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The Lead with Jake Tapper

Now, Trump Speaks In Pennsylvania About U.S. Steel Deal; Musk Says He Will Continue to Advise Trump As He Formally Ends His Time in Government; Migrant's Attorneys Demand DHS Correct Sensational Claim; Diddy On Trial: Cross-Examination Of Ex-Assistant "Mia" To Continue Monday; Debate Over Trans Athlete Hangs Over California State Track Meet. Aired 6-7p ET

Aired May 30, 2025 - 18:00   ET

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

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[18:00:00]

PHIL MATTINGLY, CNN HOST: Welcome to The Lead. I'm Phil Mattingly in for Jake Tapper.

Right now, President Trump is speaking in Pennsylvania about a deal between U.S. Steel and Japan's Nissan Steel. Let's listen in.

DONALD TRUMP, U.S. PRESIDENT: But the exemptions that they gave allowed foreign competitors to come in and steal our industry, steal our jobs, and bring them back home and bring them home by the boatload, crippling imports of foreign steel skyrocketed over the last four years, like you have never seen before by over 30 percent. That's an incredible, crazy number. And imports of steel and rebar from Mexico exploded by more than 1,000 percent. We were getting our steel from Mexico. We were getting our steel from Canada. We were getting our steel from every place.

But right here it was then that, we announced the crown jewel of our steel industry. U.S. Steel was being sold into foreign hands with no protections for our great steel workers. And I said, there's no way we're going to let that happen. I was watching over you. You don't even know it. I was watching over you, tell you, best people, you're the best people.

You built this country. You know, you people built this country. You people and others like you built this country. By the time I came into office, many feared that the Mon Valley would lose up to 3,000 steel jobs, that U.S. Steel would close, and it was a fixture of the Pittsburgh skyline. It may never live for another week. We had times we thought we were going to live -- you weren't living for another week. But I promised the people of Western Pennsylvania that I would never, ever let that happen. And as president, I kept that promise. Boy, did I keep that promise.

So, soon after initially taking office, I imposed powerful 25 percent tariffs on all foreign steel and ended each and every one of the Biden exceptions and exclusions. And today, I have a major announcement, and are you ready to hear this? This is on behalf of Scott, secretary of treasury, Howard Lutnick, secretary of commerce, and all of the great geniuses and people we have working, and they are smart, but I don't think you'd be a good steel worker, Scott, I'm sorry. I'm going to have to put a little more muscle content into that guy. But he's great. He's great at what he does.

We are going to be imposing a 25 percent increase, we're going to bring it from 25 percent to 50 percent, the tariffs on steel into the United States of America, which will even further secure the steel industry in the United States. Nobody's going to get around that. So, we're bringing it up from 25 percent. We're doubling it to 50 percent. And that's a loophole.

And by the way, I have to tell you, I believe that this group of people that just made these investments right now are very happy because that means that nobody's going to be able to steal your industry. It's at 25 percent. They can sort of get over that fence. At 50 percent, they can no longer get over the fence.

So, congratulations to everybody and to you for making a great deal. You just made a better deal, right? I said to the group, would you rather have a 40 percent increase? Because I was thinking about 40 when I came. I said, would you rather have a 40 percent or a 50 percent? They said, we'll take 50. I said, I had a feeling you were going to say that. So, congratulations. Also, congratulations to Dave because you got this whole thing started. Congratulations. Great job, great job.

The people here understand the word tariff and you understand it better than the people on Wall Street. But now the people on Wall Street are finding out, they're saying, wow, you know, Trump was right. You saw today they had an announcer joke here in CNBC, Maria Bartiromo, who's so fantastic on Fox Business, and they were saying, you know, Trump was right. Look at these numbers. The numbers got released today at 8:00 in the morning and it showed no inflation and tremendous income jumps for workers and for the people of our country, and they go, wow, he was right.

[18:05:09]

He was right.

But you knew that. You knew that before Wall Street. The workers knew that. We don't want America's future to be built with shoddy steel from Shanghai. We want it built with the strength and the pride of Pittsburgh. It's Pittsburgh Steel.

MATTINGLY: We are listening to President Trump in West Michel, Pennsylvania. He is talking about the agreement he is announcing today between U.S. Steel and Nippon Steel, but he also just made an announcement of an expansion of the existing 25 percent tariffs that were imposed on steel. Those will now be doubling, according to the president just now.

I want to bring in CNN Anchor Kaitlan Collins. Kaitlan, you cover this stuff most days. I was not expecting that element of this to be a central part of the announcement today. What's your understanding of things right now?

KAITLAN COLLINS, CNN ANCHOR: Yes, we had heard from White House officials that there might be some news in this speech today. And just there, the president announcing that he is lifting these tariffs on steel aluminum coming into the U.S. from 25 percent to 50 percent is certainly going to raise some alarm bells and is really just the president only increasing something that he has believed in ever since his first administration when he put steel and aluminum tariffs in place and then reinstated those, lifted some when he took office this time around and now says he is lifting it to 50 percent.

He seems to say there was some deliberation, Phil, over whether to do 40 percent or 50 percent. And his treasury secretary, Scott Bessent, was on hand today inside the Oval Office and is there with him right now in West Mifflin.

And so that is a headline coming out of this as the president is there to announce a deal that really, Phil, I mean, this is the culmination of back and forth negotiations and questions of what was going to happen here since 2023 when Nippon Steel came out and said they were going to buy U.S. Steel to the tune of $15 billion. It caused a ton of backlash here in the United States. President Biden vowed to not let it happen because he was worried about U.S. national security.

Trump himself actually opposed this about six months ago. He had posted on Truth Social that he would not allow this to happen. And even today, there're still questions about what this deal means and whether or not how the control structure is really brought up. Because Peter Navarro told us yesterday in front of the White House that the Japanese company is not going to have any kind of involvement or control when it comes to final decisions.

Now, I think some people have said, you know, it's hard to see that they're going to invest billions of dollars in this company and not have any decision-making power at the end of the day. And we haven't gotten a ton of clarity out of the White House on what exactly this detail and this deal is going to look like that the president is on stage touting, in addition to announcing those much higher tariffs on still and aluminum coming into the U.S.

MATTINGLY: Yes, the terms of that, the details are extremely important. Also, my appreciation to Kaitlan, who is often my gut check for, wait, that sounds new and really important, confirming it is in fact new and really important.

Kaitlan Collins, as always, thanks so much. Look out for Kaitlan just a few hours on The Source. That's weekdays at 9:00 Eastern here on CNN.

Joining us now to discuss, former Trump Economic Adviser Stephen Moore. Stephen, there's a lot I want to talk to you about, news, as with every day and every week, there's no shortage of economic news, but just to start with the idea of doubling steel tariffs in this moment. They were already problematic, I think, for some foreign -- in some foreign capitals right now. What does this mean? STEPHEN MOORE, SENIOR VISITING FELLOW IN ECONOMICS, HERITAGE FOUNDATION: Well, let me start by saying I do support this Nippon Steel deal. I think it's a good deal for everybody. I think it's a good deal for the Japanese. I think it's a good deal for the U.S. Steel workers and people who've invested in U.S. Steel will come out well too. So, I'm very pleased about that. And I've said that all along. Even when Trump was against it, I was for it. I think he's come to a good solution there. And I haven't read the fine print either about what's actually, how it'll actually work, but there will be some U.S. oversight of this company and that's what Trump was insisting on.

So, I like that. I'm a little queasy about these steel tariffs. There's been a lot of studies that looked at what happened when Trump raised steel tariffs in his first term. And what most of the evidence finds, Phil, is that we did save steel jobs. The problem with the tariffs is that all the other companies, the manufacturers, the car companies and so on that use steel, their steel was now more expensive. And so, on balance, the evidence is pretty clear, we lost jobs because of the steel tariffs, so I don't think it's going to work.

MATTINGLY: And this time around, unlike the first time around where there were a process of granting exclusions or getting exclusions, lobbying for exclusions, they've made clear there will be no exclusions here. I assume that's also going to apply to the 40 percent tariffs. Does that make them more effective, more draconian on some level?

MOORE: It probably. Look, again, I haven't seen the final details. I just heard of this myself, so I'm trying to sort through it.

[18:10:00]

But that's a pretty hefty tariff, a 50 percent tariff, and that means steel is going to cost more. I mean, it's just simple. You have to pay the tariff to bring things in. And so think, for example, with our auto companies, Trump wants to bring more auto jobs here, but if their steel is more expensive, what's that going to mean for the cost of a car? So, there's an upside and downside. The people, you know, with Trump there in Pittsburgh, they might gain jobs, but other areas probably will lose them.

MATTINGLY: Yes. The downstream effect, which economists have also often tried to make the point to the president and his administration hasn't necessarily worked up to this point.

MOORE: And the other thing, by the way, is, you know, we've still got this controversy over what the courts are going to do and what the courts are going to say. You know, one day they said he can't -- can do it, and then there was a stay. I think that may end up going to the Supreme Court, and I don't -- it's hard to predict what the courts will say, whether the president actually has the authority to impose tariffs without the will of Congress.

MATTINGLY: You know, what we've heard from administration officials is, look, we think we can win this case. But even if we lose, you know, we can do 122, we can do 301, we can do 232, we can do 388.

MOORE: That's right. There are ways around it.

MATTINGLY: They're going to do it no matter what. Do you believe them?

MOORE: We'll see. You know, we'll see. Look, as someone who's not a big fan of tariffs, I have to say that Trump has been on a roll over the last three months. He got the U.K. and then he got China at least on paper to agree to something. Now, he's saying they're not living up to that. But then just at the time, the Europeans were saying, well, let's make a deal. Now, some of his leverage might be lost if the Europeans say, well, you can't raise the tariffs. So, that's what brought them to the -- you know, I like the fact that he does use tariffs as a way to get better deals and to create a level playing field for the U.S. and that's -- you know, we want fairness.

MATTINGLY: The possibility of a re-escalation with China, which I think came onto the table today, and, look, we've done a lot of reporting on this. There were very -- there's a very clear view inside the administration that the terms of the agreement that they reached with the Chinese officials, the joint statement itself were not being lived up to the response that you saw from the president today was a result of that. If this goes back to where it was or starts back on that path, what does that mean?

MOORE: That means we're back to ground zero again in terms of getting a deal. I'm not -- as I said, I'm a free trade guy, but I think most Americans -- the one thing almost all Americans agree on is that China's a real problem, both in terms of what they're doing militarily, the fact that they don't play the way, the rules, that they steal our technology. So, I think most Americans are with Trump and getting very, very tough with China. That's very different than Canada or Mexico or the Europeans.

So -- and I view them as sort of the old -- like the old Soviet Union. You can't trust them. They don't keep their word. So, remember Reagan used to say, trust, but verify. If we're going to get a deal with the Chinese, we better make sure they're living up to it.

MATTINGLY: I want to ask you -- Jamie Dimon spoke today, actually, there were a number of very interesting comments in his remarks at the Reagan Economic Forum, but this in particular. Take a listen.

(BEGIN VIDEO CLIP)

JAMIE DIMON, CEO, JPMORGAN CHASE: We have problems and we got to deal with them. And then the biggest one, underline both that, is the enemy within. I'm not as worried about China. China is a potential adversary. They're doing a lot of things well. They have a lot of problems. What I really worry about is us. Can we get our own act together, our own values, our own capability, our own management?

(END VIDEO CLIP)

MATTINGLY: Given the fact that the cornerstone of the president's economic agenda, from a legislative perspective, is currently in the midst of a process underway on Capitol Hill, a partisan process underway on Capitol Hill. What do you make of that?

MOORE: You know, I'm not sure what exactly it means by the enemy within, but it is absolutely true. You know, if we're going to compete on this world stage, we better have the best educated people. We better do something about our, you know, school system. We better make sure we've got the training programs that we're creating the best and most capable and skilled workers in the world. And if that's what he means, I agree with them. That's the single biggest challenge.

But China is -- look, the two countries that matter the most in the world economy are clearly United States and China. And China clearly wants to take over the dominance of the world economy from us. We better be on guard and we better bring our A game. You know, there are big -- how many what they've got, you know, well above 1 billion people in China.

So, this is this is the big issue of the next 50 years is, will the United States, will China be the world economic superpower? And, Phil, I'm going to put my money on the United States.

MATTINGLY: It's been a safe bet up to this point. There's no question about that, based on the last 200 plus years.

I wanted to spend a lot of time talking to you about the big, beautiful bill. We -- unfortunately, again --

MOORE: I'll tell you this, it's going to pass.

MATTINGLY: That's what I was going to ask, real quick.

MOORE: But it will pass. I don't know if we were talking earlier, whether it gets done before --

MATTINGLY: Timeline is --

MOORE: -- July, I don't know.

MATTINGLY: Stephen Moore, I really appreciate that. Thanks so much.

Well, let's get more on that dispute we were just talking about with China. CNN's Marc Stewart is in Beijing. Mark, sources tell CNN the White House trying to set up a call with President Trump and Chinese Leader Xi Jinping. What's your sense of how likely that is at this point?

MARC STEWART, CNN CORRESPONDENT: Well, Phil, as you know from being in Washington, never say never, but we have heard of promises or mentions of these calls before and nothing has come to fruition.

[18:15:08]

And quite frankly, it's not the way Xi Jinping prefers to do business. He would rather there be diplomatic talks on the ground level as opposed to leader-to-leader as opposed to a high level discussion. But, look, the thresholds can change and the storyline keeps changing, so let's not rule it out completely. If something like this happens, though, optics are going to be very important, Phil. Xi Jinping is going to want to make sure that he is not answering to Donald Trump, not only to prove his strength on the world stage but, of course, here on his home turf here in Beijing. Phil?

MATTINGLY: Marc, what are sources over there telling you about what has transpired since the Geneva agreement was reached? Obviously, we saw the president on Truth Social today vent his frustrations about things. I've heard similar from U.S. officials in terms of compliance as well. What's the view on your side?

STEWART: I mean, look, the one thing about China is that its messaging is very consistent. A government spokesperson was asked earlier today about some of those comments that Scott Bessent made on Fox News about things perhaps not moving as smoothly as hoped. And, again, the government is sticking to its talking points of the importance of having free trade for win-win, for a win-win benefit for both nations and that protectionism, you know, doesn't help anyone. It's very harmful.

China is in it for the long game. It's made it clear. It knew Trump 2.0 was in the wings and it prepared ahead. It diversified its export base. But it also is going to have to balance the realities of what it's facing with its own economy right now. There is still high unemployment. There is still fallout from a real estate crisis.

I think the one thing to watch in the days, the hours for that matter ahead is this issue of rare earth minerals. It's something that we've reported on CNN about being a potential problem in these conversations. This is the leverage that China has because these minerals can be used in the manufacturing process of things like iPads, like E.V.s, like airplanes. They're a necessity. It's something the United States needs. So, it's something that China is going to hold over America as leverage moving forward.

And also this is not just about economics for China, it's also very much about optics yet again, showing the world that it too can be a leader in addition to the United States, a point that Stephen just brought up.

MATTINGLY: Marc Stewart and Beijing, great reporting, as always, my friend. Thanks so much.

Well, Elon Musk may be leaving DOGE, but that doesn't mean his time in the White House is over. What Musk and President Trump said today about his role moving forward.

Plus, going behind the scenes of how DOGE actually operated. I'll be speaking to one of the agency's former employees. What does she think of Musk's efforts to massively shrink the federal government?

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[18:20:00] MATTINGLY: In our Politics Lead, Elon Musk's time with the Department of Government Efficiency, or DOGE, well, maybe it was never actually happening because he wasn't technically working there. However, whatever his role was, it's technically over. Don't expect him to leave President Trump's orbit anytime soon though.

(BEGIN VIDEO CLIP)

ELON MUSK, ADVISER TO THE PRESIDENT: Well, I expect to continue to provide advice whenever the president would like advice.

TRUMP: I hope so.

(END VIDEO CLIP)

MATTINGLY: Joining us now to discuss Musk's somewhat departure from the government, former Federal Worker Merici Vinton. She left her job at the U.S. Digital Service about two months after it became DOGE, sort of became DOGE, elements of it became DOGE. You can -- Merici, you should -- let's move past that, the structure of the actual organization or entity, or a temporary entity itself.

I want to start with what Musk said about DOGE's goal of cutting a trillion dollars from the federal government just today. Listen.

(BEGIN VIDEO CLIP)

MUSK: Say, by the middle of next year, with the support of the president and Congress, could we achieve a trillion dollars of savings? I think so. We're on track to do so.

(END VIDEO CLIP)

MATTINGLY: Do you think that's realistically possible?

MERICI VINTON, FORMER DOGE EMPLOYEE: I don't think it's possible. And actually recently there was a study put out by the Partnership for Public Service that DOGE is actually costing the government. $130 billion on administrative costs of firing and then rehiring people, as well as all of the employees that are not working right now because they're on admin leave. It actually is just one example of how their cuts aren't really adding up to anything.

MATTINGLY: When you look back, both from your time in, but also since you left, do you feel like there's anything that you saw that they were doing that made a lot of sense to you or that you wished would've been happening prior to their arrival?

VINTON: So, over my time in government, I've recruited hundreds of technologists into government and I really -- you know, we built things, we built products. We launched things like Direct File, a free tax filing product at the IRS. And that's what I had hoped to see. I was optimistic that that might happen. I didn't really see them fix or build anything when they came into government. I didn't -- It was mostly just fire on focus on firing federal employees, career government experts and people who do cancer research. It was rarely -- I didn't see an example of them building anything or fixing a problem.

MATTINGLY: There was -- The New York Times reported on Elon Musk's alleged drug use. This morning, it was during last year's campaign, quote, he told people he was taking so much ketamine, a powerful anesthetic, that it was affecting his bladder, a known effect of chronic use. And to be clear, neither Musk nor his lawyer responded to the times request for comment about his drug use. CNN has reached out to Musk's representative. What do you make of the allegations themselves?

VINTON: So, as a former federal employee, I had to take drug tests to become an employee. And so that's the standard when you'd go through this work, especially if you have the levels of clearance, that somebody like Elon Musk would have to be that close to the president to work in the defense space, you would have to have the highest levels of clearance and all of those clearances require a drug test.

[18:25:06]

So, this is just an example of how a lot of these individuals didn't complete their background checks, didn't complete their ethics forms. There's a lot of unknowns about, you know, not just the drug use, but also what conflicts of interest they might have.

MATTINGLY: Yes, the number of like young staffers of an incoming administration that got bounced just for acknowledging they smoked weed back in the day is remarkable to think about when you read the story.

The -- Trump said that DOGE, I think, installed geniuses with an engineering mindset. You talked about technologists, that you recruited them. What's your perspective about the team that actually arrived?

VINTON: So, I spent a lot of my time at the IRS and I did not see the engineers that were deployed to the IRS, there were two of them, build anything. Actually, one was only focused on firing people and updating the org chart, and the other was only focused on firing I.T. employees. So, I didn't actually get to see if they understood how to -- or if they were good engineers. It wasn't really what we got to see and witness. It was more just based on their cuts of procurement contracts and things like that.

MATTINGLY: What's your sense of where it goes from here? And we're talking during the break, like what's fascinating about this moment, Musk leaves, but a lot of his people are not just inside agencies, they've actually risen, it's the CIO of Treasury now, of the Treasury Department, was a DOGE official that started at the IRS. That's happened in several places. What's your sense of how this goes moving forward?

VINTON: It's a really great question. So, I've had this unique and unfortunate position where there's not a lot of opportunities in government to see something you bring to life, both, and then die at the same time in government. And that's happened with both Direct File, the free online product from the IRS, that people love, and the Consumer Financial Protection Bureau. I helped launch both of those organizations and institutions into the world. And Musk has tried to effectively kill both of them.

His employees and his teammates are still spread out at the IRS and at Consumer Financial Protection Bureau and across government. So, I think the thing to watch is that this is still going on. Just because he's leaving doesn't mean that this is going to stop. People are still going to get fired. They're still up doing reduction in forces at different agencies. Additionally, there's a centralization of data that is ongoing and we need to have some accountability and make sure that we are watching what happens with that.

MATTINGLY: Merici Vinton, I really appreciate you coming in. Thanks so much.

VINTON: Thank you.

MATTINGLY: Well, an undocumented migrant was accused of writing a letter threatening to kill President Trump. Now, his family says he was framed and investigators, they may agree. Those details, next.

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[18:30:00]

MATTINGLY: In our National Lead, this afternoon, attorneys and advocates for an undocumented immigrant living in Wisconsin demanded Department of Homeland Security Secretary Kristi Noem immediately clarify and correct her sensational claim that the man who wrote a letter threatening to assassinate President Trump. They say Ramon Morales-Reyes can barely write in Spanish and doesn't speak or write in English, and that he's the victim of a set-up.

We asked CNN's Tom Foreman to look into this complicated story and the government's alarming claims.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice over): It is time Donald J. Trump get what he has coming. I will self-deport, but not before I shoot your precious president in the head. The words are plain and poisonous in the letter mailed to ICE. And for Homeland Security Chief Kristi Noem, proof enough to arrest the supposed author, Ramon Morales-Reyes.

Thanks to our ICE officers, she wrote, this illegal alien who threatened to assassinate President Trump is behind bars.

But hold on. Even though the letter talks about shooting the president at a rally, as happened last year, advocates for Morales Reyes says Homeland Security is being duped and he's being framed.

KIM ABDULLY, ATTORNEY FOR RAMON MORALES-REYES: He's just as shocked as any of us about these allegations.

FOREMAN: His family insists the 54-year-old immigrant is a hardworking family man who doesn't really speak English, can barely write Spanish and has nothing to do with a menacing note. Police agree.

Sources familiar with the case tell CNN. Morales-Reyes was the victim of an assault and robbery, and this looks like an attempt to get him deported before he can testify about the attack.

ABDULLY: He was a victim of a crime. He reported it to the authorities, has cooperated with investigation and ongoing prosecution in that case and is continuing to be a witness in that case.

UNIDENTIFIED FEMALE: Secretary Noem, what is habeas corpus?

FOREMAN: The handling of his case by the feds could be another black eye for Secretary Noem, who is facing sharp accusations that the administration is at times ignoring the law and evidence to speed up deportations. And even when mistakes are found, such as when that undocumented migrant living in Maryland was sent to prison in El Salvador, digging in.

KAROLINE LEAVITT, WHITE HOUSE PRESS SECRETARY: He will never live in the United States of America again.

FOREMAN: For now, it is unclear what comes next for Morales-Reyes or those closest to him.

CHRISTINE NEUMANN-ORTIZ, EXECUTIVE DIRECTOR, VOCES DE LA FRONTERA: This false claim, you know, has now had the consequence that the family, you know, feels that their lives are being threatened.

(END VIDEOTAPE)

FOREMAN (on camera): The police evidence is really quite striking that this man was specifically targeted, that he is a victim of a campaign to excite public animus and government action to drive him out before he can testify to a crime that was committed. The Homeland Security has not yet said that they are wrong about that. They're still talking about deportation. But, notably, they're no longer talking about this seemingly fake claim that there was a plot against the president, remarkable.

[18:35:05]

MATTINGLY: It really is. Thanks very much.

Well, our small business series takes us to Ohio next to a company that makes products for professional musicians. How have tariffs impacted their business? Are they actually increasing prices on consumers? That's next.

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MATTINGLY: We're back with our Business Leaders series, where we talk to small business owners from coast-to-coast about President Trump's tariffs. Some are happy with them, many are struggling.

Today, we head to the great state of Ohio, some may say, greatest state, to hear from EarthQuaker Devices, a guitar pedal manufacturer based in Akron. It launched in 2004 when musician Jamie Stillman successfully repaired his own guitar pedal. The business now has 35 employees and sells more than 40 types of devices.

Jamie's wife and the co-owner, Julie Robbins, joins me now. Julie, I really appreciate your time. You are a U.S. manufacturer, but you do source some parts from overseas. Talk about the effect tariffs have had on your business.

JULIE ROBBINS, CEO, EARTHQUAKER DEVICES: Yes. First of all, thank you so much for having me, Phil.

[18:40:00]

And I'd also like to thank you for giving a voice to other small business owners and other members of the Main Street Alliance.

So, yes, as you mentioned, we're a U.S. manufacturer. We do everything here in downtown Akron, Ohio. And, basically, our products use over 900, to be precise, 961 different components. And these are sourced from over 14 different countries of origin. So, we import everything, but then we do all the manufacturing here.

Due to the tariffs, our prices are rising drastically, and it's also created a market disruption and impacted our demand.

MATTINGLY: When you talk about --

ROBBINS: So, I could give you an example.

MATTINGLY: Yes. I was just going to ask, when you talk about your prices are rising significantly, are those being passed on? How are you weathering that?

ROBBINS: Well, we need to pass them on, but we're unable to calculate the exact price increase due to the chaos around the tariffs. They're constantly changing from week-to-week, so we're unable to implement a price increase yet.

But just an example, we have a product, that without tariffs, it was $129, and we have about a 15 percent net profit on that. If the Chinese tariffs stay in place, we'd have to raise the price about 23 percent to maintain a profit margin on that.

MATTINGLY: And one of the questions they always have is, you know, how do you plan right now? Like what's the outlook for your business for the rest of this year in this moment?

ROBBINS: Well, we are down about 15 percent for the year. April was down nearly 30 percent. We are definitely seeing, you know, issues with consumer demand. Consumer sentiment is really low right now. So, we're forecasting that we'll be down. We're looking to save costs any way that we can and really just paying attention to how things are changing. We have a lot of data, so we are always checking our data. As every change goes into effect, but it's made things really challenging for any kind of long-term planning or product launches. So, we've had to delay or even scrap product launches. And that's really unfortunate because a lot of our revenue is based on new products.

MATTINGLY: Before I let you go, just your role in the community since inception, how do you guys view yourself in Akron?

ROBBINS: Well, if you know Akron, you know that we were really devastated when the rubber companies left and moved their manufacturing elsewhere in the 70s and 80s. In fact, where I am right now, we're right across the street from the former BFGoodrich factory.

So, for us living and growing up in this place, we really wanted to create and maintain good jobs here, so jobs that pay a living wage, that have paid time off and benefits and healthcare, retirement planning. And we feel that's incredibly important for our community.

So, even though it always would've been more affordable to manufacture overseas, we've always prioritizing having jobs here in Ohio. We are now actually considering for the first time off-shoring our manufacturing due to the chaos around the tariffs. Our competitors overseas, they're not dealing with these issues. They don't have these extra fees. And so it's like the U.S. is basically the least competitive place to be manufacturing.

MATTINGLY: The business, once again, is EarthQuaker Devices. It's based in Akron, Ohio. Check it out if you're in Northeast Ohio. Julie Robbins, I really appreciate your time. Thanks so much.

ROBBINS: Thank you.

MATTINGLY: Well, another week of testimony wraps up in the Diddy trial, but have prosecutors actually made their case? Former prosecutor turned-CNN Anchor Laura Coates is here live next.

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[18:47:55]

PHIL MATTINGLY, CNN HOST: In our law and justice lead, a big day in the racketeering and sex trafficking trial for Sean "Diddy" Combs.

Today, his defense attorneys cross-examined his former assistant. She used the pseudonym "Mia" in court to protect her identity. Defense attorneys pressed her on the life she portrayed publicly, despite what was allegedly going on behind closed doors. She accused Combs of physically assaulting her and his ex-girlfriend Cassie Ventura.

CNN anchor and chief legal analyst Laura Coates has covered every single step of this trial, and she's back from New York and joins me now.

The jury today saw photos of Mia posted on social media from Combs birthday. What was the defense trying to do here?

LAURA COATES ,CNN CHIEF LEGAL ANALYST: They were trying to suggest that her allegations of sexual assault, of violence and abuse psychological and otherwise, threats to her life and livelihood, that they were all really feigned and made up. And the reality was what she was actually posting, including. A videotape where she was wishing him a happy birthday.

Now, the judge said, hold on. First of all, defense, you got to tell the prosecution before you just surprise them with different evidentiary motions or evidentiary findings. And he did not allow it in ultimately, he can talk about it. They couldn't show the jurors that because they said it wasn't noticed early enough to the prosecution, and it would have a prejudicial value that would outweigh the probative, meaning the jury could actually use it to find their conclusions.

MATTINGLY: You've done amazing reporting throughout this trial. Last night was like -- you talked to Suge Knight, and that's about as notable a guest as you could possibly have for about 50 different reasons. Obviously, former record executive, he's in prison for a deadly hit and run back in 2015.

I want to play what he told you about the prosecution in the trial so far.

(BEGIN VIDEO CLIP)

SUGE KNIGHT, FORMER RECORD EXECUTIVE (via telephone): They're not taking the steps like actually showing the RICO. They're not actually showing the drugs. They're not actually talking about all these illegal guns with the serial number erased off. They're not talking about -- they're not getting the actual individuals who might have lost their life or killed somebody.

(END VIDEO CLIP)

MATTINGLY: I mean, strong opinions, but I think probably some lawyers may agree with what he was laying out there.

COATES: So compelling to hear from somebody who had been similarly situated.

[18:50:01]

Suge Knight had a record company as well, has a legend around him as well that's not flattering reputation-wise, but his views about the inability so far for prosecutors to connect the dots was really thought provoking, because this is the critical question for jurors in the court of public opinion and the ones in that courtroom.

RICO cases are notoriously difficult because the underlying crimes they're talking about, whether its arson or kidnapping or sex trafficking, anything like that, the so-called predicate crimes, they're not charged alone. The prosecution can bring a case that talks about those different actual crimes without having them as separate charges. And for many people, that makes it an insurmountable hurdle to actually convict.

He was pointing out what he saw as the absence of those dots being connected, and it was fascinating to get the insight, because, of course, people are wondering -- him talking about it, their one-time rivals, are they one time or continuous ones? Really interesting. And also, there was this one moment I asked him about his views as to

whether or not he thought that Diddy would take the stand, whether he would testify in his own defense. And here's what he said.

(BEGIN VIDEO CLIP)

KNIGHT: He probably was advised not to, but I feel if he do tell his truth, he really would walk. He can humanize his own self and a jury might give him a shot. But if they keep him sitting down, it's like he's scared to face the music. He's just having faith in God, pull up his pants and go up there and tell his truth.

(END VIDEO CLIP)

COATES: Now, of course, there are conspiracy to think that he's trying to lead him astray and convince him to testify. Therefore, he might actually get convicted.

But this is a real challenge for the press, for the defense. Counseling their client of whether to take the stand and be exposed to all the cross, and a lot of things can come in certain hearsay rules only apply when it's a defendants actual statements. He will likely want to make the case for himself and say, I'm the one who can present myself the best. And some wonder, with all of the salacious, graphic, violent, horrific testimony that's come in, what he has to lose in terms of what more they could possibly bring. It's a very calculated decision, because people can believe that they're going to present themselves one way to the jury, and it can backfire.

MATTINGLY: I have about 150 questions going back from the source awards to what happened last night on the show. I urge people to go and listen and read about the entire interview.

I do want to ask you, though, before I go, President Trump was asked today about the idea of pardoning Diddy. What did you make of his response?

COATES: You know, this has been a question with his pardon spree that's happened so far. This is a federal crime. He certainly could do so, and he could do so really before even the end of a trial, we've seen the preemptive pardons happen with presidents.

But I would wonder if this was the type of case that he would want to associate himself with, given the breadth of the graphic details, stranger things have happened. I think we'll wait right now for the justice system to conclude in the form of a verdict.

MATTINGLY: I would be really -- it's really good to see you.

COATES: Good to see you, too. Always fun. Thank you.

MATTINGLY: And you, of course, can catch more of Laura's analysis on her show "LAURA COATES LIVE" every weeknight, 11:00 Eastern and her podcast, "Trial By Jury". Catch new episodes wherever you get your podcast. Well, the debate over transgender athletes and sports front and center

today as California's championship track and field meet gets underway. CNN's live on the scene in just moments.

(COMMERCIAL BREAK)

[18:57:24]

MATTINGLY: In our sports lead, a transgender high school student athlete competing today in California's championship track meet, is why President Trump is threatening to withhold federal funding from the state. And it's reigniting a national debate over trans athletes' participation in girls and women's sports.

CNN's Julia Vargas Jones is at the track meet, track and field meet in Clovis, California.

Julia, there was actually a major rule change just for this weekend's track meet. What was it?

JULIA VARGAS JONES, CNN CORRESPONDENT: Yeah. Phil, what they did is they are now awarding an extra slot for cisgender athlete to compete in qualifiers. If they would have made that qualifier had A.B. Hernandez in this case not competed that day. They're also adding an extra medal. So, if there is an athlete who would have qualified if A.B. Hernandez takes the podium in any of the three events that she's set to compete in this weekend, they will also get a medal for their participation.

And this is coming, of course, as California has for over a decade allowed transgender teen -- teen athletes, I should say, to participate in the sports of the gender they identify with. But this week, President Trump had ordered the DOJ to start an investigation to see if this California law is actually in violation of Title IX, the federal law that says that schools that have funding from the federal government could not have any kind of sex-based discrimination happened.

And this was echoed by Gavin Newsom, who said earlier this week that this was a good compromise to have. But earlier it had made comments about how there was an issue of fairness being raised here. This is echoed also by parents who are here today. Phil, we heard from one of them.

(BEGIN VIDEO CLIP)

DAYLA ANDERSON, PROTESTER: I don't think that having a male and female competition is fair competition. He's an athlete or she's an athlete, whatever she claims to be, it should be that he competes in his biological field which is male.

(END VIDEO CLIP)

JONES: Now, A.B. Hernandez just started her first event here, Phil. Both her and her mother had said publicly that she deserves to compete just like any other girl and deserves the protection from the government, also.

MATTINGLY: Julia Vargas Jones in Clovis, California, thank you.

But we want to clarify a story we covered yesterday here on THE LEAD, a video we showed of a Chinese paraglider contained a small amount of A.I. generated content. The source of the video did not indicate that some of the material was artificial.

Well, coming up Sunday on "STATE OF THE UNION", House Democratic Leader Hakeem Jeffries, White House Budget Director Russell Vought and Democratic Senator Chris Murphy. That's Sunday morning at 9:00 Eastern and again at noon here on CNN.

You, of course, can follow the show on X @TheLeadCNN. If you ever miss an episode of THE LEAD, you can listen to the show wherever you get your podcasts.

"ERIN BURNETT OUTFRONT" starts now.