Return to Transcripts main page
CNN News Central
Trump Administration Delays Tariffs on Mexico and Canada after Concessions; China Threatens Retaliatory Tariffs on U.S. Goods If Trump Imposes Blanket Tariffs on Chinese Imports; President Trump Says Elon Musk Only Acts on Governmental Reform Measures with Trump's Approval. Aired 8-8:30a ET
Aired February 04, 2025 - 08:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[08:00:00]
KIMBERLY DOZIER, CNN GLOBAL AFFAIRS ANALYST: Steve Witkoff, the Middle East envoy, has been spending time on the ground with hostage families. He's going to hearing about all the bad things that Hamas has done and how needs to be defanged, but then you're going to have Riyadh come in and say, the king of Jordan is supposed to be visiting soon as well, saying the only way that you will have peace in the Middle East, true peace, is if there is a two state, Palestinian independent state solution.
SARA SIDNER, CNN ANCHOR: Yes. And we know that some of the hostages are here in town and sending a message to both the prime minister and the president as there are more hostages there, as well as Palestinians who are living in a hellscape in Gaza, wondering what is next. Kim Dozier, thank you so much.
A new hour of CNN NEWS CENTRAL starts right now.
JOHN BERMAN, CNN ANCHOR: So breaking this morning, standing by to see the markets open after the new trade war launched overnight, President Trump backed away from two fights. Why is he moving ahead with this one?
Thousands of aid workers in limbo this morning with millions, maybe billions of dollars in aid, twisting in the wind as Elon Musk takes a sledgehammer to U.S. soft power.
And good news for millions of Americans living with chronic pain. The FDA approves the first new painkiller since the late 90s. What it does not include might be the biggest difference.
I'm John Berman with Sara Sidner and Kate Bolduan. This is CNN NEWS CENTRAL.
KATE BOLDUAN, CNN ANCHOR: And the breaking news overnight, one trade war ramps up, this one between Donald Trump and Beijing, and two others simmer down as Donald Trump makes a U-turn on tariffs against Mexico and Canada for now.
And just as quickly as the tariffs on China set in, China is striking back, promising a 15 percent tax on U.S. coal, a 10 percent tax on U.S. crude and other products like agriculture, agricultural machinery, and certain cars and trucks. And on top of all that, China says, we'll see you and raise you another. The Chinese government is now putting a new target on U.S. companies, specifically accusing some big name brands of market trading violations, brands like Calvin Klein and Tommy Hilfiger. And then there's Google, also now facing an investigation by China for allegedly violating the country's anti- monopoly regulations. That's even though the company is not even operating there.
CNN's Alayna Treene is at the White House this morning with much more on this. So while the president was sleeping and waking up, China decided to retaliate, promising these tariffs are coming. What are you hearing from the White House now? What do they do?
ALAYNA TREENE, CNN POLITICAL REPORTER: That's right. I mean, we really could see even further tariffs on this, Kate. We did hear the president yesterday in the Oval Office call these tariffs, as you mentioned, a blanket 10 percent tariffs on all Chinese goods coming into the United States, saying that it's an opening salvo, essentially arguing that perhaps we could see these go even higher.
I would note as well, and kind of remind you that throughout Donald Trump's time on the campaign trail, he actually talked about a far greater levee. He talked about 60 percent tariffs on China. Of course, this is only 10 percent. So as the president said yesterday, this could just be the start of all of this. But I'd also note that we are expecting both president Donald Trump and Chinese President Xi Jinping to speak in the coming days.
One thing, of course, that is top of mind for a lot of people right now is whether or not they could find some sort of deal to avert what is already begun with this trade war, with this back-and-forth kind of measure and then countermeasure that we are seeing. And of course, we did see the president reach some sort of deal with both Canada and Mexico, tariffs that were supposed to go into effect as well at 12:01 a.m., but that because of conversations between President Donald Trump and Mexico's President Claudia Sheinbaum, as well as Canadian Prime Minister Justin Trudeau, they were able to put pause on that for one month.
Now, part of that is because we did see, and this is something the White House celebrated, we saw Mexico's president say that they were going to send an extra 10,000 troops to the southern border. And then we also saw Prime Minister Justin Trudeau agree to name a fentanyl czar, to set up a joint U.S. Canada border task force, and also spend more than $1 billion on helicopters and technology to secure the 49th parallel.
But one thing that I do want to also make clear is that even though they have averted these tariffs, and waking up relieved, we saw the stock markets kind of rally on the news, that doesn't mean that they are necessarily out of the clear. And we heard the president kind of discuss this yesterday when talking about Canada, saying he's expecting so much more from them in the coming weeks. Take a listen to what he said.
(BEGIN VIDEO CLIP)
[08:05:04]
DONALD TRUMP, (R) U.S. PRESIDENT: Look, what I'd like to see, Canada become our 51st state. We give them protection, military protection. We don't need them to build our cars. I'd rather see Detroit or South Carolina or any one of our Tennessee, any one of our states build the cars. They could do it very easily. We don't need them for the cars. We don't need them for lumber. We don't need them for anything.
(END VIDEO CLIP)
TREENE: So, Kate, there you hear the president talking about what he had said previously, that perhaps he wants Canada to become the 51st state. Also, this is very different from what the president was initially saying these tariffs were for. Of course, he said he wants them to stop the stem of migrants and drugs from coming into the United States. So very much still a lot to come on this front, Kate.
BOLDUAN: Good point. It's great to see you, Alayna, thank you for your reporting. John.
BERMAN: All right, with us now, CNN political commentator, former Trump White House communications director Alyssa Farah Griffin, also former Biden White House director of message planning Megan Hays.
All right, Alyssa, "The Wall Street Journal" editorial board, their headline of the whole tariff thing, Canada, Mexico, and pre-China was this, "Trump blinks on North American tariffs. The president pauses after minor concessions from Canada and Mexico." They say Trump blinks. I wonder if this is playing out, if you think it is, like he thinks it is. Is this the big win he thinks he's getting?
ALYSSA FARAH GRIFFIN, CNN POLITICAL COMMENTATOR: I suspect the White House thinks it is a big win. And listen, they've got a media ecosystem on the right that's going to affirm that. "The Wall Street Journal" also called it the dumbest trade war in history, very critical. Traditionally, Republicans have not been in favor of tariffs and kind of the weapons that he's using to try to negotiate trade deals.
And I would remind you, one of the biggest victories of the first Trump administration that I worked in was the USMCA, which was the Mexico and Canada trade agreement with the U.S. So this is, we are operating in the terms that Donald Trump and the Republican Congress set. He seems very bothered by them.
That said, they're in spin mode, and it may work on the right, basically saying he got major concessions from both Mexico and Canada. I guess China would be next. But this, I don't know how long this is going to hold. They're going to have to get back to the negotiating table in one month, and what is he going to ask for then, and what are they willing to give up?
BERMAN: You know, Megan, we just had Congressman Pat Ryan, who represents a swing district, he's a Democrat but represents a swing district here in New York, and he was really leaning into the tariffs as something that hurt regular people, help the elites, hurts the regular people. I do wonder if that is the message that's resonating out there in swing districts.
MEGHAN HAYS, FORMER BIDEN WHITE HOUSE DIRECTOR OF MESSAGE PLANNING: I do think it is. It's the message that is the actual truth here. I think that Donald Trump had to capitulate because he saw the markets go down and he saw bipartisan criticism happening when he went to enact these tariffs. So I think that he had to give in and he had to just take less from them because he knew that these were going to be impactful to the middle class and it wasn't going to lower costs. It was going to increase costs rather quickly. And he also saw Canada come back with more tariffs on us. And he knows that if people want to rebuild their homes in L.A., they're going to need lumber from Canada. If people want to buy fresh fruits and vegetables, they're going to need them from Mexico. So this was going to cost the American people a lot of money. And he saw that with all the criticism yesterday and had to give in.
BERMAN: Yes. Again, Alyssa, I guess my question is, is the battlefield exactly what Trump thought it was going in, or has it maybe shifted just a little bit when you see the markets unsteady, when you see swing congressmen really deciding to pick up the fight rather than back off, which is what you normally see when they think something is politically contentious or explosive? Elon Musk is another thing that Pat Ryan leaned into there. He said, you have to call out villains when you see them. And right now, Elon Musk is a villain and very much a part of everything that we're seeing every day. So much so now that President Trump, I don't know if he's trying to put some distance between him and musk or not, but listen to what he said.
(BEGIN VIDEO CLIP)
DONALD TRUMP, (R) U.S. PRESIDENT: Elon can't do and won't do anything without our approval, and we'll give him the approval where appropriate. Where not appropriate, we won't.
(END VIDEO CLIP)
BERMAN: So what did you hear there?
GRIFFIN: Yes, not a ringing endorsement. Well, Elon Musk, once a very popular figure for Tesla and some of the incredible things he's done with Starlink, has a lower approval rating with the American public than Donald Trump does now. But to Trump's advantage, he can kind of make Elon the hatchet job -- hatchet man in the administration.
So whether it's going after USAID, or now, it looks like the Department of Education, he can allow him to take the measures he wants to to scale back the workforce. And if the public receives it poorly, he can kind of put it on Elon's shoulders. This is sort of a classic Trump way of going about getting things done and not necessarily taking responsibility. But I've said from the outset, I don't think this relationship is going to last long. There's one star of the show, they both have big main energy character -- main character energy. But Donald Trump is the one in charge. And if there's enough criticism of Elon's actions, he's going to let him take the blame.
BERMAN: Main character energy.
(LAUGHTER)
[08:10:00]
BERMAN: Megan, there are two major votes, Senate confirmation votes scheduled for today. The process moves along on Robert Kennedy Jr. and Tulsi Gabbard. Democrats, I think last week had hoped that maybe there was a way they could derail these nominations. How does it feel to you this morning?
HAYS: Yes, it doesn't feel like that's going to happen. I mean, I think we have Senator Cassidy who could stop RFK coming out of committee, but I think that these will probably make it out of committee, which is really disappointing. I think that both of these nominees are really problematic for very different reasons. They're both woefully unqualified for their jobs, but I think that they will probably get out of committee and probably pass unless we see something else come to light in the public eye. But I just don't know that that's going to happen.
BERMAN: Confirmation is assured at this point, Alyssa?
GRIFFIN: I think it's very likely all eyes on Todd Young on the Tulsi Gabbard confirmation. Of course, Bill Cassidy, a doctor himself with regard to RFK Jr. But there's been tremendous pressure from Trump- world on these Republicans to support his nominees. There's primary threats. There's also been reporting that they even feel that there's threats and dangers potentially to them if they don't vote for these individuals. So I think in all likelihood, both go through.
BERMAN: All right, Alyssa Farah Griffin, Megan Hays, great to see both of you. Thanks so much. Sara.
SIDNER: All right, ahead, new details on the sudden and chaotic shutdown of USAID workers locked out of their office with no notice. I'll speak with one of the workers caught up in the chaos next.
And another massive arm of the government now under threat of dismantling. What do teachers think about Donald Trump's promise to erase the Department of Education?
And a family tries to take justice into their own hands in a courtroom brawl. All of this happening right in front of the judge. That story ahead as well.
(COMMERCIAL BREAK)
[08:16:06]
SARA SIDNER, CNN ANCHOR: Our word is trash, that's how one USAID contractor is describing the mood of many workers as the fate of the government agency is in limbo. This morning, thousands of jobs are on the line after Elon Musk said the president signed off on shutting the agency down.
Just yesterday, USAID employees in Washington were told to stay home.
Joining me now is Kristina Drye. She is a speechwriter for USAID and was one of the many employees not allowed to go into work.
Thank you so much for joining us. I know this is a difficult time personally and on a larger scale for you because you believe in the work that USAID does.
You have said that people could die if funds are cut off to the places that USAID funds. Do you mean that literally?
KRISTINA DRYE, SPEECHWRITER, USAID: Yes, first of all, thank you so much, Sara, for having me today. It has been a tough time. But yes, I do believe that that people will die without this work.
USAID, you know, provides life-saving care to people around the world. Medical care in the form of PEPFAR, HIV access vaccines.
They also provide, critical food aids to people who are starving. They provide critical support around the world in conflict zones and otherwise. And without this support from the US government at USAID, people will die around the world. And it's a heavy thing to feel as someone who's worked so hard for it.
SIDNER: I am familiar with USAID because having lived abroad, many of times when there is a disaster, USAID would be there bringing in necessary aid for people. So, I've seen the work firsthand, but how did you find out what was happening at your office, at your work? What happened when you were sort of told, don't come in to work, don't come to the office.
DRYE: Yes, so your questions or my questions as well, I think, you know, Friday, we knew that people were in the building. And Saturday morning I woke up and all of our websites were down. We hadn't been given any information about those websites being down or loss of our files and access.
And then, Saturday around 7:00 PM, I tried to log in on my computer, and the whole systems are just absolutely down. Our contractors are not informed of what's happening. They can't tell us, you know, when we're going to get access back, if we're going to be able to get access back, if we're getting a paycheck, if we're getting any of these things.
So, there was no information to any employees and I know it's not only me, it's hundreds of employees across USAID's workforce here at home and abroad.
SIDNER: You know, there is the other side of this, where some Americans and you've seen it, but I know you've seen it online. I know you hear it from those who support Donald Trump, who say, look, the federal government, in their view, is bloated. They believe that there needs to be some sort of culling, just like companies lay people off.
So I'm curious, you know, what you think and what you would say to people who say, look, why does USAID need a speechwriter? Why does USAID have these hundreds of jobs? Why does it have to be so big?
DRYE: Right, I think that's such a fantastic question and at USAID, we save people around the world so that we can save and protect the American people and that work often goes unseen. But its everything from, you know, looking at land mines and taking them out of field so our soldiers are safe.
It is everything from monitoring famines around the world so that we can prevent these famines and thus prevent instability, which will affect, you know, American citizens here at home.
So there's a lot of things at USAID that go on that people don't see, because the entire purpose is that we don't see the impact. Its preventative care. For example, for American security, it's a crucial tool in the National Security toolbox for our country.
And it also happens to be a great thing for people around the world. So, any sector can be in good faith, examined and improved but this is a dire outcome, I think, for something that is so necessary for just one percent of the federal budget.
[08:20:30]
SIDNER: I'm curious about two things to end here. One is what you make of Elon Musk having this enormous amount of power who has not been elected to office but has been given this great deal of power by Donald Trump and USAID is one of the first to be targeted by him and his DOGE group. And why you think that USAID was one of the first to be culled, if you will.
DRYE: Yes, I think I'll start off by saying that every single public servant I've ever worked with, including myself, has an oath to serve the American people and when the American people mandate a leader through a democratic election, and that is what we serve. I would say in my personal thought, representing myself, that the American people did not mandate, you know, Elon Musk to be in this role and so it feels disjointed. And then I think that USAID represents the best of the American people.
It represents empathy, it represents a respect for human dignity, it represents care for others around the world and it represents, you know, truly the best of what we can give in our generosity and I think that in the current environment, that's being overshadowed by assumptions about the work.
And all I can say for my fellow, you know, USAID employees around the world is that the kind of empathy and care that we see in this workforce is absolutely outstanding. And now we have thousands of people that don't know what's next.
SIDNER: I think you sort of touched on this that USAID is about sort of the hearts and minds and helping and sort of that soft diplomacy as opposed to, you know, coming in with, with a much harder line.
Kristina Drye, thank you so much. Good luck to you and your colleagues. I know you were going through it, trying to figure out whether or not you have a job at this hour. Appreciate you coming in.
DRYE: Thank you.
SIDNER: John.
JOHN BERMAN, CNN ANCHOR: All right, this morning, new details on how President Trump's trade war will affect your bank account. Why you might want to hold off on shoe shopping for the foreseeable future. And overnight, things turned violent as protesters took to the streets over new ICE raids.
(COMMERCIAL BREAK)
[08:26:51]
KATE BOLDUAN, CNN ANCHOR: Breaking overnight, President Trump's blanket 10 percent tariff on goods coming from China is officially on. The Chinese government is also now fighting back, countering Donald Trump's tariffs with its own. New tariff on US products like oil and natural gas and agricultural machinery will set in next week.
Donald Trump, calls his moves an opening salvo when it comes to Beijing, which means this could be far from over and a trade war with China will impact industries really, across the board. One industry that could see a profound impact is actually the footwear industry and here's why.
Ninety-nine percent of all shoes sold in the United States are imported -- 99 percent and most of them come from China.
Joining me right now is Matt Priest. He's the president and CEO of the Footwear Distributors and Retailers of America, a leading footwear trade group that represents dozens of companies like Nike, DSW, Crocs, Under Armour and Walmart.
It's good to see you again. Matt, I looked back, we talked back in November about what could be coming in terms of tariffs, and here we are today.
Let's focus in on China since that's where it's all setting in. And that is where most footwear sold in the United States is coming from. What is a new 10 percent tariff on footwear going to mean?
MATT PRIEST, PRESIDENT AND CEO, FOOTWEAR DISTRIBUTORS AND RETAILERS OF AMERICA: It's going to mean higher prices for American consumers, Kate.
You know, look, we brought in about $10 billion in value of footwear from China last year, 10 percent, I'm not a mathematician but 10 percent is about a billion dollars of additional costs at the border paid by American companies. And so, that billion dollars has to go somewhere. It's got to be absorbed somewhere for companies to be competitive, to continue to have profitability.
And so, right now, our companies are trying to figure out, okay, how much can we provide and push out to the consumer to cover these costs and still maintain jobs here in the States, to ensure that we are bringing in great product.
And so, it's a lot of uncertainty right now, and we are trying to figure it all out.
BOLDUAN: Is there any universe, Matt, where consumers don't pay a higher price with when new tariffs like this are ordered?
PRIEST: There isn't a universe that we've seen ever. In fact, if you look at the president's own data that comes out of the US government, it shows that there's an unmistakable correlation as duties go up on footwear at the border, those prices go up for consumers. The two lines are interlinked.
And so, we're a warning cry to the broader economy here in the States that we've been paying duties since 1930. We pay upwards of four billion dollars a year in duties. We had an additional seven-and-a- half percent placed on footwear coming out of China in 2019. That drove up costs.
And here we are again in 2025, and our hope is that the president and his team understands that these drive up costs for consumers. They are inflationary in nature and for us to try to tamp down on inflation, which was the mandate that the president received from the American people, we want to help them do that but this is not on the top of the list of things you should do to tamp down inflationary costs.
BOLDUAN: Would this be on the top of the list of a sure fire way to raise prices and kind of increase inflation?
PRIEST: Yes, I mean, it is a surefire way. Again, these costs are paid by American companies that employ Americans and the bill, the invoice, I've seen them myself. That goes to the US Customs and Border Protection, Department of Homeland Security, and those costs have to be buried somewhere, and the consumer is going to take those on. Not to mention the fact that this is applied to all goods.
So, discretionary income for working families is going to be, you know, even tighter as prices go up across different consumer goods and sectors of the economy.
BOLDUAN: And Matt, shares of Nike, Crocs, Steve Madden, Skechers and other footwear companies, they fell on Monday. What are you hearing from footwear executives today?
[08:30:35]