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Major Changes Underway As Trump Works To Reshape Government; Sources: White House In Talks To Host Some Jan. 6 Convicts; DOJ Threatens To Prosecute Officials Who Resist Immigration Orders; JPMorgan Chase CEO On Trump Tariffs: "Get Over It"; PMorgan Chase CEO: Trump Tariff Threat May Be Negotiating Tool; Trump Tariffs Loom Over Chinese Factory In Mexico; Chinese Firms Weigh Options As Trump Threatens New Tariffs. Aired 3-3:30p ET

Aired January 22, 2025 - 15:00   ET

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

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[15:01:26]

BORIS SANCHEZ, CNN HOST: President Trump following up on a campaign promise, wasting no time targeting diversity, equity and inclusion programs, ordering all their offices and federal programs to be shut down. Now, employees in those departments will be on paid leave starting today.

ERICA HILL, CNN HOST: Plus, in a new memo, the Justice Department says state and local officials could be punished for resisting President Trump's immigration orders, what the DOJ is now threatening to do.

And one of President Trump's closest allies bashing his newly announced $500 billion AI investment, but Elon Musk says the project's backers can't make it happen.

We're following these major developing stories and more all coming in right here to CNN NEWS CENTRAL.

SANCHEZ: It is day three of Donald Trump's second presidency and major changes are unfolding in Washington as he moves to quickly reshape the federal government. Policies are changing, programs are being gutted, all while the cloud of the January 6th insurrection hangs over his new administration.

Right now, a major deadline is fast approaching in Trump's war against DEI. All employees who work in diversity, equity and inclusion positions will be placed on leave by 5 PM today.

HILL: Meantime we could also be seeing the first cracks in the relationship between Trump and Elon Musk, the tech billionaire bashing his boss' massive AI project. And there is more fallout today on the heels of those pardons from Donald Trump for those convicted in the attack on the Capitol four years ago.

Administration officials are apparently considering inviting some of those rioters to the White House. CNN's Jeff Zeleny following all of these developments for us on just day three. So, Jeff let's begin with these DEI initiatives or I guess the push back against any of those initiatives. What does this mean as of five o'clock today?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Erica, the clock is ticking on this in just a - two hours before that five o'clock deadline for all DEI: diversity, equity and inclusion employees to effectively go on paid leave. This is just one of the many consequences and fallout in action of those executive orders the President signed in the opening hours of his first return to power here. And it's a little unclear exactly what will happen after next Friday. And that according to this memorandum is that these employees would no longer have jobs at all, so they will be on paid leave until then.

And this, of course, represents the variety of a diversity programs and efforts inside and across the federal government. So, some clarity, of course, will have to come. Perhaps some lawsuits will come. We shall see. But perhaps even more interesting in that executive order, the President is also urging the private sector to follow this lead.

And, of course, the private sector can do largely what it wants except a lot of private sector businesses have a government work and a contract. So, it will remain to be seen how all this unravels here. But this is just one more on day three a very big example of some of the specific fallout from these executive orders.

SANCHEZ: And Jeff, one of the moments that caught my attention from Inauguration Day when Donald Trump was first returning to the Oval Office was him picking up that letter from former President Biden. We're looking at video of it now.

Today, he revealed a bit more about what was actually in that letter. Tell us about that.

[15:05:00]

It was an extraordinary moment when the President was walking back into the Oval Office for the first time taking a seat at the Resolute desk there, opening the drawer and showing that letter as we can see right there on screen. This is a modern-day tradition, president after president leaves a letter to his successor.

So we are getting our first look of what actually the contents were of that handwritten letter from President Biden obviously the 46th President to his successor, Donald Trump, the 47th President. And Fox News was forced to report this, but we have confirmed the contents of that letter. Let's take a look at it. It's something the President called inspirational. It starts out it's written in Joe Biden's handwriting like this.

It says, "As I take leave of this sacred office, I wish you and your family all the best in the next four years. The American people and people around the world look to this house for steadiness in the inevitable storms of history, and my prayer is that in the coming years will be a time of prosperity, and peace and grace for our nation. May God bless you as he has blessed us and guide our beloved country since our founding."

And, again, that is from President Biden to his successor. So we have gotten a look at these letters over the years. But this is just another indication of the last communication between these two men. Of course, they rode in the limousine from here at the White House up to the Capitol. We were standing there on the east front of the Capitol as the new president escorted the outgoing president to the helicopter formerly known as a Marine One. But this is the final words here.

But of course so many actions of the Biden administration have already been undone by the new Trump administration as happened four years ago. But just a note for history here on the final words that Joe Biden left for Donald Trump.

HILL: Really appreciate it, Jeff. Thank you.

Well, as we know another top priority for the Trump administration is to immediately crack down on immigration. As part of those efforts, the Justice Department just issued a memo which threatens to prosecute state and local officials who resist federal immigration orders.

SANCHEZ: Joining us now with more our CNN Senior Justice Correspondent Evan Perez and CNN Legal Analyst Elliot Williams.

Evan, first to you.

You've actually done the hard work of reading through these memos. Walk us through them.

EVAN PEREZ, CNN SENIOR JUSTICE CORRESPONDENT: Well, so this one particular memo was issued by Emil Bove who is the Acting Deputy Attorney General. And, it's an instruction, not only to the Justice Department for how to handle the - what we anticipate to be confrontation with cities and states over their sanctuary policies, right, which shield information of immigrants when the federal government wants to try to round up and do these do these this crackdown on immigration.

But it also is a message to the Justice Department staff. It also says to them essentially if you refuse, if you decline to bring some of these cases that you - we want you to bring, then there could be consequences. You'll be reported back to Justice Department headquarters and there could be perhaps even disciplinary action or being fired, right? That's what the purpose of this is.

But the big message is to cities and counties and states that have these policies in place is that we are going to come into this - we're going to challenge them and then secondly if you try to obstruct we will possibly prosecute you. I'll read you just a part of what it says.

It says, "federal law prohibits states and local actors from resisting, obstructing and otherwise failing to comply with lawful immigration related commands." Now, look, where these memos hit the practicality, the road, right, so to speak is where this problem will arise. It's not clear to me that the federal government can really force the cities to do anything. It is true that if for example a mayor tries to interfere with an ICE, you know, enforcement action trying to round up people who they want to try to detain obviously anyone who obstructs that would you know be subject to arrest.

It's not clear that the federal government really has more power than that. And in the case of sanctuary cities, a lot of this is about information that they're not sharing with the federal government. They're not collecting a lot of this information. They don't know who's a lawful immigrant, who isn't. And so what we'll see here is this intended to instill fear in those cities and it's not clear that there's a lot of practical effect to this.

HILL: Is there any precedent for this, Elliot? I mean, have you ever seen an action like this?

ELLIOT WILLIAMS, CNN LEGAL ANALYST: I haven't seen an action like this. Now the idea of the federal government and state and local governments being at odds over immigration goes back to my time in the Obama administration quite frankly where mayors and city councils would fight with ICE over this very information.

Now, this this threat of prosecution is a really interesting one and like Evan had said, it'll be interesting to see how it actually plays out.

Now, one of the things that they talk about in the memo is charging people with harboring aliens or conspiring to harbor aliens.

[15:10:04]

And I don't know if you get there simply by being in the natural push and pull that happens between state and locals in the federal government. So for instance if they don't turn somebody over from a jail, is that harboring aliens or is it just being difficult with the government. And reaching that bar of charging someone with a crime is quite difficult.

SANCHEZ: Yes, there's a wide expanse that's a gray area where it's not clear as Evan put it where the practicality stands. I do wonder what kind of powers local and state governments might have to protect some of their officials in this effort in their work.

WILLIAMS: Well, I would expect lawsuits quite frankly from state attorneys general against the federal government which is - which could be seen as encroaching on their ability to carry out the laws of their local jurisdictions. Now, look the Constitution says that when there's a conflict between state law and federal law, always the Constitution wins it's called the supremacy clause of the Constitution.

PEREZ: Which they cite in their memo. WILLIAMS: Right. And they cite that there. However they also have an interest in protecting their cities and carrying out their laws. And so how does that work when it when it comes into a court, we'll just have to wait and see once the lawsuits start flying and they will.

PEREZ: One of the one of the other things that will be a confrontation will be also with the churches, right? There's a lot of Catholic churches, there's a lot of evangelical churches that are assisting and helping people who are illegal immigrants around the country. And the question is does the federal government go in there and try to force those and you are you going to arrest priests and nuns for simply doing what the Bible tells them that they should be doing.

HILL: You read my mind on that one, because we've seen it before, right? We know that it's happening - it's going to happen we've heard a number of clergy speak out talking about their reaction to just what we've seen in the first three days.

PEREZ: We heard it yesterday at the National Prayer Breakfast.

HILL: Yes, that's true.

PEREZ: That's right.

WILLIAMS: And it's also worth mentioning that the Trump administration just modified this sensitive areas' policy. This policy that has existed across administrations that I - where I used to work - will not go into places like churches, schools, courthouses, hospitals. Now, the question is can they?

I mean, they certainly can now, but to your point would they necessarily start prosecuting priests or nuns or doctors? Hard to know.

SANCHEZ: Yes a lot of questions yet to be answered. Elliot Williams, Evan Perez thank you both so much.

Still to come the CEO of the world's largest bank has a message to anyone worried about Trump's proposed tariffs. Get over it.

HILL: Plus, what First Lady Melania Trump is planning for round two at the White House based on lessons learned from the first time around. And just some stunning new images out of Los Angeles County where firefighters are now responding to a new wildfire already prompting evacuation orders. Those details ahead.

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[15:17:14]

SANCHEZ: The CEO of the world's largest bank, Jamie Dimon of JPMorgan Chase, is dismissing concerns from businesses and governments that are nervous about President Trump's tariffs. Trump is vowing a 10 percent tariff on Chinese goods imported into the U.S., though he's floated the idea of having it go up as high as 60 percent. Remember, he's also promised 25 percent tariffs on imports from Canada and Mexico, coming just in - about 10 days on February 1st. Dimon spoke to CNBC from The World Economic Forum in Davos, Switzerland. Check out some of what he said.

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JAMIE DIMON, CEO, JPMORGAN CHASE: I look at tariffs, they are an economic tool. That's it. They're an economic weapon, you know? Depending on how you use it and why you use it and stuff like that. And, you know, people argue, is it inflationary, non-inflationary? I would put in perspective, if it's a little inflationary but it's good for National Security, so be it. I mean, get over it.

(END VIDEO CLIP)

SANCHEZ: CNN Anchor and Editor-at-Large, Richard Quest is at Davos in Switzerland for us. And, Richard, we spoke yesterday a little bit about this, how Trump's promise of tariffs was being received among the folks that are attending the conference. What did you make of Dimon's comments?

RICHARD QUEST, CNN ANCHOR & EDITOR-AT-LARGE: It's classic Jamie Dimon. It is a statement of reality and pragmatism. He's squaring the circle. Jamie Dimon knows full well the long-term economic impact of tariffs. What he is saying is they're coming, we'll get used to them, manage it. Don't make it a big deal.

And he's right insofar as - because, look, here at Davos, I've been talking to others - I was talking to Gary Cohn, former administration official in the last Trump administration. And Gary Cohn, national economic advisor, he was saying, look, tariffs are going to come. We'll see what they're going to do. We all know what they - the risks are. We'll manage it when it happens.

And that's the basic view of those people at the top, the Gary Cohns, the Jamie Dimons. But what they also say is don't try and tell us black is white. Don't try and tell us up is down. We know there will be an inflationary impact as a result of which that will have to be managed. But this is classic Jamie Dimon.

SANCHEZ: As you pointed out, they are at the top. For a lot of folks that are not at the top, that cost of tariffs gets passed down to consumers, so there will be some pain. I wonder how other business leaders might have received what Dimon was saying at the conference.

QUEST: All right. The business leaders will have just said, yep, yep, got it, I sign. I think it's worth, Boris, if we've just got one second to explain this idea.

[15:20:02]

So the U.S. government, the Trump administration tariffs, my coat, for example, assuming I was buying a coat. The importer of this coat will pay the tariff to the U.S. government. That will go into this fund, the external revenue service that Donald Trump is talking about. So that's the plus side, if you will, of the equation as seen from the U.S. government.

They've got revenue from the importer or the exporter and it's coming in. But that coach has now cost more money. So either the importer eats it on the margin or they pass it on to the ultimate consumer. That's you, by the way, Boris. That's you and me and everybody watching. And that's why we say tariffs push up prices and are inflationary, because somebody pays the tariff.

Yep, the tariff goes to the U.S. government. But ultimately, the recouping of that in the cost, that's you, Boris.

SANCHEZ: It is a fine coat. I should point out. Though I'm not sure how much I would pay for it. Richard Quest live for us from Davos. Thank you so much, Richard. Erica?

HILL: Well, President Trump's tariff threat is a headache for a number of countries, including Chinese businesses that have tried to get around the existing U.S. tariffs by setting up shop in Mexico. CNN's David Culver takes us inside Mexico's so-called industrial Chinatown to see how they're now preparing.

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UNIDENTIFIED MALE: This is where we assembled everything.

DAVID CULVER, CNN SENIOR U.S. NATIONAL CORRESPONDENT: We're getting a firsthand look at what some are calling an industrial Chinatown.

UNIDENTIFIED MALE: Everything we make, we produce here is going to end up in a major furnishing store in the U.S.

CULVER: We're in Mexico. This is an hour outside Monterrey, Mexico, about 160 miles from the U.S. southern border.

(END VIDEO CLIP)

CULVER (voice over): This region, Mexico's so-called industrial capital, ideal for companies like China's Kuka Home Furnishing, looking to reach U.S. customers.

(BEGIN VIDEO CLIP)

MATT HARRISON, KUKA HOME FURNISHING, NORTH AMERICA PRESIDENT: We as an American consumers want everything immediately. So, okay, let's open up shop in Mexico.

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CULVER (voice over): CULVER: While Kuka Home says their move was motivated by shorter supply chains, a surge of other Chinese companies flooded Mexico to dodge hefty tariffs President Trump levied during his first term.

(BEGIN VIDEO CLIP) CESAR SANTOS, PRESIDENT, HOFUSAN INDUSTRIAL PARK: Well, actually, that helped us because when they put a tariff there in China, then those companies came to us.

CULVER (on camera): And are they still here?

SANTOS: Yeah, of course. They are growing.

CULVER: Question is going to be what happens if tariffs are applied to Mexico? That's something President Trump has suggested he might do.

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CULVER (voice over): Threatening to hit the U.S.'s southern neighbor and largest trading partner with a 25 percent tariff on exports to the U.S.

(BEGIN VIDEO CLIP)

HARRISON: I mean, the 25 percent tariff on Mexico puts me out of business. Simply put, it puts me out of business.

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CULVER (voice over): And that, in turn, would leave many here out of work.

(BEGIN VIDEO CLIP)

CULVER (on camera): If you look around me, you can see at this factory in particular, the vast majority of people who work here are from Mexico.

UNIDENTIFIED MALE: (Foreign language) ...

CULVER: For now, he's comfortable staying here in Mexico because he has a job. He has opportunity. If you don't have that, he said, you have to look for other ways to sustain your family. And he goes, for some, that means migrating to places like the U.S.

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CULVER (voice over): The uncertainty of the Trump tariff threat has Kuka Home pausing expansion plans here and leaves other Chinese companies questioning their next move.

(BEGIN VIDEO CLIP)

CULVER (on camera): This is your Spanish language books.

UNIDENTIFIED MALE: Yeah.

CULVER: Chinese to Spanish.

(END VIDEO CLIP) CULVER (voice over): Zhang Jianqiu is in Mexico scouting future opportunities for his Chinese employer.

(BEGIN VIDEO CLIP)

CULVER (on camera): With the 25 percent tariff, is it feasible?

ZHANG JIANQIU, ENGINEER: I think most Chinese companies, they are waiting. They are watching and then they will make the final decision.

(END VIDEO CLIP)

CULVER (voice over): Some Chinese companies, though, are full steam ahead with expanding their footprint to be within reach of their U.S. customers.

(BEGIN VIDEO CLIP)

SANTOS: This is called the Hofusan Industrial Park.

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CULVER (voice over): Inside Hofusan ...

(BEGIN VIDEO CLIP)

SANTOS: Basically, hundred percent of the companies are Chinese companies here.

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CULVER: Some 40 companies making home appliances, auto parts, light bulbs, medical supplies, you name it, all destined for the U.S. Here, the lines between what's Mexican and what's Chinese quickly become blurred.

(BEGIN VIDEO CLIP)

CULVER (on camera): You have street signs. You can see ...

SANTOS: Yes.

CULVER: ... the Chinese flag there.

SANTOS: The Chinese flag, yes. These are restaurants. These are very nice Chinese restaurants.

CULVER: Chinese restaurant?

SANTOS: Chinese restaurant, yes.

UNIDENTIFIED FEMALE: (Foreign language).

CULVER: As I look at the name, your name ...

SANTOS: Yes. CULVER: ... is mixed into this.

SANTOS: Yes. It's a Holley, Futong and Santos.

CULVER: These two shareholders, Holley ...

SANTOS: Chinese.

(END VIDEO CLIP)

CULVER (voice over): Hofusan is expanding rapidly with plans to eventually cover some 2,000 acres. But that's not been enough for the demand.

(BEGIN VIDEO CLIP)

RAMIRO GONZALEZ, DEVELOPER: This area is just next to Monterrey. It's called Juarez.

(END VIDEO CLIP)

CULVER (voice over): Developer Ramiro Gonzalez is now building another so-called industrial Chinatown.

[15:25:04]

(BEGIN VIDEO CLIP)

CULVER (on camera): You've got your name in Spanish and then Chinese.

GONZALEZ: Yes. Yes. I'm really happy because the Chinese people call me Dai Loong. Dai Loong means big dragon.

Basically, this is a multi-tenant building.

(END VIDEO CLIP)

CULVER (voice over): But if Trump's proposed tariffs on Mexico make the U.S. market too expensive, some Chinese companies are confident that they've still got other options.

(BEGIN VIDEO CLIP)

SANTOS: We can sell to Europe, we can sell to Latin America, even Mexico. Mexico is a big market, too.

(END VIDEO CLIP)

CULVER (voice over): Yet, despite the potential loss Trump's tariffs might cause him, Cesar Santos believes widening cartel violence is a bigger threat to business here in Mexico, so much so that he's given up prime real estate to have a police presence nearby.

(BEGIN VIDEO CLIP)

SANTOS: The ... CULVER (on camera): La fuerza civil?

SANTOS: ... fuerza civil.

CULVER: (INAUDIBLE) ...

SANTOS: Yes.

CULVER: That's on your property?

SANTOS: Yes, fuerza civil is in our property. Yes, we donated that area adjacent to the property.

(END VIDEO CLIP)

CULVER (voice over): It's a big part of why he actually supports the man behind the tariffs.

(BEGIN VIDEO CLIP)

SANTOS: He's strong.

(END VIDEO CLIP)

CULVER (voice over): President Trump.

(BEGIN VIDEO CLIP)

SANTOS: Actually, I like him for all the issues we have in terms of all the criminal gangs and everything like that, the drugs. So we need the help of people like him to stop that.

CULVER: And it was that last point there that we actually made note of while we were traveling through that region, and that is despite the potential negative impact on the economy down there in Monterrey, Mexico, many of the folks we came across are actually supporters of President Trump.

The engineer from China, he says he looks up to President Trump as a businessman. And then you heard Cesar Santos there say that he actually is looking to President Trump for national security, Mexico's national security, hoping to eradicate the cartel violence that has penetrated much of that country. Cesar Santos was even here in Washington to attend the inauguration this week.

David Culver, CNN, Washington.

(END VIDEO CLIP)

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HILL: And our thanks to David for that report.

Well, still to come here, firefighters now battling new blazes near Los Angeles, including one that has now triggered a mandatory evacuation order. Those flames burning the equivalent area of a football field every 10 seconds.

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