chain. Those people, 900 people, work in factories here in the U.S. that service those plants in Mexico and in Canada.

[17:05:03]

Stellantis, day one, making moves to shore up their supply chains. You saw their stock drop 10 percent almost today, Phil.

MATTINGLY: Vanessa Yurkevich, it's going to be a lot to follow in the coming weeks, no question about it.

And let's go ahead and start with the global reaction that we are still waiting for at this point because, look, that's the next big thing. Everybody's trying to figure out what this all means. We're going to check in on what's happening with Trump's tariff with our team of correspondents across the world. CNN's Ivan Watson in Hong Kong.

Ivan, how are countries across Asia? But as you just mentioned it, reacting to Trump's tariffs.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: You know, with a wave of anxiety. Emergency meetings of governments trying to figure out a response to this. The stock markets here in Hong Kong, in Japan, in South Korea and Australia, they were all down on Thursday. And Asian economies have been hit hard by these announced tariffs. They range from at least 26 percent tariffs on the world's most populous country, India, to all the way up to, I believe, around 46 percent tariffs imposed on Vietnam, which enjoyed more than $120 billion trade surplus with the U.S. last year.

The biggest target, of course, was China. So this is the latest in basically a long running trade and tariff war between Washington and Beijing. Already the Trump administration had imposed a 20 percent tariff on China in the first weeks of this Trump administration for not doing enough to stem, the White House said, the flow of precursors of fentanyl and now an additional 34 percent tariff. That's 54 percent imposed on China. The Chinese have vowed to retaliate, they call this bullying.

And the Australian government, a longtime ally of the U.S. has said that this is not the actions of a friend. Australia hit with a 10 percent tariff. Phil.

MATTINGLY: Ivan Watson for us in Hong Kong, thanks so much.

Now to CNN's Fred Pleitgen who is in Berlin.

Fred, how are countries in the E.U. responding?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hi there, Phil. A lot of European countries, of course, big trading partners of the United States, first and foremost, the Germans, where I am right now. The German auto industry, of course, very well known in the United States, also produce a lot of cars in the United States as well. The German chancellor, Olaf Scholz, he came out earlier today and he said he believes these new tariffs are a huge deal and are a big mistake by the Trump administration. The Germans, of course, still hoping to be able to negotiate some sort of deal with the Americans.

But the auto industry really right now on edge as all of this is going down. Of course, the automobile tariffs, 25 percent, and not just the 20 percent that have been levied on the European Union. The French also lashing out to the Trump administration. I want you to listen in to what French President Emmanuel Macron had to say.

(BEGIN VIDEO CLIP)

PRES. EMMANUEL MACRON, FRANCE (through translator): If the response to the tariffs put in place by the U.S. administration is to make immediate concessions or to announce investments to get exemptions, it's a very bad idea because we have a strength. It's a market of 450 million residents. That's Europe. The E.U. is 450 million consumers. It's more than the U.S. market.

(END VIDEO CLIP)

PLEITGEN: And the Europeans certainly want to leverage those 450 million consumers, Phil. However, at the same time, they are also saying that they are already preparing retaliatory measures, Phil.

MATTINGLY: Fred Pleitgen for us in Berlin, thanks so much.

Now, over to CNN's Paula Newton, who's in Toronto.

Paula, how are the neighbors of the north responding to what's happened here?

PAULA NEWTON, CNN CORRESPONDENT: Phil, Prime Minister Mark Carney offering a strong indictment of the actions of the Trump administration, calling all of these tariffs unjustified, but really showing a bit of restraint on the counter tariffs. There were about $60 billion worth on the table. He has now decided that it would apply only to about 25 percent. That would be a 25 percent levy on American cars coming into the United States, and only those that are not compliant with the trade deal, the USMCA that the president himself negotiated. But again, as I said, his words were strong, saying that Canada want to renegotiate everything with the United States. That's the economic deal, but also take a look at security. He specifically pointed to defense procurement and that will perk up ears in the United States. He's saying that right now Canada buys about 80 percent of everything in defense from the United States and they will put that on the table as well when they renegotiate. Phil.

MATTINGLY: Paula Newton in Toronto, our correspondents around the world thank you all with that global story ongoing as we speak.

I want to bring in a pair of economic experts to try and help unpack all of this. Mark Zandi and Gordon Hanson.

Gordon, I want to start with you because what's fascinating to me is you're one of three authors on kind of a seminal paper related to China that many administration officials talk about. I think Scott Bessent, the Treasury secretary, referenced it publicly just a few weeks ago. The decision about how to move forward here in the scale of it, can you contextualize for people what this actually means?

[17:10:15]

GORDON HANSON, URBAN POLICY PROFESSOR, HARVARD KENNEDY SCHOOL: What it means is undoing a process of globalization that the U.S. helped initiate after World War II. And we're moving into a regime that doesn't look anything like the US has experienced for 70 years. The hope is that this is going to create good jobs for American workers. But it's very hard to see the logic in terms of how that will happen.

MATTINGLY: Mark, I think that's the biggest question. I have listened intently as the administration has laid out their kind of multi- pronged and it is, it has several elements to it. It's not just terrorists, despite what the President's social media account may imply in terms of their economic planning. What Gordon is saying there, when will we know? It's so hard to model this out.

We have no idea how people are going to respond. We're not really sure how this is going to work yet in practice. When will you know, OK, this is really, really a problem? Or hey, maybe they had something here.

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYST: Hey, Phil, I think we got a problem. You see the stock market today that was down 5 percent. I mean, you have to go back to the teeth of the pandemic to find that kind of a day. From the -- from the peak in the stock market back, what, six, seven weeks ago, we're down 12 percent. That's $6, $7 trillion in wealth that's been wiped out. I'm sure the folks that look at their, you know, stock portfolios or 401k plans are already getting very nervous and more cautious and it's going to show up in spending.

So I'd say it's here. We're -- I buckle up, it's happening. And I think the cumulative effects of this are going to become very, very clear as we move forward. That is assuming there's no off ramp here that the administration can take and, you know, scale this back and cool things off. They can do that, then maybe this thing turns around.

But with each passing day, I think that becomes less and less likely. MATTINGLY: Gordon, the idea of bringing manufacturing back en masse, American jobs, as you disconnect, as you noted, the kind of the end of a system that America has been a leader in for the better part of the last five, six decades, is it possible? This has been -- multiple administrations have pursued this idea. The Biden administration had their way of trying to bring manufacturing back. The Obama administration had their way as well. The first Trump administration, obviously, as you've written about had tariffs and their way of doing it.

Is it possible?

HANSON: It's possible to bring some jobs back, but not enough to restore what I think the Trump administration is trying to accomplish. And that is to take us back to 1950, when manufacturing accounted for 35 percent of employment in America and provided good jobs for workers without a college education, allowing them to attain the American dream, the middle class lifestyle. Today, manufacturing is about 9 percent of Mexican employment. So imagine that these tariffs exceed well beyond any economist's expectations and we're able to increase that by 50 percent. You're at 13 odd percent of American employment.

You're not creating substantial numbers of good jobs. That's got to happen in services. It's got to happen in health care. It's got to happen information technology targeted towards workers without a college degree.

MATTINGLY: Perspective raises a lot of questions that many people share right now. Mark Zandi, Gordon Hanson, thank you guys very much. Appreciate it.

Well, next, why economists question the math. The math the Trump administration used to impose these new tariffs. The one on the chart there. Plus the president's top trade councilor, Peter Navarro, will be here. We're back in a moment.

(COMMERCIAL BREAK)

[17:17:57]

MATTINGLY: So, we know how the Trump administration came up with the numbers on the president's tariff chart. The chart right there featured in the Rose Garden. Many economists, well, they've spent the last 24 hours questioning the methodology. Today, Trump's Commerce secretary tried to explain, here's his example.

(BEGIN VIDEO CLIP)

HOWARD LUTNICK, COMMERCE SECRETARY: When we took cars from Korea, the deal was we could sell AG to Korea. That was the deal. They wouldn't let McDonald's bring in French fries because they couldn't prove the origin of the French fry. That is not a tariff. That is called a non- tariff trade barrier.

(END VIDEO CLIP) MATTINGLY: So let me try and explain the math here. And we're going to actually take one country in particular, we're going to take Vietnam. Because when you look at the chart and you actually zero in on it, that 90 percent number was jarring when we are all looking at it yesterday. Where did it actually come from? Well, it actually came from the amount of exports Vietnam sends to the United States.

So how much is the United States importing from Vietnam? Well, 136.6 goods. How much is the United States exporting to Vietnam, $113.1 billion. So those are the trade flows, right? That's where things stand based on 2024 census data.

This is the data the U.S. trade representative was using to model out the methodology here. So, what was the math here? How did they get to that 90 percent? Well, it's actually not super complicated at all. They took the total amount of exports, 136.6.

They subtracted 13.1 billion, that's how much the U.S. exported to Vietnam, where they ended up was 123.5 billion. OK, where do we go from there? Well, 123.5 divided by the overall export number. So basically you have the trade deficit of 123.5 by 136.6. Where does that get you?

Well, it gets you to 0.9. In percentage terms, that gets you to 90 percent. And of course, the president made clear he wanted to cut whatever they landed on in half. So that is where we end up.

[17:20:00]

But here's the real question. When you heard or listened to Vietnamese officials today, Vietnamese officials who have become a major manufacturing powerhouse for multinational companies in large part because they're moving their operations away from China, they said, look, our most favored nation average trade rate, which not to get too far into details, but let's just use that as a top line for tariffs, not product by product, on average applied tariff rate was 9.4 percent. They didn't understand how they could be at 90 percent cut down in half.

Well, let's go through this again, try and show just why. When I first looked at this chart yesterday, I said, oh, wow, this is as big and probably bigger than I think a lot of people were really expecting. This is the chart again. China, 67 percent, discounted reciprocal tariffs 34 percent. European Union, 39 percent to 20 percent.

Let's push it out using again that average tariff rate based on most favored nation status. Again, just the overall average, not the product by product. And you see a dramatic difference here. What were we talking about with Vietnam? Right here, 9.4 percent.

Here's why. Nontariff barriers, as you heard the Commerce secretary talking about, were actually central to the investigation that led to the reciprocal tariffs that led to these 60 countries that were actually named and targeted with those tariffs. There is a through line in this administration, from the first administration of the importance of not just trying to go tariff for tariff, not matching on the actual tool itself, but going much bigger on barriers that are put in place that can't necessarily be quantified in a normal technical way. That has brought a lot of criticism from trade economists in particular, macro economists in general. But it is important to understand how the Trump administration has approached this. Why are these tariffs so high?

We're just looking at a tariff for tariff basis or even an average tariff basis. They were trying to calculate everything they believe impedes U.S. market access, and that is where they landed.

With me now is President Trump's senior counselor for trade and manufacturing, Peter Navarro.

Peter, you more than anybody else has talked about non-tariff barriers, the importance of them, Vietnam in particular, kind of detailing them. We have the numbers now. We know what's going into place or what already has come into place when you talk about the floor. Do we know how much revenue it will raise? How much will the U.S. bring back in because of these new tariffs?

PETER NAVARRO, TRUMP SENIOR COUNSELOR FOR TRADE & MANUFACTURING: Phil, you did such an interesting job of running numbers. Why don't we stick with that for a minute so I can walk you through it? You did it from an intelligent layperson's point of view. Let me kind of give you the economist tools because it's based on concepts like export and import, demand elasticities, currency adjustments and things like that. But here's the analytical issue we're trying to do under the principle that the president wants to charge those countries what they charge us.

As you pointed out, Vietnam has tariff, applied tariff rate, it's much larger than ours, but doesn't come near the tariff we've charged them.

MATTINGLY: Right.

NAVARRO: So, the question is, how do you value the following, Phil? So let me count the ways. You got to value currency manipulation. You got to value the VAT tax distortions, dumping, export subsidies --

MATTINGLY: Right.

NAVARRO: -- technical barriers to trade, agricultural barriers to trade, quotas, bans, counterfeiting, intellectual property theft, and all of that. So here's the punchline. If you look at the trade deficit, which every country runs from us, the first thing economists should tell you, ask the next one you have on your show, should the (inaudible) have chronic and sustained trade deficits?

MATTINGLY: No, there's a (inaudible) to have it delivered.

NAVARRO: According to economic theory, they should not.

MATTINGLY: Right.

NAVARRO: So what the trade deficit does for any given country, it's the sum of all cheating. It's the sum of all unfair trade practices. And in a national emergency, where the trade deficit itself is the national emergency and security threat because it takes our factories, our jobs and transfers wealth abroad, the reciprocal tariff is that which reduces the trade deficit with each country to zero.

MATTINGLY: So, I actually -- Peter, I do want to interrupt.

NAVARRO: And then we take half of that. But that's the method.

MATTINGLY: This is actually -- no, no, I understand. This is actually what I want to ask you about because --

NAVARRO: Yes.

MATTINGLY: -- it's important for people to understand I think that when you look at the memorandum that laid out the process to get to yesterday --

NAVARRO: Yes.

MATTINGLY: -- on January 20, the -- in terms of trade flows, this was -- the deficit is a huge -- it's in the first paragraph. It's in the first paragraph of the first directive as well.

NAVARRO: Yes.

MATTINGLY: It is clearly kind of the cornerstone of how you guys are approaching this. And what I'm trying to understand here is it's a different method. I understand --

NAVARRO: Well --

MATTINGLY: -- you don't believe trade economists understand what they're talking about. You don't believe (inaudible).

NAVARRO: No, no, actually we used the methods of the trade economists in order to estimate what you need to go to zero in the trade deficit based on commonly accepted elasticities estimated over the last 30 years. It's a very sound methodology.

[17:25:10]

I think what the study does, Phil, I mean, tells us just how huge, huge the non-tariff barriers are. That's the problem. As bad as the higher tariffs are that these countries charge us, and they're bad.

MATTINGLY: Right.

NAVARRO: India is five times higher than ours on average. They're maharaja of tariffs. The trade barriers, the non-tariff barriers are far worse. And you take me to any country. I was watching you go through all these countries and you have like people in Asia you're reporting and wow, they're shocked.

Hey, the president has been saying going back to the 1980s about Japan is why is it that 95 percent of the cars in Japan are made in Japan?

MATTINGLY: No, Peter, I know no one --

NAVARRO: One of the reasons is they have a human impact test that requires us to imagine what it's like for a human skull to fall on a hood and they simulate with a bowling ball.

MATTINGLY: Right.

NAVARRO: We can't get the cars in there.

MATTINGLY: Peter --

NAVARRO: You name any country, friend or foe alike, and I can tell you --

MATTINGLY: Peter, I'm trying to actually approach this from a --

NAVARRO: Yes.

MATTINGLY: -- good faith basis and have --

NAVARRO: Yes, no, you're doing a great job.

MATTINGLY: I know you know this. I know how you talk about this stuff often.

NAVARRO: Sure.

MATTINGLY: And I want to make clear, I'm not trying to skate over those issues. We just did a whole --

NAVARRO: OK.

MATTINGLY: -- thing trying to justify it. My point is though, is for people who are watching this right now.

NAVARRO: Yes.

MATTINGLY: And I know your frustration with how things are covered and how people view the markets on a day to day basis. What will be the sign to them that this is all working? The President says, look, it's over. We're healing right now.

NAVARRO: Sure. Sure, sure.

MATTINGLY: It doesn't feel like it. And I think the end game that you guys have laid out, which is manufacturing, comes back home in a significant way. You're redoing an entire system intentionally. That's not a --

NAVARRO: Right.

MATTINGLY: -- quick fix. How will people know? When will they know?

NAVARRO: Sure. I mean this is the day after Liberation Day. But let's look at what the trajectory is. Let's take the auto industry for example. What we've essentially been turned into assembly operation. I notice you had Stellantis, talking about Stellantis.

MATTINGLY: Yes.

NAVARRO: And look, that's not -- it's one of the big three. It used to be Chrysler, but let's face it, it's owned by Fiat. And most of the engines that go into the cars that are assembled here are from Italy. I mean that's not an American company as we once knew it. So the end game here for the auto industry is going to be to fill up all of the half empty factories that now are operating at low capacities around Detroit in the greater Midwest area where the autos are made.

And then we're also going to have more brownfield investment where abandoned factories for parts. And the parts are frankly far more important than the assembly, they're going to fill. And we're going to have Honda and Toyota and Mercedes and BMW, more and more of their content is going to be here because it has to be. And we're going to have tax breaks in the biggest tax cut in history --

MATTINGLY: Right.

NAVARRO: -- coming in for consumers who buy American. So it's going to be a beautiful thing and we're going to have a fully -- UAW fully supports this because they know it's going to bring jobs. So --

MATTINGLY: Yes.

NAVARRO: -- across. Go ahead, Phil.

MATTINGLY: No, I was just going to say, obviously, the tax cuts debate is underway. You guys are very forceful on that --

NAVARRO: Yes.

MATTINGLY: -- and are pushing forward on that. I do want to ask, am I wrong in thinking that when you talk about -- J.D. Vance is kind of -- the vice president was kind of detailing this as well. When you're undoing a system that's been in place for as long as it has because you think it's broken, but you're breaking it and doing something different that other people haven't done before, that disruption by design, prices will increase. Is that --

NAVARRO: See, here's what's so interesting. I mean, you have a guy like Mark Zandi on saying that kind of stuff. He was -- he's a like a Barack Obama operative behind a macroeconomic forecasting thing. And he was the same guy who said, and this is why history's on our side, Phil, he was the same guy who said during the first term that the China tariffs, the steel and aluminum tariffs, the solar tariffs, the dishwasher tariffs were all going to lead to inflation and recession.

MATTINGLY: And Scott Bessent, the Treasury secretary of the United States, said low prices is not the American dream.

NAVARRO: We had price stability. We had price stability and we had real wages rising. We had robust economic growth. So, I mean, if you go -- again, as an economist, if you go through the adjustment process --

MATTINGLY: Yes.

NAVARRO: -- the foreign nations who have to sell here, who have to sell here are going to lower the prices. And then the next thing they're going to do is continue to manipulate their currency. So, our currency is going to get stronger. We're going to have more purchasing power for the imports. That's going to offset it.

MATTINGLY: Yes.

NAVARRO: As that's happening, the supply chains adjust and we come here. And then remember, as President Trump has said often and correctly, you don't have to pay any tariffs if you make it here. So it took decades for this to destroy America with this globalization of our supply chain. But I have this expression I call in Trump, which was to get things done as soon as possible.

[17:30:05]

MATTINGLY: Right.

NAVARRO: And what the companies who are going to prosper, if you -- if you look at how we're going to have a -- a bull market in stocks, and we will, the companies who are going to prosper the most, this is who you should be looking at, are the ones who have already begun to move their supply chains here.

MATTINGLY: It's -- it has been the point --

NAVARRO: And who have anticipated that.

MATTINGLY: Yes, the President has made that clear, that is -- that is the pathway forward. You guys have made clear the overarching pathway forward as well.

NAVARRO: Yes.

MATTINGLY: Senior Trade and Manufacturing Counselor Peter Navarro, I know it's been a busy week. Thank you so much.

NAVARRO: Great to talk to you, sir. It was enjoyable. Thank you.

MATTINGLY: Appreciate it.

NAVARRO: All right.

MATTINGLY: Well, coming up, a top envoy of Russian President Vladimir Putin is here in D.C. and will be here in the studio. I'll speak with him about the status of ceasefire negotiations between his country and Ukraine. That's next.

(COMMERCIAL BREAK)

[17:35:10] MATTINGLY: Topping our World Lead, the U.S. will not send the Defense Secretary Pete Hegseth, or another top Pentagon official, to the Ukraine Defense Contact Group meeting in Europe for the first time since the group's founding. Now, this comes as President Trump attempts to move along a ceasefire agreement between Russia and Ukraine.

Remember, on Sunday, Trump said he was, quote, pissed at the Russian leader, Vladimir Putin, for attacking Ukrainian leader Volodymyr Zelenskyy's credibility. Now, Putin has a top Russian envoy in Washington for meetings with U.S. officials. Joining us now is that Russian envoy.

Kirill Dmitriev is the chief executive of Russia's Direct Investment Fund. I really appreciate you coming in.

KIRILL DMITRIEV, PUTIN SPECIAL ENVOY FOR INVESTMENT & ECONOMIC COOPERATION: Thank you Phil.

MATTINGLY: Just to -- to start, given how much, I think, everyone wants to know how this is actually going right now. You've been advocating for diplomacy from the early days of the war. You say you're here in the U.S. on Russian President Vladimir Putin's direct instruction. Did you discuss next steps in this process about a ceasefire moving towards one with U.S. officials?

DMITRIEV: Well, first of all, I think it's very important we have dialogue, because for a long time before, there was no dialogue, no attempt to understand Russian position, not understand what the solution can be.

Secondly, I think there is already major progress. And President Trump and his administration achieved the first ever de-escalation of Ukrainian conflict by having Russia and Ukraine agree to ceasefire when energy infrastructure hits. So that's the first de-escalation in three years.

And yes, I think there is an understanding for how we can move to finalize the agreement, and there have been lots of discussion in that realm. Lots of differences still remain --

MATTINGLY: Right.

DMITRIEV: -- but I think there are several passes to try to address all of the issues, and only diplomatic solution can be possible.

MATTINGLY: I'm interested in discussion about specific sanctions relief or taking sanctions off. The scale of the sanction regime put on to Russia, not just by the U.S., but really the entire Western world, there's no precedent for it. Do you talk to U.S. officials saying, this would be helpful, this would be something that we would appreciate?

DMITRIEV: No, actually not at all, because first of all, many Russians believe that sanctions actually have been good to transition Russia from dependence on the West. And if you look at how GDP growths, it's still 4 percent last year, versus around 1 percent for Europe. And our debt to GDP is 18 percent, versus another around 100 percent for Europe. So Russian economy has done well, and we don't ask for any sanction relief.

I think what we see is that some U.S. businesses want to go back, and if they want -- if they -- if they want as part of going back to have some sanctions relieved, I think that is a good move to be done, but it's a good move for America.

So I think at this point, we are not asking for any sanction relief, we are just discussing that if America wants to have more business with Russia, and by the way, there are 150 American companies still in Russia, with 70 percent of them doing business for more than 25 years, then of course U.S. can do so.

MATTINGLY: Why the American people, I think right now, are rightly skeptical of the process, whether there will be an outcome, I guess, would be the way I would frame it. Why should they believe it will get there? You've been involved, you've been telling people this was the only way it could end since the beginning. Why -- why should they trust where this is going?

DMITRIEV: Well, first of all, I think there is already some progress, as I mentioned, this infrastructure, a hit on energy, a ceasefire on that. And then secondly, I think there is already progress on some trust-building measures, you know, there were some prisoners exchanged, and there is a discussion of what the endgame can be, and really, prior to that, some people were advocating solutions they knew were not possible.

So there was focus to take a position that is not a real solution, and to say, do this, do this, knowing that's not possible. I think with Trump administration, we are now in the realm of thinking about what is possible, what can really work, and how we can find a long-term solution. And I think long-term solution is what is needed, because we are also thinking about global security, how to make sure that Russian security concerns are taken into account, but obviously, Trump administration wants Ukraine to be strong, in all of the discussions, they make sure that Ukraine has a strong negotiating position, and that's been their consistent messaging.

MATTINGLY: Before I let you go, Steve Witkoff, who has been kind of the point person for the U.S. here, it was striking on January 20th, when we realized that he was in the process of getting out a U.S. prisoner, and when he came back, he pointed specifically to you. How did you connect with Steve Witkoff? How did this become of -- kind of the relationship?

DMITRIEV: Well, I think we worked quite a bit on Marc Fogel, and I think that was a very important example, how we can have trust and how we can have, you know, positive solutions. And secondly, also Saudi Arabia played an important role, because we've been investing with Saudi Arabia for a long time, and Saudi have been helping on some of the discussions between the U.S. and Russia. So really, lots of trust between us and Saudi, Saudi and the U.S., were important.

[17:40:02]

And secondly, I think Steve has been really focused on solutions, and we know that, you know, this is very important, and rather than in the U.S., we're important. And secondly, I think Steve has been really focused on solutions, and we know that, you know, this is very important, and rather than coming and saying, this is what needs to be done, he was really trying to ask questions and trying to understand what the solution space can be. And because of that, I think lots of progress has been made.

MATTINGLY: Well, we certainly will all be watching. The world is watching at this point in time. Russian envoy, Kirill Dmitriev, really appreciate you coming in.

DMITRIEV: Thank you, Phil.

MATTINGLY: Thank you, sir,

Well, up ahead, the President's meeting with a far-right activist that apparently led to the staffers on the National Security Council, at least a couple of them, being fired. CNN's Kaitlan Collins has the reporting. That's next.

(COMMERCIAL BREAK)

[17:45:00]

MATTINGLY: Now to our Politics Lead, three National Security Council staffers have been fired. Sources tell CNN their terminations are tied to right-wing activist Laura Loomer, who was at the White House yesterday. Now to our politics lead.

Three National Security Council staffers have been fired. Sources tell CNN their terminations are tied to right-wing activist Laura Loomer, who was at the White House yesterday, and met with President Trump. CNN's Kaitlan Collins has the reporting. Kaitlan, you got to explain, like I saw the headline, you have to explain what exactly happened here.

KAITLAN COLLINS, CNN ANCHOR: I mean, I think some of these staffers and people inside the West Wing are even kind of asking themselves that. Because we spotted Laura Loomer at the White House and I had heard from people that she was inside the West Wing.

We knew she had a meeting with President Trump in the Oval Office and now obviously we're seeing the ramifications of that. Because basically, just to put in perspective, she's been asking people and complaining that she's not getting access to the President and access to the West Wing and to the White House or to the press briefing. So she was finally granted this meeting yesterday.

She brought in a list of people with her, it was probably 12 or so people, and she made the case to the President that she doesn't think they're loyal to him or that their views align with his agenda. Essentially arguing, they call them neocons, they have more hawkish foreign policy views, as they were saying. But clearly this message resonated with the President, who was in the Oval Office.

He'd actually just met with Mike Waltz, the National Security Advisor, the boss of these staffers. Mike Waltz, I was told, stayed behind in this meeting, as the "New York Times" first reported. He made the case and defended his staff, but he doesn't really have a ton of standing to do so because of -- of Signal Gate, of course.

And he's actually traveling with the President right now to Florida. And we heard from President Trump himself on the plane just now, confirming that yes, these people were fired.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Laura Loomer is a very good patron. She is a very strong person. And I saw her yesterday for a little while. She has make -- she makes recommendations of things and people.

And sometimes I listen to those recommendations, like I do with everybody. I listen to everybody, and then I make a decision. Always going to let go of people, people that we don't like, or people that we don't think can do the job, or people that may have loyalties to somebody else.

(END VIDEO CLIP)

COLLINS: Now, the President told reporters that Laura Loomer did not instruct him or tell him to fire anyone. That is not what our reporting shows. She actually made the case for -- for getting rid of multiple people, including Mike Waltz's deputy, who is still there.

He has not been fired, as of what we heard just a few hours ago. But for people who don't know who Laura Loomer is, she is this far-right activist. She spreads a lot of conspiracies. She once referenced that 9/11 was an inside job, and then Trump took her to the 9/11 memorial. But she obviously has a lot of influence with the President himself. She was a huge ally of his, a very vicious online defender of his during the campaign, and has clearly been still trying to seek that access now that he's more walled out, because he's in the White House.

But it shows -- we asked who -- who it was that cleared her into the White House, because you have to give Secret Service your Social Security number, your birthday, all of these things to -- to come in. No one has yet said who it was that granted her access. But certainly, some staffers have tried to wall her off from the President.

MATTINGLY: The best part about this conversation of the 80 layers I have questions about is we're going to watch you talk more about it, I hope, tonight, because there's so much in here. Kaitlan Collins --

COLLINS: I know.

MATTINGLY: -- great reporting, as always, my friend. And seriously, Kaitlan, we'll have much more tonight on her show, The Source, tonight at 9:00 Eastern, here on CNN.

[17:48:17]

Next, the big announcement from New York City Mayor Eric Adams today, one day after a judge dropped corruption charges against him.

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MATTINGLY: Back in our Politics Lead, New York City Mayor Eric Adams is changing political parties again. He started out as a Republican, got elected as a Democrat, but now he's running for another term as mayor as an independent. Now Adams opted out of the Democratic primary just one day after he was cleared of charges in his federal corruption case. CNN's Gloria Pazmino is in New York for us. Gloria, why run as an independent in a city like New York?

GLORIA PAZMINO, CNN CORRESPONDENT: Phil, there's only one reason why a candidate would do that, and that is because they don't think they can win the Democratic primary. Now, Democrats here in New York City outnumber Republicans by wide margins, six to one. But for the last several months, Mayor Eric Adams hasn't been able to campaign, he says, because of the federal indictment that was hanging over his head.

Now, as you said, a judge cleared him in that case yesterday, and today he announced that he is running for re-election, which he has said he would do, but today he made it clear he's going to do so as an independent. Now, the mayor says that this is not about political parties, that people don't care, or New Yorkers don't care what political party you are a part of, that they want someone who can manage the city.

The problem he has is that there are several Democrats who are running for the Democratic primary nomination, including former Governor Andrew Cuomo, who is dominating in most polls, and he has a short amount of time from now until November, which is when the general election will be held, to mount this campaign.

Now, this has been done before. Former Mayor Michael Bloomberg ran as an independent and a Republican, but he spent millions of dollars of his own fortune to do that. It is extremely difficult, and again, Democrats here in New York City dominate.

Whoever wins the Democratic primary is usually expected to win the general election. Phil?

MATTINGLY: Gloria Pazmino, thanks so much.

[17:55:00]

Well, as President Trump just landed in Florida, what he said about the world's reaction to his massive tariffs. We'll have it. Stay with us.

(COMMERCIAL BREAK)

MATTINGLY: Welcome to The Lead. I'm Phil Mattingly in for Jake Tapper. This hour, an absolutely brutal day in the stock market, threats from some of America's closest allies. And now a new assessment of how close we could be to a recession. This is all the fallout from President Trump's new sweeping tariffs. It's here and it's not pretty. But how will it actually affect your family and how soon?

Plus, millions of Americans are at risk for severe weather tonight from tornadoes and a once in a generation flooding, just as we're starting to get a look at the devastation from last night's tornado outbreak. Decimated communities just starting to pick up the pieces.

[18:00:07]

And a dramatic escalation --