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President Trump Announces Tariffs on Canada, Mexico, and China; Stocks Markets Potentially Down Upon News of U.S. Tariffs on Trading Partners; Workers at U.S. Agency for International Development Receive Email to Not Show Up to Work as Trump Administration Targets Agency. Aired 8-8:30a ET

Aired February 03, 2025 - 08:00   ET

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


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CHAPPELL ROAN, SINGER: I would demand that labels and the industry profiting millions of dollars off of artists would offer a livable wage and health care, especially to developing artists.

Record labels need to treat their artists as valuable employees with a livable wage and health insurance and protection, Labels, we got you, but you got us?

(END VIDEO CLIP)

ELIZABETH WAGMEISTER, CNN ENTERTAINMENT CORRESPONDENT: So Chappell getting a lot of praise for that moment. And I have to tell you, some of the stars did get political. When Shakira came on stage, she spoke about immigration. When Lady Gaga came on stage, she spoke about the trans community. And Alicia Keys talking about DEI. But overall, just a really, really great night, Kate.

KATE BOLDUAN, CNN ANCHOR: Thanks so much for walking us through it. Elizabeth, good to see you.

A new hour of CNN NEWS CENTRAL starts right now.

JOHN BERMAN, CNN ANCHOR: All right, breaking news. We just got word that USAID workers in Washington received an email overnight telling them not to show up to work today. This, as Elon Musk says, the agency should be shut down, an agency created and funded by Congress. What does the Constitution say about this?

We are standing by for stock markets to open. Futures down big as investors worry about rising prices and chaos now that President Trump has announced new tariffs, what one Republican senator called new taxes on Americans.

And new moves this morning by countries in this new trade war. Which products should you expect their prices to go up, and when?

Sara is out today. I'm John Berman with Kate Bolduan. This is CNN NEWS CENTRAL. BOLDUAN: Let's get to it. New this morning, U.S. stock futures down,

global markets roiled, and less than 16 hours until President Trump's tariffs set in against Canada, Mexico, and China. A trade war now ignited by the White House, and one that has all three of Americas biggest trading partners getting ready to retaliate against. President Trump is going to be speaking with the with Canadian and Mexican leaders this morning, but he is already saying that he's not expecting anything really to come out of those conversations.

One big change, though, already -- Donald Trump is acknowledging for the first time the reality that Americans are going to feel the pain in this trade war. Starting tomorrow, Canada and Mexico, and the American people, let's be honest, are looking at 20 to 25 percent tariffs. China is staring down an additional 10 percent tariff on goods.

CNN's senior White House reporter Kevin Liptak is starting us off this hour. So Kevin, is there -- are you hearing anything inside, any rumblings that Donald Trump could still back down in these final hours before this sets in?

KEVIN LIPTAK, CNN WHITE HOUSE REPORTER: Frankly, Kate, no. And we heard from Trump himself yesterday that he doesn't expect anything dramatic to come out of his conversations with the prime minister, Justin Trudeau, and the Canadian president this morning. We've also heard from White House officials tamping down on any expectations of a reprieve when it comes to these major new tariffs. And so every expectation is that one minute after midnight tonight, those significant tariffs could go into effect, prompting a continental trade war and potentially increasing costs for Americans on all kinds of goods, big goods like refrigerators and cars, but also small items like avocados, including things shipped directly from Chinese manufacturers, from companies like Shein and Temu. This could have a real effect on Americans pocketbooks, and Donald Trump is acknowledging just that. Listen to what he said.

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DONALD TRUMP, (R) U.S. PRESIDENT: We may have short term, some little pain, and people understand that. But long term the United States has been ripped off by virtually every country in the world. We have deficits with almost every country, not every country, but almost. And we're going to change it. It's been unfair. Thats why we owed $36 trillion.

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LIPTAK: So essentially what Trump is saying there is that in order to fulfill his campaign promises on curbing flows of illicit drugs and migrants across the border, these tariffs are necessary. But when it comes to another of his campaign promises, probably his top campaign promise, which was lowering prices for Americans, well, that will just have to wait.

Now, by and large, what we've heard from Republicans is support for these tariffs. Those who oppose them have mostly remained silent. One of the exceptions is Senator Rand Paul from Kentucky. He wrote on social media that tariffs are simply taxes. He said this could mean less trade and higher prices. And when you look at the state that Rand Paul represents, Kentucky, it could be significantly impacted by the reciprocal tariffs from Canada.

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Kentucky bourbon could be affected by decisions to pull American liquor from shelves in Canada. We also expect to hear more today from Mexico about its own reciprocal tariffs. China has also said that it will file a complaint at the World Trade Organization.

One of the big questions in all of this is what exactly Canada and Mexico can do to get Trump to ease off. Officials there have been frustrated that they don't have sort of a quantitative metric about what they can do to help these tariffs ease up. In fact, Trudeau said over the weekend that he'd been trying to reach Trump on the telephone since inauguration day, but his phone calls hadn't been returned. That will end this morning, when the two leaders speak, but there's certainly no expectation that these tariffs will be eased up before midnight. Kate?

BOLDUAN: Yes, and starting to think maybe the ambiguity in the measure of success here is intentional, but we will see. It's good to see you Kevin. Thank you so much. John?

JOHN BERMAN, CNN ANCHOR: Yes. And then running right next to Kevin there during his report, you saw that list of goods where the prices could go up. I mean, tequila, electronics, cars, cell phones, fruits, vegetables, avocados. Just before the Super Bowl, all these prices could go up because of these tariffs, what Rand Paul called taxes on U.S. consumers. Investigators are bracing for chaos. Stock futures are down across the board. You can see right there. CNN's Vanessa Yurkevich is with us now. You know, prices Americans pay could be going up.

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: This is what people are going to care about, what they're paying every single day. A trade war, really there is no winners at the end of the day, according almost every economist that I've spoken to. And there's going to be some losses for the American consumers, because even though were putting these tariffs on Canada and Mexico and China, we as Americans pay for those goods as they come into the country.

So just let's look at some of these key items. Food, this is something that Americans have been struggling with for a while now, prices at the grocery store. And we import, as you mentioned, a ton of avocados, 90 percent from Mexico. And the Super Bowl is just around the corner. And these are perishable items. So they have to come in every so often. That's going to go up in price. Also from Canada, grain, livestock, meat, and poultry.

Another thing that we need to look at is auto parts, right? Auto parts are in in particular really important because so many of the cars that are assembled in the U.S. have auto parts that come from Canada and Mexico. Also fully assembled vehicles coming right into the country, that's going to raise prices potentially by about $3,000 per vehicle.

Also, wooden lumber, right? We get about 30 percent from Canada, and then we get drywall components from Mexico, 70 percent. So when you're talking about home prices, that could potentially raise the price of homes. We have a home shortage in the country. We need to be building more. Any raw materials that are more expensive are going to make home prices more expensive.

Also shoes, 50 percent -- over 50 percent come from China. So that's going to raise the price of shoes. Fertilizer is interesting. I just want to point this out because there's a key component in fertilizer called potash. We get that from Canada, about 80 percent. Thats going to impact farmers who grow all of our foods. These are just some, some of the items, including beer, wine, bourbon, perfume that come from Mexico, Canada, and China. The U.S. consumer is going to pay those increased costs.

BERMAN: Pretty much across the board. The question is, how long will these tariffs last? That could play into it as well. Vanessa Yurkevich, thank you very much for that. Kate?

BOLDUAN: Joining us to talk much more about this is CNN economics and political commentator, also an opinion columnist at "The Washington Post," Catherine Rampell. Thanks for coming back in, Catherine. So even President Trump, which is noteworthy, President Trump is now acknowledging the reality that everyone else knew, which is when this trade war begins, Americans are going to feel the pain. The way he put it was, we may have short term, some little pain. What is that pain going to look like?

CATHERINE RAMPELL, CNN ECONOMICS AND POLITICAL COMMENTATOR: So it depends on the product, but we are already seeing some prices being passed through. For example, customers of Irving Energy, which is a Canadian company that supplies fuel oil and propane to much of New England, they were notified yesterday that they will bear the cost, the entire cost of those tariffs immediately. You also have lots of produce that's coming over the border, things that companies could not stock up on. Unlike refrigerators or cars or what have you, right ahead of the Super Bowl, as we've heard, block is going to cost extra, essentially.

And then you have a lot of other things that may filter through to the economy a little bit later. So I mentioned autos. The typical automotive part that that is produced in the United States, that is we are told is an American company that's made in the United States for a car that's American, it actually crosses borders between Canada and Mexico multiple times, as many as seven or eight times. Each time that crosses the border, its going to incur another 25 percent tariff.

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So that will weigh on auto costs, or at the very least, shut down supply chains and make autos not available.

BOLDUAN: One thing that Kevin Liptak was pointing out, and we heard from Canadian officials are saying this morning, they don't know what the measure of progress is. They don't know what you do this, and the tariffs go away from Donald Trump. Is it clear at all to anyone? Is it -- does anyone have a guess what that metric is?

RAMPELL: Unfortunately, no. Trump has been unclear about what he wants, what concessions these countries could even make to appease him. And he even has said there's nothing they can do, right? This is about raising tariff money. Lots of Wall Street analysts had assumed that this these trade threats, these tariff threats were a negotiating ploy. But he has not really made specific demands that he wants them to negotiate over. He has also not engaged in negotiations.

BOLDUAN: You make a great point. We heard that from more from over and over again in the in the election, in the lead up to Election Day, that this is a negotiating tactic and potentially a very successful one. It looks like it is much more than that.

Now, "The Wall Street Journal" writing this morning in an editorial with the headline, "The dumbest trade war in history. Leaving China aside, Mr. Trump's justification for this economic assault on the neighbors makes no sense. Drugs have flowed into the U.S. for decades and will continue to do so as long as Americans keep using them. Neither country can stop it. Drugs may be an excuse since Mr. Trump has made clear he likes tariffs for their own sake." It's getting to your point. What's the best case, worst case here?

RAMPELL: I think the best case scenario is maybe Trump sees that markets freak out, and markets haven't opened yet, so we'll see how they react. And he says OK, I need an offramp. And they come up with some sort of fig leaf, right, that the countries decide that they're going to create a fentanyl task force that's relatively meaningless, because again, what is Canada really going to do in this situation here? Arguably there's more that Mexico can do. But Canada, I don't know. But then everybody gets to save face and the tariffs are taken off the table. That's the best case scenario. I don't know if it will happen because Trump seems to have dug in his heels.

The worst case scenario is that, as we have heard, we impose tariffs. These other countries impose counter-tariffs. Trump jacks up his tariffs even higher, which the executive order indicated he would. And you get a series of these tit-for-tat trade wars that, an eye for an eye leaves everybody blind. You end up with higher prices, fewer jobs. We haven't even talked about the cost of the retaliatory tariffs hurting American businesses and their employees. And you have a potential huge drag on the economy, potentially leading to a recession.

And I say all of this not as if this is an entire hypothetical. We actually saw this happen in the early 1930s when the United States launched a global trade war with an act known as Smoot-Hawley that then led to these tit-for-tat tariffs and trade wars around the world that are widely believed to have worsened the great depression.

BOLDUAN: So stand by to stand by. I don't think it's ever actually meant more or been doing as much work as it might be doing in this case. It's good to see you, Catherine. Let's see what happens. It's 16 hours to go until they're supposed to set in. John? BERMAN: All right, breaking overnight, workers at the U.S. Agency for

International Development, USAID in Washington, were told to stay home this morning. The main office closed. They received an email shortly after midnight telling them, don't come in. This is the latest development on the future of USAID after both President Trump and, maybe more importantly, Elon Musk said it needed to be shut down.

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DONALD TRUMP, (R) U.S. PRESIDENT: Its been run by a bunch of radical lunatics, and we're getting them out. USAID, run by radical lunatics, and we're getting them out. And then we'll make a decision.

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BERMAN: All right, let's get to CNN's Jennifer Hansler at the State Department for the latest on this. You helped break this news about the email overnight. What have you learned?

JENNIFER HANSLER, CNN STATE DEPARTMENT REPORTER: Well, John, this is just the latest in a string of developments that indicate that Trump intends to abolish the U.S. Agency for International Development. We had that notice that went out overnight to employees not to show up to headquarters. You heard those comments from Trump. And as you noted, Musk has also demonized the U.S. Agency for International Development. He has played an outsized role on this administration's decisions on federal agencies.

And he hosted a Spaces on X overnight to go after the agency, criticizing it for alleged misuse of funding. And he said that Trump had agreed that it needed to be shut down. Take a listen to what else he said.

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ELON MUSK, CEO, TESLA: As we dug into USAID, it became apparent that what we have here is not an apple with a worm in it, but we have actually just a ball of worms. And so at the point at which you don't really know if you've got an apple, it's got a worm in it, maybe you can take the worm out.

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But if you've got actually just a bowl of worms, it's hopeless and USAID is a ball of worms. There is no apple and when there is no apple, you've just got to basically get rid of the whole thing.

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JENNIFER HANSLER, CNN STATE DEPARTMENT REPORTER: So I should note, John, that he didn't provide a lot of evidence to these claims, but it is the latest signal that USAID is in the administration's target site.

Now, Democrats say the abolishment of the agency would not be legal because it was a created under statute, it is an independent agency and they say that Trump cannot just unilaterally choose to fold it under the State Department, which is what his intention is reportedly to be.

Now, the State Department has not commented on the developments, but we do also see a number of other troubling signs.

Over the weekend, we reported that there was an incident involving DOGE employees from Musk's office, and they went to try to access USAID, and they were blocked, and officials were put on leave for trying to block them from accessing classified information -- John.

BERMAN: All right, Jennifer Hansler for us at the State Department. We'll have much more ahead also on USAID and who depends on that funding and those workers.

Thank you so much for your reporting on this.

This morning, wreckage is being removed from the Potomac, and investigators have begun to examine the data recorder from the Black Hawk helicopter.

An expanded mission for Marines at Guantanamo Bay. Troops arrived to handle tens of thousands of deported migrants. So, what does this mission mean?

And an aquatic mystery, this is like immaculate conception for sharks, right? Seriously, there was a baby shark born in an aquarium, but there were no male sharks around.

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BERMAN: This morning, the remains of 55 victims have now been recovered from the wreckage in the Potomac River. The search for the 12 remaining victims is ongoing.

We are learning more about some of the victims. Twenty-eight-year-old Captain Rebecca Lobach has been described as someone who was born for aviation. She was flying the Black Hawk helicopter.

Her family says she was kind, generous, brilliant, funny, ambitious and strong.

A father is mourning his wife, Julia and their 11-year-old son, Sean. Sean was one of many ice skaters on board the flight. His father says he started skating when he noticed there were cute girls in the sport.

A vigil was held over the weekend to honor those lost in the skating community.

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LORRAINE MCNAMARA, WORLD JUNIOR ICE SKATING CHAMPION: We honor the lives of those that we've lost by holding on to the beauty that they brought into this world. Let us find comfort and the love and support of one another during this time, and know that the memory of those who lost their lives will be upheld with compassion, admiration, and effervescence forever.

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BERMAN: This morning, we're learning the black box from the Black Hawk helicopter has been recovered.

With us now, Mary Schiavo, CNN aviation analyst, former inspector general at the Department Of Transportation.

The black box from the helicopter, Mary, what do you think the key data from that will be?

MARY SCHIAVO, CNN AVIATION ANALYST: Yes, a hugely important development. So, the black box from the helicopter will have both as in commercial planes is that they're separate. But the black box from the helicopter will both have verbal communications like a cockpit voice recorder and flight data information.

Most particularly, it will have on the flight data side, it will have altitude, engine settings, positional settings -- where was it headed? What's the pitch? Et cetera -- and what's the responsiveness of various parameters of that helicopter? An incredibly important development for the NTSB.

BERMAN: When we're talking about altitude, one of the things that I think is most mysterious and needs to be evaluated right now is the altitude of these two aircrafts. Number one, the black box from the plane found it to be at about 300 feet to 325 feet.

A reading from the tower -- the tower said that the helicopter was at 200 feet. There is a discrepancy there. How can there be that type of discrepancy?

SCHIAVO: There shouldn't be.

Now, first of all, the NTSB, in its press conference on Saturday indicated that it was, at this point inclined to go with the aircraft altitude reading, and I agree.

Modern aircraft, commercial passenger service aircraft, you have to get put altitude settings in at many places. You do it again just before landing, many pieces of equipment on the plane rely on that and you have great redundancies.

So, they feel, or at least they said they feel pretty confident in the 325 feet plus or minus 25 feet readout from the aircraft. So, that leaves the problem of the reported height of the helicopter.

Now, you have to calibrate equipment. You don't buy it and stick it in place forever. And so, the issue is going to become -- did the readout come from the helicopter? Was it tower equipment that misinterpreted? If the tower had that 200 foot reading, or rather 325 foot reading, what could they have done about it and actually a lot. And one thing to note is that the air traffic controllers don't repair that tower equipment, that is handled by contractors. And so now, we're looking at another group of people as who was repairing that tower equipment.

Was it synced up with the helicopter? Or was it the helicopter that gave the misreading? And so, it's -- this is a very important point. However, this is something that the NTSB will be able to solve and get the answer to. They do this all the time.

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BERMAN: And again, the reason that a very important is that helicopters, in theory, aren't supposed to fly above 200 feet in this area. And the question is, did the helicopter think it was above 200 feet or not? And we just don't know that. We don't know that just now. This is one of those things that needs to be determined.

One other piece of new information, Mary, that we got over the weekend is the idea that the pilots of the aircraft lifted the nose just before impact. What can you learn from that? How much of a difference does that make?

SCHIAVO: Well, it means that they saw the helicopter approaching them, but only at the last second. So, they lifted the nose, meaning they were trying to climb. They pitched the nose up towards the sky, most likely, but it means they saw it just a second before impact.

But with a second you cannot move out of the way that fast. I mean, a SpaceX rocket could not move out of the way that fast.

So, they saw it just before impact and that clearly was the first time that they saw it so they could not have taken evasive action before. But remember, they were on the glide, so they were on the glide path down. They were cleared to land. They were following their instruments and under the total control of air traffic control.

So, they were where they were supposed to do, be doing what they're supposed to do, which is taking that glide path or power path, of course, down to the landing.

And, you know, that one second was obviously sheer terror, but it wasn't enough time to make a difference for them.

BERMAN: Not enough. Look, we are getting new data in every day, but still so many questions.

Mary Schiavo great to see you. Thank you very much.

US Marines now preparing to hold tens of thousands of migrants at Guantanamo Bay.

And one of the world's most picturesque destinations, not very tourist friendly right now, not with thousands of earthquakes shaking things up.

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